West Bengal

Bankura

CC/94/2023

Sk. Manirul Islam - Complainant(s)

Versus

Branch Manager,UCO Bank,Kotulpur Branch - Opp.Party(s)

Sandip Chakrabarty

19 Jul 2024

ORDER

                              IN    THE   DISTRICT   CONSUMER   DISPUTES   REDRESSAL COMMISSION, BANKURA

  Consumer Complaint No.94/2023

   Date of Filing:  11/10/2023

Before:                                        

1. Samiran Dutta                              Ld. President.      

2. Siddhartha Sankar Bhui             Ld. Member.

For the Complainant:Ld. Advocate Sandip Chakraborty

For the O.P.1: Ld. Advocate Vivekananda Sinha / Ld. Advocate Sandip Das

 For the O.P.2: Ld. Advocate Prabir Bannerjee

 

Complainant:

Sk. Manirul Islam,S/O-Sk. Hamed Ali,R/O&Vill-Matiary, P.O & P.S-Kotulpur, Dist-Bankura,Pin-722141, Mob-8389990888

 

Opposite Party:

1. Branch Manager,UCO Bank,Kotulpur Branch,P.O.&P.S-Kotulpur,Dist-Bankura,Pin-722141W.B.
2. Branch Manager , Reliance General Insurance Co.Ltd.,Thapar House,4^th Floor,193,S.P.Mukherjee Road,Kol-700026                                                                     

FINAL ORDER / JUDGEMENT

Order No.12

Dated:19-07-2024

Both parties file hazira through Advocate.

The case is fixed for argument.

After hearing argument from both sides the Commission proceeds to dispose of the case as hereunder: -

The Complainant’s case is that he being the proprietor of a grocery shop namely Proyejoniya Bhariety Store took business loan of Rs.2,42,000/- under SVSKP Scheme sanctioned by O.P. No.1/Bank vide sanction letter dated:19/02/2018. At the time of sanction of loan O.P. No.1 also facilitated the insurance of the goods of the grocery shop under O.P. No.2/Insurance Co. and accordingly Insurance Policy No. being 150321826140001166 was issued in favour of the Complainant through O.P. No.1/Bank  acting as insurance intermediary which was valid from 07/04/2018 to 06/04/2019 with sum insured Rs.2,50,000/- against hypothecated grocery goods on payment of Yearly premium of Rs.1,110/-. On 11/03/2019 at about 2.35 p.m. fire broke out in the said grocery shop as a result of which the entire shop was destroyed causing a loss of goods worth Rs.3,12,663/-. Divisional Fire Officer, Bankura Division, W.B. submitted a report dated: 15/03/2019 to that effect. Immediately after the incident of fire the matter was reported to the Kotulpur P.S., Bankura and also to O.P. No.1/Bank who in turn reported the same to O.P. No.2/Insurance Co. by letter dated: 22/03/2019 with the request for settlement of the claim. A joint survey was conducted by the O.P. No.2 /

                                                                                                                                                                                        Contd…..p/2

Page: 2

Insurance Co. and the concerned appointed surveyor submitted a report dated: 16/03/2019 with the details that quantum of grocery/stationery goods stored at the shop premises was Rs.4,57,595/- and the quantum of grocery/stationery saved after fire was Rs.1,44,932/- and the quantum of material gutted out and approximate loss was estimated at Rs.3,12,663/- but the surveyor did not recommend the settlement of claim as the business of the insured as per Policy is paddy shop but physically it is found as a grocery/stationery shop. The Complainant during this period wrote letter from time to time to the O.P. No.2/Insurance Co. for settlement of claim asking for the copy of the Policy Bond but the Complainant received repudiation letter dated: 03/10/2019 from O.P. No.2/Insurance Co. citing the same ground of repudiation as mentioned above. In response to the letter dated: 04/08/2023 of the Complainant O.P. No.2/Insurance Co. reiterated the repudiation of claim by letter dated: 11/08/2023. Thereafter the Complainant has approached this Commission for appropriate relief.

O.P. No.1/Bank contested the case by filing a evasive written version stating therein that the Complainant is entitled to get compensation for loss of goods on fire in his grocery shop but not as a paddy shop as mentioned in the Policy document.

O.P. No.2/Insurance Co. took the same line of defence in the written version that the Complainant is not entitled to get any compensation in this case as the nature of business i.e. grocery shop found physically does not match with the nature of business as mentioned in the Policy document i.e. paddy shop.

-: Decision with reasons:-

Having regard to the facts of the case, contention, submission and documents on both sides   the Commission finds that it is an unfortunate case that due to lack of co-ordination between the Insurance intermediary i.e. O.P. No.1/Bank and O.P. No.2/Insurance Co. that a serious error with regard to the nature of business of the insured that crept in the policy document remains unrectified till the settlement of the claim. It is the plea of the O.P./Insurance Co. that the insurance claim will be settled in terms of the Policy bond where the nature of business is shown as paddy shop and in support of this plea the copy of the proposal form is produced at the time of hearing which also shows that the nature of business is paddy shop.

                                                                                                                                                                           Contd…..p/3

Page: 3

Now the question is whether the Commission will proceed for settlement of insurance claim on the basis of Policy document itself ignoring the surrounding facts and circumstances of the case. Before going into that question let us discuss other details of the case. 

The instant general insurance policy has been issued in favour of the Complainant in connection with his taking loan under SVSKP scheme initiated and sanctioned by O.P. No.1/Bank (vide Annexure-B)and on this consideration O.P. No.1/Bank after receipt of the report of fire in the grocery shop of the Complainant moved the O.P. No.2/Insurance Co. by letter dated: 22/03/2019(vide Annexure-J) requesting for settlement of claim for the loss of grocery goods on fire which took place on 11/03/2019 on the basis of Surveyor’s report. In this letter the O.P. No.1/Bank has clearly spelt out that the incident of fire occurred in the grocery /stationery shop of the Complainant. Without taking note of the nature of business suffered on fire by the Complainant O.P. No.2/Insurance Co. stick to their plea and repudiated the claim on the mismatch of the nature of business.

It appears from the materials on record that a Policy document was sent to the insured Complainant (vide Annexure-C) accompanying by an undated letter issued by O.P. No.2/Insurance Co. There is no material on record from which it can be ascertained that the Policy document was sent to the insured in due time or on his repeated prayer in writing. Without having received the Policy document itself the Complainant was not in a position to detect the error with regard to the nature of business.

On the other hand loan sanctioning O.P. No.1/Bank is under the impression that it is a grocery shop for which loan has been sanctioned in favour of the Complainant. The Application Form for SVSKP loan which is on record (vide Annexure-A) also shows that the Complainant has a grocery shop for which loan has been applied for. From the proposal form as produced before the Commission at the time of hearing it is seen that the O.P. No.1/Bank is the Insurance intermediary and so it is the duty of the O.P. No.1/Bank to furnish correct information and material which is necessary for issuance of general insurance policy bond and the O.P. No.1/Bank is lacking in discharging and performing their duty as an Insurance intermediary.

O.P. No.2/Insurance Co. also ignored the interest of the insured by refusing settlement of claim on the fire incident of his grocery shop on the basis of recital in the Policy document only without taking care of the existing and physical facts and representation of the insured Complainant in the matter and without taking into consideration the letter dated: 22/03/2019 (Annexure-J)of the the lending O.P. No.1/Bank.                                                                                                                               

                                                                                                                                                                                       Contd......p/4                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                              Page: 4

According to IRDA Regulation Insurance intermediary i.e. O.P. No.1/Bank serves as a bridge between consumers (seeking to buy insurance policy) and Insurance Co. (seeking to sell Policy). It is also the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties. In this case neither O.P. No.1/Bank nor O.P. No.2/Insurance Co. has followed the principle of Insurance Laws and the IRDA Regulation. IRDA (Protection of Policy Holders – Interest) Regulation, 2002 notified on 16/10/2002 has provided in Clause-3(2) that an insurer or its agent or other intermediary shall provide all material information in respect of a proposed cover to the prospect to enable the prospect to decide on the best cover that would be in his or her interest. It is also provided in Clause-3(3) of the said Regulation, 2002 that where the prospect depends upon the advice of the insurer or his agent or an insurance intermediary, such a person must advise the prospect dispassionately. It is further provided in Clause-4(1) of the said Regulation that It is the duty of an insurer to furnish to the insured free of charge, within 30 days of the acceptance of a proposal, a copy of the proposal form. The copy of Proposal Form as produced by the Ld. Advocate for O.P.2/Insurance Co. at the time of hearing is dated: 07/04/2018 and it is peculiar to note that the Insurance Policy Bond which is also on record (vide Annexure-C) has been issued on the same date i.e. 07/04/2018 by accepting the proposal form furnished on the same date by giving effect to the Policy from that date i.e. 07/04/2018 without holding any field inspection/enquiry with regard to the nature of business the insured has been carrying on.

Thus the O.P.2/Insurance Co. while issuing the Insurance Policy has not complied with Clause-4(1) of the said Regulation by furnishing the Insured the copy of the proposal form free of charge within 30 days of the acceptance of the proposal. Had the Insured/Complainant got the copy of proposal form beforehand he would have scope and opportunity to detect the serious error with regard to the nature of business that crept in the Policy document.

The nature of error crept in the Policy document with regard to the nature of business is unintended on the part of the insured who has all along under the belief and impression that the insured business is grocery shop and not the paddy shop. But the O.P.2/Insurance Co. has betrayed such innocuous belief and impression of the insured by taking no step in rectification of such serious error even after being informed by the O.P.1/Bank by their letter dated:22/03/2019 (vide Annexure-J) after about 10 days of the incident of fire. Such act and conduct and omission on the part of the O.P.2/Insurance Co. amounts to unfair trade practice within the meaning of Section-2 (47)(d) of the                                                                                                                                                                           

                                                                                                                                                                               Contd.........p/5                  

 

Page: 5

Consumer Protection Act, 2019 where it is provided that “unfair trade practice" means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:-

• represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have.

Here in this case O.P.2/Insurance Co. by issuing the faulty Policy document mis-represented before the insured that the Policy insured relates to paddy shop but physically it is a grocery shop. This mismatch has been created and kept unrectified by the O.P.2/Insurance Co. deliberately to defeat the genuine claim of the insured.

Ld. Advocate for the O.P.2/Insurance Co. has contended that the case is barred by limitation as it has been filed on 11/10/2023 long after two years of the repudiation letter dated: 03/10/2019 without any prayer for condonation of delay. In this connection Ld. Advocate for the Complainant has referred to the Letter dated: 11/08/2023 (Annexure-M) issued by the O.P.2/Insurance Co. to the Complainant reiterating the same ground of repudiation of claim and the limitation having begun to start from that date i.e. 11/08/2023 the instant case filed on 11/10/2023 is well within limitation period. The Commission is of the view that the period of limitation for such type of insurance claim should begin from the date of repudiation letter. It is no doubt true that the repudiation letter is dated: 03/10/2019 but subsequently repudiation has been affirmed by letter dated: 11/08/2023 as referred to above and the Complainant has the latest cause of action arising from that date i.e. 11/08/2023 which should be treated as the ultimate date of repudiation of claim without further consideration. So the contention of the O.P.2/Insurance Co. on limitation point is not sustainable in law.

                                                                                                                                                                                         Contd…….p/6

Page: 6

In view of the above facts and circumstances of the case and the discussion made above O.P.2/Insurance Co. is liable for deficiency in service and unfair trade practice in repudiating genuine claim of the Complainant. Surveyor’s report dated: 16/03/2019 has estimated the loss of grocery goods at Rs.3,12,663/- but the Complainant is not entitled to get the compensation more than the sum assured which is Rs.2,50,000/-. But in addition to the sum insured the Complainant is entitled to get further compensation for Rs.1,00,000/- for mental agony, harassment and business loss. O.P.2/Insurance Co. is to compensate the Complainant the total Rs.3,50,000/-.  Though relief has been claimed against O.P.1/Bank but the settlement of insurance claim is beyond the scope and jurisdiction of O.P.1/Bank. It is O.P.2/Insurance Co. who is liable to bear the compensation and the Commission has authority to mould the relief and pass necessary order accordingly.

Hence it is ordered…….

That the case be and the same is allowed on contest but without cost.

O.P.2/Insurance Co. is directed to pay to the Complainant Rs.3,50,000/- in all as compensation for insurance claim  within a month from this date in default law will take its own course.

Both parties be supplied copy of this Order free of cost.

 

____________________                               _________________         

HON’BLE   PRESIDENT                         HON’BLE MEMBER