State Consumer Disputes Redressal Commission
M/S.Pavan Enterprisesrep. By Its ... vs The Oriental Insurance Co. Ltdrep. By ... on 10 November, 2009
FA BEFORE THE ADDITIONAL BENCH OF A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD. FA.No.1176/2006 AGAINST C.D.No.92/2004 DISTRICT FORUM, GUNTUR Between: 1. M/s.Pavan Enterprises Rep. by its Proprietor Sri Vupputuri Ayyanna S/o.Subbaiah, R/o.Pulladigunta Village Vatticherukuru Mandal, Guntur District. 2. Sri Vupputuri Srinivasa Rao, S/o.late Ayyanna, R/o.Pulladigunta Village Vatticherukuru Mandal, Guntur District. Appellants/ Complainants And The Oriental Insurance Co. Ltd., Rep. by its Branch Manager, Branch Office-II, Main Road, Lakshmipuram, Guntur. Respondent/ Opp.party Counsel for the Appellants: Mr.A.Rajendra Babu Counsel for the Respondent:Mr.K.Laxmi Prasad. QUORUM: SMT.M.SHREESHA, MEMBER
& SRI K.SATYANAND, MEMBER TUESDAY, THE TENTH DAY OF NOVEMBER, TWO THOUSAND NINE (Typed to the dictation of Sri K.Satyanand, Honble Member).
*** This is an appeal filed by the unsuccessful complainant, the repudiation of whose insurance claim, came to be rather upheld by the District Forum by dismissing his complaint challenging the repudiation.
The facts of the case are briefly as follows:
The complainant is a proprietorship firm of one Vupputuri Ayyanna the father of the second appellant. The proprietorship firm in question was dealing in cotton.
It seems they have got their own ware house as also a practice of keeping the stocks for further processing in pressing mills. So the original proprietor, Vupputuri Ayyanna obtained insurance coverage for his business including in the risk address, M/s Srinivasa Pressing Company Private Limited also. The insurance was taken for Rs.10,00,000/-. It was issued to remain valid from 28-11-2001 to 27-11-2002.
While things stood thus, the complainant and the proprietor claimed to have purchased cotton stock from a company by name Sri Sambasiva Lakshmi cotton Ginning Mill in two lots for a total consideration of Rs.8,64,324/-. Admittedly the said stock was parked in the authorized premises i.e. M/s Srinivasa Pressing Company Private Limited for some further processing. While things stood thus, a fire broke out in the said M/s Srinivasa Pressing Company Private Limited on 8-5-2002 in which the entire stock belonging to the complainant firm was gutted. It seems the fire accident was duly recognized and the factum of the accident was duly recorded by various public authorities as A.P. Fire Services, Assistant Electrical Inspector and others. Thus the factum of the fire accident and the loss of cotton worth Rs.8,00,000/- and odd were not in controversy. After sustaining loss, the proprietor filed a claim before the insurance company. The insurance company sent a surveyor and did all the spade work in the course of processing the claim. Ultimately the insurance company repudiated the claim holding that the complainant failed to prove their title to the property and the so called documentation calculated to establish their acquisition of the said stock was not genuine.
Aggrieved by the said repudiation, the complainant firm filed the consumer complaint. During the pendency of this complaint, the original proprietor, Ayyanna, died on 24-6-2004. In the wake of his death, the son of the deceased proprietor came on record as complainant No.2 in his capacity as L.R. and proceeded to prosecute the complaint [as could be seen from the impugned order, the District Forum lost sight of this fact and proceeded under the impression that the son of the deceased proprietor carried on with the case on the strength of a power of attorney issued by his father as per Ex.A18.
But Ex.A18 is not power of attorney and on the other hand, it is a will executed by late Ayyanna bequeathing the insurable interest in favour of complainant No.2.] This claim of the complainants came to be resisted by the insurance company reiterating the reasons that they relied upon in the repudiation letter and, in addition, trying to make out a case of fraud against Ayyanna saying that he accommodated Sambasiva Lakshmi Cotton Ginning Mill, who did not hold any insurance policy and thus the complainant failed to have title to the property and therefore much less insurable interest.
The opposite parties relied upon the surveyors report to substantiate their repudiation.
In support of their case, the complainants filed the affidavit of the second complainant and also relied upon documents marked as Ex.A1 to A20. On the other hand, the opposite party also got filed affidavit and relied upon documents Exs.B1 to B4.
On a consideration of the evidence adduced by both the parties, the District Forum came to the conclusion that the complainant failed to prove his ownership of the cotton bales destroyed in the fire accident and the transaction that was sought to be propounded in that regard was not valid and genuine and consequently that there was no deficiency of service proved against the opposite party. On the basis of these findings, the District Forum dismissed the complaint.
Aggrieved by the said order, the complainant filed the present appeal contending inter-alia that the District Forum erred in thinking that the transfer of stock proved by the complainant was merely brought into existence for the purpose of claiming compensation on behalf of Sambasiva Lakshmi Cotton Ginning Mills as the transaction was neither genuine nor true and merely propounded to accommodate the uninsured Sambasiva Lakshmi Cotton Ginning Mill. The District Forum failed to give proper credence to the extensive documentary evidence tendered by the complainant and on the other hand erroneously relied upon the surveyors report Ex.B2 and Ombudsmans decision in Ex.B4.
It failed to see that Ex.B1 policy clearly covered the stocks in dispute. The District Forum failed to see that the commercial tax department would not have accepted tax of Rs.34,575/- paid by the insured appellant towards this transaction if the transaction was really false and was meant merely to accommodate Sri Sambasiva Lakshmi Cotton Ginning Mills. It failed to take into account Ex.A3 letter by the said Sri Sambasiva Lakshmi Cotton Ginning Mills to M/s Srinivasa Pressing Company Private Limited to transfer lots 61 and 62 of cotton bales to the appellant as per the permit issued by the Agricultural Market Committee, Guntur in Ex.A4. It also failed to see that the sale consideration for the goods was conclusively shown as having been received by the seller of the cotton Sri Sambasiva Lakshmi Cotton Ginning Mills. Instead of acting on this concrete evidence, the District Forum erroneously relied upon the findings of surveyor based on surmises and conjectures.
Heard both sides.
The points that arise for consideration are:
1) Whether the cotton admittedly destroyed in the fire accident belonged to the complainant or not?
2) Whether the repudiation by the opposite party is justified.
3) Whether the opposite party is guilty of any deficiency of service?
4) Whether there are any good grounds to interfere with the order of the District Forum?
5) Whether the complainant is entitled to any relief?
In this case majority of basic facts are not at all in dispute. The first complainant was a proprietor firm represented by its proprietor, who subsequently died during the pendency of the proceedings and his own son had come on record as L.R. and consequently became the new proprietor of the firm in question on the strength of the will executed by his father in favour of him in respect of the present subject matter of this claim.
Unfortunately the District Forum thought that the complainant No.2 proceeded to prosecute the claim on the strength of a General Power of Attorney that was executed few days before his death and continued to represent the firm even after his death. This is factually incorrect and if really that was merely a G.P.A. the District Forum ought to have dismissed the complaint on that ground itself as the general power of attorney would not survive the person who executed the instrument and the agency gets automatically terminated.
But the actual facts are otherwise. As already pointed out, the second complainant continued the litigation in his own right as the beneficiary under the will as L.R. of the deceased proprietor. The main plank upon which the District Forum dismissed the complaint is the want of complainants title to the cotton bales in question. In order to assail the title of the complainants, the District Forum relied upon two circumstances. The first and foremost was that the sale of cotton bales otherwise evidenced by Exs.A1 to A7 cannot but be characterized as false for the reason that even on their own showing was not supported by consideration in as much as, as on the date of accident, the consideration for the sale did not pass on to the seller Sri Sambasiva Lakshmi Cotton Ginning Mills and it was paid few days after this accident on 14-5-2002 no doubt as per other documents. This conclusion the District Forum reached obviously labouring under the impression that for a conclusion of the contract of sale of goods, the instantaneous passing of consideration is sign Quo non but the law in this regard is otherwise.
Any contract of sale of goods for that matter in any contract, the consideration could be not necessarily down payment and it could also be a payment on the spot or promise or part payment and part promise. It is unmistakably shown that ultimately Sri Sambasiva Lakshmi cotton Ginning Mill received the consideration and the factum was testified to even by the bankers as per Ex.A10. Over and above, the parties to the transaction obtained permit of the Agricultural Market Committee, Guntur and also paid tax as per Ex.A20 for covering this very same transaction.
This overwhelming evidence gives a lie to the contention that the transaction in question was fake and was brought into existence for the purpose of accommodating Sri Sambasiva Lakshmi Cotton Ginning Mill. Curiously the District Forum placed any amount of emphasis on the fact that the complainants failed to produce any insurance procured by Sri Sambasiva Lakshmi cotton Ginning Mill to displace their theory that Sri Sambasiva Lakshmi cotton Ginning Mill was not having insurance and therefore had taken accommodation from this complainants. This is rather a very far fetched articulation and cannot be accorded any serious note. Likewise in order to condemn this transaction as false, the District Forum also embarked upon a conjecture that Sri Sambasiva Lakshmi Cotton Ginning Mills was not in the habit of getting its cotton pressed by M/s.Srinivasa Pressing Company Private Limited as it was the customer of Balaji pressing Mill and that the said Sri Sambasiva Lakshmi cotton Ginning Mill diverted its stocks to M/s Srinivasa Pressing Company Private Limited only to lend colour of truth to this transaction allegedly owned by the complainant by way of accommodation. This again is an argument that suffers from the vice of double presumption. Such conjectural argument without the basis of first conclusively proving that the cotton in truth only belongs to Sri Sambasiva Lakshmi Cotton Ginning Mills and then that it temporally switched loyalty to M/s Srinivasa Pressing Company Private Limited only to take advantage of the insurance coverage readily available with the complainant.
It has already been conclusively shown that the transaction pleaded by the complainants that constituted the basis for this claim has been amply proved. Thus the grounds upon which the title to the cotton of the complainants is sought to be challenged do not carry any conviction and in fact they are contrary to the weight of evidence especially documentary evidence available in the case in favour of the complainant.
It is very obvious from the tenor of the repudiation that the insurance company mainly reputed the claim of the complainants on the very ground that the complainants failed to prove their title to the movable property and therefore not entitled for the insurance coverage by the policy in question. But the opposite party failed to establish it by tendering cogent evidence instead of helping itself with conjectures and surmises culled out from the surveyors report issued without any supporting material. Thus the repudiation appears to have been actuated for untenable reasons.
In other words, there is nothing that is adverse to the claim of the complainants, inspite of that the insurance company repudiated on flimsy grounds, this marks the deficiency of service for which the redressal is very much available.
For the reasons stated above, the order of the District Forum is unsustainable and deserves to be reversed. Accordingly the appeal is allowed setting aside the order of the District Forum.
Consequently the complaint is allowed directing the opposite party to pay to complainant No.2 a sum of Rs.8,64,376/-
with interest at the rate of 6% p.a. from the date of repudiation i.e. 28-3-2003 till the date of realization and also an amount of Rs.5,000/- representing costs. As interest is awarded, we do not think that this is a fit case for granting any separate compensation. Time for compliance six weeks from the date of receipt of this order.
Sd/-MEMBER.
Sd/-MEMBER JM Dt.10-11-2009