BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION : HYDERABAD.
C.C.No.72/2011
Between:
Sri Lakshmi Nivas Plastics Pvt. Ltd.,
2-3-720/1/C1 Lal Bagh Govindanagar,
Amberpet, Hyderabad-13,
Rep. by its Managing Director K.V.S.Prasad,
S/o.Veera Raghavaiah, aged 43 years,
Occ: Business, R/o.Zinda Tilismath Road,
Amberpet, Hyderabad. ….Complainant
And
1.Syndicate Bank, Malakpet Branch,
Hyderabad, Rep. by its Chief Manager.
2.The United India Insurance Co.Ltd.,
Regional Office, 2nd floor, United India Towers,
3-5-817 and 818, Hyderabad-27,
Rep. by its Regional Manager.
3.The United India Insurance Co.Ltd.,
Branch Office, Malakpet, Hyderabad.
4. United India Bank Assurance Division,
7th floor, United India Towers, Basheerbagh,
Hyderabad, Rep. by its Manager.
(Opp.party No.4 added as per orders in
I.A.No.2425/11 DT. 26.12.2011). …Opp.parties
Counsel for the complainant : Mr.D.Vallabha Rao
Counsel for the opp.parties : M/s. M.V.Ramana-OP.1
Mr.S.Shravan Kumar-OPs.2 to 4
QUORUM: THE HON’BLE JUSTICE SRI D.APPA RAO , PRESIDENT,
SMT.M.SHREESHA, HON’BLE MEMBER
AND
SRI S.BHUJANGA RAO, HON’BLE MEMBER.
FIRDAY, THE THIRTIETH DAY OF NOVEMBER,
TWO THOUSAND TWELVE.
Oral Order : (Per Sri S.Bhujanga Rao, Hon’ble Member).
***
The complainant filed this complaint under Section 17(1)(a)(i) of the Consumer Protection Act,1986 seeking direction to the opposite parties to pay a sum of Rs.10,50,000/- for which sum, the stocks in trade of the complainant are insured by opposite party no.1 with opposite parties 2 and 3 and to direct the opposite party no.1 to pay a sum of Rs.14,18,000/- for not insuring the machinery for which, the term loan is sanctioned and for damages of Rs.5 lakhs for mental agony suffered by the complainant and for costs of the complaint.
The case of the complainant as set out in the complaint in brief is as follows:
The complainant established Plastic Blow Moulding and Injenction Moulding Industry by obtaining loan from the opposite party no.1 in the year 2003. Opposite party no.1 bank has initially sanctioned C.C. limit of Rs.10 lakhs towards the working capital. The said C.C. limit has been renewed in the year 2007. While renewing the C.C. limit, the opposite party no.1 bank has directly insured the stocks in trade and machinery with the opposite party no.2. While insuring the stocks and machinery, opposite party no.1 bank has not obtained the signatures of the complainant on the proposal form. The bank on its own insured the stock and machinery to secure the loan advanced by it, against any losses. The premium paid to the opposite party no.2 has been debited to the C.C. account of the complainant. The insurance policy issued by the opposite party no.2 is with opposite party no.1.The said insurance policy covers the risks of “fire accident and burglary”
Opposite party no.1 bank has sanctioned term loan of Rs.10.5 lakhs on Hypothecation of stocks and machinery and on security of immovable property i.e. plot no.107 situated at Boduppal village, Ghatkesar Mandal, R.R.Dist. Subsequently, opposite party no.1 has insured the stocks and machinery with opposite party no.2 in the year 2009-10 commencing from 11.12.2009 to midnight of 10.12.2010 vide policy no.050400/46/09/04/00000606. The stocks and machinery of the complainant company are continued to be under the hypothecation of opposite party no.1.
While so, on 2.9.2010 at 2 a.m. the fire accident took place, plant and machinery and stocks gutted in fire, thereby, the entire business of the company has been collapsed and company suffered huge financial loss. The said fact was informed to opposite party no.1 on 3.9.2010 requesting to claim insurance from opposite party no.2,which was covered under the above said policy. Thereafter, the opposite party no.1 addressed a letter dt.3.9.2010 to the Branch Manager of opposite party no.2 to arrange surveyor to assess the loss and settle the claim,at the earliest. Thereafter, the insurance company appointed one Sri Jillellamudi Surendra Babu Rao, surveyor and loss assessor to assess the loss caused, due to fire accident, in the company. The Surveyor noticed that the cover note of the policy covers the loss due to burglary only, hence requested opposite party no.1 to arrange the copy of fire insurance policy against the fire risk to proceed further in the matter.
In response to the said letter dt.14.9.2010 of the surveyor, opposite party no.1 bank has addressed a letter dt.14.10.2010 to opposite party no.3 informing that in their renewal proposal dt.27.7.2007, they have requested to cover the stocks of the caption company under fire and burglary policies and subsequently the policy 052200/11/07/11/00000362 dt.27.7.2007 was being renewed. No fresh proposal or specific letter was sent to cover the stocks of the company for burglary and not for fire and on their own, they have issued burglary policy only, instead of fire policy, it is deemed that the policy is renewed under fire and burglary and requested the insurance company, notwithstanding the validity of the policy, the insurance company may arrange to inspect/survey of loss/damage to the stocks of the unit without delay and settle the claim amount.
Opposite party no.1 instead of taking action to get the claim settled, initiated action against the complainant by issuing notice dt.9.10.2010 under sec.13(2) of SAARFAESI Act calling upon the complainant, to pay the loan outstanding within 60 days from the date of receipt of the notice.
Opposite party no.1 bank has taken insurance policy covering the risks of fire and burglary and the premium was debited to the account of the complainant, but did not furnish the copies of the insurance policy taken initially and the renewal policies. Therefore, opposite party no.1 bank is negligent in submitting the proposal for obtaining the insurance policies to protect the interests of both the bank and the complainant as well. The copies of the polices have been furnished to the complainant, only after the surveyor and loss assessors of opposite parties 2 and 3 referred the case as ‘no claim’. The mistake might have been occurred due to the communication gap and the negligence at the end of opposite party no.1 and opposite parties 2 and 3. There was no explanation from opposite party no.1, as to why they did not look into the policies issued by opposite parties 2 and 3, covering the risks and the items insured.
Therefore, on the advise of the Asst. General Manager of opposite party no.1 bank, the complainant gave a proposal for settlement of the claim and loan account on OTS basis. Opposite party no.1 also appointed Sri K.Ganapathi Valuers Pvt. Ltd. to assess the loss of stock and machinery and salable value of the machinery and immovable property offered as security. The said valuer has assessed the salable value of the machinery at Rs.65,000/- and the market value of the plot that was offered as security, valued at Rs.9 lakhs and realizable value of the plot is Rs.7,20,000/-. Accordingly, the complainant submitted a proposal for settlement on OTS basis.
At the time of fire accident, the stocks worth Rs.18 lakhs lying in the company premises and the entire stock gutted in fire. Hence no salvage was assessed by loss assessor. The loss of machinery is to a tune of Rs.24 lakhs and the stocks in trade to a tune of Rs.18 lakhs totaling to Rs.42 lakhs. Because of the negligence on the part of the opposite party no.1, the complainant suffered loss to a tune of Rs.42 lakhs. The complainant as a responsible borrower has submitted the proposal for OTS having offered Rs.7,50,000/- towards full and final settlement of total liability of the complainant.
Because of the negligence and carelessness of opposite party no.1 in not taking the insurance policy, covering the risks of the fire accident and burglary to the loss caused to the stocks in trade and machinery, hypothecated with opposite party no.1, the claim of opposite party no.1 on behalf of the complainant was denied by opposite parties 2 and 3 due to policy conditions and coverage of risk, which clearly establishes deficiency in service. Hence the complaint.
Resisting the complaint, the opposite party no.1 bank filed written version contending, interalia that as per the terms of the sanction of the loan and also documents executed, it was the responsibility of the borrower to insure the hypothecated machinery and stocks and deliver the insurance policy to the bank. Infact, the complainant had submitted a letter along with security documents undertaking to insure the stock/machinery for the full value and submit the policy to the Bank. This opposite party, further contended, that as per the agreement of hypothecation executed by the complainant also, it is responsibility of the borrower to insure the hypotheca and submit the policy document to the Bank. It is only in the eventuality of the borrower failing to insure the hypothecated assets, the bank insures the same, in order to safeguard its interest. The complainant is further expected to submit the stock statement for the stocks in the unit, once in every month. But, the complainant never used to submit the stock statement or insurance policy to opposite party no.1 bank.
This opposite party further contended that apart from the above, the complainant was not operating the loan account as per the agreed terms and the account was classified as ‘Non Performing Asset’ as per the RBI guidelines and recovery proceedings are initiated under SARFAESI Act,2002 by issuing notice under Sec. 13(2) of the said Act, to the complainant, on 9.10.2010 for realisation of securities. The complainant, having failed to respond to the said notice, within the stipulated time of 60 days, the opposite party no.1 initiated further proceedings u/s.13(4) of the SARFAESI for the sale of mortgaged property for realisation of dues and the said notice was also published in the newspapers. This opposite party further contended that no activity was going on in the unit for the last more than a year and no monthly statements were submitted to the bank as required by the terms of the sanction. In the absence of such statement, it is for the complainant to establish the correctness of its/his claim regarding the loss.
This opposite party further contended that auction of the mortgaged property was completed for proceedings initiated under SARFAESI Act, there is an appeal provision before the Debt Recovery Tribunal u/s. 17 of the said Act and the complainant had approached the Commission without even admitting to prefer an appeal against the said proceedings. The claims made in the complaint are imaginary and without any supporting documents. The mortgaged property was sold in the auction conducted on 6.9.2011 and an amount of Rs.13,25,000/- was realized and OD account was closed by appropriating the same. The Term Loan Account which is also classified as NPA, is overdue by Rs.11,46,880-87 and the opposite party no.1 reserves its right to initiate its proceedings for recovery of the same. The complainant had not made out any case of deficiency in service or negligence on the part of opposite party no.1 and as such, the complaint deserves to be dismissed with costs.
Opposite parties 2 and 3 filed written version, interalia, contending that the complaint is bad for misjoinder of opposite parties 2 and 3 and non joinder of Bank Assurance. Opposite party no.1 bank has taken the insurance policy with United India Insurance Co.Ltd., Basheerbagh, Hyderabad on 11.12.2009 for the period from 11.12.2009 to 10.12.2010. The policy taken was ‘Burglary Policy’ vide policy no.050400/46/09/04/00000606, the sum insured was Rs.10,50,000/-, the items covered under the said policy are stock of oils and lubricants.
These opposite parties further contended that the complainant informed the insurer i.e. Bank Assurance Division, through opposite party no.1, about the fire accident on 3.9.2010. The Bank Assurance Division deputed their surveyor and loss assessor to assess the net loss. The said surveyor requested the complainant to furnish all necessary documents including the policy copy. Inspite of several requests, the complainant did not furnish the relevant documents except the policy copy. The surveyor, on observing the policy, found that the policy was ‘Burglary BP Policy’ covering only oil and lubricants, which is not relevant to the peril. The risk is supposed to be covered under Standard Fire and Special Perils Policy. The surveyor submitted his report on 7.2.2011 stating that the occurrence of loss or damage to the stocks of the insured is purely accidental in nature, i.e. due to short circuit, which is cause of peril, not covered under/or fall within the scope of Burglary BP policy, as such there is no liability on the part of the insurer. Therefore, the file was closed as ‘no claim’ and informed the same to the complainant through letter dt.4.3.2011. They further contended that they have not received any instructions from the opp.party no.1 or the complainant to insure the stocks against the fire risks, as such burglary policy was renewed and there was no fire policy. Therefore, the complaint is liable to be dismissed with costs.
During the course of enquiry, in order to prove its case, the complainant filed evidence affidavit of one K.V.S. Prasad, its Managing Director and got marked Exs.A1 to A23. On behalf of the opposite party no.1 bank, its Branch Manager filed his affidavit and got marked Exs.B6 to B8. On behalf of opposite parties 2 and 3, Asst. Manager of opposite party no.2 insurance company filed his evidence affidavit and got marked Exs.B1 to B5.
We heard the counsel for both the parties and perused the entire material on record including the written arguments filed by both the parties.
Now the points for consideration are
1. Whether there is any deficiency in service on the part of the opposite parties?
2. Whether the complainant is entitled to the reliefs sought for in the complaint?
3. To what relief?
It is an admitted fact that the complainant established Plastic Blow Moulding and Injenction Moulding Industry, under the name an style of Sri Laxmi Nivas Plastic Industry Pvt. Ltd., by obtaining loan from opposite party no.1, in the year 2003. The said fact is also established by Ex.A1, Certificate of Incorporation dt.5.11.2003 and Ex.A2, extract of minutes of meeting of Board of Directors dt.5.3.2007 and Ex.A3 acknowledgement part –II issued by Govt. of A.P. , Dept. of Industries.
It is also an admitted fact that the opposite party no.1 bank has sanctioned Term Loan of Rs.10,50,000/- on hypothecation of stocks and machinery and on security of immovable property i.e. plot no.107 admeasuring 200 sq.yards in survey nos.35, 36 and 51 part. situated at Boduppal Village, Ghatkeshar Mandal R.R.Dist.
The case of the complainant is that opposite party no.1 has insured the stocks and machinery, with opposite party no.2 insurance company, for the year 2009-2010 commencing from 11.12.2009 to midnight of 10.12.2010 vide policy no. 050400/46/09/04/00000606 and that the machinery of the complainant company is continued to be under the hypothecation of opposite party no.1. In support of his case the complainant filed Ex.A6 policy copy.
While so, on 2.9.2010 at about 2 a.m. fire accident took place in the company of the complainant and as a result the plant and machinery and the stock gutted in fire. Immediately, the said fact was brought to the notice of opposite party no.1 on 3.9.2010 requesting to claim insurance policy amount from opposite party no.2, as per the policy no. 050400/46/09/04/00000606. Thereupon, responding to the request of the complainant, Opposite party no.1 addressed a letter Ex.A8 to the Branch Manager of opposite party no.2 requesting to arrange surveyor to assess the loss and to settle the claim for the said policy at the earliest. Immediately, thereafter, opposite party no.2 insurance company deputed surveyor and loss assessor by name Jillellamudi Surendra Babu Rao to assess the net loss caused due to fire accident in the company. The said surveyor visited the place of accident and on the information given by the complainant that the banker has taken care to cover the said property and obtained insurance policy by debiting to his account to obtain proper coverage and insurance, addressed a letter Ex.A10 14.9.2010 to the Chief Manager of opposite party no.1 bank marking a copy of the same to the complainant company requesting to arrange copy of fire insurance policy covering the subject property against the fire risks to proceed further in the matter, if not confirm the same in writing to enable the undersigned to inform to the insurer to close the claim as ‘no claim’. In pursuance of surveyor’s letter, opposite party no.1 bank addressed Ex.A11 letter dt.14.10.2010 to opposite party no.2 stating that notwithstanding with the validity of the policy, arrange to inspect/survey the loss/damage to the stock of the unit, without delay and settle the claim amount. In response to Ex.A11 letter, the surveyor addressed Ex.A12 letter dt.23.10.2010 requesting to furnish the copy of fire insurance policy covering the subject property, against the fire risks, to proceed further in the matter, if not the claim would be closed as ‘no claim’. All the above facts are not in dispute.
The specific case of the complainant is that while renewing the C.C. limit of Rs.10 lakhs sanctioned by opposite party no.1 bank, towards the working capital, opposite party no.1 bank has directly insured the stocks in trade and machinery with opposite party no.2. While insuring the stocks and machinery, opposite party no.1 bank has not obtained signatures of the complainant, on the proposal and opposite party no.2 Insurance Company has also not inspected the complainant company, issued the policy in the name of Syndicate Bank, Malakpet Branch, Hyderabad vide policy no. 052200/11/00000362 from 27.7.2007 to the mid night of 26.7.2008 for the stocks covering the risks of fire and of stocks. The bank on its own insured the stock and machinery for the loan advanced by the bank against any losses. That the premium paid to the opposite party no.2 has been debited to the C.C. account of the complainant. The said policy covers the risks of fire accidents and burglary. In proof of the above case, the complainant filed Ex.A5 copy of the insurance policy bearing no.052200/11/07/11/00000362.
Opposite party no.1 contended that the complainant had credit facilities from the opposite party no.1 for its business and executed various security documents at the time of availing limits, apart from creating the mortgage security of immovable property. As per the sanction letter, it is the responsibility of the borrower to insure the hypothecated assets and submit a copy of the policy to opposite party no.1. The complainant had executed a composite deed of hypothecation dt.8.3.2007 as the Managing Director of the company vide Ex.B6 and also submitted Ex.B7 letter agreeing to insure the hypothecated assets. Therefore the complainant who was primarily responsible for the insured assets, having failed to do so, cannot complain against opposite party no.1 that it has not obtained a policy to cover all the contingencies while insuring the assets.
It is true that as per Ex.B6, Composite Hypothecation Agreement Clause 8(a), all the goods which are subject matter of the agreement shall be insured and kept insured by the borrower against the loss or damage by fire, theft, robbery, lightening, riot, civil commotion etc. as the borrower may think necessary or as may be required by the Bank, in its discretion, in joint names of the borrower and the bank, with an insurance company approved by the Bank to the extent of actual value of the said goods and that the cover note/notes and the insurance policy/policies thereof shall be delivered to the Bank.
For better appreciation of contentions of both the parties, it will be useful to extract Clause 8 ‘a’ & ‘b’ of Ex.B6 Hypothecation Agreement which reads as follows:
“a).That all the “SAID GOODS” , which is the subject matter of this agreement, shall be insured and kept insured by the Borrower against loss or damage by fire, theft, robbery, lightening , riot, civil commotion, malicious damages, strikes and/or any other risk as the Borrower may think necessary or as may be required by the Bank in its discretion in the joint name of the Borrower and the Bank with an Insurance Company/Companies approved by the Bank to the extent of actual value of the “SAID GOODS” and the Borrower shall punctually pay the premium due for such insurance and that the cover note/s and the insurance policy/policies thereof shall be delivered to the Bank.
“(b)If the Borrower fails to effect such insurance in time, the Bank may, but without being bound to do so, insure the “SAID GOODS” against any one or more the aforesaid risks as may be deemed necessary by the Bank in its discretion in such joint names and any premium and other charges paid by the Bank shall be paid by the Borrower. However, the Borrower agrees that for any non-insurance by the Bank, the Bank is not liable/answerable to the Borrower”.
From the above Clause 8 (a) and (b) of Ex.B6, it is obvious that if the complainant failed to obtain the policy as required under Clause 8(a), the Bank may insure the goods which are subject matter of the agreement against any one or more risks mentioned in Clause 8(a) in joint names with any insurance company and obtain the policy.
Ex.B7 is written undertaking said to have given by the complainant to the Chief Manager of opposite party no.1 bank to furnish the insurance for full value and to submit copy of it. Ex.B7 letter is a piece of plain paper without date. However, in view of clause 8(a) and (b) of Ex.B6, there is no necessity either for the complainant to give or for the bank to obtain Ex.B7 letter from the complainant. Therefore Ex.B7 cannot be taken into consideration.
Admittedly, the complainant did not obtain the policy as required under Clause 8 (a) of Ex.B6 Agreement. The specific case of the complainant since the beginning is that the opposite party no.1 directly obtained the original of Ex.A5 insurance policy and subsequently renewed the same under Ex.A6 copy of the policy and that he was not informed of the same nor was furnished with copies of the same and that he could able to secure Exs.A5 and A6 copies of the policies, only after the surveyor visited the company, after the accident, to assess the loss. Opposite party no.1 has not disputed the fact that it obtained Exs.A5 and A6 policies by itself. It is not the case of the opposite party no.1, that it has furnished the copies of the policies to the complainant. But admittedly, the premium amount paid to opposite party no.2 insurance company, was debited to the account of the complainant by opposite party no.1. The opposite parties have not filed the proposal forms said to have been signed by the complainant under the policies. It is not in dispute that the stock and machinery continued to be under hypothecation of opposite party no.1 till the date of accident.
In response to Ex.A10 letter dt.14.9.2010 letter addressed by the surveyor to the Chief Manager of opposite party no.1 bank, the Senior Manager of opposite party no.1 addressed a letter Ex.A11 dt. 14.10.2010 stating as follows:
“In our renewal proposal dt.27/07/2007, we have requested to cover the stock of the captioned company under fire and burglary policies and subsequently the same policy is being renewed i.e. 052200/11/07/11/362 dt. 27/07/2007. No fresh proposal or specific letter was sent to you to cover the stocks of the company only for burglary not for fire. On your own you have been issuing burglary policy only instead of fire policy. It is deemed that policy is renewed under fire and burglary. Moreover as per the extant rules of Insurance company no policy can be issued without primary risk i.e., fire. Therefore quoting the existing policy to reject the claim of the party/Bank is not reasonable and tenable.
Not withstanding the validity of the policy, you may arrange to inspect/survey loss/damage to the stocks of the unit without delay and settle the claim amount. “
Ex.A11 discloses that opposite party no.1 sent proposal to opposite party no.2 insuring the stocks and machinery of the complainant, with insurance company, for fire and burglary and later sent renewal proposals requesting to cover the stock of the company under fire and burglary policies.
Ex.A5, the copy of Standard Fire and Special Perils Policy discloses that the opposite party no.1 itself insured the stocks in trade of the complainant. However, opposite party no.1 bank obtained the original of Ex.A6 policy Burglary BP policy, for the stocks and machinery with opposite party no.2, for subsequent period commencing from 11.12.2009 to mid night of 10.12.2010 and the premium paid to opposite party no.2 by opposite party no.1 was debited to the account of the complainant. Though the stocks and machinery was hypothecated with opposite party no.1 bank, machinery was not covered under the policy. Though, opposite party no.1 bank received the policies from the insurance company from time to time, it appears, it did not look into the policies covering the risks and items under the policies. As per the version of opposite party no.1 bank, the policy proposals were submitted covering the stocks in the unit against the risks of fire and burglary. The insurance company issued the policy initially covering the risks of fire and burglary, but in subsequent policies it covered only the risk of burglary as mentioned above.
The original of Ex.A6 insurance policy was issued by opposite party no.2 insurance company only to cover the risk of burglary and the stocks in trade are mentioned as oils and lubricants etc. The said items are nothing to do with the business of the complainant. The stocks in trade input material are plastic granules and out put material are plastic bottles, containers and jars etc. It is significant to note that the surveyor appointed by opposite party no.2 insurance company, gave report Ex.B2 wherein it is mentioned that the loss/damage caused to stock of plastic products in the company of the complainant, but he did not find loss of any oils or lubricants, for which, the policy was taken. It is therefore obvious, that either opposite party no.1 bank or opposite party no.2 insurance company did not inspect the premises of the complainant and examined the activities of the company and issued the policy without mentioning the stock in trade as plastic component. Both opposite parties 1 and 2 have not filed the proposal forms said to be kept in their custody. Opposite party no.1 bank did not offer any explanation as to why it did not look into the policy issued by opposite party no.2 covering the risks and items insured. Had the opposite party no.1 furnished the copy of the policy to the complainant, the complainant would have taken steps for correction of the stock in trade from oils and lubricants etc. to plastic products and machinery of the complainant company.
As seen from Ex.B1 copy of the policy, in between Exs.A5 and Ex.A6 policies, the opposite party no.1 bank obtained Burglary BP policy in the name of the complainant for the stock of oils and lubricants etc. for the period from 11.12.2008 to mid night of 10.12.2009.
Though, opposite party no.1 bank has advanced the loan for purchase of machinery also the same was not insured with opposite parties 2, 3 and 4. Had opposite party no.1 bank insured the machinery, the complainant would have got the claim from opposite party no.2 which can be adjusted towards the loan outstanding.
The learned counsel for the complainant relied on the following decisions in support of the case of the complainant. The Hon’ble National Commission in the case of PUNJAB NATIONAL BANK vs. BHUPINDER SINGH in IV (2012) CPJ 129 (NC) observed as follows:
“The banks are constituted to serve the people properly. The people of this country have reposed enormous faith in the banks. The learned counsel for the petitioner has tried to make light of such like serious criminal offences. The higher authorities are prone to turn a Nelson’s eye to indiscipline in the Branch rather than tackling the issue by taking the bull by horns. Unfortunately, ours is not a Criminal Court. For such like offences, codging punishment is called for. It appears that the Branch Manager has committed series of criminal offence. The omissions and commissions on the bank’s part must have caused problems to the complainant without number. For such kind of harassment and mental torture, the complainant deserves this much compensation”.
The Hon’ble National Commission in CHAMPAKLAL HANSRAJ SHAH vs. UNITED INDIA INSURANCE CO.LTD. III(2012) CPJ 303 (NC) observed at para 7 of its judgement “principle and the objective of insurance cover being to protect the consumer from any unforeseen eventuality, the attention of the opposite party-insurance company snipe at the main purpose of the policy should be guarded and a view should be taken to relieve the distress and miseries of victims of incidents”.
In view of the facts and circumstances discussed above and rulings of the Hon’ble National Commission, we have no hesitation to hold that because of negligence and carelessness of opposite party no.1 in not taking insurance policy covering the risks of fire accident, burglary to the loss caused to the stocks in trade and machinery hypothecated with opposite party no.1, the complainant suffered loss due to fire accident occurred in their company. The claim of the opposite party no.1 on behalf of the complainant was repudiated by the opposite parties 2,3 and 4 due to policy conditions, coverage of risk which clearly establishes the deficiency in service on the part of the opposite party no.1. However, the complainant failed to establish deficiency in service, on the part of the opposite parties 2, 3 & 4. Therefore, opposite party no.1 only is liable to compensate the loss of the complainant.
As seen from the documents, especially Exs.A14 and A23 clearly show that the stopping further correspondence with the surveyor after receiving Ex.A12 letter, the opposite party no.1 initiated action against the complainant for recovery of loan amount borrowed by him, under the provisions of SAARFAESI Act,2002 (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act).
As seen from Ex.B2, Surveyor’s report, the surveyor appointed by the opposite party no.2 assessed the net loss of stock and machinery in the company of the complainant at Rs.16,20,800/-. The opposite party no.1 has not adduced any evidence to show that the assessment of loss by the surveyor under Ex.B2 report is not correct. In our considered view, the complainant is entitled to the said amount from opposite party no.1. Infact, in the written arguments submitted on behalf of the opposite party no.1 bank, it is mentioned that the mortgaged property since sold for an Rs.13,25,000/-, the said amount was appropriated towards the dues. The complainant is still due an amount of Rs.11.46,880.87 ps. and that opposite party no.1 reserves its right to initiate appropriate action for realization of the same. Opposite party no.1 did not adduce any evidence in proof of the same. We do not find any reasons as to why the assessment of loss made by the surveyor under Ex.B2, cannot be accepted.
Admittedly, opposite party no.1 did not approach Debt Recovery Tribunals under the said Act to recover the loan amount from the complainant. Therefore, the present complaint filed by the complainant under the provisions of the Consumer Protection Act is maintainable under law. The rulings of Hon’ble National Commission cited by the learned counsel for the opposite party no.1 in CDJ 2012 (CONS.) Case No.350 & 487 are not applicable to the facts of the present case.
In the result, the complaint is allowed in part, directing opposite party no.1 bank to pay a sum of Rs.16 lakhs to the complainant with interest at 9% p.a. from the date of the complaint till the date of realization towards compensation. Opposite party no.1 is also directed to pay a sum of Rs.10,000/- towards costs of the complaint. The remaining claim of the complainant is dismissed. The complaint against opposite parties 2 to 4 is dismissed, but without costs. Opposite party no.1 is directed to comply with the order within four weeks from the date of this order.
PRESIDENT
MEMBER
MEMBER
Pm* Dt. 30.11.2012
APPENDIX OF EVIDENCE
Witnesses examined
For the Complainant :nil For the opp.parties : nil
Chief evidence affidavit of the complainant is filed.
Affidavit evidence of opp.party no.1 in lieu of Chief examination is filed.
Affidavit evidence of opp.party no.2 is filed.
Exhibits marked on behalf of the complainant:
Ex.A1:Certificate of Incorporation dt. 5.11.2003,
Ex.A2:Extract of minutes of meeting of Board of Directors dt.5.3.2007.
Ex.A3:Acknowledgement Part II issued by Govt. of A.P. Dept. of
Industries.
Ex.A4 :Lr.dt.16.12.2009 from opp.party no.1 to Complt.
Ex.A5 :Insurance policy
Ex.A6 :Insurance policy
Ex.A7 :Fire Attendance Certificate dt. 18.9.2010
Ex.A8 :Lr. from opp.party no.1 to opp.party no.2
Ex.A9 :Lr.dt.3.9.2010 addressed by complainant to opp.party no.1
Ex.A10:Lr.dt.14.9.2010 from the Surveyor to opp.party no.1
Ex.A11:Lr.dt.14.10.2010 from opp.party no.1 to Opp.party no.2
Ex.A12:Lr.dt.23.10.2010 addressed by surveyor of OP.2 to OP.1
Ex.A13: Lr. dt. 6.9.2010 addressed by opp.party no.1 to the complt.
Ex.A14: Notice dt.9.10.2010 issued by opp.party no.1 to the complt.
Ex.A15: Lr. dt.23.11.2010 addressed by K.Dhanapathi Rao & Valuers
Pvt. Ltd. to opp.party no.1
Ex.A16: Lr.dt.24.12.2010 from complainant to opp.party no.1.
Ex.A17: Lr.dt.18.3.2011 from opp.party no.1 to the complt.
Ex.A18:Lr. dt. 15.4.2011 from complainant to opp.party no.1.
Ex.A19: Lr.dt.9.6.2011 from opp.party no.1 to complainant .
Ex.A20: Lr.dt.23.6.2011 from complt. to opp.party no.1.
Ex.A21: Auction notice given by opp.party no.1 given in Saakshi
News Paper.
Ex.A22: Lr. dt. 30.7.2011 from opp.party no.1 to complt.
Ex.A23: Lr.dt.12.8.2011 from complt. to opp.party no.1
Exhibits marked on behalf of the opposite parties:
Ex.B1 : Insurance policy (Burglary BP Policy).
Ex.B2 : Survey Report dt. 7.2.2011.
Ex.B3 : Lr. dt. 14.9.2010 from surveyor to opp.party no.1
Ex.B4 : Lr.dt.19.10.2010 from opp.party no.2 to opp.party no.1.
Ex.B5 : Lr. dt. 4.3.2011 from opp.party no.2 to complainant .
Ex.B6 : Composite Hypothecation Agreement.
Ex.B7 : Lr. from complainant to opposite party no.1.
Ex.B8 : Lr. dt.23.6.2011 from complainant to opp.party no.1.
PRESIDENT
MEMBER
MEMBER
Pm* Dt. 30.11.2012
