Dt. 08.10.2015

JAGANNATH BAG, MEMBER

          The complaint case has been filed under Section 17 of the Consumer Protection Act 1986 , on the ground of deficiency in service on the part of the OPs and praying for direction upon OP No. 1  to pay compensation of Rs. 96,13,000/- towards compensation for the loss suffered by the Complainant due to fire that broke out in the factory shed of the Complainant and also to pay cost.

           The Complainant’s case , in brief, is as follows:

           The Complainant carries on business of manufacturing and exporting eco- friendly bags and handicraft items made from jute and cotton at their factory at Baruipur Industrial Estate , Shed No. 4.  On 21.01.2011 at midnight, 12-25 a.m. i.e., 22.01.2011 , the factory was destroyed by fire causing complete damage to the factory shed and destroying all the machines and goods which were kept in the factory shed. The business of the Complainant was insured with OP No.1.  OP No.2 gave loans to the Complainant and induced the latter to take insurance from OP No.1 in place of M/s United India Insurance Co. Ltd. with whom the business was initially insured. A Standard Fire and Special Peril Policy was taken on 28^th September, 2007 and  thereafter the said policy was renewed from time to time. As the Complainant entered into an insurance agreement with OP No.2 , the policies was renewed regularly and automatically for the risk period for 2008 -09 and 2009-10 . On or about 12.01.2011 the proprietor of the Complainant learned from an employee of OPNo.2 that due to inadvertence the renewal of the policy for the year 2010-11 fell due. A cheque for Rs.33,091/- was issued by the proprietor of the Complainant towards renewal of the Insurance Policy. The said policy document was kept in the safe custody of OP No-2 as security against the credit facility. The local police station was informed of the fire accident . OP No.1 was also informed of the accident and was requested for payment of compensation for the loss suffered by the Complainant. OP No.1 appointed a surveyor for assessing the loss. Though a report by the investigator was submitted to the OP No.1, such report was not disclosed to the Complainant. OP No.1 sent a repudiation letter on 03.03.2011 stating, inter alia  that the Complainant informed about the accident after 5 days from the date of loss. It has been alleged that the insurance policy was not renewed for the year 2011-12 in time due to negligence on the part of OP No.2. But the process of renewal of the insurance policy was regularized and on the date of the said accident the insurance policy was in existence and the obligation of the OP No.1 can not be shirked off. Again, the OP No.2 being the agent of OP No.1 has also the responsibility to get the insurance policy renewed before time. The OP No.1 by their letter dated 03.03.2011 wrongly repudiated the claim. Hence,  the complaint.  

       The complaint has been contested by OP No.1 by filing W.V.

       It has been contended that at the time when the alleged fire accident took place , there was no insurance policy and / or contract of insurance between the Complainant  and the OP Insurance Company. The Complainant’s banker failed and neglected to renew the insurance policy and there was no renewal inspite of reminder issued by the insurance company on 19.11.2010. No premium for renewal of the policy was submitted till 22^nd January 2011.  It was only on request of OP No. 2 for issuing quotation for coverage of the Complainant’s property that the OP Insurance Company had collected the cheque on 22.01.2011  at around 1.30 p.m and issued an insurance policy in favour of the Complainant covering risk from 15.01.2011 to 14.01.2011 which was obtained by suppression of material facts and deliberate misrepresentation. Such policy was void ab initio . The information regarding fire was given on 27.01.2011 after lapse of 5 days .

      The Complainant filed evidence on affidavit. The OP-1 put their questionnaire which have been replied to by the Complainant.  OP No.1 also filed their evidence including the copy of the Surveyor’s Report and questionnaire being put by the Complainant,  replies have been submitted by OP-1. BNA have been filed by the Complainant.

Ld. Advocate for the OP-1 has cited the following case references :

No.1. Judgment reported in AIR 1997 Supreme Court 2147

No. 2. Judgment reported in 1998 (1) Supreme 52

No. 3. Judgment reported in 1998 (1) Supreme 54

No.4. Order of Utter Pradesh State Consumer Disputes Redressal Commission reported in II (2001) CPJ 477

Ld. Advocates appearing for both the Complainant and the OPs have been heard .

        Ld. Advocate appearing for the Complainant submitted that the repudiation of the claim raised by the Complainant following the fire accident is totally arbitrary and without valid reason . The Complainant duly sent the cheque for renewal of the Insurance Policy covering the business and the Insurance Company renewed the policy with effect from 15.01.2011 to 14.01.2012. The claim was preferred on 25.02.2011 in writing after due intimation to the insurance company. Though the previous Insurance Policy  should have been renewed by the OP No.2 on or before 22.11.2010 , it was for the negligence on the part of OP -2 that appropriate step was not taken for renewal of the policy before expiry of the last policy. The cheque towards payment of premium of Rs. 31,091 dated 12.01.2011 was forwarded to the insurance company and the same was duly encashed. The renewed policy was issued for the period from 15.01.2011 to 14.01.12.  Hence, the plea of the insurance company that on the date of accident there was no policy coverage does not stand. The Surveyor would not have been engaged, had the Complainant not intimated about the fire accident in their factory premises. All concerned authorities namely the Local Police Station as well as the Fire Briegade were duly informed of the accident of fire which the OP Insurance Company was met aware of  Denial of compensation by the Insurance Company is an act of negligence and deficiency in service on the part of the OP.  The Complainant is entitled to get the full compensation of Rs. 96,13,000/- which may be allowed apart from payment of cost.

          Ld. Advocate appearing for OP No.1 submitted that the Complainant has not come in clean hands before this Commission. The complaint is based on such allegations which are not at all substantiated with appropriate evidence . The incident of fire as alleged by the Complainant took place when there was no insurance cover. There being no insurance cover at the time of fire , no claim arising out of such fire is either admissible or payable by the insurance company. It reveals from record that the last Insurance Policy was valid from 23.11.2009 to 22.11.2010 . There was no renewal inspite of reminder issued by the Insurance Company on 19.11.2010 . Neither the Complainant nor their banker i.e., OP No.2 submitted any premium to the Insurance Company till 22^nd January 2011. Being requested by the banker of the Complainant on 22^nd January 2011 during office hours , the insurance company generated the renewal premium notice where it was specifically mentioned that no claim was registered against the policy as on 22.01.2011. It was the OP Insurance Company who on the request of the OP No.2 collected the cheque on the same day and issued a policy . There was no intimation about the damage before 27.01.2011 which was about 5 days after the alleged fire accident. This was a gross violation of  policy condition No. 6 which stipulates that on the happening of any accident intimation should be given to the  Insurance Company forthwith. There was  a clear and intentional suppression of the fact of accident when the  cheque for renewal of the policy was made over  to the Insurance Company.  No such cheque was delivered  prior to the date of accident. It is, therefore, evident that on the material date of accident there was no policy coverage . The claim of the Complainant has been repudiated with proper reasons as conveyed vide letter dated 03.03.2011 . The complaint deserves to be dismissed on that score .

          Ld. Advocate appearing for OP No.2 submitted that there was no lapse on their part in the matter of renewal of the Insurance Policy after expiry of the same on 22.11.10 as the Complainant took no initiative to pay the premium due by cheque. There was no such system whereby as banker of Complainant , they would arrange to pay  premium to the Insurance Company. On the other hand , they repeatedly issued letters to the Complainant asking them to arrange to get the insurance policy renewed which the Complainant neglected to do. Further in their prayer, no aspersion has been brought up against them regarding payment of compensation or cost. The complaint against them does stand and deserves to be dismissed.

                             The points for considerations are :

1.Whether the Complainant is entitled to the compensation as prayed for.

2. Whether there is any deficiency in service or negligence on the part of the OP-1 in regard to settlement of the claim raised by the Complainant.

          We have gone through the petition of complaint together with all annexure thereto including reminders issued by and on behalf of OP No.2 for renewal of Insurance Policy , the Advocate’s letter addressed to the Insurance Company dated 30.06.2011 , the letter of repudiation dated 03.03.2011, copy of the policy paper showing the period of insurance from 15.01.2011 to 14.01.2012 etc.

          It is disputed  that the Complainant got his property insured with the OP Insurance Company and the last policy was issued for the period from 23^rd November 2009 to 22^nd November 2010 (Midnight). It is apparent that the policy was not renewed in due time . It appears that the Complainant with the help of the  OP-2 took a hectic initiative to get the policy renewed after the occurrence of the fire accident on 21.01.2011 / 22.01.2011 . It is not at all believable that the premium cheque for Rs. 33,091/- was issued on 12.01.2011. There is no evidence to show that the cheque for renewal of the policy was made over to the insurance company on 15.01.2011 as claimed by the Complainant . The Surveyor in his report categorically stated that the cheque No. 204528 issued to the Insurer was not actually issued on 12.01.2011, but sometime after 21.01.2011 from which it appears that the contention of the insurer is true  and that the said cheque was handed over the insurer on 22.01.11 i.e., after the occurrence of the fire . Again it was by several letters dated 15.11.10, 01.12.2010, 15.12.2010 and 15.01.2011 (Annexure No. 20,21,22 and 23 to the petition of complaint) that OP No.2 Annexure -1 to the petition of complaint requested the Complainant to renew the insurance cover . It has been rightly pointed out by the Ld. Advocate of the OP No.1 having relied upon the order of the Hon’ble National Consumer Disputes Redressal Commission as reported in AIR 2009 (NOC) 2806 (NCC) that date of policy should be interpreted as date on which policy was issued and not as date on which risk under policy commenced by way of allowing it to be back dated.

          Further, it appears from Section 64 VB of the Insurance Act 1938 that no risk is to be assumed unless premium is received in advance.

          In the present case , the last insurance having expired on 22^nd November 2010 and premium for renewal of the policy being received after about 13 hours of occurrence of the alleged fire on 22.01.2011, we are inclined to hold that the Complainant did not possess any valid insurance policy for his property on the material date. We find no reason to disbelieve the assertion of the OP No.1 that the policy was got renewed only after the accident. The complaint is liable to be dismissed as there is neither any deficiency in service on the part of the OP Insurance Company nor any negligence. The Complainant’s prayer for direction upon OP No.1 to pay compensation and cost does not contain material substance. Hence,

                                                  Ordered

That the complaint be and the same is dismissed on contest against the OP. There shall be no order as to cost.