DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION: BHADRAK
Dated the 1st day of March, 2021
C.D Case No. 67 of 2019
Present 1. Shri Basanta Kumar Mallick, Presiding Member
2. Afsara Begum, Member
M/S- Baidhar Muduli Cold Storage
Represented by its Proprietor
Trilochan Muduli
At- Rukunadeipur, Po- Padampur, Ps- Basudevpur, Dist: Bhadrak, Odisha
……………………. Complainant
(Versus)
- Authorized Signatory, SBI General Insurance
At- Apeejay House, 4th Floor, Block- B, 15, Park Sreet, Kolkata
2. Branch Manager, SBI General Insurance Company Ltd.
3rd Floor, Padmalaya Complex,
Opposite Bus Stand, Sahadevkhunta, Balasore
3. Branch Manager, SBI, Basudevpur Branch
At/Po/Ps- Basudevpur, Dist- Bhadrak- Odisha
…………… Opposite parties
Counsel For Complainant: Sri S. P. Mohanty, Adv
Counsel For the O.Ps No. 1 & 2 : Sri P. K. Kanongo, Adv
Counsel For the O.Ps No. 3 : Sri J. Nayak, Adv
Date of hearing: 28.10.2020
Date of order: 01.03.2021
BASANTA KUMAR MALLICK, PRESIDING MEMBER
This dispute arises out of a complaint filed by the complainant alleging deficiency of service and unfair trade practice. The facts as narrated in the complaint are that the complainant is an entrepreneur of a cold storage financed by OP No. 3 after being selected by the Dist. Industries Center Bhadrak under P.M.E.G. Program. In order to augment the funds shortage in Working Capital, the complainant requested OP No. 3 for providing Working Capital support which was considered and sanctioned by the said OP. After sanction of Cash Credit Accommodation, OP No. 3 instigated the complainant to insure the project particularly the stock in cooling chamber for a sum insured Rs 12,00,000/- with SBI General Insurance Company Ltd. to indemnify the loss in the event of any damage to be caused due to unexpected reasons. The said policy was valid from 27.07.2018 to 26.07.2019 in respect of stock of fish in cooling chamber. On 02.10.2018 at about 10 AM, fire broke out due to short circuit causing huge damage to plant and machinery as a result of which the stock in the trade perished and the complainant sustained huge loss. After the incident the complainant informed the matter in writing to all concerned including Fire Officer, Basudevpur and Inspector Factories and Boilers Balasore requesting immediate survey and assessment of loss. OP No. 1 & 2 appointed M/S S. K. Das and associates to assess the loss. The said surveyor paid a visit to the cold storage spot and inspected all relevant documents as well as damage caused by fire due to short circuit. Simultaneously the Fire Officer, Basudevpur and Inspector Factories and Boilers Balasore visited the spot, verified the relevant records to ascertain the actual loss occurred due to incident. The complainant also staked a claim covering the entire loss to the insurer which was repudiated by OP No. 2 & 3 without consideration. After receiving the letter of repudiation from insurer the complainant met OP No. 2 in his office at Balasore who assured to consider settlement of the claim but despite of repeated request and persuasions, O.Ps did not pay any heed to the request of the complainant. Finally, finding no other way the complainant issued a notice through his advocate on dt. 22.07.2019 calling upon the O.Ps to settle the claim for an amount of Rs 12,00,000/-. The O.Ps also replied the said legal notice on dt. 08.08.2019 denying the settlement of the claim. Being dissatisfied with the activities of the O.Ps, the complainant instituted the present case in this Commission praying for a direction to be issued to the O.Ps for settlement of the claim for the damage caused due to fire.
O.Ps objected the claim of the complainant and contested the case. In submitting written version OP No. 1 & 2 stated that they have not caused any deficiency of service nor resorted to unfair trade practice as the O.Ps have not erred in offering service to the complainant under settled business practice of insurance company with reference to terms and conditions stipulated in the policy. It is also raised by the O.Ps that the complainant is not a consumer within the meaning of CP Act. It is an admitted fact that the insurance policy bearing No. 0000000009541680 was issued covering the risk period from 27.07.2018 to 26.07.2019 subject to terms and conditions and the loss of the complainant around Rs 15,50,000/- due to fire is not within the knowledge of answering O.Ps. It is further submitted that as per the wording of standard fire special perils the spoilage of material is excluded as per general exclusion number 10 which speaks as “Loss or damage by spoilage from the retardation or interruption or cessation of any process or operation caused by operation of any of the perils covered”. In view of the above condition that the cause of loss is not a peril and spoilage of stock is due to breakdown of process is clearly excluded under the fire section of the policy. In the above backdrop, the complaint is devoid of merit.
OP No. 3 in submitting written version has raised the question of maintainability of case as there is no cause of action and there is no negligence in providing service on the part of OP No. 3. It is also stated that for the same reason the present Commission has passed an order in CD Case No. 72/2019 directing Oriental Insurance Company to indemnify the loss caused due to fire. OP No. 3 has also stated that the complainant has availed the loan from the bank to run his business and the transaction is limited within availing and repayment of loan. It is not the responsibility of the answering OP to settle the insurance claim and therefore the bank is an unnecessary party to this case and the liability of the bank is nil and there is no negligence on part of the OP No. 3.
Heard the parties to this case and perused materials on record. Evidently the complainant has taken up policy bearing No. 0000000009541680 covering fire and Allied perils for a sum insured of Rs 12,00,000/-. In the event of outbreak of fire due to short circuit the function of total machinery system failed as a result of which the total stock of fish were damaged. The stock position in the tread was around Rs 15,50,000/- at the time of incidence. Due to failure of the system the said stock in the storage perished as a result of which the complainant sustained huge loss. Since the stock was insured with OP No. 1 & 2 and the cause of damage of stock was due to fire, the complainant is entitled to compensation of Rs 12,00,000/-. The insurance policy issued by OP No. 1 itself discloses that any damage caused due to fire, the O.Ps have to compensate the loss. The objection raised by the O.Ps No. 1 & 2 with regards to the loss in quoting the policy condition as “Loss or damage by spoilage from the retardation or interruption or cessation of any process or operation caused by operation of any of the perils covered” is not sustainable as the damage has been caused due to outbreak of fire. The O.Ps have taken false plea to repudiate the claim of the complainant which is not just and proper. According to the submission of the OP No. 3 it is a fact that another case was filed by the complainant vide CD Case No. 72/2019 wherein this Dist. Commission has ordered the Oriental Insurance Company to compensate the value of 50% of the stock of the fish on nonstandard basis. The OP No. 1 & 2 are, therefore liable to pay residue 50% of loss under this policy.
In view of the above circumstances, this Dist. Commission is of opinion that OP No. 1 & 2 are liable to pay 50% of the stock damaged i.e. Rs 6,00,000/- to the complainant in order to compensate the loss. Hence ordered;
ORDER
In the result, the complaint be and the same is allowed on part against the O.Ps on contest with cost and compensation. O.Ps are also directed to pay Rs 6,00,000/- towards damage of stock due to fire and the O.Ps are to pay Rs 10,000/- as compensation for mental agony and harassment and Rs 3,000/- towards cost of litigation. This order must be complied within 30 days from the date of receipt of the order failing which 7% interest will be charged on the order amount from the date of lodging the claim till the date of payment.
This order is pronounced in the open Court on this day of 1st March, 2021 under my hand and seal of the Commission.
