Sri. Jacob Stephen (President):<br /> <br /> The complainant Mr. V. Varghese, Silex House, Ranni-Perunad P.O. Pathanamthitta District has filed this complaint against the opposite parties for a relief from the Forum.<br /> <br /> 2. The facts stated in the complaint are the following:- The complainant is a retired teacher. He was doing retail business of fertilizers in the name ‘Silex Agencies’ at Perunad. In the year 1984, the second opposite party advanced loan for the business against hypothecation of the stock of fertilizers and deposit of title deeds of immovable properties. The loan A/c. No. is 80. The second opposite party was issuing insurance policy for the stock yearly to the first opposite party for the complainant. The first opposite party was debiting the loan account of the complainant for the said policy from 1984 onwards. The last such policy bearing No.100701/011/16/05022/2000 dated 22.12.2000 was taken by the first opposite party from the second opposite party for an amount of Rs.1,00,000/- by debiting his loan account by Rs.390/- on 22.12.2000 and the said policy was valid up to 22.12.2001. Initially, the stock of fertilizers was kept at building No.38/IX of Ranni-Perunad Panchayat. In the year 1991, the said shop was demolished due to its dilapidated condition; the complainant shifted the stock to building No.101/VII after giving intimation to second opposite party. Later the said building was renumbered as 108/III of the same panchayat. In the year 2001, the stock was damaged in an unexpected flood. The second opposite party intimated the damage to first opposite party on 9.7.2001 and first opposite party conducted spot survey. During these days, the complainant was out of station for treatment at Madurai. After the complainant’s return after treatment from Madurai, he submitted a letter dated 14.7.2001 to the first opposite party regarding the damage and filed insurance claim on 20.7.2001 with first opposite party for an amount of Rs.41,364/-. Thereafter on 12.7.2002, the first opposite party sent a letter to the complainant stating that the damaged goods were found at door No.III/108, whereas the door number entered in the policy is IX/38 and directed to the complainant to furnish a certificate regarding the change of premises, failing which the claim file would be closed as no claim. The complainant did not furnish the certificate as the premises were different. Then he made enquiry to second opposite party vide letter dated 17.8.2002 whether the change of premises was intimated to first opposite party and in the reply dated 18.9.2002 by the second opposite party informed the complainant that they have not informed it as the complainant did not inform the shifting to second opposite party. Thereafter, he sent legal notice to opposite parties on 17.10.2002. The first opposite party does not replied, but in November 2002, a surveyor of first opposite party came to the spot and collected information about the loss, but nothing happened. However, second opposite party sent a reply notice dated 11.11.2002 through their Advocate stating that the complainant does not have privity of contract to demand insurance benefit as the policy was taken by second opposite party. The denial of the claim by the first opposite party is a deficiency of service and he is entitled to get the reliefs as prayed for in the complaint from the first opposite party or in the alternative from the second opposite party. The complainant prays for granting an amount of Rs.41,364/- for the loss, Rs.5,882/- as interest, Rs.5,000/- as compensation for mental agony and pain and the cost of the proceedings.<br /> <br /> 3. The first opposite party filed a written version raising the following contentions: The O.P. is not maintainable either in law or on facts and liable to be dismissed in limini. It is stated that there is a policy No.100701/011/16/05022/2000 which is valid from 23.12.2000 to 22.12.2001, in the name of the 2nd opposite party on account of the complainant for the fertilizer kept at Door No.IX/38 of R.Perunadu and the complainant has no privity of contract with 1st opposite party directly. The complainant is claiming damages for the loss of fertilizer kept at Door No.111/08 of Perunad Panchayat. Neither the complainant nor the 2nd opposite party intimated such a change and hence complainant is not entitled to get any claim. Even if any claim is to be lodged it would have been through the 2nd opposite party. In spite, the 1st opposite party deputed a surveyor who found and reported that the premises is different and the complainant is directed to furnish certificate for the change of the number of the building, who does not furnished. Hence they are not liable for the damages claimed by the complainant and canvassed for the dismissal of the complaint against the 1st opposite party as there is no deficiency of service from their part.<br /> <br /> 4. The 2nd opposite party filed their written version raising the following contentions: The complaint is not maintainable. The complaint is frivolous. They admit the financial transactions based on the loan agreement and as per the hypothecation agreement the stock were kept at Door No.38/IX of Perunad Panchayat. It is true that the 2nd opposite party had arranged insurance policy covering the hypothecated goods and it is so arranged solely for the purpose of protecting the hypothecated goods. The 2nd opposite party is not intimated about the shifting of the premises. Hence complaint alone is liable for the loss and hence there is no deficiency of service from their part and therefore this complaint is liable to be dismissed and canvassed for the dismissal of the complaint.<br /> <br /> 5. The points for consideration in this O.P are the following:-<br /> <br /> (1)Whether the complaint is maintainable before the Forum?<br /> (2)Whether the complainant is entitled to get a relief as against the<br /> opposite parties?<br /> (3)Reliefs and Costs?<br /> <br /> 6. The evidence of the case in favour of the complainant consists of oral evidence of the complainant and two witnesses who were examined as PW1 to PW3 respectively. Exts.A1 to A5 were marked based on the affidavit filed by the complainant and Ext.A6 marked as per the order in IA.121/04. No oral or documentary evidence adduced by the 1st opposite party. For the 2nd opposite party, the Branch Manager of CBI, Perunad has been examined as DW1 and Exts.B1 toB3(a) were marked. Ext.A1 is the claim form, dated 20.7.01. A2 is the letter dated 20.7.01 given by the complainant to 1st opposite party. Ext.A3 is the letter dated14.7.01 given to the first opposite party by the complainant. Ext.A4 is the current account pass book and A4(a) is an entry in A4. Ext.A5 is the letter dated 12.7.02 issued by 1st opposite party to the complainant. Ext.A6 is the letter dated 9.7.01 given by 2nd opposite party to 1st opposite party. Ext.B1 is the hypothecation agreement between the complainant and second opposite party. Ext.B2 is the reply notice of 2nd opposite party to the complainant. Exts.B2(a) and B2(b) are postal receipts and acknowledgement card of Ext.B2. Ext.B3 is the policy certificate and Ext.B3(a) is an entry in Ext.B3. After the closure of the evidence, both sides heard.<br /> <br /> 7. Point No.1:- The complainant is a consumer of opposite parties and the matter in dispute between the parties are also a consumer dispute. So Point No.1 with regard to the question of maintainability, we hold this O.P is maintainable before the Forum.<br /> <br /> 8. Point Nos.2 & 3:- The complainant’s case is that stock of fertilizers worth Rs.41,364/-, as per Ext.A1, insured with opposite party 1 and 3 damaged due to flood-during July, 2001 and he is entitled to get insurance claim as the damaged fertilizers were duly insured with the 1st opposite party by the 2nd opposite party for the complainant. Complainant had availed loan for the fertilizers executing Ext.B1 loan agreement by hypothecating the stock and title deeds with 2nd opposite party and his loan account was operative since from 1984 onwards. In the year 1991, the shop room where the goods were stored was demolished due to its dilapidated condition, the complainant with advance intimation to the 2nd opposite party shifted the stock to another building, which was later renumbered as III/108. The 2nd opposite party regularly debited the complainant’s loan account for taking insurance policy for the stock of fertilizers till 22.12.2000 and the last such policy, Ext.B2 is valid up to 22.12.2001 whereas the damage occurred during July, 2001. The complainant and the 2nd opposite party informed about the flood and damage to the 1st opposite party who deputed a surveyor for ascertaining the damages. But the 1st opposite party repudiated the claim by saying that the damaged goods were seen at Door No.III/108 of R-Perunad Panchayat whereas the door number entered in the policy is IX/38 R-Perunad Panchayat. The 1st opposite party disallowed the claim as the damaged goods were found at a building other than the building number entered in the policy. Therefore, the complainant approached the 2nd opposite party and enquired whether the shifting was communicated the 1st opposite party. 2nd opposite party told the complainant, that the shifting was not communicated to 1st opposite party as it was not intimated to them by the complainant. <br /> <br /> 9. The 1st opposite party’s contention is that there is no privity of contract between the 1st opposite party and the complainant. The second opposite party had taken the policy. As such, claim if any, should be submitted by the 2nd opposite party as the 2nd opposite party had taken the policy from the 1st opposite party. Even then they are admitting the policy and its validity. But its coverage is for goods kept at building No.III/38 of R-Perunad Panchayat as per the policy certificate Ext.B3, whereas the damaged goods were found at building No.111/108. The shifting was also not communicated to them either by the complainant or by the 2nd opposite party. So they are not liable to pay the damages.<br /> <br /> 10. The 2nd opposite party’s contention is that as per the loan agreement, Ext.B1, the loan was given for the goods kept at Building No.IX/38 of R-Perunad Panchayat and they have taken the policy as the complainant failed to arrange it by himself and the subsequent shifting was not intimated to them by the complainant. Hence the complainant omitted to comply with the stipulations of the loan agreement and thereby the complainant alone is liable for the loss sustained to him and there is no deficiency of service on the part of 2nd opposite party.<br /> <br /> 11. On an analysis of the complaint, versions, proof affidavits, depositions and exhibits, the advancing of the loan, taking of the insurance policy, validity of the policy, damage of the fertilizers due to flood, the value of the quantity of the damaged stock were not disputed by the opposite parties. Even then the claim of the complainant was repudiated by the 1st opposite party. The repudiation of the claim by the 1st opposite party is also not challenged by the 2nd opposite party. Both the opposite parties had taken similar stand that the shifting of the building was not intimated to them and because of the shifting of the building by the complainant without intimating the opposite parties the complainant is not entitled to get the claim. The complainant in his complaint, proof affidavit and in his deposition clearly stated that he had intimated the shifting to the 2nd opposite party in time and he shifted the stock with the knowledge of the 2nd opposite party. He also stated that the two buildings, old and new, were very near to the 2nd opposite party’s branch. He had not intimated the shifting to 1st opposite party directly. <br /> <br /> 12. The main contentions of opposite parties are that, the complainant has not intimated the shifting of the stock of fertilizers to another building other than the building noted in Ext.B1 hypothecation agreement. But on perusing Ext.B1, the number of the building where the stock was kept is not seen. The relevant portion of Ext.B1 read as follows:- Page No.1 Para 1 middle portion ‘................warehouses or godowns of the said V. Varghese, borrower at R-Perunad or any where else...............’. As per the recitals of Ext.B1, the complainant is entitled to stock goods anywhere. Accordingly, the complainant stocked the fertilizers earlier in building No.IX/38 and later it was shifted and stocked at building No.III/108. As per Ext.B1, there is no stipulation for intimating the change of premises. So, even if the complainant does not intimate the change of premises we don’t find any fault with the complainant in this regard. As per the stipulations in Ext.B1, the 2nd opposite party had advanced loan and it is for the stock of fertilizers of the complainant and the advancing was made on the basis of the physical verification of the stock by the 2nd opposite party. Importance is not for the building but for the stock. The 2nd opposite party advanced loan by satisfying the stock by physical verification. The loan account was operative from 1984 to 2002. This means, the 2nd opposite party have inspected the stock several times during this period. The 2nd opposite party regularly debited the loan account of the complainant for their interest and for the insurance premium. So they cannot say that they are unaware of the shifting. They have debited the loan account of the complainant for insurance policy for the stock of fertilizers. Another contention raised by the second opposite party is that they arranged the policy without collecting any service charge for it. May be true. But, are they entitled to draw money from the complainant’s loan account without providing any benefit for the complainant? If the complainant’s loan account is debited for insurance policy, definitely, the complainant is entitled to get the benefits from the policy. The second opposite party had debited the loan account for insurance policy as a matter of right, but they have ignored their liability to intimates the shifting of the building to the first opposite party as the complainant has no direct connection with first opposite party and in the absence of specific mention in Ext.B1, regarding the building where the stock of fertilizers were kept. In cross, DW1 deposed that “bank will generally verify the stock in case the party is in a good dealing, the statement of the party will be taken with confidence”. This statement is not acceptable as it is against law and banking principles.<br /> <br /> 13. The complainant is a consumer of second opposite party. Second opposite party advanced loan to the complainant. For giving the loan, the second opposite party is charging interest. Interest is the reward for the services rendered by the second opposite party. They have added the premium amount to loqn account and charged interest also. After accepting the interest as a reward for the services rendering by the second opposite party for the complainant, the second opposite party cannot claim that they are doing free service. So the contention put forward by the second opposite party’s counsel, that the complainant is not a consumer of the second opposite party as defined in Sec.2(d) of the C.P. Act, is not sustainable.<br /> <br /> 14. The dispute regarding the value of the damaged stock was not challenged in the version or at the time of cross-examination of the complainant. It is also pertinent to note that the second opposite party was not exparte and the second opposite party had not challenged the occurrence of the flood which caused damage to the complainant, the damage of fertilizers of the complainant, the value of the damaged stock either in their version or in cross examination of PW1. So the contention put forwarded by the learned counsel for the second opposite party during argument with regard to the genuineness of the value of the stock damaged is also not sustainable.<br /> <br /> 15. The first and third opposite parties’ contention is that they have issued the policy for the stocks kept at building No. IX/38 of R-Perunad Panchayat as Ext.B3. But the damage caused to the stock at room No.III/108 of the Perunad Panchayat and the shifting was not intimated to them. So they are not liable to pay any amount to the complainant as per the terms and conditions of Ext.B3(a). They also have no dispute regarding the flood, damage, insurance policy, validity of the policy, value of the damaged stock. The only dispute is with regard to the shifting. Their contention is that, they are not intimated the shifting and they are unaware of the shifting. But the policy was given for the stock of fertilizers of the complainant. They have collected the premium amount for 17 years and it is evident from the averments in the complainant and from Ext.A4 and A4(b). They have not challenged this fact. In this circumstance, can they say that they have issued the policy without verifying the stock of fertilizers kept by the complaint? Insurance is not for the building. It is for the stock of fertilizers. Subject matter is the stock of fertilizer, which was damaged and it is having valid insurance policy. So the contentions based on non-intimation of shifting is not sustainable. Such technicalities are raised only for the purpose of eschewing the liability.<br /> <br /> 16. 1st and 3rd opposite parties are insurance company and 2nd opposite party is the Central Bank of India. They are dealing with public money. The employees of the opposite parties are dealing with public money and it is their duty act cautiously while dealing with public money. They acted mechanically without considering the risk of the complainant. The 2nd opposite party simply debited money for insurance policy from complainant’s loan account. The 1st and 3rd opposite party simply accepted the premium amount and issued policy. If they acted cautiously the shifting of the building come to their notice and they can either stop the dealing with the complainant or to make necessary changes in the records regarding the shifting. If it was done properly, the complainant could not be put to such a trouble which lead to this complaint before this Forum. <br /> <br /> 17. The 2nd opposite party deliberately or not, omitted to communicate the shifting of building to 1st and 3rd opposite party by saying that they are not informed of the shifting. They are not entitled to take such a contention on the basis of Ext.B1 and on the basis of periodical inspection and verification of the stock as per banking principles and rules and the complainant is not having any direct connection with 1st and 3rd opposite party.<br /> <br /> 18. The 1st and 3rd opposite party rejected complainant’s claim by saying that shifting was not intimated to them and the shifting was not effected in Ext.B3 policy. They are also not entitled to take such a contention in the absence of a pleading that they have not verified or inspected the stock of fertilizers before accepting the premium amount as per insurance regulations and rules. The transactions with the complainant by the opposite parties were started from 1984 onwards and was effective up to 2002. <br /> <br /> 19. On the basis of the above discussions, we find deficiency of service from the part of opposite parties 1 to 3. Therefore, the complainant is entitled to get a relief to realize the loss caused to him from the opposite parties.<br /> <br /> 20. The complainant has been dragged to the Forum to file this O.P. solely due to the conduct of the opposite parties in denying the right of the complainant to get the loss incurred to him in the flood. The opposite party’s, the Bank and the Insurance Company jointly played for denying the genuine right of the complainant. The nature of the contentions raised by the opposite parties need careful and cautious consideration. So that such instances may not occur while settling the legal claims of the customers who are having belief in banks and insurance companies that are established also for the benefits of their customers. Considering these aspects, the complainant is entitled to get reasonable cost and compensation also from opposite parties.<br /> <br /> 21. In the result, this O.P is allowed and thereby the complainant is allowed to realize Rs.41,364/- (Rupees Forty one thousand three hundred and sixty four only), the value of the stock damaged due to flood with interest at the rate of 12% per annum from the date of filing of this case till this date and thereafter at 6% interest per annum till realization of the amount together with compensation of Rs.5,000/- (Rupees Five thousand only) and cost of Rs.2,500/- (Rupees Two thousand five hundred only). Considering the nature of the case and the extent of deficiency of service of opposite parties 1 to 3, opposite parties 1 & 3 are ordered to pay the claim amount of Rs.41,364/- and its interest to the complainant and 2nd opposite party is ordered to pay the compensation of Rs.5,000/- and cost of this proceedings of Rs.2,500/- to the complainant for their deficiency of service of non-intimating the shifting to 1st opposite party. The opposite parties are directed to pay the amounts so awarded in favour of the complainant within two months from the date of receipt of this order, failing which, interest for the awarded amount will follow 9% per annum till whole payment.<br /> <br /> <br /> Declared in the Open Forum on this the 17th day of May, 2008.<br /> <br /> <br /> Jacob Stephen,<br /> (President).<br /> <br /> Smt. C. Lathika Bhai (Member) :<br /> <br /> Sri. N. Premkumar (Member) :<br /> <br /> Appendix<br /> Witness examined on the side of the complainant:<br /> PW1 : V. Varghese<br /> PW2 : K.A. Thomaskutty<br /> PW3 : M.S. Raghavan<br /> Exhibits marked on the side of the complainant:<br /> A1 : Claim form dated 20.7.2001.<br /> A2 : Letter dated 20.7.2001 issued by the complainant to the <br /> 1st opposite party.<br /> A3 : Letter dated 14.7.2001 issued by the complainant to the<br /> 1st opposite party.<br /> A4 : Current Account Pass Book<br /> A4(a), A4(b) : Relevant portion of Ext.A4 Pass Book.<br /> A5 : Letter dated 12.7.2002 issued by the 1st opposite party<br /> to the complainant.<br /> A6 : Letter dated 9.7.01 issued by the 2nd opposite party <br /> to the 1st opposite party.<br /> Witness examined on the side of the opposite parties:<br /> DW1 : C. Sukumaran<br /> Exhibits marked on the side of the opposite parties:<br /> B1 : Hypothecation agreement.<br /> B2 : Reply notice dated 11.11.2002 issued to the 2nd opposite party<br /> to the complainant.<br /> B2(a) : Postal Receipt<br /> B2(b) : Acknowledgement card.<br /> B3 : Policy Certificate.<br /> B3(a) : Relevant portion of Ext.B3 Policy Certificate.<br /> <br /> <br /> <br /> <br /> <br /> <br />