DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,<br /> BATHINDA (PUNJAB)<br /> <br /> CC No. 226 of 06-08-2007<br /> Decided on :08-01-2008 <br /> <br /> 1.Sham Lal S/o Sh. Walaiti Ram, Sole Proprietor M/s. Shakti Feed Industries, Mehraj Road, Rampura Phul, District Bathinda.<br /> 2.Shakti Feed Industries, Mehraj Road, Rampura Phul, through its Sole Proprietor Sham Lal S/o Walaiti Ram<br /> ... Complainants<br /> Versus<br /> <br /> 1.Bajaj Allianz General Insurance Company Limited, Head Office, Ga Plaza, Airport Road, Yerwada, Pune 411006, through its Chairman/Managing Director<br /> 2.Bajaj Allianz General Insurance Company Limited, SCO 147, 6th Floor, Feroze Gandhi Market, Ludhiana 141 001 through its Manager<br /> 3.Bajaj Allianz General Insurance Company Limited, G.T. Road Near ICICI Bank and Sagar Hotel, Bathinda, through its Branch Manager<br /> 4.Punjab & Sind Bank, Rampura Phul through its Branch Manager<br /> 5.Punjab & Sind Bank, Zonal Office, 100' Road, Near Deshmesh School, Bathinda through its Zonal Manager. <br /> ...Opposite parties<br /> <br /> Complaint under Section 12 of the Consumer Protection<br /> Act, 1986.<br /> <br /> QUORUM :<br /> Sh. Lakhbir Singh, President<br /> Dr. Phulinder Preet, Member<br /> <br /> For the Complainant : Sh. Vinod Garg, Advocate.<br /> For the Opposite parties : Sh. Sanjay Goyal, Advocate for opposite parties No. 1 to 3. <br /> Sh. Tarsem Raj, Advocate for opposite parties No. 4 & 5. <br /> <br /> O R D E R<br /> LAKHBIR SINGH, PRESIDENT<br /> 1. Instant one is a complaint under Section 12 of the Consumer Protection Act, 1986 (Here-in-after referred to as 'Act') which has been preferred by the complainants seeking directions from this Forum to the opposite parties to jointly and severally pay Rs. 2,17,875/- towards loss alongwith interest @ 18% P.A. from the date of incident till realisation; Rs. 50,000/- as compensation on account of mental tension and agony and Rs. 10,000/- as cost of litigation.<br /> 2. Succinctly put the version of the complainants is that complainant No. 1 is the sole Proprietor of complainant No. 2 and is earning livelihood by doing the work of cattle feed at Rampura Phul. They (complainants) are availing the facility of cash credit limit from Account No. 183 which is with opposite party No. 4 at Rampura Phul. Opposite parties No. 4 & 5 deducted Rs. 11,185/- on 2.3.06 by way of debiting the account for getting the insurance from opposite parties No. 1 to 3. When complainant No. 1 came to know about this deduction, opposite party No. 4 was contacted. He became aware that opposite parties No. 4 & 5 have got their (complainant's) entire building and material/stocks insured with opposite parties No. 1 to 3 by making payment of Rs. 11,185/- to them. Complainants represented to opposite parties No. 4 & 5 that they do not want to get the building insured. On 18.5.06 a sum of Rs. 7944/- out of Rs. 11,185/- was credited to their account by opposite parties No. 4 & 5. They were categorically told by opposite parties No. 4 & 5 that for the remaining amount, their stocks have been insured against any loss on account of fire and other perils. They were further apprised that policy period is w.e.f. 10.04.2006 to 9.4.2007 and that policy would be issued at the earliest by opposite parties No. 1 to 3. Policy has not so far been issued. On 5.7.06 there was fire in their premises on account of which raw material/stocks lying therein were damaged. They suffered loss to the tune of Rs. 2,17,875/-. Information was given to the opposite parties. Opposite parties No. 1 to 3 deputed Mr. Dinesh Kumar Goyal as surveyor who visited the spot and assured that Insurance Company would indemnify them for the entire loss. Complainant No. 1 was asked to write statement as dictated by him and also got his signatures. They (complainants) came to know that surveyor has assessed the loss at much lower side in order to oblige his pay master i.e. the Insurance Company and has submitted the survey report to opposite parties No. 1 to 3 who were pre-determined to repudiate their genuine claim. Thereafter letter dated 19.7.06 was received by them whereby their claim was repudiated by stating that destruction or damage caused to the property by way of fermentation, natural heating and spontaneous combustion is not covered by the policy. They assail this letter as illegal, null and void and not binding upon them on the grounds that policy was not issued and Exclusion was never communicated/conveyed to them. Opposite parties No. 4 & 5 who got the insurance for Fire from opposite parties No. 1 to 3 vide their letter dated 4.10.06 have assured them that they would make all out efforts for getting the loss compensated from opposite parties No. 1 to 3. They (complainants) got legal notice dated 24.4.07 issued to opposite parties through their counsel. Opposite parties No. 1 to 3 again issued letter dated 4.5.07 and did not make the payment. They allege deficiency in service and unfair trade practice on the part of the opposite parties.<br /> 3. Opposite parties No. 1 to 3 filed their version taking legal objections that complainants have got no locus standi and cause of action to file the complaint; they have not approached this Forum with clean hands; Insurance policy was obtained for commercial purposes and as such, complaint is not maintainable and complainants are not consumers. Voluminous oral and documentary evidence are required and as such, this Forum cannot decide the case in its summary way. Since the controversy pertains to the terms and conditions of the policy, complaint is beyond the ambit and scope of the jurisdiction of this Forum and complaint is false and frivolous. On merits, they admit that standard Fire and Special Peril policy was got issued from them. They deny that policy alongwith terms and conditions was not issued. Exclusion Clause was duly explained to Complainants as well as opposite parties No. 4 & 5. As per policy condition, any destruction or damage caused to the property insured vide its own fermentation, natural heating or spontaneous combustion is not covered under the policy. On receiving the intimation from the complainants, they had appointed Sh. Dinesh K. Goyal to enquire about the claim and loss etc., He visited the spot on 6.7.07 and again on 7.7.06. They deny that they had assured the complainants that the Insurance Company would indemnify them for the entire loss. They deny that claim has been illegally and falsely repudiated. Mr. Dinesh K. Goyal in his report dated 14.7.06 has reported that insured had placed the bags one over the other upto the height of 18-20 feet. It was very hot on the day of occurrence and the stocks of Binola, Khal Binola, Husk Binola, Husk matter, Husk Soyabean, Husk Groundnut, Husk grams (raw material for cattle feed) had heated up and due to this reason, fire took place due to natural heating/internal combustion and not due to external means. Complainant No. 1 made statement before the surveyor which was also signed by Sh. Mohinder Singh, Chowkidar and Senior Manager of Punjab and Sind Bank, Rampura Phul. Claim was not payable as per terms and conditions of the policy. Loss was assessed by the surveyor to the tune of Rs. 1,35,269/-. They admit that legal notice was received. According to them, it was replied on 4.5.07. They deny the remaining averments in the complaint including deficiency in service and unfair trade practice.<br /> 4. Opposite parties No. 4 & 5 filed separate reply taking legal objections that complaint is not maintainable in the present form; complainants have got no locus standi to file the complainant as they have suppressed true facts. On merits, they admit that complainant No. 1 is the sole Proprietor of complainant No. 2 and availing Cash Credit Limit No. 183 with them. Insurance was done by opposite parties No. 1 to 3 and insurance premium was paid to the tune of Rs. 11,185/- by them (Opposite parties No. 4 & 5). Opposite parties No. 1 to 3 have reversed the amount of Rs. 7940/- as excess paid. Policy was issued by opposite parties No. 1 to 3 to the complainant. They deny that complainants were not aware of the Insurance policy. Complainants had informed them on 6.7.06 about the fire in their premises and in turn they had further informed opposite parties No. 1 to 3 for taking necessary action. Opposite parties No. 1 to 3 had deputed surveyor for survey. They (opposite parties No. 4 & 5) had again recommended the claim on 27.9.06 after claim was repudiated by opposite parties No. 1 to 3. <br /> 5. In support of their averments contained in the complaint, complainants have produced in evidence affidavit of complainant No. 1 (Ex. C-1), claim repudiation letter (Ex. C-2), photocopy of certificate dated 27.9.06 (Ex. C-3), photocopy of letter dated 4.10.06 (Ex. C-4), copy of legal notice (Ex. C-5), postal receipts (Ex. C-6 to Ex. C-10), reply to legal notice (Ex. C-11), Daily summary of branch collections (Ex. C-12), another affidavit of complainant No. 1 ( Ex. C-13), affidavit of Sh. Rakesh Tayal (Ex. C-14), photocopy of Income Tax Return (Ex. C-15), copy of statement of account (Ex. C-16), photocopy of Balance Sheet (Ex. C-17), photocopy of stock statement (Ex. C-18), copy of Estimate of loss (Ex. C-19) and photographs (Ex. C-20 to Ex. C-30).<br /> 6. In rebuttal, on behalf of opposite parties No. 4 & 5 affidavit of Sh. Kiranjit Singh Dhillon, Chief Manager (Ex. R-1) and on behalf of opposite parties No. 1 to 3 photocopy of Fire Claim Form (Ex. R-2), photocopy of Information/Statement (Ex. R-3), photocopy of survey report dated 14.7.06 (Ex. R-4), photocopy of letter dated 19.7.06 (Ex. R-5), photocopy of estimate of loss (Ex. R-6), photocopy of estimate of loss (Ex. R-7), affidavit of Sh. Vijay Dang, Manager (Ex. R-8), affidavit of Sh. Dinesh Goyal, Surveyor (Ex. R-9), photocopy of policy alongwith terms and conditions (Ex. R-10), photocopy of Courier receipt (Ex. R-11) and affidavit of Sh. Sachin Arora, Senior Executive (Ex. R-12) have been tendered in evidence.<br /> 7. We have heard learned counsel for the parties. Besides this, we have gone through the record and written brief of arguments on behalf of complainants and opposite parties No. 1 to 3.<br /> 8. Arguments pressed into service by Mr. Garg, learned counsel for the complainants are that opposite parties had assured complainants that all types of losses due to fire and other perils are covered. Complainants had suffered fire on 5.7.06 in their premises on account of which there was loss to the tune of Rs. 2,17,875/- as given in the stock statement Ex. C-18. He further drew our attention to copy of the estimate of loss Ex. C-19 and copy of the balance sheet Ex. C-17. He further submitted that surveyor of opposite parties No. 1 to 3 has assessed the loss to the tune of Rs. 1,35,269/- as is clear from Ex. R-4. He conceded at Bar that complainants may be allowed payment of the claim amount as has been assessed by the surveyor vide Ex. R-4. Regarding repudiation of the claim vide letter dated 19.7.06, copies of which are Ex. C-2 & Ex. R-5, his submission is that opposite parties No. 1 to 3 are relying upon the Exclusion Clause by saying that the loss was due to natural heating and such loss is not covered. This Exclusion is not at all binding upon the complainants as policy was not issued nor any Exclusion Clause or terms and conditions were communicated and explained to the complainants. Opposite parties have made an attempt to distort the facts by presenting Ex. R-11 to show that policy was issued although no such policy was ever issued. Affidavit Ex. R-12 is false.<br /> 9. Learned counsel for opposite parties No. 1 to 3 countered the arguments of the learned counsel for the complainants by submitting that Sh. Dinesh K. Goyal was appointed as surveyor by opposite parties No. 1 to 3 to assess the loss who has submitted his report dated 14.7.06, copy of which is Ex. R-4, assessing the loss to the tune of Rs. 1,35,269/-. Claim has been repudiated by opposite parties No. 1 to 3 as policy was issued to the complainants and its terms and conditions including the Exclusion Clause were duly explained to them as well as to opposite parties No. 4 & 5. He also drew our attention to the copy Ex. R-10 of the Insurance policy alogwith terms and conditions. According to him, policy and its terms and conditions were sent to the complainants by courier as is evident from Ex. R-1 and this stands corroborated from the affidavit Ex. R-12 of Sh. Sachin Arora, Senior Executive Operation of opposite parties No. 1 to 3. It was very hot on the date of occurrence and stocks of Binola, Khal Binola, Husk Binola, Husk matter, Husk Soyabean, Husk Groundnut and Husk Grams had heated up on account of which fire had taken place due to natural heating/internal combustion and not due to any external means. Even complainant No. 1 had made statement before the surveyor. Which was signed by Mohinder Singh, Chowkidar and Senior Manager of Punjab and Sink Bank, Rampura Phul and copy of the same is Ex. R-3. Statement was voluntarily made by complainant No. 1. He further submitted that insurance policy was obtained for commercial purposes and as such, this complaint is not maintainable.<br /> 10. We have considered the rival arguments.<br /> 11. Some facts do not remain in dispute in this case. They are that complainants have Cash Credit Limited No. 183 with opposite parties No. 4 & 5 which had insured stocks of the complainants against any loss of fire and other perils. Fire had broken in the premises of the complainants on 5.7.06. Intimation was immediately given to the opposite parties No. 4 & 5 which further gave information to opposite parties No. 1 to 3 which appointed Sh. Dinesh K Goyal as Surveyor who has submitted his report copy of which is Ex. R-4 assessing the loss to the tune of Rs. 1,35,269/-. Claim has been repudiated by opposite parties No. 1 to 3 vide letter dated 19.7.06 stating that it is not admissible under the scope of the policy due to the following reasons :<br /> “As per the Standard Fire And Special Perils Policy,<br /> The Company shall pay to the insured the value of the property at the time of the happening of its destruction or the amount of such damage or at its option reinstate or replace such property or any part thereof<br /> Fire :<br /> Excluding destruction or damage caused to the property insured by<br /> - Its sown fermentation, natural heating or spontaneous combustion.<br /> Hence, we are repudiating the claim. This is for your information please.”<br /> 12. Plea of opposite parties No. 1 to 3 that Insurance Policy was purchased for commercial purposes and as such complaint is not maintainable, is not tenable. Firstly complainant No. 1 in his affidavit Ex. C-1 has made it clear that he is the sole Proprietor of complainant No. 2 and is earning his livelihood by doing the work of Cattle feed. Moreover in such like situation, matter has been set at rest by the Hon'ble National Commission in the case of Harsolia Motors Vs. National Insurance Company Limited 2005 (1) CLT 97. It was held in that case that a person who takes Insurance policy to cover the envisaged risk does not take the policy for commercial purpose. Policy is only for indemnification and actual loss. It is not to generate profit.<br /> 13. Claim has been repudiated by the opposite parties No. 1 to 3. Onus is upon the insurer to prove that Insurance Policy and its terms and conditions were issued to the complainants or terms and conditions were communicated to them. Similarly it is for the insurer to establish that there is violation of the terms and conditions of the Insurance policy and they were known to the insured. Non-delivery of the policy to the insured, amounts to deficiency in service on the part of the Insurance Company. In this view of the matter reference may be made to the observations of the Hon'ble National Commission in the case of M/s. Hundi Lal Jain Cold Storage and Ice Factory Pvt. Ltd., Vs. Oriental Insurance Company Limited 2004(3) CLT 245. Their Lordhships of the Hon'ble Supreme Court in the case of M/s. Modern Insulators Limited Vs. Oriental Insurance Company Limited AIR 2000 Supreme Court 1014 has held that when Exclusion clause is neither a part of contract of insurance nor disclosed to the insured, insurer cannot claim benefit of exclusion clause. In this case principal grouse of the complainants is that Insurance policy was not issued to them and exclusion clause upon which opposite parties No. 1 to 3 are relying was never communicated /conveyed to them. To prove that insurance policy and its terms and conditions, copy of which is Ex. R-10 were sent and supplied to the complainants, opposite parties No. 1 to 3 are relying upon the documents Ex. R-11 & Ex. R-12. Ex. R-11 is the copy of the computer generated document of opposite parties No. 1 to 3. In this document at Sr. No. 473, policy No. 4001-0093 has been shown to have been sent to complainant No. 2 through On Dot Courier. Receipt No. 30812 has been mentioned. A sum of Rs. 1/- has been shown to have been charged. Date of despatch has been recorded as 1.5.06. Mr. Sachin Arora in his affidavit Ex. R-1 also states that insurance policy was sent to the complainants through On Dot Courier vide receipt No. 30812 on 1.5.06. Complete policy and its terms and conditions including Exclusion Clause were sent. They were received by the complainants as they were not returned to them. In our view documents Ex. R-11 & ex. R-12 do not establish the receipt of the policy alongwith its terms and conditions including Exclusion Clause upon which the opposite parties No. 1 to 3 are depending. As mentioned above, Ex. R-11 is the computer generated document. Such a document can be generated anywhere by using a computer. The actual receipt, delivery slips, the affidavit of the delivery person or of the courier or the receipt for actual delivery have not been produced meaning thereby that no such policy was issued to the complainants. It is not known from which station envelop containing the alleged documents was booked with On Dot Courier. Ex. R-11 does not show from which office of opposite parties No. 1 to 3, copy of the insurance policy alongwith its terms and condition, was sent. Hence, conclusion is that opposite parties No. 1 to 3 have not discharged the onus upon them to prove that policy including the exclusion cause was delivered and communicated to the complainants. In these circumstances, opposite parties No. 1 to 3 cannot take the benefit of the Exclusion Clause on the basis of which claim of the complainants has been repudiated. In the absence of the record mentioned above, affidavit Ex. R-12 carries no legal value particularly when it is not the plea of Mr. Arora that he had booked the envelop containing the documents with On Dot Courier for delivering the same to the complainants.<br /> 14. Fact pleaded by opposite parties No. 1 to 3 that complainant No. 1 signed the statement, copy of which is Ex. R-3 and it supports exclusion clause of the policy, assumes no significance.<br /> 15. On the basis of the observations of their Lordships of the Hon'ble Supreme Court and Hon'ble National Commission in the authorities referred to above, repudiation of the claim made by the opposite parties No. 1 to 3 with regard to the claim of the complainants is liable to be set aside. Hence, it is set aside leading to deficiency in service on their part. Accordingly, complainants have got locus standi and cause of action to file the complaint.<br /> 16. Question that now arises is as to what relief should be accorded to the complainants. As per version in the complaint and on the basis of the documents submitted by the complainants, claim is for Rs. 2,17,875/- alongwith interest. At the risk of repetition, it is again mentioned that Mr. Garg, learned counsel for the complainants has conceded at Bar during the course of arguments that loss assessed by the surveyor through his report to the tune of Rs. 1,35,269/- may be allowed. Even otherwise complainants could not show sufficient reasons for rejecting this report of the surveyor. Report of the surveyor is an important document and sufficient reasons must be shown to reject it. For this we get support from the observations of the Hon'ble National Commission in the case of Paam Eatables Limited Vs. United India Insurance Company Limited 2004 (3) CLT 163. Since the repudiation of the claim stands set aside, it is a case for direction to opposite parties No. 1 to 3 to pay the amount of loss to the complainants to the tune of Rs. 1,35,269/- alongwith interest @ 9% P.A. w.e.f. 06-10-2006 (the date calculated on expiry of three months period from the date of intimation of loss, a period required for processing the claim in an effective manner in normal course) till realisation. Since the stocks were insured with opposite parties No. 1 to 3, opposite parties No. 4 & 5 are not liable. Complainants are seeking compensation to the tune of Rs. 50,000/- on account of mental tension and agony. There is no case to allow it on the face of relief going to be accorded as above particularly in view of the authority Life Insurance Corporation of India Vs. Ms. Bhupinder Kaur (minor) and others 2002 (2) CLT 646.<br /> 17. In view of our foregoing discussion, complaint is partly allowed against opposite parties No. 1 to 3 with cost of Rs. 2,000/-. It stands dismissed qua opposite parties No. 4 & 5. Opposite parties No. 1 to 3 are directed to do as under :-<br /> i) Pay to the complainants an amount of Rs. 1,35,269/- alongwith interest @ 9% P.A. from 06-10-2006 till payment.<br /> Compliance of this order be made within 30 days from the date of receipt of its copy. Copy of this order be sent to the parties concerned free of cost and file be consigned to record room.<br /> Pronounced :<br /> 08-01-2008 (Lakhbir Singh )<br /> President<br /> <br /> (Dr.Phulinder Preet)<br /> Member <br />