State Consumer Disputes Redressal Commission
Bhushan Kumar Tulli vs New India Assurance Company Limited on 31 August, 2012
2nd Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.1222 of 2007.
Date of Institution: 06.09.2007.
Date of Decision: 31.08.2012.
1. Bhushan Kumar Tulli S/o Sh. Krishan Gopal;
2. Leena Tulli W/o of Sh. Bhushan Kumar Tulli;
Both residents of H.No.295, Indl. Area-A, Ludhiana.
Second Address: H.No.B-VIII, 469 (old), 638 (New), Naya Mohalla,
Lakkar Bazar, Ludhiana.
.....Appellants.
Versus
1. the New India Assurance Company Limited, Divisional Office, IV, 478,
Ashok Nagar, Aman Palace, Ludhiana through its Manager.
2. Central Bank of India, Brown Road, Ludhiana, through its Branch
Manager.
...Respondents.
First Appeal against the order dated
06.07.2007 of the District Consumer
Disputes Redressal Forum, Ludhiana.
Before:-
Shri Inderjit Kaushik, Presiding Member.
Shri Baldev Singh Sekhon, Member.
...................................
Present:- Sh. Munish Goel, Advocate, counsel for the appellants.
Respondent no.1 Exparte.
Sh. H.S. Bhatia, Advocate, proxy for Sh. R.S. Bhatia, Advocate, counsel for respondent no.2.
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INDERJIT KAUSHIK, PRESIDING MEMBER:-
Sh. Bhushan Kumar Tulli and another, appellants (In short "the appellants") have filed this appeal against the order dated 06.07.2007 passed by the learned District Consumer Disputes Redressal Forum, Ludhiana (in short "the District Forum").First Appeal No.1222 of 2007 2
2. Facts in brief are that the appellants filed a complaint under section 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the respondents, on the grounds that appellant no.1 is owner of H.No.295, Industrial Area-A, Ludhiana vide registered Sale Deed dated 10.08.1970. One partition took place between appellant no.1 and Tarsem Lal vide partition deed dated 13.09.1972. Vide this partition deed, land measuring 446-05 sq.yds. fell to the share of appellant no.1 and a double storeyed building existed on this portion.
3. The appellants approached respondent no.2 for providing loan facility and the said loan was taken from respondent no.2, by mortgaging the property no.295, Industrial Area-A, Ludhiana. Respondent no.2 sent a proposal to appellant no.1 for insuring the said property for a sum of Rs.35.00 lacs for the period ranging from 22.04.2005 to 21.04.2009 and respondent no.2 deducted a sum of Rs.8,000/- from the accounts of the appellants and insured the said property belonging to the appellants after sending its representative to the site for inspection, for a sum of Rs.35.00 lacs and took Rs.7714/- from the accounts of the appellants.
4. Due to heavy rains in the rainy season, the building no.295 fell down on 20.09.2005 and the appellant informed the respondents about its dismantling/falling of the insured building and the respondents appointed a surveyor to assess the loss. The said surveyor visited the spot and directed the appellants to appoint a valuer/engineer to estimate the loss/damage caused to the said building and the appellants approached United Engineers, approved Building Surveyors, to estimate the cost of construction of the insured building and Sh. Jagdish C. Sadana, Engineer estimated the cost of construction at Rs.9.67 lacs vide report dated 28.09.2005. The total loss of the damage building was estimated at Rs.18.00 lacs by the appellants, although it was insured for Rs.35.00 lacs. The appellants demanded the said amount from the respondents but the respondents refused to pay the same First Appeal No.1222 of 2007 3 on the ground that the building insured was residential, vide letter dated 30.01.2005.
5. In the proposal form, the only word "building" is mentioned and it is nowhere mentioned that the building to be insured was a residential building. The building in question consisted of ground floor and first floor and is situated at Industrial Area-A, Ludhiana. Proposal form was accepted and acted upon respondent no.1 and the amount as directed was paid and was accepted by respondent no. The policy was later on sent by respondent no.1 and it was not signed and accepted by the appellants. Due to flood and shock, the said building collapsed and it is covered under the insured perils. Respondent no.1 is deficient in service and it was prayed that respondent no.1 be directed to pay Rs.18.00 lacs as compensation for the loss/damage to the building in question.
6. In the written statement filed on behalf of respondent no.1, preliminary objections were taken that the complaint is barred U/s 26 of the Act and the District Forum has no jurisdiction and there is no deficiency in service on the part of the answering respondent. On receipt of the claim, it was registered, entertained and processed. The surveyor was appointed to assess the loss and after receipt of the report and going through the documents, the claim was repudiated as 'no claim', by the answering respondent vide letter dated 30.01.2005, as it did not fall within the purview of the insurance policy. The building was insured as residential building whereas it was occupied as industrial building and respondent no.1 has charged the premium for residential building and there is no deficiency or negligence in service on the part of the answering respondent and the complaint is liable to be dismissed.
7. M/s Consolidated Surveyors Pvt. Ltd., 171, Sector 36-A, Chandigarh was appointed as surveyor and loss assessor, who personally visited the spot, took photographs and prepared the report dated 22.10.2005 and submitted the same with respondent no.1. As per the surveyor report, the First Appeal No.1222 of 2007 4 building collapsed due to the negligence of the insured and not on account of any insured perils like fire, explosion, impact damage, earthquake and there is breach of policy conditions by the insured and the said surveyor recommended that the claim be repudiated as 'no claim'. The appellant has obtained 'standard fire and special perils policy' from respondent no.1 and the claim was repudiated as 'no claim', as the building was insured as residential building, whereas it was occupied as industrial building. Complicated questions of law and facts are involved and civil court is competent. The appellants are estopped by their own act and conduct from filing the complaint.
8. On merits, it was admitted that respondent no.2 sent the proposal form for insurance of the property of the appellants w.e.f. 22.04.2005 to 21.04.2009 for covering risk of fire, flood, lightening and riots, earthquake and premium of Rs.7714/- was paid. The insurance was done in utmost good faith as per the disclosures made by the insured. No inspection or verification of actual and factual position of the structure or the building was made by respondent no.1 before insuring the said building. It was also admitted that the building was insured for Rs.35.00 lacs. The loss assessed by the surveyor was for Rs.3,06,796-40 only, but the surveyor recommended that the claim be repudiated as 'no claim'. In the proposal form, nowhere the word 'building' is mentioned, but the word 'property' is mentioned and the same is not signed by any official of respondent ono.1, nor it is in the hands of any official of respondent no.1 and is not signed by the appellants. The said proposal form was submitted by the officials of the Central Bank of India and is duly signed by the officials of officials of Central Bank of India i.e. respondent no.2. In the proposal form, nowhere it is mentioned that the building is commercial/ industrial building. Respondent no.2 or its officials at the time of submission of proposal form or obtaining insurance policy never disclosed that the property insured is industrial building. No objection was raised by the appellants. All First Appeal No.1222 of 2007 5 other allegations of the complaint were denied and it was prayed that the complaint may be dismissed with costs.
9. In the written statement filed on behalf of respondent no.2, the pleas of the appellants were admitted. It was further submitted that the refusal of respondent no.1 to pay the claim amount of Rs.18.00 lacs to the appellants is against the terms and conditions. As per the proposal form, word 'building' is mentioned. Building No.295, Industrial-A, Ludhiana was insured for Rs.35.00 lacs w.e.f. 22.04.2005 to 21.04.2009 and it was prayed that the complaint may be accepted.
10. Parties led evidence in support of their respective contentions by way of affidavits and documents.
11. After going through the documents and material placed on file and after hearing the learned counsel for the parties, the learned District Forum observed that in the description of the property in the cover note, it has been mentioned as 'building'. The building was not inspected by the respondent insurance company. The loan was given and the building was got insured. The policy is a contract between the parties and both the parties are bound by the terms of the contract. The repudiation is bonafide because the policy covering said risk is not attracted to indemnify the appellants for the loss under the policy and there is no deficiency in service, and dismissed the complaint.
12. Aggrieved by the impugned order dated 06.07.2007, the appellants have come up in appeal.
13. We have gone through the pleadings of the parties, perused the record of the learned District Forum and have heard the arguments advanced by the learned counsel for the appellants and respondent no.2.
13. The respondent no.1 has not contested the appeal and was proceeded against exparte.
14. Learned counsel for the appellants has contended that as per the cover note, the address given was of 295, Industrial Area-A, Ludhiana, First Appeal No.1222 of 2007 6 District Ludhiana and the risk covered was 'building' and under the description, it was 'on residential building, property of insured, under lien to bank'. It was argued that the building itself was situated in the industrial area and it was not used for residential purpose, but it was for running industry and at the time of taking the policy, everything was made known to the respondent insurance company and the respondent insurance company repudiated the claim as 'no claim' which is against the terms and conditions of the policy. It was argued that as per the policy Ex.R-32, the loss, destruction or damage directly caused by flood or inundation etc. was covered. In the proposal form, flood is covered and United Engineers, Approved Valuers assessed the value at Rs.9.67 lacs. Premium to the tune of Rs.7714/- was paid which also included the risk from flood. The report of the surveyor on the basis of which the claim was repudiated, is incorrect and is not as per the facts and evidence and the order of the District Forum is also against the evidence and is liable to be set aside.
15. Respondent no.2 supports the case of the appellants.
16. We have considered the submissions advanced by the learned counsel for the appellants and have minutely examined the entire documents and material placed on the file.
17. The appellants in support of their case have relied upon two affidavits of the appellants, sale deed dated 10.08.1970, partition deed dated 13.09.1972 and the site plan, proposal form, report of United Engineers, photographs and the letters, repudiating the claim, cover note and the statement of accounts of Central Bank of India. Except the affidavits of the appellants, there is no evidence regarding the floods or heavy rains in the area where the building in question was situated. Even the valuer appointed by the appellants has not stated even a word about the damage caused by flood. Newspaper cutting has been placed on record by the appellants, wherein the appellant was clueless about the reason why the structure fell. The photographs relied upon by the appellants also show that the building First Appeal No.1222 of 2007 7 collapsed not due to floods, but due to some other reason as the bricks and other material are lying scattered.
18. The respondents have relied upon a large number of documents. Ex.R-2 is the cover note, wherein the description of the property insured was 'on residential building, property of insured under lien to bank'. In the surveyor report Ex.R-5, nowhere it is mentioned that the loss was caused by any flood and the appellant is stated to have informed the surveyor that he was not aware of the reasons about the collapse of the building. Ex.R-17 is again a newspaper cutting, wherein it is reported that three storeyed building constructed in the area of about 400 sq.yds. in Janakpuri today collapsed at 10.30 a.m. when some construction work was going on inside. No reason is mentioned in this also. No flood is mentioned in this report also. Similar are the newspaper reports Ex.R-18 to Ex.R-20. As per the policy, the loss, destruction or damage caused by flood, inundation etc. was covered.
19. From the above evidence and material placed on file, it is clear that the insured building collapsed due to some other reason and there is no evidence that the same collapsed due to flood. The appellants except their own affidavits have not led any evidence to prove that the building collapsed due to floods. Moreover, the cover note was for residential building and not for industrial building or the building, where some industry was running or the machines were installed. Although, the building in question is situated in industrial area, but only the residential building was covered.
20. In view of above discussion, there is no merit in the appeal and the order passed by the District Forum is detailed and speaking and there is no ground to interfere with the same.
21. Accordingly, the appeal being false and frivolous is dismissed with special costs of Rs.20,000/- (Rupees Twenty Thousand) and the impugned order under appeal dated 06.07.2007 passed by the District Forum is affirmed and upheld. Amount of costs shall be paid by the appellants to First Appeal No.1222 of 2007 8 respondent no.1-Insurance Company within one month of receipt of copy of the order.
22. The arguments in this appeal were heard on 29.08.2012 and the order was reserved. Now the order be communicated to the parties.
24. The appeal could not be decided within the stipulated timeframe due to heavy pendency of court cases.
(Inderjit Kaushik) Presiding Member (Baldev Singh Sekhon) Member August 31, 2012.
(Gurmeet S)