THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BHADRAK.
Present- Sri Raghunath Kar,President
Sri Basanta Kumar Mallick ,Member
Afsara Begum, Member
Dated the 9th day of October, 2017
C.D case No. 72 of 2014
Sri Udaya Nath Prusty
S/O :- Makara Prusty
At:- Todanga,
PO:- Barikpur Bazar
PS:-Bhandaripokhari
Dist :- Bhadrak ……………Complainant
Versus:-
Branch-In-Charge
Magma Fincorp Ltd
1st floor, sahadev Khunta
Infront of CANARA Bank
Po:- Sahadevkhunta
P.s:- Sahadevkhunta
Dist:- Balasore
The Manager
Oriental Insurance Company Ltd. (Magma Cell)
4Lyons Range, 2nd Floor,
Kolkata 700001 ……………..Opposite Parties
Advocate for complainant - … Sri R.K. Nayak & Associates
Advocate for Op No-1 ….Sri Sarat Mohapatra & Others
Advocate for OP No-2 …..Sri A.K. Panda
Date of hearing - …..24.05.2016
Date of order - ……09.10.2017
SRI BASANTA KUMAR MALLICK, MEMBER
This dispute arises out of a complaint filed by the complainant alleging deficiency of service and unfair trade practice.
The facts disclosed in the complaint are to the effect that the complainant, being an unemployed young man, in order to earn his livelihood, approached OP No.1 for financing a second hand (old) truck which is formally agreed by the above mentioned OP. As per understanding between OP No.1 and the complainant, OP No.1 advanced a sum of Rs4,90,000/- which is repayable in 35 Equated monthly installments @ Rs 19490/- per month commencing from 1st June 2011. The amount of loan so sanctioned was released on execution of prescribed printed documents and after submission of some undated blank cheques to OP No.1. The complainant claims to have been paying the loan installments regularly without fail but the OP No.1 has levied late payment charges and penal interest without any valid reason. It is also alleged by the complainant that OP No.1 has been requested, several times, to supply the Hypothecation-cum–loan agreement, repayment schedule and statement of accounts which are not supplied by the said OP No.1.
It is also submitted by the complainant that the said truck caught fire while playing on the road at Brahmabarada under Dharamsala Block in Jajpur district and was completely burnt on 18.03.2013.
It is pertinent to mention here that under the instruction of OP NO-1. The said vehicle was insured with oriental insurance company, Balasore Branch vide policy No-311500/31/2012/12723 to remain in force from 28.02.2012 to 27.03.2013 on payment of premium of Rs 17721/- when the vehicle (Truck) was completely burnt in fire, complainant filed the FIR with Brahmabarada outpost on 19.03.2013 and simultaneously informed the insurance authorities (OP No. 2) immediately in order to facilitate an early survey by the surveyor of OP No. 2. Surveyor also conducted survey on the spot and advised the complainant to submit all original documents which was also complied instantly without obtaining acknowledgement receipt from the surveyor. Further OP No. 2 engaged/appointed another surveyor namely Mr.K.C. Malhotra who conducted the survey once again and insisted upon the complainant to settle the claim on “Non standard” basis. Accordingly the complainant expressed his willingness to settle the claim for an amount of Rs 3,56,838/- which was assured to be settled shortly within a reasonable time but OP No. 2 did not settle the claim in spite of repeated requests and persuasions’. Complainant has also requested OP No. 1 to insist upon OP No. 2 to settle claim as the OP No. 2 was selected by OP No-1for insurance of the vehicle. Finally on 08.09.2014, OP No. 2 refused to settle the claim.
OP No. 1 resisted the claim and contested the case. In the written version submitted by OP No. 1, it is stated that the complaint is not maintainable as the OP had filed a case in the court of Arbitrator and the same has been decided on 07.04.2014 directing the complainant to pay the sums as stated in the said award. When the Arbitration has been finalized and awarded, filing a CD Case in D.C.D.R.F, Bhadrak is bad in law and not at all maintainable as per decision of National Commission in case of the Installment Supply Ltd. versus “Kangra Ex-Serviceman Transport Company” and another. OP No. 1 has also denied its relation with the insurance company as regards it’s selection for coverage of the financed truck under insurance. It is also stated by OP No. 1 that it had no role to play in settlement of the claim and related services thereon. Being the financer of the vehicle, OP No. 1 has played the role of a facilitator in transmitting the documents received from the complainant as the matter of insurance and settlement is the privity of contract between the insured and insurer. It is also submitted by OP No. 1 that the complainant neither paid the amount nor preferred any appeal against the Award, became Decree and binding upon the parties. It is also submitted by OP No. 1 that there is no office of opposite party and as either was no transaction within the Jurisdiction of the Forum, the present complaint is liable to be dismissed against OP No. 1 with cost along with a direction to the complainant to pay the awarded amount as per award passed on 07.04.2014.
OP No. 2 also vehemently opposed the allegations made in the complaint and contested the case. In the written version OP No. 2 raised the question of Jurisdiction on the ground that the answering OP has no Branch office in Bhadrak District nor actually and voluntarily resides and carries on business within the territorial Jurisdiction of this Forum. It is also objected by OP No. 2 that the complainant has suppressed the fact of actual cause of fire. The truth remains that the said truck was over loaded with hay/straw (Nada) beyond the permissible height which came in contract with Electric wires hanged over the road caused sparking and ignited the stock of hay/straw loaded on the truck. The entire stock of hay including truck was burnt completely leaving ashes. The actual reason which caused fire in the stock of hay/straw due to careless driving and gross negligence of driver is suppressed in the complaint with an ulterior motive to avail the own damage claim. It is also vehemently objected by OP No. 2 about acceptance of all original documents along with claim proposal form duly filled in is absolutely false and afterthought. OP No. 2 also refuted to have finalized and agreed to settle the claim on “Non-standard basis” which was agreed by the complainant. Hence the OP finally repudiated the claim as “No claim” on the ground of willful negligence, and over loading of straw beyond the permissible height & requested the Forum to dismiss the case due to devoid of merit with cost.
Heard the complainant as well as O.Ps and perused materials on record. Admittedly the complainant is a borrower of OP No. 2 and availed credit support of Rs 4,90,000/- for acquisition of a truck (Tata LPT-1109136) bearing registration No-OR 22B 7237 and the said Truck was insured with Oriental Insurance Co. Ltd vide policy No-311500/31/2012/12723 commencing from Zero hours on 28.03.2012 to midnight on 27.03.2013 on payment of premium amount of 17,721/- to the insurer. That apart, the parties to this case have disputed all other allegations as raised in the complaint and as discussed here under.
1. Both OP No. 1 and two have challenged the complaint on different grounds. OP No. 1 has raised that much before filing of this dispute in the present Forum, this OP had raised the matter in the court of arbitrator for recovery of the outstanding loan dues and received award from the court of arbitrator. Despite summon was served, the complainant did not appear before the arbitrator to defend himself as a result of which after expiry of appeal period decree was passed in favour of OP No. 1. When the decree has already been passed, filing of case in the District consumer Forum is not Justified and against the settled principles of Law. Thus the dispute so filed after award and decree is bad in Law and liable to be dismissed. OP No. 2 also raised the question of Jurisdiction stating that it does not have any Branch office to carry on business nor actually & voluntarily resides within the territorial Jurisdiction of this Forum. Hence this case may be dismissed.
On the contrary complainant contradicted the submissions of OPs in stating that, if the OP No. 2 does not have any business interest in Bhadrak District, how and why oriental insurance accepted the insurance proposal of the complainant. OP No. 2 lied in stating that OP No. 2 does not have any Branch at Bhadrak which proves that whatever OP has stated in the W/V are all false. As regards the decree obtained by OP No. 1 from the court of arbitrator, complainant has not received any intimation/ Notice/summon from the court to appear on the date fixed for hearing etc which need to be proved by OP.
Perused the materials on record and heard the counselor of complainant and OPs. Even though OP NO-1 has mentioned in the W.V to have submitted the copy of the loan agreement and the decision copy of the arbitrator’s order which are not found in the record. In absence of any evidence the submission of OP NO-1 is not sustainable secondly the plea taken by OP No. 2 is proved un true as the said insurance company is having a Branch office at Bhadrak. Hence the point of Jurisdiction raised by OP No. 2 is rejected and the Forum held that the dispute filed by the complainant is maintainable in this Forum.
2. In the complaint and during hearing the complainant has strongly condemned the stand of OP No. 2 in the matter of repudiation of claim of the complainant. The claim arose out of a fire accident of the insured truck which caused severe damage leaving no hope of its revival. Complainant has duly intimated OP No. 2, registered FIR with police and also intimated OP No. 1 about the incident of fire that completely burnt the truck in to ashes and residue of the truck was for salvage only. OP NO-2 appointed a surveyor and loss assessor namely Er. Amarendra Mohanty in order to conduct survey and asses the loss. The said surveyor assessed the loss in presence of the complainant and submitted report to OP NO-2 on 08.04.2013. Once again the said OP No. 2 also appointed another Surveyor/Loss Assessor for assessment of loss which contradicts the settled provisions of rules and regulations issued by IRDA. The complainant has also raised the issue as to what prompted OP NO-2 to appoint second surveyor and Loss Assessor after about three months of receipt of report from 1st surveyor and such action of OP No-2 gives a smell of foul play to avoid settlement of claim. Secondly after receipt of the report wherein it is was suggested by the second surveyor to settle the claim on non-standard basis, OP NO-2 negotiated and convinced the complainant to file affidavit to the effect that the complainant is milling to settle the claim on non-standard basis and accordingly complainant complied all the requirements as advised by OP NO-2. After submission of all required documents, OP NO-2 did not do anything to settle the claim for a pretty long period and finally repudiated the claim. Such an action of OP NO-2 inflicted a heavy blow to the rice & bread of the complainant which is prejudicial to the interest of the complainant.
On the contrary OP NO-2 Submitted that the truck was insured which was valid as on the date of fire accident that turned the truck and the goods therein in to ashes leaving salvage. The stock of straw/hay loaded on the truck caught fire by electric sparking due to over loading in respect of height beyond the permissible limit. The overhead Low Transmission line wires and stretched the wires which caused fire to ablaze the stock of straw and burnt the whole. OP NO-2 shows the reason of repudiation is that the truck was over loaded beyond the permissible height which is a violation of terms of the contract. The repudiation of claim so raised is not the negligence of OP NO-2 rather violation of contractual terms by the complainant and thus there is no deficiency of service in this case. In contradicting the submission of OP NO-2 complainant stated that such an over loading clause in respect of height was not incorporated in the exclusion clauses nor the said OP has adduced any material evidence in support of over loading. If the accident caused due to over loading beyond permissible height, then how the surveyor recommended for settlement of claim on non-standard basis and how OP NO-2 convinced and advised complainant to excise option for settlement of claim on non-standard basis. If the overloading factor is the sole reason of repudiation of claim, the said OP would have not advised the complainant for settlement on non-standard basis, rather OP would have repudiated the claim after receipt of the report from the 2nd surveyor and loss assessor. Such actions of OP make everything clear that the decision of repudiation of claim is the second and after through to deprive the complainant of getting his legitimate claim. It is worth mentioning that the OP (Insurer) has not provided any documentary evidence with regards to over loading in respect of height beyond permissible limit which caused the fire accident. It is further added that as per clause 2 (a) of the terms & conditions of commercial vehicle package policy, the insure is not liable to make any payment in respect of any damage caused by overloading but there is no mention in the policy about the fact that what should be the maximum height of loaded truck and what was the actual height when the truck, loaded with dry straw, caught fire from the sparks. It is also mentioned in the survey report that under the head of “Cause of accident” that the dry straw caught fire due to sparks from over head LT line failing on to the same. But it is not specifically mentioned that the overloaded truck came in contact with the overhead electric wires which stretched two wires together to cause sparks that fell on the dry straw which led to this accident. In course of hearing the complainant has raised that the LT line wires crossing the road were hanging below the required height which was not be distinctly visible to the driver during night time. As there is no such provision in the policy conditions nor any evidence is adduced by the insurer (OP No. 2) as regards to the height of loading truck, the submission of the said OP in the matter of the case in hand is proved meaningless and repudiation of claim of the complainant by OP (Insurer) is not genuine and justified.
3. In course of hearing, complainant raised that OP No. 2, with malafide intention and ulterior motive, has appointed another surveyor even after the survey/spot verification was conducted by 1st surveyor namely Er. Amarendra Mohanty. The complainant is in doubt on the transparency of the actions of insurer taken so far for settlement of claim. Appointment of 2nd surveyor and hiding the report of the 1st surveyor is nothing but an act of foul play of OP (Insurer) to avoid settlement of claim. On the contrary, OP No. 2 submitted that the 1st surveyor was appointed to find out the cause of fire that totally burnt the truck but not to assess the loss. Second surveyor was appointed to assess the loss caused due to fire.
Heard the parties and perused materials on record. Forum did not find any valid reason from the submissions of the OP (Insurer) for appointment of the second surveyor which is inconsistent with the provisions of regulations issued by IRDA. It is not clarified properly with evidence as to OP No. 2 appointed second surveyor after six months of the accident and five months after the surveyor was conducted by Er. Amarendra Mohanty. It creates doubt as to why OP (Insurer) did not file the report of 1st surveyor in the Forum for perusal and to know the cause of fire and the loss caused due to accident. Hence it is beyond doubt to hold that OP No. 2 is hiding to disclose the report of the 1st surveyor for its own interest ignoring the plight and genuine claim of the complainant.
4. The complainant raised that the insurer of that truck in discussion was the selection of the financier (OP No. 1) who insisted upon the borrower (Complainant) to insure the financed truck with OP No. 2 as the financier and insurer were having business tie up with each other. Complainant’s option was meaningless as the amount of premium was paid to OP No. 1 by the borrower to get his vehicle insured. It is OP No. 1 who has done the insurance policy with OP No. 2 because of their business link with each other which can be confirmed from the seal affixed on the insurance policy. OP No. 2 is having separate and specific cell named as Magma Cell to deal with the insurance of vehicles financed by Magma Finance Corporation. Hence denial of not having any business relation of OP No. 1 with OP No. 2 is false & fabricated. It is an established fact that OP No. 2 is acting hand in glove with OP No. 1 to deprive the complainant of his legitimate claim. In resisting the complainant, OP No. 1 stated that it has no business relation with OP No. 1 other than a financier in whose favour the said vehicle has been hypothecated. The financier has also obtained award decree from the Court of arbitrator on 07.042014 after which this dispute has been filed in D.C.D.R.F, Bhadrak. Therefore this case is not maintainable in the Forum against OP No. 1. To resist the statement of OP No. 1, complainant once again submitted that the truck, so financed by OP No. 1 met accident on 18.03.2013 and due intimation was given to all concerned within a day or two. But OP No. 1, instead of insisting upon OP No. 2 for settlement of the claim, preferred to refer the matter for arbitration during December, 2013 which indicates the malafide intention of the said OP as to how it wants to safeguard its own interest without caring for the loss sustained by the complainant.
Heard the complainant and OP No. 1 and perused materials on record. The policy certificate reveals that there is special business tie up of OP No. 1 with OP No. 2 as the policy certificate bears the seal of insure with special mention as “Magma Cell” in the center of the seal. Hence it is evident that OP No. 1 did not press the insurer (OP No. 2) for settlement of the claim rather preferred a dispute before the arbitrator which gives an impression that the repudiation of claim is the outcome of secret understanding between the O.Ps as a result of which complainant became a victim to their conspiracy. Hence the silence of OP No. 1 in the matter of settlement of claim attributes to negligence in providing proper service to the complainant. Further it is also observed that the complainant and OP No. 1 are the joint owner of the truck and whatever loss has been caused shall be shared by both. Hence the total loss of the vehicle should be shared by both the financier and borrower.
5. Finally, the repudiation of claim by the OP No. 2 is absolutely unfair & unlawful and such acts of insurer are detrimental and prejudicial to the genuine interest & legitimate claim of the complainant who deserves to get his claim settled from OP No. 2. Hence in view of the above facts and circumstances, it is ordered;
ORDER
The complaint be and the same is allowed against the O.Ps with cost. OP No. 2 is directed to settle the claim of the complainant on “Non-standard” basis and pay Rs 3,56,838/- to the complainant along with compensation of Rs 10,000/- for mental agony and harassment and Rs 5,000/- as cost of litigation within 30 days from the date of order failing which interest @ 7.5% shall be charged from the date of default to the date of payment on monthly rest basis. As the nexus between the O.Ps has been proved, OP No. 1 is also directed to pay compensation of Rs 10,000/- for mental agony and harassment to complainant within the above mentioned time limit violation of which shall arrest interest as applicable to OP No. 2.
This order is pronounced in the open Forum on this day of 9th October, 2017 under my hand and seal of the Forum.
(Sri Basanta Kumar Mallick)
Member
(Sri Raghunath Kar)
President
Typed to my dictation & corrected by me
(Sri Basanta Kumar Mallick)
(Apsara Begam) Member
Member
