State Consumer Disputes Redressal Commission
Pema Namgyal Kazi vs The Senior Branch Manager, New India ... on 18 March, 2020
THE STATE CONSUMER DISPUTES REDRESSAL
COMMISSION, SIKKIM AT GANGTOK
DATED : 18th MARCH, 2020
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CORAM : THE HON'BLE MRS. JUSTICE MEENAKSHI MADAN RAI, PRESIDENT
MR. T. P. KOIRALA, MEMBER
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Consumer Complaint No.01 of 2017
Appellant : Pema Namgyal Kazi
versus
Respondents : The Senior Manager,
New India Assurance Company Limited and Others
Application under Section 17 of the
Consumer Protection Act, 1986
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Appearance
Mr. Souri Ghosal, Advocate for the Complainant.
Mr. Sudesh Joshi, Advocate for Respondent/Opposite Party
No.1.
Mr. J. K. Chandak, Advocate for Respondent/Opposite
Party No.2.
None for the Advocate for Respondent/Opposite Party
No.3.
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JUDGMENT
Meenakshi Madan Rai, President
1. The Complainant is the owner of a four storied residential building (since demolished) at Pakyong Bazaar, East Sikkim. He insured the property by obtaining a "Standard Fire and Special Perils Policy" from the Opposite Party No.1- Insurance Company (in short, "OP 1") and deposited the relevant premia which were duly adjusted from his loan account with the Opposite Party No.2-Bank (in short, "OP 2"). The terms and conditions of the Policy were allegedly not made Consumer Complaint No.01 of 2017 2 Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others available to the Complainant either by OP 1 or OP 2. Only on completion of payment of loan a copy of the Insurance Policy document was handed over to him by the OP 2. The entire building of the Complainant collapsed in April, 2015, due to construction of the Airport at Pakyong, wherein damages were assessed at Rs.1,09,64,413/- (Rupees one crore, nine lakhs, sixty four thousand, four hundred and thirteen) only. The Complainant therefore sought compensation for the damages from the OP 1 who for its part appointed Opposite Party No.3- Surveyor (in short, "OP 3"), to conduct a survey which was concluded on 16-10-2015. The report of the OP 3 assessed the depreciated value of the property at Rs.68,57,427/- (Rupees sixty eight lakhs, fifty seven thousand, four hundred and twenty seven) only. The OP 3 opined in his report that the Complainant had received compensation from the Airports Authority and therefore was not entitled to receive any compensation out of the Insurance Policy. No payment was made to the Complainant by the OP 1 despite the assessment made by OP 3. That, thereafter the Complainant issued a legal Notice on the OP 1 requiring them to release his claim within fifteen days from the date of receipt of notice, in vain. Hence, the prayers below as enumerated in the Complaint;
(a) An order of compensation and/or reimbursement of Rs.68,57,427/- (Rupees sixty eight lakhs, fifty seven thousand, four hundred and twenty seven) only, towards the compensation out of the Insurance Policy.
Consumer Complaint No.01 of 2017 3Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others
(b) An order of compensation of Rs.20,00,000/-
(Rupees twenty lakhs) only, towards mental pain, agony and harassment.
(c) A cost of Rs.1,50,000/- (Rupees one lakh and fifty
thousand) only, as costs of the present
proceedings.
(d) Any other order(s) as the Complainant may be
found entitled to both in law and in equity.
2. The OP 1 filed his written version repudiating the claims of the Complainant and averred that the Complaint is not maintainable either in law or on facts and the Complainant cannot be defined as a 'consumer'. That, infact the building of the Complainant was damaged due to the ongoing construction of the Pakyong Greenfield Airport undertaken by the Airports Authority of India and the Complainant is required to furnish proof of the loss assessed to the tune of Rs.1,09,64,413/- (Rupees one crore, nine lakhs, sixty four thousand, four hundred and thirteen) only. In any event, the building of the Complainant was not damaged due to any of the events mentioned in the Policy terms of the "Fire and Special Perils Policy" but was a consequence of the ongoing construction of the Pakyong Airport, towards which the Complainant has already received compensation from the Public Authority on whose orders the concerned building was demolished. Hence, no liability of the OP 1 arises. The Complaint be dismissed with exemplary costs.
3. OP 2 also filed its written version and averred that the Complainant had obtained Cash-Credit Loan from them and Consumer Complaint No.01 of 2017 4 Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others given a withdrawal form of the insurance amount to the OP 1, with instructions to remit the amount towards the Insurance Policy, which was complied by the OP 2, by issuing a Demand Draft. The OP 2 denied that the Policy documents or its terms and conditions were not made over to the Complainant and averred that on repayment of the entire loan, the OP 2 returned all the original documents pertaining to the mortgaged property along with original Insurance Policy papers to the Complainant. That, the OP 2 is unaware of the condition of the property of the Complainant after the closure of loan. That, infact no cause of action arises against the OP 2 and the Complaint be dismissed against the OP with costs.
4. On the basis of the pleadings and after hearing Learned Counsel for the parties, the following issues were settled for determination;
(i) Whether the Complainant can claim compensation against the insurance done by him with the Respondent No.1, in addition to the compensation already granted to him by the Airport Authority of India/Government on account of destruction to his dwelling house, due to the construction of the Pakyong Airport?
(ii) Whether the Complaint is maintainable or not?
5. The Complainant examined himself as his witnesses while both the OPs had no witnesses to examine. On closure of the evidence, the final arguments of the parties were heard.
6. Advancing his argument for the Complainant Learned Counsel urged that the Complaint is maintainable as it Consumer Complaint No.01 of 2017 5 Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others is evident that the Complainant is a Consumer having paid the requisite premia for the Insurance Policy and thereafter hired the services of the Insurance Company, thereby bringing him within the ambit and definition of 'Consumer' as provided under Section 2(d) of the Consumer Protection Act, 1986. That, the instant Complaint was filed on 17-11-2017 well within the period of limitation as prescribed by the Statute. On this count, it was contended that the agent of the OP 3 surveyed the property on 31-08-2015 after damages had occurred to the building in April, 2015. The OP 3 then submitted his report on 16-10-2015. Despite submission of the report as no response emanated from the OP 1 the legal Notice came to be issued by the Complainant to the OP 1 on 17-07-2017. As the Notice remained unresponded the cause of action continues thus the filing of the Complaint on 17-11-2017 is well within the period of limitation. That, the agreement of insurance is a contractual liability and the insurer is bound to honour the terms of the contract, besides, the OP 1 has not repudiated the claim of the Complainant by any official communication. That, although the OP 1 now asserts that the damages occurred due to construction of the Pakyong Airport, but no evidence was led by OP 1 to establish this fact. The terms and conditions of the Policy were not made over to the Complainant and in any event loss occurring to the insured by Subsidence and Landslide including Rock Slide, in terms of the Insurance Policy at Clause VIII are to be compensated. That, the earthquake in April, 2015, was the reason for the subsidence and therefore well Consumer Complaint No.01 of 2017 6 Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others within the ambit of the insurance Clause supra. That, Clause XII(A) "General Exclusions" which enumerates grounds on which compensation cannot be granted does not cover the circumstances of the instant case. That, there is no Clause in the Insurance Policy which debars the Complainant from receiving the insured amount in addition to compensation granted to him by the Airports Authority of India.
7. Learned Counsel for the OP 1 in response to the afore-enumerated arguments admitted that the Complainant is a consumer and therefore had no further arguments to advance on that count. However, it was contended that no cause of action has arisen in the instant matter and the Complaint is barred by the period of limitation prescribed in the Statute. That, the report of OP 3 came to be completed on 16-10-2015 and the averments of the Complainant indicate that he was in the know of this development. Consequently, the Complaint ought to have been filed on or before two years thereafter. The Complaint came to be filed beyond the period of limitation and is therefore not maintainable. According to Learned Counsel Clause V at Page 2 of the terms and conditions of the Insurance Policy excludes the Complainant from claiming the compensation as the damage to his property was not on account of "external violent means" but was the outcome of the executive orders of the Government issued after his due consent. Had the building been demolished on account of external violent means then the OP 1 would be liable. Exhibit 1, the Evidence-on-Affidavit of the Complainant reveals that the Consumer Complaint No.01 of 2017 7 Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others building collapsed due to construction activities carried out for the Pakyong Airport and Exhibit 4 is the Assessor's Reports relied on by the Complainant which indicates that there were no signs of landslide in the area nor did not the building have cracks due to earthquake. This document clarifies the fact that the Complainant allowed demolition of his building pursuant to accepting compensation of Rs.1,09,64,413/- (Rupees one crore, nine lakhs, sixty four thousand, four hundred and thirteen) only, received by him. In the next leg of his argument, it was contended that the exclusion clause at Clause VIII(e) does not cover the Complainant as the destruction to the building was not because of subsidence or landslide/rockslide but was due to demolition duly ordered by the Government for which compensation was provided. Hence, the Complaint deserves no other fate but a dismissal.
8. Learned Counsel for the OP 2 contended that no relief has been claimed from them by the Complainant. However, he has no objection to the submissions of the Complainant to the effect that a sum of Rs.25,000/- (Rupees twenty five thousand) only, was paid as premium for the Insurance Policy of the Complainant through OP 2.
9. Having heard Learned Counsel for the parties at length and given due consideration to their submissions and after perusing the documents on record, it is but apposite to discuss the Issue No.1 settled for determination supra. Consumer Complaint No.01 of 2017 8 Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others
10. From a careful perusal of the averments and the documents on record, it may be pointed out that the Complainant nowhere in his pleadings has averred that his building was destroyed on account of earthquake. In Paragraph 6, it is averred as follows;
"6. The said entire Building of the Complainant was damaged and subsequently collapsed, due to Construction of the Airport at Pakyong, the damage was assessed at Rs.1,09,64,413/-."
In his Evidence-on-Affidavit, the Complainant reiterated the averments. Under cross-examination, he stated inter alia as follows;
"....................... I do not remember the date, month and year when I lodged claim with OP No.1 for damage caused to my building. I do not remember if I had lodged the claim with OP No.1 for the damage caused to my building due to earthquake. I cannot say whether or not I made a claim for compensation with OP No.1 on the ground that my building had suffered damages due to the construction activities of Pakyong Airport. It is not true to suggest that the Loss Assessor Mr. Indranil Bhattacharjee after making the inspection of the building came to the conclusion that it was due to the activities carried out for the Pakyong Airport that my building had suffered cracks and had fallen down. I cannot say if my building had been demolished due to earthquake or the construction activities undertaken at Pakyong Airport. It is true that the Officers from the Government of Sikkim came to my property and assessed the damage which had occurred to my building on account of the construction of the Airport nearby. It is true that the Government compensated my loss by paying me a sum of Rs.1,09,64,413/-(Rupees one crore, nine lakhs, sixty four thousand, four hundred and thirteen) only. It is true whatever loss I suffered has been compensated by the Government. It is true that my building collapsed due to the construction activities carried out at the nearby Pakyong Airport and not due to any natural calamity. ................................."
11. The evidence on record is revelatory of the fact that the Complainant is unaware as to whether the destruction to Consumer Complaint No.01 of 2017 9 Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others his building occurred due to an earthquake or whether it was the outcome of the construction of the Pakyong Airport. It unequivocally emerges that the Government assessed the losses meted out to his building on account of the construction of the Airport and compensated him by paying him Rs.1,09,64,413/- (Rupees one crore, nine lakhs, sixty four thousand, four hundred and thirteen) only. He admits that whatever losses he suffered was duly made good by the Government paying him the amount assessed as his loss. Nevertheless, it must be borne in mind that the Insurer is liable to pay the insured if the grounds in the Policy are fulfilled and the Complainant makes out sufficient grounds for payment of compensation by the Insurer in terms of the Policy thereto. I would therefore be apposite to examine the terms and conditions of the Policy relied on by both parties to assess whether the Complainant has made out a case for payment of compensation by OP 1 to him.
12. Clause VIII of the Insurance Policy, viz., "Standard Fire and Special Perils Policy", is extracted herewith for easy reference;
"VIII. Subsidence and Landslide including Rock Slide Loss, destruction or damage directly caused by Subsidence of part of the site on which the property stands or Landslide / Rockslide excluding :
a) the normal cracking, settlement or bedding down of new structures,
b) the settlement or movement of made up ground,
c) coastal or river erosion,
d) defective design or workmanship or use of defective materials, Consumer Complaint No.01 of 2017 10 Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others
e) demolition, construction, structural alterations or repair of any property or groundworks or excavations.
[emphasis supplied] "
13. Evidently, the Policy compensates losses which occur on account of destruction or damage directly caused by subsidence of part of the site on which the property stands or landslide/rockslides but excludes the occurrences as delineated in Clause VIII(a) to (e). Clause VIII(e) which is relevant for the present purposes clearly mentions that loss due to demolition, construction, structural alternation or repair of any property or groundworks or excavations is excluded from such Insurance, in other words the insured will not be compensated for damages which occur on the grounds supra. While bearing this in mind we may now relevantly allude to the provisions of Clause V of the Policy which reads as follows;
"V. Riot, Strike and Malicious Damage Loss of or visible physical damage or destruction by external violent means directly caused to the property insured but excluding those caused by
a) Total or partial cessation of work or the retardation or interruption or cessation of any process or operations or omissions of any kind.
b) Permanent or temporary dispossession
resulting from confiscation,
commandeering, requisition or destruction by order of the Government or any lawfully constituted Authority.
c) Permanent or temporary dispossession of any building or plant or unit of machinery resulting from the unlawful occupation by any person of such building or plant or unit or machinery or prevention of access to the same.
d) Burglary, housebreaking, theft, larceny or any such attempt or any omission of any kind of any person (Whether not such act is committed in the course of a disturbance of public peace) in any malicious act.
Consumer Complaint No.01 of 2017 11Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others If the company alleges that the loss / damage is not caused by any malicious act, the burden of proving the contrary shall be upon the insured. Terrorism Damage Exclusion Warranty :
....................................................................................."
This Clause elucidates that loss on account of visible physical damage or destruction by external violent means directly caused to the property insured will be compensated provided such damage or destruction is not on account of the grounds excluded and extracted supra.
14. Exhibit 4 the report of OP 3 relied on by the Complainant belies his case as the report details as follows;
"...................................................................... SURVEY:
The undersigned visited the insured premises on 10/10/2015 and on that date insured representatives were absent and in absence of the insured checked the damages in the insured residential building at Chalamthang, Pakyong Bazar, P.O. Pakyong, East District, Sikkim. On 15/10/2015 visited Pakyong to enquire the details of the compensation allotment and reason of damages.
On scrutiny the undersigned observed that ground soils were intact, the structure bears no sign of damages due to land slide or cracks due to earth quake having special feature.
............................................................................. The undersigned in the process of the enquiry meet with the land records department and get informed that a large number of house and building was declared unsafe for the Green field Airport constructed in Pakyong Bazar, Dickling, Kartok. Not specifically mentioned in the stated documents of the local administration but the documents procured by application of RTI confirm that 164 nos of residential building within the periphery of Green Field Airport was effected and those have paid with the compensation for their house. This insured residence is in the area of Pakyong bazaar and he was also paid compensation or in the process of getting compensation.
...............................................................................Consumer Complaint No.01 of 2017 12
Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others The undersigned in receipt of the study report from the CSIR - Central Building Research Institute Roorkee 247667 and it was also made confirmation that three village of the Pakyong sustained severe to moderate damages in the constructed portion. This damages were visualized in form of severe to minor cracks and the CSIR - Central Building Research Institute Roorkee 247667 was deputed to undertake "Study on instrumentation and Monitoring of Building and Retaining wall of Green Field Airport Pakyong in Sikkim to assess the distress in Building and RE wall and slope stability evaluation" In this connection the representative of the institute first visited (The project personnel) the location on 18th February 2014. This policy was secured/issued on 2012 and the cracks were formed within this period was not intimated to the insurer. It was transpired from the documentary evidence that that the building's cracks were formed prior to the happening of the earth quake on 25/04/2015.
...............................................................................
2) It is a fact the insured have knowledge that the government authority will paid or in the process of payment compensation of the building. We checked the records from the AAI officials and the Sub Divisional Magistrate of Pakyong and get confirmed that Sr no 155 of the compensation awarded person is the insured himself. There was specific mention of the landed area and plot as well as Khatian was also matched.
3) It was evident from physical inspection as well local enquiry that numbers of residential building and other property was in the verge of demolition and the insured was also in the process of demolition of these building.
..............................................................................."
15. Admittedly, the building of the Complainant as per his own evidence was destroyed due to the construction of the Pakyong Airport. It was not on account of any of the reasons as emanates in the Clause which would make the OP 1 liable to compensate him. Resultant, in the absence of proof that the Consumer Complaint No.01 of 2017 13 Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others damage to the building was due to earthquake this Commission is constrained to opine that in view of the admitted stand of the Complainant the question of OP 1 compensating him in addition to the compensation granted by Airports Authority of India and already paid, would not arise. Had the Complainant been able to prove that earthquake had initially damaged his building then notwithstanding the fact that demolition occurred subsequently he would have been eligible for compensation by OP 1. But in the given facts, circumstances and evidence before this Commission the question of OP 1 compensating him over and above the compensation granted by the Airports Authority of India does not arise.
16. This Commission is aware that once a contract is entered into the contracting parties are liable to honour the terms of the contract. However, it also falls upon the person making any claim to establish his case obviously not by the standard of beyond reasonable doubt but to the extent of preponderance of probability, which, however is also lacking in the instant matter.
17. While discussing Issue No.2 it needs no reiteration that Section 24 of the Consumer Protection Act, 1986, lays down as follows;
"24. Finality of orders .............................. 24A. Limitation period.--(1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.
(2) Notwithstanding anything contained in sub-section (1), a complaint may be entertained Consumer Complaint No.01 of 2017 14 Pema Namgyal Kazi vs. The Senior Manager, New India Assurance Company Limited and Others after the period specified in sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period:
Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay.
24B. Administrative control ....................."
Paragraph 9 of the Complaint reads as follows;
"9. Accordingly, the respondent No.1 appointed respondent No.3, who concluded his survey on 16/10/2015 and submitted his report. A copy of the said report is annexed herewith and marked with letter "C"."
This Paragraph reveals that the Complainant was well aware of the steps taken by the OP 1 and OP 3 who had submitted his report on 16-10-2015. The Complaint came to be filed only on 17-11-2017 beyond the period of limitation. Hence, the Complaint is not maintainable.
18. Issues decided accordingly.
19. Consequently, the Complaint stands dismissed and disposed of.
Sd/ ( Justice Meenakshi Madan Rai ) President 18-03-2020 Sd/ ( T. P. Koirala ) Member 18-03-2020 Approved for reporting : Yes ds