State Consumer Disputes Redressal Commission
The Branch Manager, New India Assurance ... vs Debendra Kumar Lokchandani, S/O Suresh ... on 30 May, 2014
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, ODISHA, CUTTACK FIRST APPEAL NO. 225 OF 2013 (From an order dated 23.4.2013 passed by the District Consumer Disputes Redressal Forum, Jharsuguda in C.C. No. 30 of 2012) The Branch Manager, New India Assurance Company Limited, 1st Floor, Mishra Complex, Mangal Bazar Road, Dist: Jharsuguda, Odisha, now represented through Deputy Manager, M/s New India Assurance Company Limited, Badambadi Kathajodi Road, Badambadi, Cuttack. Appellant Vrs. Debendra Kumar Lokchandani, Aged about 32 years, S/o Suresh Kumar Lokchandani, R/O Mangal Bazar Road, Dist: Jhsrsuguda, Odisha. Respondent ____________ For the appellants : Mr N.B.Das, Advocate For the respondent : None _____________ P R E S E N T: THE HONBLE SHRI JUSTICE R.N.BISWAL, PRESIDENT, SMT. SMARITA MOHANTY, MEMBER AND SHRI G.P.SAHOO, MEMBER DATED: THE 30TH MAY, 2014 O R D E R
JUSTICE R.N.BISWAL, PRESIDENT The appellant calls in question the order dated 23.4.2013 passed by the learned District Consumer Disputes Redressal Forum, Jharsuguda (hereinafter referred to as District Forum) in Consumer Complaint no. 30 of 2012 wherein it was directed to pay a sum of Rs.10,53,949.11 paise with interest at the rate of 9% per annum from 20.5.2008 along with sum of Rs. 5,000/- towards litigation cost to the respondent. Respondent was the complainant and appellant was opposite party in the aforesaid Consumer Complaint before the learned District Forum.
As per the case of the complainant, he is the Proprietor of M/s Mateswari Enterprises, Mangal Bazar Road, Jharsuguda and a Super Stockiest of Parle Biscuits and distributor of other products. He hypothecated his stocks to the State Bank of India, Main Branch, Jharsuguda in the year 2003-2004. Through the said Bank, he took a fire policy against the aforesaid shop and godown vide Policy no.550904/11/07/11/00000014, which was renewed from year to year till 25.4.2007 to 24.4.2008 and the assured sum was fixed at Rs.32,00,000/-. On 26/27.9.2007 night, fire broke out in the said shop and godown due to electrical short circuit and the stock of Parle G Biscuits were burnt and damaged, for which complainant sustained loss of Rs.12,00,000/-. Immediately, he informed the Financer Bank about it, who lodged a claim with the opposite party without delay. On 26.9.2007, he had total closing stock of value Rs.32,94,390/- in the aforesaid premises. On being deputed by opposite party, the Surveyor Esen Den, Bhubaneswar visited the site on 28/29.9.2007 and made extensive enquiry from the complainant. Again another Surveyor namely, Ajit Nanda of Cuttack being duly appointed, visited the affected site on 26.3.2009 and made extensive enquiry. Complainant cooperated both the Surveyors to their satisfaction. Opposite party vide its letter no. 293 dated 11.8.2009 sought for a clarification from the Manager, State Bank of India, Jharsuguda as to whether the stock kept in the affected godown were hypothecated to it or not. In view of the statement contained in the proposal form, the Bank replied to it affirmatively vide letter no.29/223 dated 18.9.2009. But as the opposite party slept over the matter, State Bank of India vide letter dated 2.12.2010 requested it to settle the claim in view of tie up between the State Bank of India and the opposite party Company, but it did not cut any ice. Again the Bank on 15.4.2011 wrote to the opposite party expressing its dissatisfaction in the matter, on receipt of which, opposite party sent an antedated letter of repudiation dated 30.3.2011 to the Bank with a copy to the complainant, which was received by the latter on 20.4.2011. The claim was repudiated on the ground that as per declaration in the proposal form, the shop M/s Mateswari Enterprises was insured, but the fire occurred in the godown on 7.9.2007 which was not covered under the aforesaid policy. It is the case of the complainant that his place of business was not described with reference to any plot number or holding number of Municipality and boundaries thereof in the proposal form submitted by his Bank before it. The misstatement of fact as shop in the proposal form that too which was not signed by the complainant cannot form the basis to repudiate the claim of the complainant. On 19.11.2007, complainants Bank wrote a letter to the opposite party along with loan sanctioned papers and stock statements from June, 2006 to August, 2007 and requested it to rectify the policy by inserting the word godown in place of shop and process the claim of the complainant. Despite such letter, opposite party failed to appreciate that the place where the hypothecated stock was kept was meant to be covered by the Bank as per the proposal form submitted by it.
The further case of the complainant is that in the year 2005, he got another shop from his cousin grandfather Hiralal Lokchandani in the same location and extended his sales counter to it for the convenience of his customers. However, without taking into consideration all these facts, opposite party repudiated the claim on vague grounds, which amounts to deficiency of service on its part. So, he filed the aforesaid Consumer Complaint with prayer to direct the opposite party to settle the claim at Rs.12,00,000/-, to pay interest at the rate of 18% per annum from the date of fire till the date of payment, to pay compensation of Rs.2,00,000/- for mental and physical harassment and cost of litigation.
Opposite party in its written version admitted that it had issued a Standard Fire and Special Perils Policy bearing no. 550904/11/07/11/00000014 in the name of State Bank of India, Jharsuguda M/s Mateswari Enterprises to cover the risk of shops dealing in goods otherwise not provided for including Laundries situated at M.B.Road, Jharsuguda. The policy further contains that the shop was a grocery shop and the stock was hypothecated to State Bank of India, Jharsuguda. During the currency of the policy, it was intimated by the Bank to the opposite party that on 26/27.9.2007 at night time, the goods stocked in the said shop were destroyed by fire. Immediately on receipt of said information, opposite party deputed its surveyor and loss assessors to ascertain the fact of breaking out of the fire and to ascertain the loss of property damaged. The surveyor and loss assessor assessed the loss at Rs.7,82,750/- after due deduction under insurance policy excess. Opposite party received report on 4.8.2009. Thereafter, it applied its mind to the claim of the insured and found that the premises insured was shop but the fire took place in a godown. Accordingly, it rightly repudiated the claim.
After going through the pleadings, documents and hearing the counsel for the parties, the learned District Forum held that on receipt of the claim form duly filled in, opposite party deputed two surveyors to the premises to assess the loss. On 28/29.9.2007, the first surveyor and loss assessor assessed the loss at Rs. 10,53,949.11 paise whereas on 26.3.2009, the second surveyor and loss assessor assessed the loss at Rs.7,82,750/. There was a tie up between the Bank and the opposite party. In the year 2003, the proposal form was filled in seekeing coverage of the grocery shop having paid up capital of Rs.20,00,000/- of the firm which was renewed from time to time and on 25.4.2007, it grew to Rs.32,00,000/-. In the meantime, the shop was developed to a Shop-cum-Godown having a road in between, which was in the knowledge of Bank. Since it was not mentioned as shop-cum-godown in the original policy, it was the duty of State Bank of India to make necessary rectification in the policy after the shop developed to a shop-cum-godown. Again two surveyors were deputed to assess the loss differently and accordingly, learned District Forum passed the impugned order against which the present appeal has been preferred.
At the time of hearing, none appears on behalf of the respondent, who was the complainant before the District Forum. Hence, this order is passed ex parte.
Learned counsel for the appellant submits that in Column no.3 of the proposal form as against business of proposer, it has been mentioned as grocery shop and again in column no. 16 as against if used as warehouse/godown ( not located in a manufacturing unit), please give the list of goods stored, it has been mentioned as No, which show that the grocery shop alone was insured and not the godown. In the insurance policy also it has been mentioned shop alone. Since the godown of the respondent was caught fire and not the shop, the appellants surveyor and loss assessor, Esen Insurance and Loss Assessors Private Limited in its report dated 10.3.2008 mentioned that the affected premises is completely different, which has been separated from the shop by black top road of about 20 feet. The said surveyor and loss assessor specifically mentioned in its report that the business premises, which was affected due to break out of fire was not covered under the policy. So, the appellant rightly repudiated the claim of the respondent.
Learned counsel for the appellant further submits that although the 1st surveyor and loss assessor conducted the survey since the under insurance factor was left out by it, the appellant obtained a report of the second surveyor and loss assessor Ajit Nanda in this regard, who simply calculated the loss and gave a finding that the loss was Rs.7,82,750/-. So, the learned District Forum ought not to have allowed the Consumer Complaint holding that two surveyors were engaged, who assessed the loss differently. In support of his submission, he relies on a decision in the case of Sri Venkateswara Syndicate vrs.
Oriental Insurance Company Ltd and another reported in II (2010) CPJ 1 SC.
Admittedly, as found in the proposal form and the insurance policy, the shop of the respondent was insured under Fire and Special Peril Policy. It is also found that the godown of the respondent caught fire and not the shop. The District Forum held that there was tie up between the appellant and the Bank. In the year 2003, the shop was covered under the policy. But in the meantime, it developed to a shop cum-godown having a road in between and it was within the knowledge of the State Bank of India. Since it was not mentioned as shop-cum-godown in the original policy, it was the duty of the Bank to make necessary rectification therein. Even if it was the duty of the Bank to make necessary rectification in the policy still then because of inaction of the Bank, the respondent should not suffer.
In the case of Sadhu Ram Mittal vrs. United India Insurance Company Limited and another reported in III (2010) CPJ 368 (NC), the Honble National Consumer Disputes Redressal Commission, New Delhi have held that unless a change intimated by insured to insurer is incorporated by the latter in insurance policy by way of specific endorsement, change in premises cannot be held to have been included in insurance policy.
In the present case, as there is no specific endorsement in the policy as shop-cum-godown, the appellant cannot be liable to pay the loss sustained by the respondent.
In the case of Sri Venkateswara Syndicate (Supra), the Honble Apex Court have held that there is no prohibition in the Insurance Act for appointment of second surveyor by the Insurance Company, but while doing so, the insurance company has to give satisfactory reasons for not accepting the report of the first surveyor and the need to appoint second surveyor.
In the present case, since the under insurance factor was left out by the first surveyor and loss assessor, the Insurance Company simply engaged the second surveyor to calculate the loss sustained by the respondent after deducting the under insurance and the policy excess. So as per the decision quoted above, the appellant was within its limit to engage the second surveyor. Only because two surveyors were engaged, who assessed the loss differently, it would not go in favour of the respondent.
Under such circumstances, the appeal is allowed and the impugned order is set aside.
Records received from the District Forum, Jharsuguda be sent back forthwith.
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(Justice R.N.Biswal) President (S.Mohanty) Member ( G.P.Sahoo) Member Bkm/ Member