State Consumer Disputes Redressal Commission
New India Assurance Company Ltd., vs M/S Sohan Lal & Sons on 17 May, 2013
2nd Addl. Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
First Appeal No. 958 of 2010
Date of institution: 28.5.2010
Date of decision : 17.5.2013
New India Assurance Company Ltd., Branch Office, Mal Godam Road,
Kotkapura through Sh. K.B. Bindal, Manager, Regional Office New India
Assurance Company Ltd., SCO No. 36-37, Sector 17-A, Chandigarh.
.....Appellant
Versus
1. M/s Sohan Lal & Sons, Prince Open Restaurant, Faridkot Road,
Kotkapura, District Faridkot through its Sole Prop. Sh. Yogesh
Grover S/o Sohan Lal R/o Faridkot Road, Kotkapura.
2. Krishna Kumari (wrongly written as Kumar) W/o Late Sh. Sohan
Lal, S/o Sh. Kashmiri Lal, r/o Faridkot Road, Kotkapura.
.....Respondents
First Appeal against the order dated 31.3.2010
passed by the District Consumer Disputes
Redressal Forum, Faridkot.
Before:-
Shri Piare Lal Garg, Presiding Member
Shri Jasbir Singh Gill, Member Shri Vinod Kumar Gupta, Advocate Present:-
For the appellant : Sh. Vinod Mahendru, Advocate
For the respondents : None.
PIARE LAL GARG, PRESIDING MEMBER
This is an appeal filed by the appellant/opposite party-New India Assurance Co. Ltd.(hereinafter called 'the appellant') against the order dated 31.3.2010 of the District Consumer Disputes Redressal Forum, Faridkot(hereinafter called the 'District Forum') vide which the complaint of the respondents/complainants (hereinafter called 'the respondents') was accepted by the District Forum.
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2. Brief facts of the case are that respondent No. 1 was running a business of restaurant to earn his livelihood in the building of respondent No. 2 Krishna Kumari mother of Yogesh Kumar Grover-respondent No.1 taking the building on rent at the rate of Rs. 4000/- per month. As per the terms of the rent note, respondent No. 1 was responsible to get the building insured and to pay house tax, electricity charges etc.. Respondent No. 1 purchased a policy from the appellant for the period of 12.1.2006 to 11.1.2007 vide which the building was insured for Rs. 4 lacs and all the stocks of all kinds of goods stored or lying in the said building of restaurant of respondent No. 1 like crockery, diary products, furniture, fixtures, electricity fittings, deep freezers, TV sets, refrigerator, coolers, VCD system etc. was insured for an amount of Rs. 4 lacs i.e. total for Rs. 8 lacs..
3. On 19.9.2006, suddenly the building collapsed in the early hours and the building was completely damaged. The entire stock of dairy products, raw material, eatables, fixtures, furnitures, electrical alongwith electrical appliances were also completely damaged. The intimation was given to the Police as well as to the Branch Manager of the appellant. Surveyor of Mittal Surveyors Pvt. Ltd., Bathinda was appointed to inspect and assess the loss suffered by the respondents. A loss of Rs. 4 lacs was suffered by respondent No. 1 on account of damage of furniture, fixtures, electric goods and diary products as well as due to damage of other articles alongwith loss of Rs. 6,07,500/- was suffered due to damage of building.
4. The building was damaged due to leakage/damage of the sewerage water as the sewerage pipe was laid down by the local authorities just outside the building of the respondents. The building was also got inspected to assess the loss of building from Er. Rupinder Ahuja First Appeal No. 958 of 2010 3 of Sahyog Builders and Consultants, Kotkapura, who after inspection assessed the loss of the building to the to the tune of Rs. 4,42,000/-.
5. The requisite documents were submitted by the respondents to the appellant and payment of the claim was assured by the appellant without any delay. The claim of the respondents was repudiated by the appellant on 24.9.2007 on the grounds that the cause of loss does not fall within the scope of terms and conditions of the policy and respondent No. 1 also had no insurable interest in the building.
6. The complaint was filed by the respondents with the prayer that the appellant may be directed to pay Rs. 8 lacs on account of loss of the building and stocks of articles which were lying in the building with interest @ 18% per annum from the date of loss till its payment alongwith Rs. 2 lacs as compensation on account of deficiency in service and harassment as well as litigation expenses.
7. Upon notice, the reply was filed by the appellant taking preliminary objections that there was no deficiency in service on the part of the appellant, the respondents were not entitled for any interest, the respondents do not fall under the definition of consumer as the business was being run by respondent No. 1 for commercial purpose, complicated questions of law and facts were involved as such, the District Forum was not competent to try and decide the complaint, respondent No. 1 had no insurable interest in the building. Er. Rakesh Kumar Gupta of Mittal Surveyors Pvt. Ltd. inspected the building and specifically submitted the report that the building was collapsed/damaged as the real part of the building was damaged due to wrong construction of the building. On merits, it was pleaded that respondent No. 1 was running a hotel and restaurant for commercial purposes and the building was also being used for commercial purposes. It was admitted that the building belongs to respondent No. 2. It was also admitted that the same was taken on rent by First Appeal No. 958 of 2010 4 respondent No. 1. The rent note alleged by respondent no. 1 was not binding upon the appellant, as such, the appellant was not liable to pay the loss of the building to respondent No. 1. The other averments of the complaint were also denied by the appellant. It was also denied that the building was collapsed due to entry of the sewerage water in the foundation of the building. Er. Rakesh Kumar Gupta after inspecting the building submitted his report that the building was collapsed as the insured had started addition of building at the back part of the damaged building. The insured started this disturbing longitudinal wall of the building without providing proper supports of pillar/ballies as the damaged building was a double storey as such it required a proper designing of load by structure engineer but the same measures were not taken by the respondents. It was also pleaded that the sewerage line was going alongwith front wall of the building but only back portion of the building was damaged and front portion of the building was not damaged. The building was not damaged due to entry of sewerage water in the foundation of the building, as such, the respondents were not entitled for any claim and the claim was rightly repudiated. Dismissal of the complaint was prayed.
5. The District Forum after hearing the learned counsel for the parties and going through the record, partly accepted the complaint and the appellant was directed to pay Rs. 3,02,194/- as insurance claim and Rs. 10,000/- as compensation as well as Rs. 5000/- as litigation expenses within a period of one month from the receipt of the copy of the order, failing which the appellant will pay Rs. 3,17,194/- alongwith interest @ 12% per annum from the date of filing of the complaint till realization.
6. Aggrieved against the order of the District Forum, the present appeal is filed by the appellant on the grounds that the District Forum fell in error while deciding the complaint and ignored the gross negligence committed by the respondents, the District Forum fell in error while First Appeal No. 958 of 2010 5 considering/deciding the report of the Surveyor submitted by the appellant, the claim was also not payable under the policy, the policy was issued in the name of Sohan Lal and sons whereas the building was in the name of Krishna Kumari wife of Late Sh. Sohan Lal, the building was being used for commercial purpose, as such, the District Forum was not competent to try and decide the complaint, complicated questions of law and facts were involved in the complaint, as such, the same could not be decided in summary proceedings, as such, the order of the District Forum is liable to be set-aside.
7. We have gone through the pleadings of the parties, grounds of appeal, perused the record of the learned District Forum and heard the arguments of the learned counsel for the appellant.
8. There is no dispute between the parties that the building in dispute was insured for an amount of Rs. 4 lacs and the stock of all kinds of goods stored or lying in the building i.e. restaurant, such as, crockery, dairy product, furniture, fixtures, electricity fitting, deep freezers, TV sets, refrigerators, VCD system etc. were also insured for Rs. 4 lacs with the appellant for the period of 12.1.2006 to 11.1.2007 by the respondent vide policy Ex. C-2.
9. It is also admitted fact between the parties that in the morning of 19.9.2007, the building collapsed and the material/goods lying in the building were also destroyed. Intimation regarding the incident was given by the respondents to the appellant as well as to the Police. Sh. Pramod Mittal of Mittal Surveyors Pvt. Ltd. was appointed by the appellant for the inspection of the site and to assess the loss, who inspected the site and assessed the loss to the tune of Rs. 3,28,012.50p vide his report Ex. C-46 dated 10.7.2007. He also contacted Er. Rakesh Kumar Gupta to know the reason for the collapse of the building, who has given his opinion regarding First Appeal No. 958 of 2010 6 the loss of the building vide report dated 21.6.2007. The copy of the same is at page No. 271 of the District Forum file.
10. The claim of the respondent was repudiated by the appellant vide letter Ex. C-48 on the following grounds:-
"Claim No. 360701/11/9000001 A/C YOURSELF Date of Loss 19.9.2006 With ref. to the above, we may inform that your goodself intimated loss to your building and contents lying therein. Our office deputed Surveyor to conduct survey and assess the loss. The concerned Surveyors gave their report after inspection your property and verification of documents produced by you, assessing therein amount of loss. As per Survey Report, approximate cause of loss does not fall within scope of policy terms and conditions. Further it may be noted that you do not hold any insurable interest in the building.
Hence, the competent authority of the Co. has repudiated our liability in this claim.
It is for your information pl."
11. So from the perusal of the repudiation letter, the claim of the respondent was repudiated on the ground that the cause of loss was not within the scope of policy terms and conditions of the policy and the respondent was not holding any insurable interest in the building as per the report of the Surveyor.
12. We have perused the report of the Surveyor Ex. C-46 dated 10.7.2007. The Surveyor has assessed the loss of stocks and FFF to the tune of Rs. 1,51,224/- but in the report, nowhere it is mentioned that the claim of the stock was not payable under the terms and conditions of the policy. Only it was mentioned by the Surveyor that the loss of the building was not payable under the terms and conditions of the policy as the owner of the building is respondent No. 2 i.e. mother of respondent No. 1. The policy regarding the building was purchased by respondent No. 1, who has no insurable interest in the same as well as the building was also damaged due to the negligence of respondent No. 1.
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13. It is pleaded case of respondent No. 1 that the owner of the building is his mother and the same was taken on rent by respondent No. 1 vide rent deed Ex. C-40 dated 6.3.2003.
14. We have perused the rent deed. It was condition in the rent deed that respondent No. 1 will insure the building.
15. We have also perused the policies Exs. C-50 to C-56 vide which the building was earlier also insured by respondent No. 1 with the appellant. The appellant never inquired regarding the ownership of the building and there is also no condition that owner can only insure the building and not occupier of the same. There is no dispute between the parties that respondent No. 1 was running restaurant in the building in dispute after taking the same on rent from respondent No. 2. The appellant also not produced any evidence that the rent note was prepared by respondent No. 1 after the incident with connivance of respondent No. 2.
16. We have also perused the back of the rent deed Ex. C-40. It is also entered in the register of the Stamp Vendor at Sr. No. 900 dated 6.3.2003. So from the entry of the same in the register of Stamp Vendor, it is also proved beyond doubt that the rent deed was executed between respondent Nos. 1 & 2 on 6.3.2003. As such, the version of the appellant that respondent No. 1 has no insurable interest in the building is not correct.
17. The version of the appellant is that the building was collapsed due to the negligence of respondent No. 1 as per the report of Er. Rakesh Kumar Gupta.
18. We have perused the report of Er. Rakesh Kumar Gupta. It is stated by Er. Rakesh Kumar Gupta that the version of the Police was that the building collapsed due to entry of sewerage water in the foundation of the building was not correct. Actually, the building collapsed as the insured has started addition of building at back part of the captioned building First Appeal No. 958 of 2010 8 without taking proper measures to save the old construction of the building. But in the report, Mr. Rakesh Kumar nowhere has mentioned that he inspected the site or not. If inspected then who was present at the site on behalf of the respondents. No site plan was also prepared by Mr. Rakesh Kumar to ascertain the building in dispute. So from the report, it is proved that Mr. Rakesh Kumar prepared the report only on the instructions of Surveyor Sh. Pramod Mittal. On the other hand, respondent No. 1 has tendered into evidence the report of Er. Rupinder Ahuja Ex. C-49 and also tendered into evidence his affidavit as Ex. C-47. In para No. 2 of the affidavit, it was stated on Oath by the deponent Rupinder Ahuja that he inspected the collapsed building of M/s Sohan Lal and Sons situated at Faridkot Road, Kotkapura and assessed the damage of building to the tune of Rs. 4,42,000/-. It was also stated in para No. 3 of the affidavit that on removal of the Debris it was found that the sewerage pipe laid down by the authority just outside the building in dispute was found leaking/damaged and sewerage water damaged the foundation of the building and as a result of which the building was collapsed and loss was caused. He has also annexed site plan of the building with his report, which proves that he prepared the report as well as estimate after the inspection of the site.
19. We have perused the report of S.H.O. P.S. City, Kotkapura, who also inspected the damaged building and found that the building collapsed due to entry of sewerage water, in the foundation of the building and at the time of his inspection the foundation was full with the sewerage water. He has also reported that respondent No. 1 had suffered a loss of Rs. 7,50,000/- due to the collapse of building. The surveyor never contacted the S.H.O. or the Police of City Kotkapura to enquire the reason of loss suffered by the respondents. There is also no allegation against the First Appeal No. 958 of 2010 9 S.H.O. that he had give survey report with the connivance of the respondents.
20. There was also more than 10 ft. distance between the damaged building and newly constructed building, as such, there was no possibility that the building in dispute was damaged due to the construction of new building, which was being raised at the distance of 10 ft. from the building in dispute.
21. So from the above discussion, the version of the appellant that the building was collapsed due to negligence of respondent No. 1 is not correct as no appropriate measures were taken by the appellant for the construction of the new building and also not provided sufficient support by way of pillars and ballies to the old building.
22. The restaurant was being run by the respondents to earn his livelihood. The word "commercial purpose" has not been defined in the Act and the Hon'ble Supreme Court way back in case "Laxmi Engineering Works Vs P.S.G. Industrial Institute", II (1995) CPJ-1(SC), interpreted the same and observed in Para-10 (relevant portion) as follows:-
"The explanation reduces the question, what is a "commercial purpose", to a question of fact to be decided in the facts of each case. It is not the value of the goods that matters but the purpose to which the goods bought are put to. The several words employed in the explanation, viz., "uses them by himself", "exclusively for the purpose of earning his livelihood" and "by means of self-employment", make the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself, by employing himself for earning his livelihood. A few more illustrations would serve to emphasis what we say. A person who purchases an auto-rickshaw and ply it himself on hire for earning his livelihood would be a consumer. Similarly, a purchaser of a truck who purchases it for plying it as a public carrier by himself would be a consumer. A person who purchases a lathe machine or other machine to operate it himself for earning his livelihood would be a consumer. (In the above illustrations, if such buyer takes the assistance of one or two persons to assist/help him in operating the vehicle or machinery, he does not cease to be a consumer.). As First Appeal No. 958 of 2010 10 against this a person who purchases an auto-rickshaw, a car or a lathe machine or other machine to be plied or operated exclusively by another person would not be a consumer. This is the necessary limitation flowing from the expressions "used by him", and "by means of self-employment" in the explanation. The ambiguity in the meaning of the words "for the purpose of earning his livelihood" is explained and clarified by the other two sets of words".
Further it was held in para No. 24 as follows:-
"CONCLUSIONS:
24. We must, therefore, hold that (i) the explanation added by the Consumer Protection (Amendment) Act 50 of 1993 (replacing Ordinance 24 of 1993) with effect from 18-6-1993 is clarificatory in nature and applies to all pending proceedings.
(ii) Whether the purpose for which a person has bought goods is a "commercial purpose" within the meaning of the definition of expression "consumer" in Section 2(d) of the Act is always a question of fact to be decided in the facts and circumstances of each case.
(iii) A person who buys goods and use them himself, exclusively for the purpose of earning his livelihood, by means of self-employment is within the definition of the expression "consumer".
23. As per para No. 24(iii), respondent No. 1 is fully covered under the definition of 'Consumer'.
24. The order passed by the learned District Forum is legal, valid and speaking one and there is no ground to interfere with the same. The appeal of the appellant being without any merit is dismissed and the impugned order of the District Forum is affirmed and upheld. No order as to costs.
25. The arguments in this appeal were heard on 6.5.2013 and the order was reserved. Now the order be communicated to the parties.
26. The appellant had deposited an amount of Rs. 25,000/- with this Commission at the time of filing the appeal. This amount of Rs. 25,000/- with interest accrued thereon, if any, be remitted by the registry to the respondents in equal share by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellant.
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27. Remaining amount shall be paid by the appellant to the respondents within 30 days from the receipt of the copy of the order.
28. The appeal could not be decided within the statutory period due to heavy pendency of Court cases.
(Piare Lal Garg)
Presiding Member
(Jasbir Singh Gill)
Member
May 17, 2013 (Vinod Kumar Gupta)
as Member