State Consumer Disputes Redressal Commission
National Insurance Co. Ltd. vs Exterior-Interior Pvt. Ltd. & Another on 11 May, 2010
State Consumer Disputes Redressal Commission State Consumer Disputes Redressal Commission West Bengal BHABANI BHAVAN (GROUND FLOOR) 31, BELVEDERE ROAD, ALIPORE KOLKATA 700 027 S.C. CASE NO. : FA/09/14 DATE OF FILING : 13.01.2009 DATE OF FINAL ORDER: 11.05.2010 APPELLANT National Insurance Company Ltd. Regd. Office at 3, Middleton Street Calcutta Regional Office-I Represented by the Regional Manager Kolkata-700 071 Having its office at 8, India Exchange Place Kolkata-700 001. RESPONDENTS 1. Exterior-Interior Pvt. Ltd. Rajkamal Building, 4th Floor, 13, Camac Street Kolkata-700 017. PROFORMA RESPONDENT 2. National Insurance Co. Ltd. Netaji Subhas Road Branch Office at Royal Insurance Building 2nd Floor, 5, Netaji Subhas Road, Kolkata-700 001. BEFORE : MEMBER : MR. P.K.CHATTOPADHYAY MEMBER : MR. S.COARI FOR THE PETITIONER / APPELLANT : Mr. G.P.Dey, Ld. Advocate FOR THE RESPONDENT / O.P.S.: Mr. P.Banerjee, Ld. Advocate : O R D E R :
MR.
P.K.CHATTOPADHYAY, LD. MEMBER This Appeal arose out of judgement and order dt. 22.2.08 in DCDRF, Kolkata Unit-II in C.D.F. Unit-II Case No. 304 of 2006 where the complainant namely Exterior-Interiors Pvt. Ltd., stated inter alia that the complainant was engaged in business of imparting training and education in interior design and for the purpose of business, the complainant entered into a Fidelity Guarantee Insurance Policy with the OP where the complainant was indemnified for the loss suffered in case of a pecuniary loss by reason of fraud perpetrated/designed by any employee of the complainant company. The OP namely National Insurance Co. Ltd., accepted the policy and renewed the same from year to year when the last renewal was sought to be made from 5.1.05.
During the tenure of such policy existing between the Appellant and Respondent No. 2, a claim arose on account of misappropriation of an amount of Rs. 80,100/- by one erstwhile employee called Mr. Beki Verghese and subsequent to the claim form being filed with requisite particulars, the Respondent/Insurance Co. appointed one Insurance Surveyor, under intimation to the complainant. However, after protracted correspondence and repeated assurance the claim was not settled, nor refuted, thus rendering the complainant to suffer financial loss of Rs. 1,86,346/-. Thus the complaint seeking direction of payment of claim amount of Rs. 71,971/- with 18% interest with compensation of Rs. 50,000/-.
After hearing the matter, the Ld. District Forum passed its judgement and order as under :-
That the application u/s.
12 of the C.P.Act, is allowed ex parte against the OP/National Insurance Company, but without any cost in the circumstances. Complainant is entitled to get compensation of financial loss to the extent of Rs. 1,86,346/- (Rupees one lakh eighty six thousand three hundred and forty six only). OP 1 is hereby directed to make payment of the amount of Rs. 1,86,346/- (Rupees one lakh eighty six thousand three hundred and forty six only) in favour of the complainant within a period of one month herefrom failing which the complainant will be at liberty to put the decree into execution through the District Forum.
Being aggrieved and dissatisfied with the impugned judgement and order of the Ld. Forum the OP in the Forum below namely National Insurance Co. Ltd., filed this Appeal when condonation of delay application accompanying the Appeal was heard by this Commission and by its order dt. 15.6.09 the condonation being not allowed the Appeal stood dismissed. The Appellant namely National Insurance Co. Ltd., then filed a Civil Revision Application being C.O. No. 2163 of 2009 before the Honble High Court, when the said Revision Application was disposed of by condoning the delay in filing the Appeal on payment of cost of Rs. 5,000/- and the cost having been paid the Appeal was finally admitted. The Appellant in its Memo of Appeal contended inter alia that the order(s) in the complaint case was passed without giving any opportunity to the OP for being heard and for passing the judgement in a hurry avoiding placement and examination of the surveyors report and more so, when the complainant suppressed the fact that for one employee the maximum liability of the insurer was only Rs. 50,000/- as per policy terms.
Stating that the complaint case was not maintainable and that it was liable to be dismissed for lack of documents/suppression of facts, it was argued that a surveyor having been appointed immediately after the claim was lodged and surveyor having not been furnished/provided with documents as were asked for, the matter should be referred to the Ld. Forum for denovo hearing on remand with setting aside of the impugned judgement and order and Respondent No. 1 may be directed to pay the cost incidental to this Appeal.
Respondent No. 1 namely Exterior-Interiors Pvt. Ltd., entered appearance and stated inter alia that the Appellant was liable to pay the given insurance claim as per contract and the non-payment of the same without any repudiation amounted to negligence and deficiency of service. Stating that the Respondent submitted all documents as were requisites and the Appellant kept the matter pending for perpetuity it was submitted that the Appellant did not even care to repudiate the claim by assigning valid reasons therefor. Accordingly, the Respondent prayed for affirmation of the impugned judgement and order with prayer for further orders as deemed fit.
This matter was heard from both sides with filing of WNA.
DISCUSSION A. The complainant by its admission is engaged amongst other activities in the business of providing training and education in interior designing and awarding Diplomas in interior design and for the purpose of business the complainant proposed to enter into a Fidelity Guarantee Insurance Policy and accordingly approached the OP, a subsidiary of General Insurance Corporation of India. By its description in the cause title of the complaint the complainant called itself EXTERIOR-INTERIORS Private Limited, a Company incorporated under the Companies Act, 1956, carrying on business inter alia, from its office at 4th Floor, Rajkamal Building, 13, Camac Street, Kolkata-700 017.
However, there is no tangible evidence that the complainant runs the business for earning livelihood and there was no proof whatsoever to such effect filed by the complainant.
Section 2(d)(i) and (ii) of the Consumer Protection Act, 1986, as amended, is as under -
(d) Consumer means any person who
(i) buys any goods for a consideration which has been paid or promised or party paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purpose.
Where in the explanation it is provided that for the purpose of this clause, commercial purpose does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self employment.
In the instant matter, admittedly the complainant is a proprietary firm engaged in dealing with wholesale business of readymade garments, sarees and hosiery goods, purchases of which were made from various huts/local marketing centres and resold wholesale to various vendors. From the averments and in evidence there is no pleading or proof whatsoever that the complainant conducted business on self-employment or for earning his livelihood.
B. In I (2005) CPJ 27 (NC) Harsolia Motors Vs. National Insurance Co. Ltd., the Honble National Commission inter alia decided as under -
Consumer Protection Act, 1986 Sections 2(1)(d), 2(1)(o) Consumer Service Commercial purpose Insurance policy taken by commercial units whether excluded from purview of C.P.Act Complainants availed service of insurance company for commercial purpose Complaint dismissed by State Commission as not maintainable Hence appeal Hiring of services of Insurance company by complainants who are carrying on commercial activities cannot be held to be a commercial purpose Policy is taken for reimbursement or indemnity for loss which may be suffered due to various perils No question of trading or carrying on commerce in insurance policy Contract of insurance generally belongs to general category of contract of indemnity Services may be for any connected commercial activity, yet it would be within purview of Act Commercial purpose means goods purchased or services hired should be used in activity directly intended to generate profit which is the main aim of commercial purpose Where goods purchased or services hired in activity which is directly not intended to generate profit, it would not be commercial purpose Person who takes insurance policy to cover envisaged risk not takes policy for commercial purpose Policy is only for indemnification of actual loss, not intended to generate profit Appeals allowed - Order of State Commission set aside Matter remitted back for being decided on merit.
This position underwent revisit in judgement in case of First Appeal No. 84 of 2008 B.S.E.S. Rajdhani Power Ltd. Vs. M/s. Saraf Project Pvt. Ltd. decided on 7.8.09 and Meera Industries Vs. Modern Constructions reported in (2009) 2 CPJ 402 where consequent upon amendment of Consumer Protection Act, 1986 in 2003 it was held as under :-
A person who avails of such services for any commercial purpose is excluded .. .Therefore, even the service availed for commercial purpose is excluded from the scope and ambit of consumer.
In the facts and circumstances of the complaint case under adjudication we find that the foregoing judgement of the Honble National Commission is aptly applicable and thus the complainant namely M/s. Exterior-Interior Pvt. Ltd., cannot be regarded as a Consumer for the purposes of any adjudication under Consumer Protection Act, 1986, as amended.
C. In this regard our attention has been drawn to this Commissions Case No. CC/56/2009 where in a Misc. Application under number MA-263/09 arising out of the complaint case, this Commission held inter alia, considered the law referred to by the OP/Appellant in the two judgements cited by him. The position in law appears to have been settled by the said two judgements that after the amendment of Section 2(d)(ii) of the Consumer Protection Act, the definition of consumer has undergone a change and in respect of any cause arising after 15.3.03 the complainant is not a consumer if the Service Providers service has been taken for a commercial purpose. In the present case on facts it is apparent that contract was taken by the complainant for construction and maintenance of the road. Therefore, coverage of the policy being in aid of maintenance of the road, the same is a commercial purpose. No case has been made out that the complainant enjoys the benefit of the explanation i.e. the contract was for self-employment and for earning livelihood. Therefore, the complainant here is not a consumer and the complaint is not maintainable. Considering the facts and circumstances of the present case the same view may be taken for adjudication of the dispute.
D. In the fact of the case, the Appellant engaged a surveyor immediately after the claim was lodged, but the cause of the claim having occurred at Bangalore, there was no doubt that some time was lost in correspondence but the Appellants claim that requisite particulars as were sought from the Respondent No. 1 were not filed and hence the claim could neither be settled nor could be repudiated, has to be weighed with reference to evidence, the opportunity of which could not be taken by the Appellant, for reasons best known to them. But fact remains that the surveyors report as was filed to the Appellant could not be placed before the Ld. Forum, which is no doubt a very important document and that is all the more when the claim involved a criminal case.
E. The Appellant has also pointed out that as per terms of the policy, the claim in respect of a single employee was limited to Rs. 50,000/-, when knowing the same the Respondent/Complainant wilfully filed the claim for Rs. 71,971/-, thus suppressing given terms of contract with intent to mislead the Ld. Forum. The Respondent had no reasonable and acceptable reply to such.
F. In such context, we are of the opinion that justice would be best met if the impugned judgement and order of the Ld. Forum below is set aside and the complaint is sent back on remand to the Ld. Forum below for fresh adjudication with opportunity provided to the Complainant/Respondent for establishing through sustainable record/evidence that it is indeed a consumer for purposes of Consumer Protection Act, 1986, as amended and to Appellant/OP for providing its evidence, if any and then a finding could be reached, as the Ld. Forum may determine. No cost is imposed on the Appellant as the complainant also failed to establish on evidence that it was a consumer for purposes of Consumer Protection Act, 1986, as amended.
O R D E R The Appeal is allowed on contest without cost. The impugned judgement and order is set aside. The case be remanded back to the Ld. Forum below for fresh adjudication with opportunity provided to the Complainant/Respondent for amending the pleadings, if necessary, and for establishing through sustainable record/evidence that it is indeed a consumer for purposes of Consumer Protection Act, 1986, as amended and to Appellant/OP for providing evidence, if any and then a conclusion could be reached, as the Ld. Forum may determine, to be so done as expeditiously as possible.
MEMBER MEMBER