BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
C.C. 33 of 2011
Between:
Sri D.Venugopal S/o Laxmirajyam,
age 46 years, Occ: Business, Proprietor
of Nuthan Dresses R/o H.No.1-7-79
New (1-3-1028 Old) Metpally Main Road
Karimnagar Dist.
Complainant
A N D
1. The United India Insurance Co.Ltd.,
Micro Office H.No.1-4-209, Sai Goud Bldg.,
Opp: Balaji Theatre Lane, Balaji Nagar
Jagtiyal, District Karimnagar rep. by
its Divisional Manager, Divisional Office
Behind R & B Guest House, Karimnagar
2. The Branch Manager,
National Insurance Co.,Ltd.,
1st Floor, 4-8-799/2, Laxmiraj Complex
Jawahar Road, Dist.Nizamabad, AP
3. The United India Insurance Co.Ltd.,
Micro Office, H.No.1-4-209, Sai Goud
Building, Opp: Balaji Theatre Lane,
Balaji Nagar, Jagtiyal Dist. Karimnagar
rep. by its Dividional Manager
D.O. behind R & B Guest House
Karimnagar
4. The Branch Manager
State Bank of Hyderabad (ADB)
Metpally Branch, Metpally Town
Karimangar Dist.
Counsel for the Complainant: M/s. TLK Sharma
Counsel for the Ops. M/s V.Srinivas Rao (Ops1&3)
M/s M.Hari Babu (OP2)
Served (OP4)
QUORUM:
HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.
&
SRI S.BHUJANGA RAO, HON’BLE MEMBER
WEDNESDAY THE THIRD DAY OF OCTOBER
TWO THOUSAND TWELVE
ORAL ORDER: (Per Hon’ble Sri Justice D.Appa Rao, President.)
***
1. This is a complaint filed u/s 17 of the C.P. Act claiming `24,31,289/- for loss of stocks, damage to the building proportionate to the policies issued by opposite parties no.1 and 2 with interest @ 24% per annum from the date of submission of claim till payment together with compensation of `5 lakhs for deficiency in service, `5 lakhs towards mental agony and costs.
2. The case of the complainant in brief is that he is the owner and resident of 1-3-1028 (old) H.No.1-7-79 (new) situated at Metpally Village of Karimnagar District consisting of ground and first floor. He availed bank loan from the opposite party no.4, State Bank of Hyderabad and he has been running business under the name and style of Nutan Dresses a garment shop of readymade dresses since last several years. The opposite parties no.1 and 3, United India Insurance Company and its Branch Office, issued Shop Keepers Policy covering the stocks for sum assured `12,01,500/- for the period from 4.9.2008 to 3.9.2009. They issued another policy Standard Fire and Special Perils Policy covering the building for sum assured `9,75,000/- which includes electrical installations, furniture, fixtures, fittings etc for the period from 22.3.2004 to 21.3.2014. The opposite party no.2, National Insurance Company Limited issued Shopkeepers Insurance Policy covering stock in trade such as readymade garments for sum assured Rs.15 lakhs and Rs.5 lakhs covering the furniture, fixtures, fittings, electricals totalling to Rs.20 lakhs for the period 17.09.2008 to 16.09.2009.
3. While so, when he and his family members were away, a fire accident took place on 6.10.2008 due to which both the building as well as stocks gutted and damaged. When the claim was made the opposite parties no.1 to 3 jointly deputed a common surveyor M/s Professional Surveyors & Loss Assessors Pvt Ltd., which inspected and submitted its report.
4. After submission of the report of the surveyor, the opposite party no.1 released a sum `5,94,373/- on 27.3.2010 out of sum assured `12,01,500/- sent to opposite party no.4. The opposite party no.3 released a sum `2,12,999/- on 29.10.2010 as against total loss of `7,82,711/- estimated by Civil Engineer. Though the amount had to be paid to him contrarily they had released it to the Bank without his consent. Therefore, the sum that was sent to the Bank was not acceptable to him. The opposite party no.2 released a sum of `9,62,839/- on 22.3.2010 against a total sum of `20,25,000/-.
5. The complainant submitted report from MRO, Electricity Department and Fire Brigade which had estimated the amounts towards loss sustained by him. The amount that was released were far less than the damage suffered. Despite legal notice issued no satisfactory reply was given. Alleging that non-settlement of claim disproportionate to the loss suffered by him would amount to deficiency in service claimed the amounts which we have mentioned earlier in Para No.1.
6. Opposite parties no.1 and 3, United India Insurance Co., Ltd., and its branch filed written version denying the facts alleged by the complainant while admitting the issuance of two policies, one for the sum assured `12,01,500/- towards Shop Keepers Policy and another for `9,75,000/- towards Standard Fire and Special Perils Policy. However, the policies were issued in the name of State Bank of Hyderabad. The complainant had taken policies from different insurance companies for the same stocks kept in the single premises claiming damages for the same accident contrary to clause (6) of the terms and conditions: Clause (6) which reads as follows:
Contribution: In the event of any loss, damage, liability or expenses covered by this policy there shall be any other insurance covering the same loss, damage liability or expenses whether effected by the insured or not. This policy shall ay only so much of the excess of such loss, damage, liability or expenses as is/not recoverable under such other insurance subject always to the limitation of this policy.
7. In the circumstances both the insurance companies jointly deputed a single surveyor for assessing the loss. Therefore he cannot expect amounts from both the insurers. As per the surveyor’s report, the loss sustained was made good by sending the said amount to the Bank towards full and final settlement through its letter dated 22.10.2010. The complainant accepted the amount. The question of receiving the amount under protest would not arise. The complainant has no locus standi to file the complaint. There was no deficiency in service and prayed for dismissal of the complaint with costs.
8. Opposite party no.2, the National Insurance Co., Ltd., equally resisted the case. However, admitted the issuance of the Shopkeepers Insurance policy for a sum of `15 lakhs covering its stock in trade such as readymade dresses and `5 lakhs covering the furniture, fixtures, fittings, electricals totalling to `20 lakhs for the period from 17.09.2008 to 16.9.2009. On receipt of intimation, a surveyor was appointed to assess the loss. He has inspect it on 7.10.2008 and 8.10.2008. The complainant was directed to file claim documents, namely, purchase and sale bills, VAT return, entire records in respect of the stocks. He did not submit despite reminders. As per the report of the surveyor the net loss was apportioned and `9,62,839/- was paid towards full and final discharge. The complainant issued vouchers Exs.B11 and B13 towards full and final settlement of the claim. Equally the insured had received the assessed amount executed full and final discharge voucher towards full and final settlement without raising any objection. There was neither coercion nor fraud or undue influence in settling of the claim. He is not an illiterate and is doing business with legal assistance. The complaint was filed with an unlawful intention to gain. It is an afterthought. The complaint is vexatious and prayed for dismissal of the complaint with costs.
9. Opposite party no.4 did not choose to contest despite service of notice.
10. The complainant in proof of his case filed his affidavit evidence and got Exs. A1 to A45 marked. Refuting their evidence the opposite parties no.1 and 3 filed the affidavit evidence of their Regional Manager and got marked Exs.B1 to B6 and on behalf of the opposite party no.2, its Regional Manager has filed his affidavit evidence and got marked Exs.B7 to B13.
10. The points that arise for consideration are :
1. Whether the complainant is entitled to the entire claim
made by him towards the insurance policies?
2. Whether the amounts that were paid by the insurance
companies are towards full and final settlement or towards
part payment?
3. To what relief?
11. It is an undisputed fact that that the complainant is running garment shop under the name and style of Nutan Dresses and had obtained from United India Insurance Company Limited, the opposite parties no.1 and 3, two policies i.e., Shop Keepers Insurance Policy for the sum assured `12,01,500/- covering the stocks and another Standard Fire and Special Perils Policy for the sum assured `9,75,000/- covering the building which includes electrical installations, furniture, fixtures, fittings etc., vide Exs.B1 and B2 (Exs.A11 and A13). He had also obtained Shop Keepers Insurance Policy from the opposite party no.2, the National Insurance Company Limited covering stock in trade such as readymade garments for sum assured Rs.15 lakhs and `5 lakhs towards the furniture, fixtures, fittings, electrical totalling to `20 lakhs., vide Ex.B8 (ExA12).
12. It is also not in dispute that on 6.10.2008 the building was damaged in fire accident and the entire stock, furniture, electrical installations were burnt and destroyed evidence in Ex.A1, a copy of FIR, Ex.A3 and A4, Panchanamas, Exs.A5 and A6, certificates issued by the Electricity department and fire department respectively. The insurance companies having come to know that the complainant had taken insurance policies for the same stock from two different insurance companies covering the period for which the accident took place, appointed a common surveyor and loss assessor. Basing on Ex.B10 report, the insurance companies, namely, United India Insurance Company Limited, opposite parties no.1 and 3, released `5,94,373/- and `2,13,999/- , while the opposite party no.2, National Insurance Company Limited, released `9,62,839/-. When the opposite parties no.1 and 3 has released the amount, the Bank had received the amount towards full and final settlement vide its letter Ex.B4 dated 22.10.2010. The opposite parties no.1 and 3 when released the above said amount, the complainant acknowledged it. It may be stated herein that while opposite parties no.1 and 3, United India Insurance Company Limited, assured `12,01,500/- and `9,75,000/- towards the insurance policies, the amount that was paid was `5,94,373/- and `2,13,999/- totalling to `8,08,372/-. For the insurance policy issued by opposite party no.2 as against a sum of `20,25,000/- the amount that was paid `9,62,839/-. The complainant claimed `6,07,127/-, `7,82,711/- from opposite parties no.1 and 3 and `10,62,161/- from opposite party no.2 alleging that still the said amounts were due from the above insurance companies.
13. The complainant in proof of his claim, filed Ex.A10 copy of weighing bills dated 11.10.2009, Exs.A30 to A32 delivery receipts, Ex.A33 invoice, Ex.A34 copies of challans besides Ex.A35 statement of stocks hypothecated to SBH. He also filed Exs.A37 to A40 quotations from glass and plywood stores, electrical stores and wood furniture shops. Exs.A40 to A45 are DTDC Cargo and Courier receipts. The complainant also got the building estimated through his own engineer marked as Ex.A16 for `5,33,520.04 towards civil works. By then already the complainant had the advantage of the report of the surveyor whereunder he made estimate. The surveyor appointed by both the insurance companies, not only mentioned layout plan of the building and various damages caused but also made physical verification of the stocks. He also noted the value and goods available at the time of loss. Evidently, the complainant did not produce balance sheet, accounts of the previous three years, copies of purchase bills and sale bills, LRs, ledger accounts, bank stock declaration statement, bank account statement, VAT returns, income tax returns etc. A sweeping explanation was that they were burnt in a fire accident.
14. It is very important to know that the complainant did not dispute, when the surveyor had made a mention as follows:
01. Sale bills for the period of 01.04.2008 to 06.10.2008: Insured stated that normally they do not issue any sale bills to the customers against purchases and if any customer insists for the same, they issue a small piece of paper (chit) mentioning the date, name of the goods sold and value. This was mainly to enable the buyer to know the price and in case of exchanges for identification purposes.
02. Income tax returns: IT returns were never filed since none had insisted for the same.
03. VAT/TOT: Their business was not subject to VAT but attracts Turn over Tax but even this return is never filed till date.
04. Provisional P&L A/c for the period 01.04.2008 to 06.10.2008: Insured stated that it would not be possible for them to submit the same since the records of Apr’08 to Oct’08 were also gutted in the fire.
05. Bank A/c. statement for the period April’08 to Oct’08: Insured also gave us to understand that all most all transactions were by cash and hence the bank Account statement would not reflect the correct position.
15. From the above it is beyond doubt that the complainant obviously in order to get over the proof of the stocks alleged that they were destroyed in the fire accident and was harping on the fact that they were all lost. When according to him he was having stocks worth of few lakh rupees, all of them could not have been purchased by way of cash. In fact, the insurance surveyor also verified the bank stocks declaration statement and opined that:
Accounting Method:
01. Opening balance as on 01.04.2008 was arrived as under:
As per P&L Account of FY 04-05, 05-06 and 06-07, the closing stock were for Rs.12,73,400/-, Rs.14,58,600/- and RS.18,90,200/- respectively and this works out at 14.54% & 29.6% increase over the years 005-06 & 06-07. The closing stock as per Bank Stock declaration statements as at 31.03.2007 & 31.03.2008 are Rs.14,80,000/- & Rs.18,35,000/- respectively. Insured stated that since they do not file any IT Returns, they did not make any P&L A/c statement for the year 07-08 and the P&L for the years 04-05 to 06-07 were made for the purpose of Bankers since they were considering sanctioning of loan and CC limits for the operation of the business.
In regard to the purchases herein the explanation:
Purchases from 01.04.2008 to 06.10.2008:
Insured produced duplicate copies of few purchase bills. Some of them were LR copies attached. Insured explained that they were buying goods form whole sale/retail dealers with and without purchase bills and could procure duplicate copies only from some of the sellers. Further we were also told that most of the goods are brought by person and/or in transports without LRs. We observed the purchase bills were from New Delhi, Solapur, Hyderabad, Kolkota, Mancherial and Kavali in Nellore dist. We worked out the purchase based on these invoices and grouped them with and without LRs.
In regard to sales:
Insured stated that they do not issue any sale bills and only a chit to the customers and that if they insisted for the same.
16. Despite all this surveyor had estimated the value of stocks at `13,69,840/-, furniture at `2,08,080/- by noting down the burnt material. It may be curious to note that the complainant had claimed `31,95,875/- towards stock in trade, `5,86,495/- towards furniture, fixtures and fittings in all Rs.37,82,370/-. In the light of the fact that he had taken two insurance policies for stock-in-trade as well as fixtures etc., apportionment was made, which we have excerpted above, the value found by opposite parties no.1 and 3, United India Insurance Co., Ltd., was at Rs.6,04,373/-, the opposite party no.2, National Insurance Company Limited was at `9,64,497/- towards loss in stock-in-trade. When he did not agree, the said amount was paid to the Bank which in fact was “the insured” under the policies. The complainant now claims for the remaining balance, namely, `6,07,127/- and `7,82,711/- from opposite parties no.1 and 3 and `10,61,161/- from opposite party no.2, deducting the amount that were paid already.
17. The complainant alleged that this payment of amount towards full and final settlement was towards proportionate loss of stock and damage to the building. Therefore he was entitled to the total amount. The complainant could not explain as to why he could not file those documents before the surveyor. Even now he could not explain as to how he get those documents. He did not file the affidavits from the persons who had issued delivery receipts, invoices, quotations etc., in order to substantiate his case. There is no occasion for the insurance to verify or otherwise find out the genuineness of the documents. They were handicapped to consider the genuineness of those documents, in the light of the fact no affidavits were filed to prove those documents. Mere filing of these documents without proof he cannot assume the existence of stock when the complainant was given an opportunity to file those documents before the surveyor who was admittedly appointed on the complaint given by the complainant, adverse inference has to be drawn from non-filing of the same.
18. The complainant has been running his business in the building bearing No.1-7-79 while taking the shop keepers policy with opposite party no.2, National Insurance Company he insured the dresses for a sum of Rs.15 lakhs, furniture, fixtures and fittings for a sum of `5 lakhs in all `20 lakhs. He had taken Standard Fire and Special Perils Policy for readymade cloths worth `12 lakhs.
19 He also insured the building with opposite party no.1, United India Insurance Company for a sum of `9,75,000/-, namely, `8 lakhs towards building, `25,000/- towards electrical installations and `1,50,000/- towards furniture, fixtures and fittings. He mentioned the above premises as dwelling residential building. He has also taken another policy for the premises situated at 1-3-1028, where he kept the readymade cloths, valued at `12 lakhs. The surveyor after inspecting the premises mentioned that Nutan Dresses was housed on the ground floor of a pucca building with ground + 2 floors. The building bears Old Dr.No.1-3-1028 and New No.1-7-79. Therefore, the premises bears two door numbers which were insured mentioning in different insurance policies. He further clarified stating that the front portion of the building is occupied by readymade shop and rear side as residential place. A portion of the building towards the front on the western side is occupied by Gajanand Ayurvedic Clinic and on western side it is used as the entrance to the lodge.
20. All this shows that the complainant is taking as many policies for the same stock and premises from different insurance companies. Importantly no account for purchase of stock is maintained. He did not pay any of the taxes when he claims that was doing business in a high scale. All the purchases according to him is by cash. He is not paying even sales tax, VAT, income tax etc., even then the surveyor has assessed in best possible means. His report cannot be faulted. Only after the amount was paid by insurance companies, he filed complaints, obviously taking a chance. If he succeeds it is all the more good. Even if he fails, nothing is lost. Obviosly in view of claims of this nature, the Hon’ble Supreme Court in Ramarameshwari Devi and others vs Niramala Devi and others V(2011)SLT196 held that:
“We are clearly of the view that unless we ensure that wrong-doers are denied profit or undue benefit from the frivolous litigation, it would be difficult to control frivolous and uncalled for litigations. In order to curb uncalled for and frivolous litigation, the Courts have to ensure that there is no incentive or motive for uncalled for litigation. It is a matter of common experience that Court’s otherwise scarce and valuable time is consumed or more appropriately wasted in a large number of uncalled-for cases”
21. In “United India Insurance Vs. Ajmer Singh Cotton and General mills and others” AIR 1999 Supreme Court 3027, the Supreme Court held that the complainant can question the settlement of the claim after issuing discharge voucher for final settlement, on the grounds of fraud, coercion misrepresentation etc. The Apex Court held “The claim preferred regarding the deficiency of service shall be deemed to be based upon the insurance policy, being covered by the provisions of Section 14 of the Act.
22. In the instant case the discharge vouchers were admittedly executed voluntarily by the complainant and the complainant had not alleged that they were executed under fraud or under undue influence, misrepresentation etc.
23. The Hon’ble Supreme Court in catena of judgments has opined that report of Surveyor is an important piece of document and evidence which cannot be brushed aside without sufficient reasoning. In the present instance, no such ground has been shown to take a different view from the report of the Surveyor. Therefore the estimation towards damage of the building for which the policy was taken and the goods for which he had taken policy were adequately assessed and we do not see any misappreciation of the facts by them except introducing some documents it could not in any way prove the value of the stocks in existence at the time when the accident took place. The insurance companies have paid the amounts as assessed by the insurance surveyor. From a perusal of which, it cannot be said that the surveyor undervalued any of these items. The insurance companies have rightly paid the amount to the bank, opposite party no.4. Since the insurance policy was taken in the name of the bank and that too hypothecation made by the complainant in favour of the bank, the complainant having received the amounts got filed the complaint to get some more amount which he was not entitled to. We see no merits in the complaint and is liable to be dismissed.
In the result the complaint is dismissed. No costs.
PRESIDENT
MEMBER
Dt.03.10.2012
KMK*
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
NIL
APPENDIX OF EVIDENCE
EXHIBITS MARKED
For the complainants
EX.A1: Copy of FIR. dt: 6-10-2008
EX.A2 Copy of the complaint to P.S. Metpally by the complainant dt: 6.10.2008
Ex-A3 . copy of panchanama dt: 7-10-2008
EX-A4. copy of panchanama by Tahasildar dt: 6-10-2008
EX-A5 Report of electricity dept. dt: 8-10-2008
Ex-A6. Copy of fire service certificate dt: 8-10-2008
EX-A7. Copy of newspapers report (Sakshi ) dt: 7-10-2008
EX-A8. Copy of newspapers report Vaartha dt: 6-10-2008(original)
EX-A9 Copy of newspapers report of EENADU, local edition Karimnagar
EX-A10 Copy of original weighing bills dt: 11-10-2008 (9)
EX.A11 Copy of policy with UIICO issued by the O.P.NO.1
EX.A12 Copy of policy with National Co.,by the O.P.NO.II
Ex-A13. Copy of the Policy UIICO by the O.P.NO.III
EX-A14 Copy of claim form dt:6-10-2008 with UIICOO.P.NO.1
EX.A15 Copy of the claim form dt: 6-10-2008 with UIICO i.e, O.P.NO.3
EX-A16. Copy of General abstract estimation of premises by civil engineer,
Metpally Karimnagar
EX.A17 Legal notice dt: 18-8-2010 to 3rd.O.P.
EX.-A18 Reply letter dt:29-9-2010 by Ist.O.P
EX.A19 Another letter dt: 8-10-010 by the complainant
EX.A20 Photos
EX.A21 Copy of the Bank statement showing the partial payment
dates:27-3-2010 by O.P.NO.I
EX.A22 Copy of the cheque dt: 22-3-2010 showing partial payment by O.P.NO.II
EX.A23 Copy of the cheque dt; 29-10-2010 showing partial payment by O.P.NO. 3
Ex-A24 Covering letter dated: 3-11-2010 (copy)
EX-A25 Protest letter dated: 9-11-2010 by the complainant to the O.P.NO.3
Ex.A26 Syndicate bank statement showing partial payment by the O.P.NO.2 dt: 27-3-2010
EX.A-27 Copy of ownership certificate dt: 12-11-2008
EX-A28 Copy of layout showing the plan of the building
EX-A29 Letter addressed by the appellant to the bank dt: 9-9-2009 )
Delivery receipt NO.14805 dated: 28-8-2008
through HMT
EX.A30 SL.NO.30 to 31 (2 BILLS)
EX. A31 Delivery receipt NO.3295 dated: 20-9-2008 through
HMT transport(8)
Ex-A32 Delivery receipt NO. 4553 dated: 12-9-2008 through star lorry service SL.NO.32 TO 38 (16 BILLS)
EX.A33 Invoice no. D-188 dated: 31.5.2008 through star lorry service (47)
EX.A34 Challan no.472 (copies) (56)
Ex.A35 Statement of stocks Hypothecated to the SBH dated 31.3.2008(New)
Ex.A36 Statement of stocks Hypothecated to the SBH dated 31.3.2008
Ex.A37 Copy of quotation dated 29.10.2008 of Sri Sri Raja Rajeswari glass
and Ply wood
Ex.A-38 Quotation of Tirumala Elect. Stores dated 6.11.2008
Ex. A-39 Quotation of Kranthi wood furniture works and showroom no.618
Ex.A-40. Quotation of Kranthi wood furniture works and showroom no.619
Ex.A-41 Possession notice dated 17.5.2010
Ex.A-42. DTDC cargo and courier receipt no.H79083647
Ex.A-43. DTDC cargo and courier receipt no.H79083646
Ex.A-44. DTDC cargo and courier receipt no.H79083646(with
acknowledgement)
Ex.A-45. DTDC cargo and courier receipt no.H79083647(with acknowledgement)
For the opposite parties:
Ex B-1 Copy of policy vide no.050882/48/08/34/00000471
Ex B-2 Copy of policy vide no.050882/11/03/11/00000564
Ex B-3 Terms and conditions of shop keepers policy.
Ex B-4 Letter issued by SBH dated 22.10.2010
ExB-5 Surveyors report 28.1.2010
ExB-6 Professional Surveyor’s report dated 27.3.2010
Ex B-7 Proposal form submitted complainant
ExB-8 Insurance policy
Ex B-9 claim form dated 6.10.2008
ExB-10 Surveyors report dated 28.1.2010
ExB-11
To Voucher and receipts
ExB-13
PRESIDENT
MEMBER
