State Consumer Disputes Redressal Commission
Gayatri Cotton Traders, Guntur vs The New India Assurance Co. Ltd., And 2 ... on 8 December, 2008
BEFORE THE A
BEFORE
THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: HYDERABAD.
FA.No.834 OF 2007 AGAINST C.D.NO.133 OF
2005 District Forum, GUNTUR.
Between:
Gayatri Cotton Traders,
Kurnuthala, Vatticherukuru Mandal,
Guntur Dist.,
Rep. by its partner,
Sri N.Gowrishankar. ..Appellant/
Complainant
And
1. The Branch Manager,
The New India Assurance Co.
Ltd.,
Lalapet branch Office, Guntur.
2. The Regional Manager,
The New India Assurance Co.
Ltd.,
Pavan Paradise,
Dwarakanagar,
Visakhapatnam-530 016.
3. The Chairman & Managing Director,
The New India Assurance Co.
Ltd.,
New India Assurance
Building,
87, M.G.Road, Fort,
Mumbai-400 001. Respondents/
Opposite
parties
Counsel for the Appellant : M/s.V.Gourisankara
Rao.
Counsel for the Respondents: Mr.
Kota Subba Rao.
QUORUM: THE HONBLE JUSTICE
SRI D.APPA RAO, PRESIDENT.
AND
SMT.M.SHREESHA, MEMBER.
MONDAY, THE EIGHTH DAY OF DECEMBER, TWO THOUSAND EIGHT Oral Order :
(Per Smt.M.Shreesha, Honble Member) *** Aggrieved by the order in C.D.No.133/2005 on the file of District Forum, Guntur, the complainant preferred this appeal.
The brief facts as set out in the complaint are that the complainant is carrying on cotton business of buying cotton Kappas, gin and press them and sell all forms of cotton products under the name of M/s.Gayatri Cotton Traders, having principal place of business at Kurnoothala, Vatticherukuru Mandal, Guntur District. In the course of business, the complainant used to purchase cotton lint in boars fully pressed cotton in bales and cotton Kappas from their customers on both cash and credit transaction and also maintain Khata to its customers as per trade customs usages and practices. After purchase of cotton in all forms from the farmers and also traders, they were stored in various cotton yards and godowns. It is generally the practice not to move the stocks even after the purchase, to avoid incurring huge carting and transportation charges but to retain them in the same premises and merely change the ownership in the records or the premise owners. The stocks of cotton belonging to complainant, when it was actually lying in the premises of Sri Srinivasa Pressing Company Ltd., was destroyed in a devastating fire accident on 8-5-2008 along with the stocks of many other cotton traders. As per police records, the stocks of many such traders were destroyed. The complainant submitted that he insured his stocks of cotton located at various godowns/yards under a single policy No.621001/11/20015895 for the value of Rs.40,00,000/- for the period of 6-11-2001 to 5-5-2002 and again extended the policy upto 5-6-2002 without break in Insurance coverage (extended policy No.6210011/11/02/00385 for Rs.30,00,000/-) with opposite parties. In other words, the insurance cover is valid for a total period of 7 months and as there was a fire accident on 8-5-2002 in the premises of Sri Srinivasa Pressing Company where the stocks of complainant were stored. The complainant submitted it is his first claim made to opposite party after 6 years of insurance coverage of their stocks with opposite party and paid lakhs of rupees as premium. The complainant submitted that while the claims made by other cotton traders were settled, the claim of the complainant was repudiated without considering the facts. The complainant submitted that there is certain delay while filing the claim with the opposite parties due to delay in getting Sales Tax Assessment Certificate required to justify his claim and the complainant submits that the surveyors submitted their report on 21-8-2002 but opposite parties kept the matter pending for 20 months from the date of accident and 17 months after receipt of survey report and repudiation by opposite parties was conveyed only on 23-1-2004 stating that it has been opined by the surveyors that no stocks of whatever nature belonging to M/s.Gayatri Cotton Traders were present in the pressing company on the date and time of Fire accident i.e. on 8-5-2002. The complainant submitted that the survey report of Mr.G.G.K.Prasad stated that the stocks are cotton only and stated that incase of fully pressed bales at least, iron bale hoops will remain as salvage. In the present case, no cotton was involved and there could be no salvage.
Hence the question of verification of stocks was not possible and loss can only be arrived at from the books and record and the so called verification of stocks is wrong on the face of it.
The complainant submitted that after the fire accident, surveyors deputed by Insurance company have assessed the loss on the basis of records available and valued the stocks of the petitioner at Rs.45,37,533.50 while the same are insured for Rs.30,00,000/-. The surveyor confirmed in report dated 21-8-2002 that the insured is maintaining daybook ledger, stock book, sales and purchase invoices etc. and also remarked that he verified the same at the time of survey and found to be in order.
The complainant submitted that he purchased cotton stocks of MCU variety from M/s.V.Ramarao Cotton Ginning Mill under various lots and under various invoices on different dates on credit basis and purchased stock worth Rs.14,85,238/- and the same were kept in Sri Srinivasa Pressing Company Pvt. Ltd. and paid the necessary market fee to the Agricultural Mandal Committee and obtained necessary permit for the transactions. The complainant further submitted that he paid the value of said cotton to vendors i.e. V.Ramarao Ginning Mills, Inkollu by cheque No.044288 dated 11-5-2002 for Rs.7,00,000/- drawn on Karur Vysya Bank Guntur an another payment of Rs.7,85,000/- by another cheque on the same Bank for Rs.14,00,000/- and the balance of Rs.238/- by cash thus he paid full purchase invoice value of cotton and also purchase tax to Commercial Tax Department. The complainant submitted that the repudiation made by the opposite parties is based on surveyors opinion and hence he approached the Forum seeking directions to the opposite parties for releasing the claim amount of Rs.19,28,020/-.
Opposite parties filed counter stating that the claim of the complainant is not genuine one as there were no stocks of the complainant in the premises of Sri Srinivasa Pressing Company Pvt. Ltd. at the time of fire accident and they after careful consideration of all relevant aspects have rightly repudiated the claim of the complainant. They submitted that there is no delay or deficiency of service on their part. They submitted that the complainant in order to have a wrongful gain to itself resorted to make false allegations against the opposite parties and justified their repudiation. Opposite parties submitted that they acted in all promptness subject to furnishing of relevant information and documents by the complainant. They further submitted that the complainant cannot claim the value of stock etc. before the Consumer Forum as it is not a recovery mechanism for the amounts even assuming the case as genuine and the amounts can be recovered by due process of law only in competent court. They submitted that the amounts claimed are exaggerated and the claim is boosted up without any stocks of the complainant as on the date of fire accident and submitted that the matter involves consideration of complicated questions of fact and adducing elaborate evidence both oral as well as documentary to find out the genuineness of the claim and prayed for dismissal of the complaint.
Based on the evidence adduced i.e. Exs.A1 to A18 and the pleadings put forward, dismissed the complaint.
Aggrieved by the said order, the complainant preferred this appeal.
The learned counsel for the appellant/complainant submitted that the District Forum erred in holding that the complainant is not a consumer and directing him to approach a civil court for redressal. He submitted that it is well settled proposition of law laid down by Honble National Commission and subsequent to Amendment Act 62/2002 of Consumer Protection Act and relied on the judgement of the Apex court in Dr.J.J.Merchant v.
Srinath Chathurvedi reported in 2002(3) CPJ 8 SC wherein it was held that a consumer should not be driven to civil court on the ground that elaborate enquiry cannot be conducted under summary jurisdiction. He further submitted that the repudiation of the claim is made by opposite parties in a mechanical way and failed to see that the respondents have not filed any evidence to show that there were no stocks of the complainant in the premises of Sri Srinivasa Pressing Company Ltd., he submitted that the complainant renewed the policy for Rs.30,00,000/- and paid the premium of Rs.5,328/- and that there was no dispute about the fire accident. He submitted the complainant vide Ex.A15 purchased 166 bales of MCU 5 variety of cotton from M/s.Valiveti Rama Rao Cotton & Ginning Mill, Inkollu vide 4 separate invoices and filed the invoices, permits issued by the Agricultural Market Committee, Purchur and weight lists to substantiate his claim.
He also submitted that Exs.A16 and A17 stock Register copy of M/s.Sri Srinivasa Pressing Company pertain to the complainant which were signed by 6 different surveyors of different insurance companies who were physically present while the stocks of different dealers insured by different insurance companies were going on burning and that the complainant was also constrained to pay 4% purchase tax of Rs.59,400/- even on the burnt stocks. He further submitted that the payments were made by the complainant to M/s.Valiveti Rama Rao Cotton Ginning Mill, Inkollur through bank cheques and drew our attention to the judgements reported in 2006(4) CPJ 3 SC in SHOBIKA ATTIRE v. NEW INDIA ASSURANCE COMPANY LTD., AND ANOTHER, 2006(4) CPJ 68 NC in NATIONAL INSURANCE COMPANY LTD., v. NIKITA PAPERS Pvt. Ltd., III (2006) CPJ 332 (NC) in TARGET PLYWOOD INDSTRIES LTD. v. ORIENTAL INSURANCE CO. & ANOTHER and to the decision of this Commission in M/s. VIJAYA SRINIVASA COTTON COMPANY v. ORIENTAL INSURANCE CO. LTD. AND ANOTHER in C.D.No.41/2003 and prayed to allow the appeal.
We have perused the material on record.
The facts not in dispute are that the complainant insured stocks of cotton located on various godowns under a single policy No.621001/11/20015895 for a period of 6.11.2001 to 5.5.2002 and again extended the policy upto 5.6.2002 without break in insurance coverage. In other words the insurance cover is valid for a total period of 7 months.
There was a fire accident on 8.5.2002 in the premises of Sri Srinivasa Pressing Company where cotton stocks of the complainant were stored. It si the complainants case that this is the first claim they made with the opposite eparty after 6 years of coverage of their stocks and while the claim made by other cotton traders were settled, the claim of the complainant is repudiated without considering the facts. The surveyor submitted his report on 21.8.2002 and the opposite party repudiated the claim on 23.1.2004 on the ground that on verification of the stocks affected in the fire it has been opined by the surveyor that none of the stocks did not belong to M/s Gayatri Cotton Traders as on the date and time of the fire accident i.e., 8.5.2002. It is also on record that the insured amount is Rs.30 lakhs where as surveyor had assessed the value of the stocks of the complaiant at Rs.45,37,535.50 as per his report dated 21.8.2002.
While the material on record does not dispute the fire accident it is main contention of the opposite eparty that stocks in Sri Srinivasa Pressing Company Pvt. Ltd., at the time of fire accident does not belong to the complainant and therefore the repudation is justified. The complainant field Exs.A1 to A18 on their behalf while the opposite parties did not file any documents to substantiate his contention. Ex.A6 is a certificate issued by fire service. Ex.A7 is the inspection report issued by the electrical department stating that the cotton kapas, lint borahs and cotton bales were considerably damaged in M/s Balaji Pressing Compnay, Sri Srinivasa Pressing Compnay and also Sri Naga Sai Pressing Company due to possibility of contact in the LT conductors due to inadequate line clearance. This goes to show that the very accident of the fire was not in dispute. Exs.A8 and A9 which are police reports further confirmed that the fire accident was due to the electrical problem and that it is genuine. Ex.A10 is a fire survey report of Mr.G.G.K.Prasad dated 21.8.2002 in which he has assessed the net loss at Rs.10,10,105.30 on the following basis.
The total stock of 166 FP bales lying at Sri Srinivasa Cotton Pressing Co., Pvt. Ltd., are claimed to be totally lost in fire and no salvage available except burnt bale hoops. Salvage taken at Rs.10/- per bale.
Value of 166 FP bales Rs.1,85,238.00 Less Salvage of bale hoops Rs. 1,660.00
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Rs.14,83,578.00 Add 4% purchase tax Rs. 59,343.00
--------------------
Rs.15,42,921.00
--------------------
Loss on application of average Rs.15,42,921 X 0.661152 Rs.10,20,105.30 Less policy excess Rs. 10,000.00
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Net loss assessed Rs.10,10,105.30 _____________ Ex.A11 is the legal notice got issued by the complainant to the insurance company dated 12.4.2004 demanding for payment of Rs.15 lakhs with interest at 24% per annum from 8.5.2002.
Now we address ourselves to the contention of the opposite parties the stocks in Sri Srinivasa Pressing Company does not belong to the complainant. Ex.A14 is the assessment dated 3.2.2004 of the Commercial Tax Department in which the net turnover is shown as Rs.38,95,223/- and the gross turnover Rs.95,62,375/-. Ex.A16 is the true copy of stock register maintained by Sri Srinivasa Pressing Company Pvt. Ltd., and Ex.A17 is also true copy of the Stock register maintained by Sri Srinivasa Pressing Company Pvt. Ltd., and Ex.A18 is the copy of stock register, bond statement copy and the challen copy.
While we observe that the surveyor himself in Ex.A10 has assessed the loss at Rs.10,10,105.30 taking into consideration the various stocks as aforementioned the contention of the learned counsel for the complainant that there were two policies Exs.A3 and A4 and Ex.A3 refers to policy period 25.4.2002 to 24.5.2002 for an amount of RS.20 lakhs and the policy no.621001/11/02/00360 and Ex.A4 refers to policy No.621001/11/02/00385 for an amount of Rs.30 lakhs. The policy period coverage being 6.5.2002 to 5.6.2002. The Surveyor in Ex.A10 clearly stated that there were two policies taken for M/s Gayatri Cotton Traders for a sum of RS.30 lakhs and Rs.20 lakhs totally Rs.50 lakhs. Thereafter the surveyor at page 6 of his survey report has taken into consideration only one policy of an amount of RS.30 lakhs and stated that there is an under insurance since the insured was holding a stock of RS.45,35,533.50 and deducted the underinsurance amount of 33.88478%. The assessment of loss done by the surveyor is Rs.10,10,105.30. The complainant himself has sought for the claim amount of Rs.15 lakhs in his legal notice dated 12.4.2004 which is Ex.A11.
We are of the considered view that the insurance company ought to have settled the claim amount of Rs.10,10,105.30 that is at least for the surveyor assessed with interest at 9% per annum from the date of repudiation i.e., 23.1.2004 till the date of realization together with costs of RS.5000/-.
In the result this appeal is allowed by setting aside the order of the District Forum and consequently complaint is allowed directing the opposite parties to pay an amount of Rs.10,10,105.30 together with interest at 9% per annum from 23.1.2004 till the date of realization together with costs of Rs.5,000/-. Time for compliance 4 weeks.
PRESIDENT LADY MEMBER 08.12.2008.