State Consumer Disputes Redressal Commission
M/S S K Plastic Industries vs The New India Assurance Co Ltd & Anr. on 8 May, 2012
BEFORE THE HON'BLE STATE CONSUMER DISPUTES REDRESSAL
BEFORE THE HON'BLE STATE CONSUMER DISPUTES
REDRESSAL
COMMISSION, MAHARASHTRA,
MUMBAI
Miscellaneous Application No.MA/11/42 a/w.
Complaint Case No. CC/11/24
1. M/S S K PLASTIC
INDUSTRIES
FACTORY AT PLOT NO
257/P & 258/P VILLAGE CHANOD , 40 SHED AREA GIDC VAPI TALUKA PARDI
VALSAD GUJRAT &
REGD. OFFICE AT B-303
SANGITA APT. NEAR DAHISAR
TOLL NAKA DAHISAR (E)
MUMBAI 68 THROUGH
ITS PARTNER SHRI
KETAN L. MAJITHIA
...........Complainant(s)
Versus
1. THE NEW INDIA
ASSURANCE CO LTD
PLOT NO C-6 NCL
BANDRA PREMISES CO-OP SOCIETY LTD 1 ST FLOOR BANDRA -KURLA COMPLEX
BANDRA EAST MUMBAI 400 051
2. CORPORATION BANK
AT SARKAR PALACE
65 S.V. ROAD
AMBOLI NEAR RLY.
PHATAK ANDHERI (W)
MUMBAI 400 058
MAHARASHTRA
............Opp.Party(s)
BEFORE:
HON'BLE Mr.Justice S.B.Mhase
PRESIDENT
HON'BLE MR. Narendra Kawde MEMBER
PRESENT:
Mr.B.S. Talwar, Advocate for the applicant/complainant.
Mr.A.S. Vidyarthi, Advocate for the non-applicant/opponent No.1-Insurance Company.
Mr.S. Hussain, Advocate for the non-applicant/opponent No.2-Bank.
ORAL ORDER Per Justice Mr.S.B. Mhase, Honble President We herd Mr.B.S. Talwar, Advocate for the applicant/complainant and Mr.A.S. Vidyarthi, Advocate for the non-applicant/opponent No.1-Insurance Company and Mr.S. Hussain, Advocate for the non-applicant/opponent No.2-Bank.
2. The present complaint along with delay condonation application has been filed by M/s.S.K. Plastic Industries, a partnership firm of three persons, namely, Mr.Ketan Majithia, Mrs.Khemal Majithia and Mr.Sangram Majithia. Mr.Ketan Majithia and Mrs.Khemal Majithia are husband and wife and Mr.Sangram Majithia is a brother of Mr.Ketan Majithia.
This partnership firm has taken loan from the Corporation Bank-opponent No.2 of `70 Lakhs. Out of this `70 Lakhs, `50 Lakhs was taken as a term loan by pledging plant and machineries. `20 Lakhs were advanced by the Bank as a working capital. The complainant is a manufacturer of BOPP self adhesive tapes and plastic Box Strapping and the licenced manufacturing capacity of the complainant is 3000 Boxes per month. As the complainant committed a default in repayment of the loan, opponent No.2-Corporation Bank has taken steps under the Securitisation Act, 2002 and by invoking powers under Section 13(4) of the said Act, mortgaged property, namely, plant and machineries and other movable property were taken into possession by the Corporation Bank. After the assets were taken into possession by the Corporation Bank, the Corporation Bank has insured these assets with opponent No.1-Insurance Company by taking an insurance policy for burglary. The insurance policy of burglary is dated 20/06/2007 and validity of the said policy is for the period from 19/06/2007 to 18/06/2008.
It is to be noted that the policy has been taken by the Corporation Bank-opponent No.2 from the opponent No.1 for the assets of the complainant which was seized and taken into possession by the Corporation Bank under the Securitisation Act sub-Section 4(a) of Section 13. When such a possession is taken it includes rights to transfer the property for realizing secured assets. Not only that if the Bank transfers these assets, the transferee also gets a title of the property under sub-Section (6) of Section 13 of the said Act.
Therefore, one of the consequences of taking possession of the property under Section 13(4) of the said Act is that it gives rights to transfer the property either on lease, sale or otherwise and thus, as a result of the vesting of the property in the Bank such consequences in law follows. What is important is that unless the amounts are paid, the borrower is not entitled to get repossession of the said property. While this property was in the possession of opponent No.2-Corporation Bank, burglary in respect of certain movable property has taken place and thereby, opponent No.2 has lodged complaint with the Police Station after carrying out an inventory of items in respect of which theft has taken place. Said complaint was lodged on 13/03/2008. However, what is the date of burglary is not known to either of the parties.
However, after burglary, on 12/03/2008 opponent No.2 made an insurance claim to opponent No.1/Insurance Company in respect of items of the theft and burglary. Said insurance claim was repudiated by the Insurance Company/opponent No.1 on 18/03/2009. Thereafter, opponent No.2 has not challenged the repudiation of the claim till today.
3. It appears that meanwhile, the proceedings under the Securitisation Act are simultaneously pending before the Debt Recovery Tribunal (DRT in short). While proceedings were pending before the DRT, a settlement has taken place between the complainant and opponent No.2. We are not concerned with the total settlement, but one of the terms of the settlement was to the effect that rights of the opponent No.2 under the insurance policy were transferred or assigned to the complainant and that was a settlement agreement on 24/06/2008. It requires to be noted at this stage that this settlement has taken place between the complainant and opponent No.2 while insurance claim was pending before the opponent No.1 and it was not repudiated.
4. Since the insurance claim was repudiated and the opponent No.2 is not taking any further steps to claim insurance claim and, as there is a settlement between opponent No.2 and the complainant dated 24/06/2008 upon assigning the rights under the insurance policy in favour of the complainant, the complainant has come forward to file a consumer complaint.
5. What is interested to be noted is that repudiation of the claim, admittedly, has taken place on 18/03/2009. Therefore, present complainant approached the State Consumer Commission by filing a complaint No.152/2010. That was the complaint filed by M/s.S.K. Plastic Industries, namely, the present complainant. In that complaint, opponent No.1 was the Insurance Company, namely, New India Assurance Company and opponent No.2 was Corporation Bank. In the present complaint also, the complainant is the same and opponent Nos.1&2 are the same. What is interesting to be noted is that the present complaint, if perused and compared with the earlier complaint, it is ad-verbatim same with the para numbers and no where any change has been brought about in any of the paras of the present complaint. Thus, it requires to be mentioned that when the earlier complaint No.152/2010 came for admission before this Commission on 19/01/2011, partner of the said firm, Ms.Sandhya K. Majithia was present. However, name of said partner was not today disclosed. On the contrary, name of the partners which are disclosed today do not show the name of Ms.Sandhya K. Majithia. But Advocate Mr.Talwar who was appearing for the complainant in Consumer Complaint No.152/2010 is also appearing in the present complaint. There was power of attorney in favour of Ms.Sandhya Majithia and she has withdrawn said complaint by filing pursis at Exhibit Z-1 and to that effect the order on 19/01/2011 was passed by this Commission. In this fact and circumstance, subsequent complaint, namely, present complaint is filed. The fact that the earlier complaint was filed and was withdrawn should have been disclosed in this complaint. However, said fact has been suppressed.
Advocate Mr.Talwar who appeared in the earlier complaint and in the present complaint is the Advocate for the complainant and, therefore, there is no escape for him to say that said information was not given to the Advocate while drafting second complaint. As an officer of the Court, advocate is under an obligation to explain this fact in the subsequent complaint. However, said fact has been suppressed for the reasons best known to them. But one of the purposes for such suppression is to keep unaware the State Consumer Disputes Redressal Commission of the earlier facts, so that the admission in the subsequent matter should not become a difficult one.
What we find that the first complaint has been withdrawn on 19/01/2011 and second complaint has been filed on 27/01/2011 i.e. within a period of eight days. Therefore, facts were fresh for the party and the Advocate.
6. It is further required to be noted that along with the present complaint, delay condonation application has been filed and the delay which is being sought to be condoned is of 300 days, admittedly, according to the complainant. That means, when the first complaint was filed i.e. on 01/10/2010, there was delay of about 180 days. However, along with the first complaint, there was no delay condonation application. Resultantly, we inferred that since there was no delay condonation application, probably the complaint must have been withdrawn. However, from the record we find that it was withdrawn unconditionally. Subsequently, second complaint along with delay condonation application has been filed suppressing the fact of filing of earlier complaint. Therefore, what is important is that since earlier complaint was withdrawn unconditionally, the second complaint on the same cause of action is not tenable and only because delay condonation application has been filed subsequently, it will not in any way allow them to prosecute the complaint which was withdrawn.
7. Apart from that we do not want to non-suit the complainant on this technical aspect. There is one more aspect of merit which is required to be considered. The main question in the present matter is that alleged insurance policy upon which the complainant is pressing his claim is a policy taken by opponent No.2 from opponent No.1 in respect of property which was in possession of opponent No.2 in view of provisions of Section 13(4) of the Securitisation Act. The proceedings under the Securitisation Act are going on and further recovery and adjustment of the claims of the parties is pending for adjudication before the DRT or ADRT. We are told that stay has been granted by the DRT to dispose of the property by the opponent No.2-Corporation Bank. What is important for our purpose is that if the amounts are paid as per the adjudication carried out by the authorities under the Securitisation Act, namely, DRT or ADRT, the property in question which was taken into possession will have to be returned and restored back by the Corporation Bank. The claims in respect of burglary can be very well agitated before the authority and while passing an order, the claims in respect of burglary of the property which was in possession of the Corporation Bank-opponent No.2 can be considered by the said authority and accordingly decree can be passed. But we want to bring on record that the dispute tried to be adjudicated by the complainant in respect of burglary that has taken place, can very well be adjudicated in the proceedings before the ADRT and the parties have submitted to the said jurisdiction of ADRT. That is the usual existing remedy under the law. The complication which has arisen as a result of enforcing the rights of the Corporation Bank under the Securitisation Act and as a result of consequences of such exercise of rights, if any loss has been suffered by the complainant, that is a subject matter to be considered by the authorities under the Securitisation Act and fortunately, for this purpose, the parties have availed the usual existing remedy and proceedings are going on. Therefore, availing of additional remedy under the Consumer Protection Act, 1986 is unwarranted in the facts and circumstances of the case to avoid multiplicity of litigations and conflicting decisions.
8. Apart from that there is one more aspect that though there is an agreement between the complainant and the opponent No.2 for transferring the insurance rights, for such a transfer, the Insurance Company is not a party.
There is no tripartite agreement amongst the complainant, Insurance Company and Corporation Bank permitting the transfer of the insurance rights in favour of the complainant. The question is whether the complainant and opponent No.2-Corporation Bank can transfer their rights creating an obligation as against the Insurance Company in favour of the complainant. Initially, there is no privity of contract between the complainant and the Insurance Company. Secondly, the policy was taken by the Corporation Bank so as to protect the property which is in their possession and which vested in said Bank under the provisions of Securitisation Act and for safeguard of the rights of the Corporation Bank. It was not the policy taken for and on behalf of the complainant for the benefit of the complainant in order to secure the loan. Therefore, the complainant is not a beneficiary as contemplated under the definition of consumer in Section 2(1)(d) of the Consumer Protection Act, 1986. Therefore, rights under the insurance policy cannot be transferred in favour of the complainant and the complainant cannot rely upon said insurance policy as a beneficiary of said policy because under the said policy he is not a beneficiary. Thirdly, the insurance policy does not contain the clause permitting transfer and assigning of the insurable rights under the said policy to any other person. It is a policy of a burglary and when said policy is issued, the Insurance Company, apart from the premium, considered the status of the person as to whether he has a potential capacity to protect the property. For transferring rights under the said policy to some other person, the Insurance Company has to verify whether transferee has such potential capacity to protect the property or not.
In case the transfer is permitted, the Insurance Company will be suffering loss because the transferee may not have machinery to protect the insured property. Therefore, verification of the capacity of the transferee in respect of protecting property from burglary is one of the aspects to get satisfied by the Insurance Company. Therefore, in absence of consent of the Insurance Company such a transfer cannot be permitted unless the statute or rules permit to do so. Thus, considering from any angle, namely, on merit also this complaint is not tenable in law.
9. Now coming to the grounds in respect of delay condonation, the delay of 300 days has been sought to be condoned. From the delay condonation application, it is crystal clear that the fact that theft has taken place was within the knowledge of the complainant immediately after the theft had taken place. It appears that in the month of March 2008, inventory was taken by the officers of opponent No.2-Corporation Bank and they found shortage in respect of certain items and therefore, on 13/03/2008, the complaint was lodged with the Police Station. It further appears that the survey was carried out by the Insurance Company sometime on 19/06/2008 and said claim was rejected by the Insurance Company on 18/03/2009. However, by settlement agreement dated 24/06/2008 between the complainant and opponent No.2-Corporation Bank, the insurance rights were transferred to the complainant. Thus, all these facts are within the knowledge of the complainant and they were equally on the record of DRT and in spite of being aware of the fact that the claim was rejected on 18/03/2009 they have not taken any steps to file the complaint. What is important to be taken into consideration is that that the cause of action arose on the date of burglary and not on the date of repudiation of the claim under Section 24-A of the Consumer Protection Act, 1986 and therefore, they were aware that delay condonation application was very much necessary in the first complaint No.152/2010 which they had not filed. They withdrew it and consequently, this complaint has been filed along with delay condonation application. That shows the conduct of the person though one may not say that it is a fraudulent act, but it is an attempt to circumvent. First they tried to say that there is no delay from the date of repudiation and when that was not successful, they withdrew the case and thereafter, they filed second complaint with delay condonation application. However, the facts which reflected in the second complaint were also within the knowledge of the complainant since beginning. For condonation of delay, sufficient grounds are required.
What are the sufficient grounds is always a question of fact for adjudication. Sufficient grounds are those grounds which incapacitated the complainant to file a complaint within a period of limitation. In the present case, since it is a partnership firm, all the partners are in the business and there is no administrative process causing delay which required in the case of corporate sector where there are hierarchy of the officers and decision making file required to be handled by several officers. Here it is a partnership firm. All the partners are available, they are family members and therefore, decision to file complaint could have been taken immediately after the accrual of cause of action, at least immediately after the rights were assigned in their favour on 24/06/2008. However, such grounds have not been made. The grounds in the delay condonation application do not show that the complainants were incapacitated for filing complaint at any point of time. On the contrary, that shows that they were attending the proceedings in the DRT / ADRT regularly. They were aware of the proceedings and it is a simplicitor case of negligence on their part and therefore, even for condonation of delay, there are no sufficient grounds.
Therefore, considered from any angle i.e. first suppression of facts, second no privity of contract and thirdly, no sufficient grounds for condonation of delay, the complaint and delay condonation application are without any merit and are hereby rejected.
Hence, the order :-
-: ORDER :-
1. Application for condonation of delay and the complaint are hereby rejected.
2. No order as to costs.
3. Copies of the order be furnished to the parties.
Pronounced Dated 8th May 2012.
[HON'BLE Mr.Justice S.B.Mhase] PRESIDENT [HON'BLE MR. Narendra Kawde] MEMBER dd