BEFORE THE DISTRICT FORUM:KURNOOL
Present: Sri.K.V.H. Prasad, B.A., LL.B President
And
Smt. C.Preethi, M.A.LL.B., Lady Member
Tuesday the 21st day of October , 2008
C.C.No.138/07
Between:
1. Smt. N. Khurseheed, W/o. Late Dr. N. Abdul Malik,
2. N. Jubeda, D/o. Late Dr.N. Abdul Malik,
3. N. Shaheensha, D/o. Late Dr. N. Abdul Malik
All are residents of H.No.26-607, Devanagar, Nandyal. … Complainants
Versus
1. The Branch Manager, United India Insurance Company Limited,
2-415-B, N.K.Road, Nandyal.
2. The Divisional Manager, United India Insurance Company Limited,
Divisional Office, Near State Bank, Kurnool.
… Opposite parties
This complaint is coming on this day for orders in the presence of Sri. M. Sivaji Rao, Advocate, for the complainant, and Sri. B. A.V. Subramanyam, Advocate, for the opposite parties 1 and 2 and upon perusing the material papers on record, the Forum made the following.
ORDER
(As per Sri. K.V.H.Prasad, President)
C.C.No.138/07
1. This case of the complainant is filed U/S 11 and 12 of C.P.Act seeking direction on the opposite parties to pay to the complainants Rs.2.5 lakhs assured amount under policy No.051102 / 11 /04 /00514 with interest at 12% towards the loss of medical equipment furniture and fittings in fire accident , Rs.1,00,000/- as damages and compensation for loss of earnings , Rs.25,000/- as compensation for mental agony at the improper repudiation of the claim and cost of the case alleging that Noble Health Clinic in Noorani Mazid Complex of Venkatachalam Colony , Nandyal belonging to Dr.N.Abdul Malik was insured with the opposite parties vide policy No. 051102 / 11 /04 /00514 for the period 12-7-2004 to 11-7-2005 for covering the risk of fire to the stocks of all medicines and furniture of said clinic for Rs.2.5 lakhs and during subsistence of said policy , on the innerving night of 22/23 -11-2004 the said insured clinic met fire accident due to electric short circuit damaging and causing loss to valuable equipment and furniture of said health clinic worth more than Rs.5.31 lakhs but the insurance being for Rs.2.5 lakhs only limiting the claim to that extent only.
2. In pursuance of the receipt of the notice of this forum as to this case of the complainant the opposite parties caused their appearance through their counsel and contested the case filling written version denying their liability to the complaints claim.
3. The written version of the opposite party No.2, adopted by the opposite party No.1 , besides requiring the proof of the complainants relationship the policy holder and the complaint averments , allege no deficiency on its part as the repudiation is based on two survey reports . Even though it admits the alleged standard fire and special perils policy ( SFSP policy) in favour of Dr.N. Abdul Malik , it allege the medicines put to loss in fire were expired medicines and the said fire accident was a created one to take undue advantage of the expired medicines and the said medical shop was without drug license and it being it as illegal the complainants are not entitled for reimbursement of loss occurred in the said fire accident especially as there is failure on the part of the complainant to furnish for consideration necessary account books purchase and sale bills , income-tax and sales tax returns and the room Nos . 3 and 4 concerned in the insurance are not separated by walls and the claim of the complainant being exorbitant as the surveyor asses the loss at Rs.23,585.75 only and so seeks dismissal of the case for want of proper cause of action.
4. In substantiation of the contentions while the complainant side has taken reliance on documentary record in Ex.A1 to A11 and sworn affidavit of the complainant in support of its case , the opposite party side has taken reliance on documentary record in Ex.B1 to B8 and the sworn affidavit of the opposite party No.1 in reiteration of its defence.
5. Hence, the point for consideration is whether the complainant has made out deficiency in the conduct of the opposite parties in repudiation of the claim and there by their liability to the complainants claim .
6. The Ex.A1 is the Xerox of the policy No. 051102 / 11 /04 /00514 concerned to this case . It insures risk to the building and stocks situated at 1-26th ward in room No.4 N.M Complex, Venkatachalam Colony, Nandyal against the loss on account of earthquakes ( fire and stock) .The property covered for risk of Rs.2.5 lakhs was stated therein as revolving chair, Godrej table , examination table stands , sterilization stand , switching material , B.P operators stethoscope and all types of medicines stocked . The perusal of the contents of Ex.A1 /B1 anywhere provides for a declaration of the insured that the said stocks and medicines in said insured place was stocked obtaining drug license . If the provision for any such declaration is provided in said policy then only the insured will be in know of the fact that for obtaining said insurance policy having drug license is an essential one and the insurance company may require its production at the time of claim under the said policy. In those circumstances only the insurance company will be justified in repudiation of the claim for non disclosure and non possession of drug license . The opposite party side did not place any such rule which warrants possession of drug license by the insured to cover the risk under the said policy . However the Ex.A9 alleges of the furnishing to the opposite party the drug license by the policy holder . The non renewal of the drug license does not make any variance as it envisages the entitleness of the policy holder for its renewal and his carrying with the medicines is not totally unauthorized or void from the beginning .
7. As to the fire accident occurred to the complainants insured property , III Town police, Nandyal registered a case vide Ex.A2 ( FIR) in Cr.NO.156/04 of P.S.Nandyal . It envisages the said occurrence as accidental fire due to electrical short circuit. The Ex.A4 preliminary enquiry report of police not only says the cause for said occurrence as electric short circuit but also the medicines and furniture’s in those rooms were completely burnt into ashes. The Ex.A5 and A10 fire service certificate issued by Additional Assistant Engineer Distribution III and fire service attendance certificate respectively also confirms the cause of fire accident as of electric origin . From the above the documents required in Ex.A6 appears to have been furnished to the opposite parties for consideration. In Ex.A6 and A7 the opposite parties requires certificate of business / license of medical shop. If they are required for having valid insurance policy the opposite parties must have insisted for it at the time of issual of the policy itself for having satisfaction that it is issuing policy for which there was a certificate of business / license of medical shop . As it has not done so there remains any justification to the opposite parties for its insistence at the time of claim settlement under the said policy .
8. In the Ex.A9 letter dated 11-7-2005 the complainant alleges the purchase bills and sale bills kept in said premises were burnt away in the said fire accident . In the light of above circumstances there appears any justification for the opposite parties in insisting for production of purchase bills and sales bills especially when some available documents pertaining to loan documents and purchase bill copies were said to have been furnished to the opposite parties surveyor and enclosed there with certificates issued by the concerned authorities and drug license. In the light of the bills being burnt away in said fire accident there appears any justification for their insistence by the opposite parties claim. If the opposite parties are having any doubt on the so called material furnished by the complainant , it ought to have made necessary enquiries on those material transparently to base its conclusions for repudiation of the claim . The opposite parties does not appear to have made any such endeavour .
9. The Ex.B2 is a paper clipping dated 24-11-2004 of Andhra Jyothi Newspaper. It alleges the fire accident was caused by pouring kerosene and litting fire to it by the very policy holder with an ulterior motive. But neither the Ex.A3 – panchanama of place of occurrence finds any traces of causing fire accident by litting fire to kerosene nor the Ex.A4 the preliminary enquiry of the police finds any such occurrence on account of litting fire to kerosene and on the other hand reveals that the witnesses enquired by the police during enquiry confirmed the fire accident on account of electric short circuit only . The Ex.B2 being a mere paper clipping without any corroborative material it is not remaining sufficient to over through the material in Ex.A3 and A4 and there by the Ex.B2 is not remaining worthy of reliance to doubt the cause of fire accident envisaged under Ex.A3 and A4 .
10. Unless any condition of the policy stipulates that the policy holder must be a person who would be filling income tax and sales tax returns there is any justification for the opposite parties for their insistence for consideration of the claim under the policy especially when the ExB3 letter dated 14-4-2005 of the policy holder maintains that he is not filling any of them. Further as the Ex.B3 indicates that the insured property is private clinic and not a business concern there appears any possibility for maintaining stock accounts . Consequently the opposite parties cannot take an advantage of said omission on the part of the policy holder to produce any stock accounts .
11, While the Ex.B6 fire survey report dated 11-4-2006 done by J.S.V. Kameswara Rao surveyor loss assessor appointed by the opposite parties , and the Ex.B7 the investigation report dated 8-2-2006 done by M.S. Prasad appointed by the opposite parties to investigate into the claim of the policy holder in Ex.A1/B1, appears to have been influenced by the newspaper clipping in Ex.B2 , the Ex.B7 does not at all assess the value of the loss and the Ex.B6 report assess the total loss of A.M Medical and General Stores of the policy holder to a tune of Rs.29,500/- only deducting the salvage value of Rs.210/- from total loss assessed at Rs.29,710/- .
12. It puts the said Rs.29,500/- loss assessed to a further depreciation of 4% considering 25 years average life for furniture and fixtures as the said were said to have been purchased in July , and August, 1998 and working out said rate of depreciation for six years as 25% and a further depreciation of 67.10% for under valuation of the stock of medicines worth Rs.1, 10,075/- and putting for a further drop of Rs.10,000/- as excess as per policy , totals the net loss to nil . The said surveyors who are the authors of said Ex.B6 and Ex.B7 were neither examined in person nor by an affidavit to lend any supportive justification for the so called depreciations the assessed value is put to or to enlighten the relevant provision of the said policy which justifies the said exclusions from the assessed value of the loss .
13. There appears any clause or stipulations in the policy that to have claim under this policies the insured must have a drug license for his insured medical shop and must be submitting returns of sale tax and income tax and maintenance of periodical stock records and the property covered under the policies must have a separate entity by partition walls. Hence there appears any justification for the opposite parties for their insistence for considering the claim arising under the policy . Further if they are so warranted for having a valid policy they must have been verified by the insurance company before to the issual of very policy after being satisfied of them . Instead , asking for these things when the claim is made shows not only every unjustification on the part of the opposite parties but also their evasive conduct for a just claim and there by their deficient conduct as the dealing with any such violation is not within the fold of insurance company and there by make it a ground of rejection of claim as the ground of non submission of stock registers etc., is not justified vide decision of Hon’ble National Consumer Disputes Redressal Commission ,New Delhi in New India Assurance Company Limited Vs. Bharat Watch Company reported in 1998 NCJ ( NC) 483 .
14. The insurance company has to assess the value of the payable claim by its proper enquiry and not merely taking reference to the investigations of others such as of police to which it is not a party it can take assistance of the assessing agencies but cannot depend upon it solely as it has to have its own independent assessment on those basis applying its mind . Any such endeavaour appears on the part of the insurance company in having its own evaluation except merely referring and adopting the surveyors reports . When the insurance company not placed any such cogent material justifying the repudiation the claim of the complainant remains to be accepted as unrebutted .
15. Consequently, there being every justifiability in the case of the complainant, the complaint is allowed directing the opposite parties with joint and several liability to pay to the complainant the assured amount under the Ex.A1/B1 policy towards the loss occurred to insured covered under the policy , Rs.10,000/- as compensation for mental agony suffered at the improper repudiation of the claim , and Rs.10,000/- as cost of this case as complainant being driven to the forum for redressal at the deficient conduct of the opposite parties . Time granted for compliance is one month from receipt of this order. In default the supra stated award shall be payable at their joint and several liability with 12% interest from the date of default till realization.
Dictated to the stenographer, transcribed by her, corrected and pronounced by us in the open bench on this the 21st day of October, 2008.
MEMBER PRESIDENT
APPENDIX OF EVIDENCE
Witnesses Examined
For the complainant :Nil For the opposite parties :Nil
List of exhibits marked for the complainant:-
Ex.A1. Policy No.051102/11/04/00514.
Ex.A2. Certified copy of Cr.No.156/04 Nandyal, III Town Police.
Ex.A3. Certified copy of Panchanama of scene of offence.
Ex.A4. certified copy of primary enquiry report dated 10-2-2005.
Ex.A5. Certified copy Fire service attendance certificate dated 29-12-04.
Ex.A6. Letter dated 27-12-2004 of OP.No.1 to complainant.
Ex.A7. Letter dated 28-6-2005 of OP.No.1 to complainant.
Ex.A8. Letter date 8-6-2006 of OP.No.1 to complainant.
Ex.A9. Letter dated 11-7-2005 of complainant to Op.No.1.
Ex.A10. Certificate issued by Additional Assistant Engineer,
Distribution – IV, Nandyal.
Ex.A11. Family member certificate dated 13-11-2006 issued by MRO,
Nandyal.
List of exhibits marked for the opposite parties:
Ex.B1. Duplicate policy No.051102/11/04/11/00000514.
Ex.B2. Andhra Jyothi paper cutting dated 24-11-2004
Ex.B3. Xerox copy of letter dated 14-4-2005 of complainant to OP.
Ex.B4. Letter dated 24-11-2004of OP.No.1 to complainant.
Ex.B5. Letter dated 28-6-2005 of OP to complainant.
Ex.B6. Fire service report dated 11-04-2006.
Ex.B7. Investigation report dated 08-2-2006..
Ex.B8. Letter dated 08-6-2006 of OP to complainant .
Sd/- Sd/-
MEMBER PRESIDENT
// Certified free copy communicated under Rule 4 (10) of the
A.P.S.C.D.R.C. Rules, 1987//
Copy to:-
Complainant and Opposite parties
Copy was made ready on :
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