State Consumer Disputes Redressal Commission
Rattika [G.M.R.] Textiles,42-C, Sidco ... vs New India Assurance Co. Ltd.,Kumaran ... on 22 February, 2012
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI Present Hon'ble Thiru Justice M. THANIKACHALAM PRESIDENT Thiru.A.K. Annamalai, M.A., B.L., M.Phil., JUDICIAL MEMBERC.C.47/2005
DATED THIS THE 22nd DAY OF FEBRUARY 2012 Rattika [G.M.R.] Textiles, | Complainant Rep. by its Partner G.I. Viswanathan, | 42-C, Sidco Industrial Estate, | Harvey Road, Tirupur 641 602. | Vs.
1. New India Assurance Co. Ltd., | Rep. by Divisional Manager, | Kumaran Road, Tirupur 641 601. | | Opposite Parties
2. The Karur Vysya Bank, | Rep. by its Manager, | P.N. Road Branch, 282, P.N. Road, Tirupur. | This complaint dt. 26.07.2005 filed against the opposite parties alleging deficiency in service, claiming Rs.32,19,167/- together with interest at 18% per annum from 14.07.2002 till payment in full, to pay Rs.5 lakhs as compensation for mental agony and suffering undergone by the complainants partner and to pay Rs.50,000/- towards costs.
This petition coming on before us for hearing finally on 15.02.2011, upon perusing the material documents, and upon hearing the counsels for both the parties, and having stood over till this day for consideration, this Commission made the following order.
Counsel for the Complainant : M/s.Sampathkumar Associates, Advocate.
Counsel for the 1st Opposite Party : M/s. M.B. Gopalan, Advocate.
Counsel for the 2nd Opposite Party : M/s.A.V.Radhakrishnan, Advocate.
M. THANIKACHALAM J, PRESIDENT
1. Invoking the provisions of Consumer Protection Act, this complaint is filed for the recovery of a sum of Rs.32,19,167/- with interest along with compensation of Rs.5 lakhs, with costs on the following grounds [in brief].
2. The complainant was carrying on business, as manufacturer and exporter of Hosiery Garments in Door No.42-C, Sidco Industrial Estate, Harvey Road, Tirupur, forming part of Door No.42. The second opposite party/Bank granted various facilities, financially and on their insistence, the complainant had taken policy with the first opposite party, for the period from 13.09.2001 to 12.09.2002, for the sum assured Rs.40 lakhs.
3. On 14.07.2002, unfortunately fire accident had taken place in the said premises insured, causing a total loss of Rs.32,19,167/-, worth of stock and destroying the building, which was informed to the first opposite party and the second opposite party, on behalf of the complainant, lodged a claim on 25.09.2002.
4. The Insurer had appointed a Surveyor to whom, required documents were furnished and it seems, they had assessed the loss at Rs.3,63,680/-, which was offered, to be paid by the first opposite party directly to the second opposite party. The repudiation or assessment of the loss, as if, fire accident had not taken place in the premises insured, is incorrect, as if, there was no Door No.42-C, forgetting the actual premises insured. Thus, the first opposite party had committed deficiency, preceded by negligence in not honouring the policy condition, thereby causing mental agony. Later when the complainant had chosen to take up the matter to the Arbitration, as per the terms and conditions of the policy, the offer was also withdrawn and they have not conceded for Arbitration. Thus, the first opposite party not settling the loss occurred to the complainant based upon the policy, should be construed as deficiency in service, for that, they should be directed to pay the loss, as well as compensation amount as prayed for. Hence, the complaint.
5. The first opposite party admitting that the complainant was carrying on business at Door No.42-C, as well as the insurance taken for the stock and the building, totaling a sum of Rs.40 lakhs, resisted the case inter alia contending that the complainant had also occupied rear portion of Door No.41, Harvey Road, taking the said portion, from one P.Kumaraswamy, which is an independent and separate building, not covered under the policy, in which alone, fire accident appears to have taken place and therefore, the non-settlement of the claim by the first opposite party, for the alleged loss cannot be treated as deficiency in service or negligent act.
6. Under the policy, the loss or damage to the property at the location specified therein alone is admissible. The accident had taken place, as per the Surveyors report at Door No.41, which is not covered under the policy. However, temporary removal of stocks from the insured premises, upto 10% of the respective sum insured was permissible under the policy and on that basis, the Surveyor has estimated the admissible loss at Rs.3,63,680/- which was offered, not accepted, seeking Arbitration, thereby compelling the Insurer to withdraw the offer, since it was not a case of dispute on quantum, the further fact being, Arbitration was not maintainable. The claim is barred by limitation and interest claimed is excessive.
7. The second opposite party reiterating the accident occurred on 14.7.2002, conceding the policy taken, as well as the offer made by the first opposite party, would contend that the Insurer having offered to pay a sum of Rs.3,63,680/-, then withdrawing should be construed as mischievous, ridiculous and unwarranted, that the first opposite party did not survey the premises where fire accident had taken place and that they have not acted in a reasonable manner, praying for allowing the complaint.
8. The parties to the lis have filed Ex.A1 to Ex.A33, Ex.B1 to Ex.B8, supported by affidavits. On the basis of the pleadings and documents, the following points are framed for decision:
(1) Whether the first opposite party had committed deficiency in service, in not settling the claim, pursuant to the admitted policy?
(2) Whether the fire accident had taken place in the premises insured, if so, what is the amount the complainant is entitled to, if not, what is the amount payable by the Insurer, on the basis of the Policy?
(3) To what relief?
POINTS 1 & 2:
9. The complainant, borrowing loan and availing various facilities from the second opposite party-bank, was carrying on business as manufacturer and exporter of Hosiery Garments. The place of business, even, as pleaded in the complaint is No.42-C, Sidco Industrial Estate, Harvey Road, Tirupur, which forming part of main Door No.42.
Admittedly, he had taken the above said premises from its owner, as per the Lease Deed dated 1.9.1995, which is also not under cloud. Originally though the complainant had taken insurance with other Insurance Company, probably as requested by the second opposite party or otherwise, policy was taken for the above said business, covering stock and building, for the period from 13.09.2001 to 12.09.2002 and the assured sum was Rs.40 lakhs, which is also evidenced by Ex.A1. Therefore, under the policy, if any fire accident had taken place, causing damaged to the building Insured, Insurer should indemnify the loss, otherwise the purpose of taking insurance will be frustrated.
10. According to the complainant, there was a fire accident in the insured premises on 14.7.2002, causing damage to the stock worth of Rs.32,19,167/-. When this was reported to the opposite parties, the second opposite party being the interested person, in securing the assured sum, being the lender to the complainant, lodged a claim under Ex.B6 on 25.09.2002. The Insurance Company, promptly appointed a Surveyor to assess the loss due to fire accident on the belief, that fire should have occurred in the premises insured. The Surveyor [Comtec] inspected the business premises, enquired the incident and noticed that the fire damaged the building No.41, affecting the stock stored therein alone, and not causing any damage to the building or not causing any damage to the stock in Door No.42-C, Sidco Industrial Estate, which premises alone was insured. However, the Surveyor felt, considering the terms available in the policy, that the insured has an ADD ON peril towards Temporary Removal Clauses and the insured is entitled to the value upto 10% of the total sum assured. On that basis, he reported to the first opposite party, that the net loss adjusted was Rs.3,63,680/- [Ex.B1]. Based upon the Surveyors report, the first opposite party also offered to pay the above said sum, communicated the same to the complainant or the second opposite party, which they have refused to accept.
Instead of accepting the amount offered, taking advantage of the Arbitration Clause available in the policy, the first opposite party sent a communication, to refer the matter for Arbitration, as if, the quantum alone is in dispute. At that stage, as reported before us by the parties, the first opposite party withdrew the offer and refused to concede for Arbitration also.
Therefore, the complainant accusing the first opposite party, as if, they have committed deficiency in service, have filed this case as said before, which is opposed.
11. The crux of the matter in this case is, whether the fire accident had taken place in the premises, insured or not. In the Policy [Ex.A1], the insured premises is described as No.42-C, Sidco Industrial Estate, Harvey Road, Tirupur, and no other places are included or added. Only for this premises alone, license also obtained, other documents are also came into existence, even as pleaded by the complainant in the complaint. Thus, without any hesitation, we can come to the conclusion, that the first opposite party had given insurance coverage for the period from 13.09.2001 to 12.09.2002 only for the above said premises, not for any other premises. Therefore, it is for the complainant to make out a case, that fire had taken place in the insured premises namely Door No.42-C. In case, if the goods manufactured are stocked elsewhere and damaged due to fire, generally on the basis of the Ex.A1-Policy, the complainant is not entitled to the reimbursement, to the entire extent, whereas if at all, if there is any provision as ADD ON Policy, that should be applied, there cannot be any quarrel. The complainant has not filed any document, indicating that the fire had taken place in Door No.42-C, though he was carrying on business in that premises. On the other hand, the Surveyor, who had inspected the premises, has come to the definite conclusion, that the stock at Godown at Door No.41, Sidco Industrial Estate, adjacent to the insured building, fire had taken place and not at Door No.42-C, Sidco Industrial Estate, Tirupur, which is not challenged, by producing the Fire Brigades report, which should disclose ordinarily where the fire accident had taken place. Therefore, accepting the Surveyors report, as well as the Proof Affidavit filed on behalf of the first opposite party, in the absence of alternate proof, we come to the conclusion that fire had occurred only at Door No.41, which is also supported by a statement available in the Surveyors report, given by one Kumaraswamy from whom the complainant had taken a portion of premises in Door No.41, for stocking the goods. In the letter, Mr.Kumaraswamy has informed the Surveyor, that the complainant is using their premises, that is Door No.41, and in that place, they are doing the business, which is carried out in Door No.42-C, thereby indicating unquestionably, fire had taken place in Door No.41, which is not the subject matter of the policy or in other words, Door No.41, was not covered under the policy.
Therefore, the non-settlement of the claim to the extent of Rs.32,19,167/- as claimed by the complainant, even assuming that is the value of the damaged goods, cannot be treated or construed as deficiency in service, as held by the National Commission in Sadhu Ram Mittal Vs. United India Insurance Company Ltd & Anr reported in III (2010) CPJ 368 (NC) wherein it is held, claim repudiated as loss occurred, which is not covered by the Insurance Policy, will not come within the meaning of deficiency in service.
12. The Surveyor in his Report-19.11 has observed The policy of the insured however has an ADD ON peril towards Temporary Removal Clause for the stock which permits storage for any process at any uninsured premises for value upto 10% of the total sum insured, which is available, in the policy also for temporarily removal of stocks.
It is not the case of the complainant, that they have temporarily stocked the goods at Door No.41 since there was no place in Door No.42-C. Despite this fact, in order to help the Insured, claim being genuine in the sense, there was fire accident in Door No.41, causing damage to the stock, invoking the clause available in the policy, Surveyor has recommended 10% of the total sum insured namely Rs.3,63,680/-, on which basis, an offer was made under Ex.A12, with discharge voucher, declined by the complainant under Ex.A13.
When the complainant has declined to accept the offer and preferred to take the matter for Arbitration under Ex.A17, at that stage, first opposite party withdrew the offer under Ex.A18, which alone appears to be deficiency in service. The Insurer having offered to pay the sum assessed as loss by the fire, as per the Surveyors report, should have honoured the same irrespective of the fact, the complainant had taken steps for Arbitration and this withdrawal alone should be construed as deficiency in service. On that basis, the complainant is entitled to the offer amount, which cannot be denied, by the first opposite party, forgetting their own Surveyors report, which cannot be easily brushed aside. Therefore, we felt, the complainant is entitled to this amount, and when we put this question to the complainant, they have filed a Memo stating, that they are willing to receive the sum of Rs.3,63,680/-, from the first opposite party as per their letter dated 13.11.2002 with interest, as full and final settlement of their claim, which is recorded by this Commission, on 15.02.2012. For the reasons assigned by us, as well as on the basis of the consent given by the complainant, as per the Memo, we are willing to pass an award for the above said amount, with reasonable interest from the date of withdrawal of the offer, that will take care of compensation for deficiency in service.
13. An attempt was made in the Written Version to say as if, the claim is barred by limitation. True, fire had taken place on 14.7.2002 and the claim was not filed before this Commission, within two years that is on or before 14.7.2004, whereas, the complaint was filed on 13.06.2005. Therefore, it may appear, as if, the claim is barred by limitation which cannot be so in this case considering the offer made by the first opposite party, then withdrawal by the first opposite party, then alone giving cause of action, for the complainant to come before this Commission. In this view, for the purpose of this case, we conclude, the case is not barred by limitation, on the facts and the circumstances of the case and this cannot be precedent for any other case. For the above reasons, these two points are answered accordingly.
POINT NO.3:
14. In the result, the complaint is allowed in part, directing the first opposite party, to pay a sum of Rs.3,63,680/- with interest thereon at 9% per annum from the date of withdrawal of the offer, by the first opposite party on 03.03.2003 [Ex.A18] till the date of payment with cost of Rs.5,000/-. Rest of the claim is dismissed without costs. Time for payment - three months, from the date of receipt of copy of this order.
A.K. ANNAMALAI M.THANIKACHALAM JUDICIAL MEMBER PRESIDENT Documents of the complainant:
A1 -- Insurance Policy.
A2 14.07.2002 Letter from complainant to first OP.
A3 14.07.2002 Letter from complainant to second OP.
A4 26.07.2002 Letter from Surveyor to complainant.
A5 14.08.2002 Letter from Complainant to Surveyor.
A6 05.09.2002 Letter from Complainant to Surveyor.
A7 25.09.2002 Letter from 2nd OP to 1st OP.
A8 25.09.2002 Claim Form.
A9 07.10.2002 Letter from 2nd OP to 1st OP.
A10 31.10.2002 Letter from 2nd OP to 1st OP.
A11 05.11.2002 Letter from Surveyor to Complainant.
A12 07.11.2002 Letter from 1st OP to 2nd OP.
A13 11.11.2002 Letter from 2nd OP to 1st OP.
A14 13.11.2002 Letter from 1st OP to 2nd OP.
A15 14.11.2002 Letter from 2nd OP to 1st OP.
A16 20.11.2002 Letter from 2nd OP to 1st OP.
A17 13.02.2003 Letter from complainant for reference to Arbitration.
A18 03.03.2003 Letter from 1st OP to 2nd OP.
A19 03.03.2003 Letter from 1st OP to complainant.
A20 17.03.2003 Letter from complainant to 1st OP.
A21 31.03.2003 Letter from 1st OP to Arbitrator.
A22 09.04.2003 Letter from 1st OP to Complainant.
A23 07.02.2005 Letter from complainant to 1st OP.
A24 03.03.2005 Letter from 1st OP to complainant.
A25 01.09.1995 Lease Deed.
A26 12.12.1995 Certificate of Exporter.
A27 30.01.1996 CST Registration.
A28 30.01.1996 TNGST Registration.
A29 22.02.1996 SSI Registration Certificate.
A30 15.07.1996 FIRM Registration Certificate.
A31 12.12.1996 RBI Registration.
A32 -- Other Insurance Policies.
Complainants Additional Type Set:
A33 12.02.2011 Letter from the KVB to the Complainant about the rate of interest.
Document of the 1st Opposite Party:
B1 -- Survey Report dated 23.10.2002 of M/s.Comtec.
Document of the 2nd Opposite Party:
B1 26.04.2002 Letter of Hypothecation executed by the complainant in favour of the second opposite party bank.
B2 28.06.2002 Letter of Hypothecation executed by the complainant in favour of the 2nd OP.
B3 28.06.2002 Letter of Hypothecation executed by the complainant in favour of the 2nd OP.
B4 13.09.2001 Insurance Policy taken together by the complainant with 2nd OP Bank for the Hypothecated Stocks.
B5 25.09.2002 Lodging of complainant with the 1st OP by the 2nd OP Bank.
B6 07.11.2002 Letter from the 1st OP to the 2nd OP Bank.
B7 13.11.2002 Letter from the 1st OP to the 2nd OP Bank.
A.K. ANNAMALAI M.THANIKACHALAM JUDICIAL MEMBER PRESIDENT