::BEFORE THE DISTRICT CONSUMER DISPUTES  REDRESSAL COMMISSION AT BIDAR::

                                                                     C.C. No.62/2021.

                                                                                                                                    Date of filing: 01.09.2021.

                                                           Date of disposal:30.09.2023.

P R E S E N Ts:-    

                                (1) Shri. Mabu Saheb H.Chabbi,                                                                                                               B.Com.,LL.B.,(Spl.),

                                                                                                  President.,  

                                (2) Kum. Kavita,

                                                               M.A.,LL.B.,(Spl.),  

                                                                         Member.

                                   (3) Shri.Thriyambakeshwara,

                                                                                   B.A.,LL.B.,(Spl.), 

                                                                                           Member.

COMPLAINANT/S                    1.    Vasanthraj S/o Saibanna, 

                                                       Age: 70 years,  Occ: Proprietor Yelalinga
                                                       Dal Industries, R/o Plot No.9-312 KIADB  
                                                       Industrial Area Kolar Tq&Dist:Bidar.

                                                                              (By Smt.Padma.M., Advocate.)                             

V/s

OPPONENT/S                             1.  Branch Manager,

                                                       The United India Insurance Company
                                                       Ltd., Branch Office Basava Sri.Complex

                                                       #8-10-268 to 273, First Floor Ganesh
                                                       Maidan Stadium Road, Bidar 585401.

                                                2.         The Divisional Manager,

                                                      Karnataka State Financial

                                                      Corporation Bidar 585401                                                         

                                                     (OP NO.1 By Sri.M.A.Khan and
                                                     OP No.2 Sri.V.M.More., Advocate.)

::  J U D G M E N T  ::

By. Shri.Thriyambakeshwara. Member

The complaint is filed by complainant under section 35 of the Consumer Protection Act, 2019, against the opponents for the deficiency in service for not settling the insurance claim by Ops for loss incurred due to inundation of Building, Machinery and stocks of Murmura due to heavy rain.  Hence, passed the following judgement.

Brief facts of the complaint.

The brief facts of the complaint in as follows: -

1.         The complainant is the resident of Bidar and also Proprietor of “Yella linga Dal Industry” which was started in land SY.No.312 measuring 1 Acre 5 Guntas by getting allotted said plot from KIADB in the year 2010 under “Micro Small scale Industrial Project” Scheme for his livelihood by way of self employment.  Thereafter, complainant approached OP No.2 KSFC Bidar, for the development of said open plot with an intention to start therein for production of Dal & MurMura (Puffed Rice) by seeking financial help and OP No.2 after compliance of its entire documentation, sanctioned loan on 05.04.2016, to complainant.  The complainant approached OP NO.2 and obtained insurance Policy No. 2406021119P111348181 from OP No.1 under “standard fire and special peril policy” for the period i.e., from 30.11.2019 to 29.11.2020, by paying premium separately under different heads as shown in policy. 

2.         It is further submitted by complainant that, it was on 16.09.2020, there was heavy raining with thunder and storm and due to which the insured building, machinery and stocks including Murmura were put to heavy loss because of inundation due to said heavy rain fall.  The said loss was surveyed through Civil Engineer (Govt. approved valuer) of
“Jai Bhavani Engineering company” which was issued bill dt:25.09.2020.  The said heavy rain fall in Kollar Village Bidar is evident from report issued by U.A.S Raichur dt:07.10.2020.  The said factum of loss was intimated to both OPs who visited the complainant building, machinery and stock was surveyed loss and thereafter OP No.2 strictly informed complainant to close the factory for 1 month till further intimation by it.  The entire documentation was provided by complainant as and when several times as demanded by both OPs, since 27.01.2020 to 18.01.2021 as per OPs letters.  However, the OP No.1 insurance company repudiated the claim of complainant as “No Claim” through letter dt:15.01.2021 on the ground that, Dal was only insured but not Murmura as contended by complainant, which is said to be against to the OP No.2 reply notice dt:24.03.2021, by admitting that, the policy issued by insurer includes Dal as well as Murmura, and hence complainant filed complaint by claiming Rs.4,83,025/- as shown in his Para 11 of complaint under different heads along with interest, cost and compensation. 

Written Version of OP.No.1.

3.         Subsequent to service of summons on Ops by this commission, the OP No.1, appeared before this commission by filing his W.V. by categorically denying all most all facts of the complaint by admitting that, the allotment of plot by KIADB to the complainant in year 2010 for starting “Yella Ling Dal Industry” and loan was sanctioned by OP No.2 KSFC and further the policy in question was issued by it only for Dal, raw material, finished goods industries, but not starting Murmura Industry.  It is further denied heavy rain fall as on 16.09.2020 for want of knowledge and thereby loss as stated by complainant and however on intimation by complainant he appointed surveyor who after survey submitted report about damage to stock and paddy and Murmura, which is not covered by policy issued by OP No.1, as it covered only Dal, raw material, finished goods.  Despite its repeated reminders to OP No.2 and complainant both have failed to submit proper and relevant documents sought by it for settlement of claim accordingly it has closed the claim of complainant as “No Claim”.  However, in Para No.9 of his W.V. contended that, if at all any liability arises against OP No.1, then it would be limited the report of surveyor and again which is subject to proof of Paddy and Murmura was insured by complainant with it.  OP No.1 further by way of additional W.V. contended that, the license issued by the Designated Officers of food safety standard authority dt:01.12.2018 was expired on 30.11.2019, and incident was taken place on 16.09.2020 and therefore there was no enforcing of food and safety license an on date of incident, which is nothing but violation of terms and condition of policy.  Accordingly OP No.1 prayed for dismissal of the complaint as there are no any specific allegation of deficiency in service etc., against its company in compliant.

Written Version of OP NO.2.

4.         The OP No.2 categorically denied almost all facts of the complaint by admitting the fact that, complainant approached him for loan for his industry at the leased premises bearing plot no.312 situated at Kollar industrial Area for producing Poha mill (Murmura) and for the same OP No.2 sanctioned loan and obtaining insurance  policy by complainant is as per one of the condition for sanctioning loan and the OP No.2 initially had insured the assets of the units of the complainant by furnishing the copy of sanctioned dated list of machinery , building  and working capital assets which are secured to OP No.2 corporation.  It is further admitted that, complainant informed him about the incident through letter dated 18.09.2020, which was intimated immediately to OP No.1 for taking necessary course of action and which was replied by OP No.1 insurance company through letter dt:24.11.2020 to complainant for compliance of document as sought by it.  Accordingly, complainant and OP No.2 complied the same documentation and further stated that, if at all OP No.1 insurance company sought any documents regarding the product of complainant, then he ought to have submitted the copy of the permission for additional production of Murmura in addition to Dal, to OP No.1 which is nothing to do it with OP No.2 and accordingly properly replied through reply notice dt:24.03.2021 to complainant and hence, OP No.1 is neither proper and necessary party and accordingly he prayed for dismissal of complaint against it by imposing exemplary cost against complainant.

Evidence of complainant.

5.         The complainant is examined himself as P.W.1 and got marked   documents Ex.P.1 to Ex.P.14 which are as follows,

1. Ex.P.1-OP No.2 loan sanction letter dt:05.04.2016.
2. Ex.P.2-Insurnace policy dt:30.11.2019.
3. Ex.P.3-Civil Engineer Report dt:03.12.2020.
4. Ex.P.4-Bill of Jai Bhavani Engineering Co. Dt:25.09.2020.
5. Ex.P.5-Climate Data Report from University of Agriculture Science Raichur dt:07.10.2020.
6. Ex.P.6(1to3)- Letter from KAIDB with Photos.
7. Ex.P.7(1&2)-Courier Receipts.
8. Ex.P.8 to 10-Document requisition cum Repudiation Letter of United India Insurance Company.
9. Ex.P.11-Claim closer letter from KSFC dt:15.02.2021.
10. Ex.P.12-Reply notice OP No.2 dt:24.03.2021.
11. Ex.P.13-Legal notice from complainant dt:03.03.2021.
12. Ex.P.14-Letter of KIADB dt:12/16.05.2015.

Evidence of Opponent NO.1.

6.         One Swamy Tummala, is examined as R.W.1 and Vijayakumar Patil is examined as R.W.2 T.Rama Gopal is examined as R.W.3, on behalf of OP No.1, and got marked 4 documents as per Ex.R.1 to Ex.R.4 which are as below.

1. Ex.R.1-Copy of insurance policy.
2. Ex.R.2-Copy of repudiation letter dt:05.02.2021.
3. Ex.R.3-Copy of Fire survey report of surveyor Vijaykumar Patil, dt:25.10.2020 along with photos (invisible.)
4. Ex.R.4-Copy of report issued by T.Rama Gopal, dt:13.12.2020.

Evidence of Opponent NO.2.

7.         Despite sufficient opportunity provided to OP No.2, he did not lead evidence accordingly his evidence was closed on 23.01.2023, even subsequent to which, he has not tried for leading his evidence, hence, evidence was taken as nil.  In view of not leading the evidence even his W.V. filed by also ignored as not substantiated the same through his evidence.  Hence, treated as no W.V and evidence on behalf of OP No.2. 

Points/Issues.

8.         On perusal of pleadings, evidence of the both parties and documents, this commission raised the points for discussion as below;

1. Whether the complainant proves that, he is consumer to Ops and further proves any deficiency in service by the Ops in not settling his insurance claim?  
2. Whether the complainant is entitled for any relief sought in her complaint? What orders?   

9.         Our answers to the points raised above are as follows: -

1. In the affirmative.
2. In the affirmative and as per the final order.
   •  

Points No 1 and 2.

9.         In order to decide the complaint issues, this commission discussed points/issues No.1 and 2 altogether for discussion as each points are inter related to each other- as follows.

Complainant is Consumer.

10.       In order to prove the case of the complaint, the complainant lead his evidence as P.W.1 by way of reiterating the complaint facts and got marked Ex.P.1 to Ex.P.14 documents on his behalf.  In similar manner, OP No.1 also examined himself as per R.W.1 and lead his witness evidence as RW-2 & RW-3 who are his surveyors in order to substantiate his case and he got marked in all 04 documents i.e., Ex.R.1 to Ex.R.4.

11.       On perusal of overall pleadings, evidence of both kinds of the parties, it is not in dispute that, the complainant had purchased
Ex.P.2 =Ex.R.1 Insurance Policy in question for the period 30.11.2019 to 29.11.2020 which is issued by OP No.1 company through OP NO.2, whose name found in policy in question and the complainant is the proprietor of the said “Yella linga Dal Industry” and policy was in force as on the date of heavy rain fall incident as on 16.09.2020.  The complainant submitted claim which is admitted by the both Ops in their W.V. and evidence of OP No.1.  But, the OP No.1 repudiated the claim of complainant as per Ex.R.2/Ex.P.8 to Ex.P.10 based on Ex.R.3 & Ex.R.4 i.e., Survey reports issued by RW-2 and RW-3 respectively.  The insurance by complainant with OP No.1 as admitted by both Ops, through OP No.2, complainant being beneficiary of said policy in the capacity of proprietor of “Yella Linga Dal industry” Kollar Bidar, certainly he is consumer to both Ops.  

Deficiency in service by Ops.

12.       The main contention of the OP No.1 is that, the complainant not insured the Paddy and Murmura which was resulted in loss due to heavy rain fall on 16.09.2020 but, insured Dal, raw materials and its finished goods only by OP No.2.  The rain fall in heavy manner is proved by complainant through document No.Ex.P.3 i.e., a Govt. Approved valuer and also through “climatic data dt:16.09.2020”,  issued by UAS Raichur through letter dt:07.10.2020 i.e., Ex.P.5.  In order to ascertain as to whose duty to get insured the loan assets and stock in the premises of “Yella linga Dal Industry”, the OP No.1 drawn our attention to document No.Ex.P.1 at Sl.No.22 on Page No.6 which speaks as under.

22) ¸Á®zÀ ±ÉÃPÀqÁ 60% gÀµÀÄÖ ¨sÁUÀzÀ ºÀtªÀ£ÀÄß ©qÀÄUÀqÉ ¥ÀqÉAiÀÄĪÀ ªÉÆzÀ®Ä WÀlPÀPÉÌ ¨ÉAQ DPÀ¹äPÀ C¥ÁAiÀÄ ¥Àæw¨sÀl£É zÀAUÉ ¥ÁæPÀÈwPÀ «PÉÆÃ¥ÀUÀ¼À£ÉÆßüÀUÉÆAqÀ «ªÉÄAiÀÄ£ÀÄß ¸ÀA¸ÉÜAiÀÄ CqÀªÀiÁ£ÀzÉÆA¢UÉ d£ÀgÀ¯ï E£ÀÆìgÉ£Àì PÀA¥À¤AiÀÄ°è ¤ÃªÉ ªÀiÁr¸ÀvÀPÀÌzÀÄÝ.  ¸ÀA¸ÉܬÄAzÀ ¥ÀqÉzÀ ¸Á® ¥ÀÆwðAiÀiÁV ¥ÁªÀwAiÀiÁUÀĪÀªÀgÉUÉ ¥Àæw ªÀµÀ𠫪ÉÄAiÀÄ£ÀÄß £À«ÃPÀj¸ÀvÀPÀÌzÀÄÝ ªÀÄvÀÄÛ CzÀgÀ ¥ÀÄgÁªÉAiÀÄ£ÀÄß ¸ÀA¸ÉÜUÉ ¸À°è¸ÀvÀPÀÌzÀÄÝ.

              On plain reading of the above clause in loan sanction letter Ex.P.1 issued by OP No.2, it was the duty of complainant to get insured the loan assets, building machinery and any other stocks was by the complainant and to update the same to OP No.2 regularly, till repayment of entire due loan amount to OP No.2.  Having a plain look on 1^st page of the Ex.P.2 Insurance Policy No.2406021119P111348181 for the period 30.11.2019 to midnight of 29.11.2020, the name of insured is showing OP No.2 fallowed by complainant along with his industry address and thereafter the “agent name” on the same page is also showing OP No.2 address with its phone number.  So, it is clear that, it is the OP No.2 contrary to the above clause of loan sanction letter observed at Sl.No.22, had got insured the same with OP No.1, only for Dal Mills as found on Page No.3 of said policy for an assured sum of Rs.11,99,6000.00/- apart from building machinery etc., but, not depicting any insurance coverage for Paddy and its finished goods Murmura. 

13.       In the light of above findings based on Ex.P.2 policy in question contrary to loan sanction letter Sl.No.22, if the same is compared with the admission of OP No.2 in his reply notice at Ex.P.12 in Para No.3 on page No.2^nd last 4 lines of the same Para reads as “Your client vide his representation dt:28.11.2018 requested the corporation to insure the assets and to change insurance company from IFFKO TOKIO to United India Insurance Company by debiting to his Account”.  And further Para No.4 reads as “ I find from the particulars furnished to me by Corporation that, Corporation had insured the Assets of your client by furnishing the copy of sanction letter, list of machinery, building and working capital assets, which are secured to it.  This includes plant, machinery and raw material used for manufacturing Murmura”.

            Apart from the above the OP No.2 in the same reply notice at Para No.6 admitted that, “ Now, it is surprised by the Corporation that the Insurance Company has repudiated the claim as “No Claim”, only for the reason that the policy does not cover Murmura.  This is incorrect decision of the Insurer.  in fact, the Dall Industry and the policy issued by insurer includes Dall, as well as plant, machinery and raw materials for manufacture of Dall as well as Murmura, which is clearly indicated in the policy by Corporation while obtaining the policy”.   

14.       Having gone through the above reply notice contents, it is clear that, the OP No.2 against to its loan sanction letter (Ex.P.1) condition at Sl.No.22, it has accepted the representation of complainant dt:28.11.2018, for changing the insurance company from IFFKO TOKIO to OP No.2 company and debited the premium to his account, then the OP No.2 ought to have placed the said representation of complainant before this commission to resolve the dispute once for all for clarifying as to whether the complainant had requested to insure the Paddy and its finished goods Murmura under insurance with OP No.1.  If so, for what amount?  The same is thought admitted about insurance in respect of Murmura by OP No.2 but, the same is not placed on record to put an end to the controversial dispute.  Apart from above, when he had insured on behalf of complainant as per his representation, then he ought to have supplied a copy to the complainant for the disputed policy in question so, as to clarify himself whether OP No.2 KSFC had acted in accordance with his request dt:28.11.2018.  The same is also not established by the OP No.2.  this commission also directed to OP No.2 by order dated 17.06.2023, to produce all the insurance copies since beginning from the year of sanctioning loan to till the disputed policy, but the OP No.2 did not comply the same.  Therefore, this commission taken as not complied the direction of this commission by vide order dt:21.09.2023.  Thereby, the same needs to be drawn an adverse inference against OP NO.2 for having not placed the said all insurance policies as per direction of this Commission and thereby complainant had been kept under dark about details as to insurance of his assets and stocks as requested by him through representation dt:28.11.2018.   When OP No.2 is admitting in its reply notice as afore stated for having insured Murmura along with Dal and other heads, then nothing is prevented the OP No.2 to place such his intimation letter addressed to OP NO.1 for insuring Murmura alongwith Dal and other heads while obtaining the disputed policy in question whereby certainly OP No.1 would have been alone held responsible for non insuring the Murmura in question by complainant thorough OP No.2.  Therefore, non placing such document before this commission under the above circumstances of the case, the OP No.2 as well as OP NO.1 are responsible for the loss in question. 

15.       In the background of the above discussion, if we peruse the Ex.R.4 i.e., the un-served survey report to complainant under policy in question, the author of said report Mr.T.Rama Gopal who examined himself as RW-3 in support of his report, had quantified the loss in question under the head of final assessments in the last page stating that, the license issued by Designated Officers of Food Safety and standard authority Bidar dt:01.12.2018, was expired on 30.11.2019, and whereas the incident was taken on 16.09.2020, so that the said license was expired and consequently complainant was not supposed to produce food products and thereby he violated the policy terms and conditions and hence, the complaint is not liable for any insurance under policy in question.  This finding of the RW-3 not in agreement by this commission as the lapse of his license to factory had contributed nothing for the damage of said items under heavy rain fall which is natural calamity.  If OP No.1 has to invoke such provision, then it is his bounden duty to apprise the same prior to issuance of the policy in question as per mandatory regulation No.7 of IRDA “Protection of policy holders interests” regulations -2002.  Therefore, when the OP No.1 itself is under in violation of observation of such mandatory regulation prior to issuance of the policy, then it has no right to repudiate claim of complainant on the alleged ground of non intimated provision of violation of policy terms and conditions. The awareness for existence of a policy is different from awareness of its contents to complainant.  The same view was held by Hon’ble NCDRC in a reported judgment of Hon’ble National Commission New Delhi reported in (2010)C.J. 190(NC), R.P.No.326/2009 DD:17.04.2009  in “United India Insurance Co.Ltd and Anr Vs S.M.S Tele Communications and Anr”.

Consumer Protection Act-1986 Sections 2(1)(g), 2(1)(o), 14(I)(d), 17 and 21 –Insurance-System damaged due to short circuit-Rejection of claim by Insurance company and subsequently by Insurance Ombudsman-District Forum awarded Rs.4,77,473/- against net loss as assessed by Surveyor alongwith compensation of Rs.25,000/- and cost of Rs.2,000/- Appeal dismissed by State Commission-Being aware of existence of policy is one thing and being aware of contents and meaning of clauses of policy is another-Policy was taken by Bank and not by complainant-Nothing on record to show that Insurance Company had explained meaning of all exclusion clauses to Bank and requested them in turn to bring them to notice of complainant-Unexplained or unnoticed exclusion clauses would not be binding to insured-Exclusion clauses are required to be ignored if Insurance Company or its Agent Intermediary does not adhere to mandatory requirement of explaining Exclusion Clauses before issuance of Insurance cover-Revision Petition dismissed.

16.       Therefore, the evidence of RW-3 as per Ex.R.4 final survey report not in accordance with law as the net payable amount to complainant kept blank which is incomplete in its form as he is not competent authority to decide whether it is payable or not payable for alleged violation of policy terms and conditions. His final assessment for Rs.4,33,184/- has to be upheld in view of admission of OP No.1 in his W.V. Para No.9, stating that, his surveyor report is its liability.  The said amount of final assessment by RW-3 is in corroboration with the proximity to the prayer of complainant for having suffered loss due to heavy rain fall on 16.09.2020, which is evident from Ex.P. & Ex.R. series.  Therefore, in our considered opinion of this commission failure on the part of OP No.2 to place the material documents in support of defense set out in his W.V. had been ignored by this commission as afore discussed in the body of judgment and for non compliance of the direction of this commission order dt:17.06.2023 which deserved for adverse inference against it.  Consequently, the OP No.1 being insurer is responsible for the acts of OP No.2, who acted as agent on his behalf and in between OP No.1 and complainant which is evident from its own admission on 1^st page of Ex.P.2 =Ex.R.1 disputed policy. 

17.       Hence, we are of the considered view that, the complainant has proved his case for claim as prayed for in his complaint which is proved under Ex.P. and Ex.R. series document.  Accordingly, we answered the point No 1 and 2 in the affirmative in favor of complainant and proceed to pass the following order.

::ORDER::

        The complaint u/s 35 of CP Act 2019, filed by the complainant is hereby allowed in part along with costs and compensation.

            The OP No.1&2 are hereby directed to pay jointly and severally Rs.4,33,184/-  (Rupees four lakh thirty three thousand one hundered eighty four only) as per final survey report Ex.R.4 to complainant under “standard fire and special peril policy” bearing No.2406021119P111348181, along with interest 6% p.a. from the date of repudiation as per Ex.R.2 dt:05.02.2021 till realisation along with compensation of Rs.10,000/- for having suffered mentally and inconvenience, and Rs.5,000/- as litigation expense within 45 days from the date of this order. 

            Intimate the parties accordingly.                        

 (Typed to our dictation then corrected, signed by us and then pronounced in the open Commission on this 30^th day of September-2023).

Documents produced by the complainant.

1. Ex.P.1-OP No.2 loan sanction letter dt:05.04.2016.
2. Ex.P.2-Insurnace policy dt:30.11.2019.
3. Ex.P.3-Civil Engineer Report dt:03.12.2020.
4. Ex.P.4-Bill of Jai Bhavani Engineering Co. Dt:25.09.2020.
5. Ex.P.5-Climate Data Report from University of Agriculture Science Raichur dt:07.10.2020.
6. Ex.P.6(1to3)- Letter from KAIDB with Photos.
7. Ex.P.7(1&2)-Courier Receipts.
8. Ex.P.8 to 10-Document requisition cum Repudiation Letter of United India Insurance Company.
9. Ex.P.11-Claim closer letter from KSFC dt:15.02.2021.
10. Ex.P.12-Reply notice OP No.2 dt:24.03.2021.
11. Ex.P.13-Legal notice from complainant dt:03.03.2021.
12. Ex.P.14-Letter of KIADB dt:12/16.05.2015.

Document produced by the Opponent.

1. Ex.R.1-Copy of insurance policy.
2. Ex.R.2-Copy of repudiation letter dt:05.02.2021.
3. Ex.R.3-Copy of Fire survey report of surveyor Vijaykumar Patil, dt:25.10.2020 along with photos (invisible.)
4. Ex.R.4-Copy of report issued by T.Rama Gopal, dt:13.12.2020.

Witness examined.

Complainant.:-

P.W.1- Vasanthraj S/o Saibanna,        (complainant).                  

Opponent:- 

R.W.1- Swamy Tummala.

R.W.2- Vijayakumar Patil .

R.W.3- T.Rama Gopal.