Haryana

Kurukshetra

CC/35/2019

Gambhir Timber - Complainant(s)

Versus

Chola MS Gen Ins Co - Opp.Party(s)

Sandeep Madhan

02 Mar 2022

ORDER

BEFORE THE DISTRICT CONSUMER DISPTUES REDRESSAL  COMMISSION, KURUKSHETRA.

                                                     Complaint Case No.35 of 2019

                                                     Date of institution: 29.01.2019                                                               

                                                    Date of decision:2.03.2022

                         

1.Gambhir Timber Store, situated at village Mirjapur, Dhand Road, Thanesar, District Kurukshetra through its Proprietor Balvinder Singh Gambhir (Rinkal).

2.Balwinder Gambhir son of Shri Kasturi Lal resident of  Gali No.4, Shanti Nagar, Kurukshetra.

4.Sudesh Rani wife of Kasturi Lal resident of Gali No.4, Shanti Nagar, Kurukshetra.

                                                                …Complainant.

                        Versus

1.The Branch Manager, Chola MS General Insurance Company Limited, SHAW Wasllace Building, 2^nd Floor 154. Thumbu Chetty Street, Parry’s Coorner Chaini – 600004.

2.Chola MS General Insurance Co. Limited, 2^nd Floor Dare House 2NSC Bose Road, Chaini – 600004 through its Authorized Signatory.

3. The Chief Manager, Oriental Bank of Commerce, SCO No.23-24, Sector 12, Urban Estate, Karnal.

4. The Branch Manager, Oriental Bank of Commerce, Main Branch Railway Road, Kurukshetra.                            ….Opposite parties.

                Complaint u/s 12 of the Consumer Protection Act.

Before:      Smt. Neelam Kashyap, President.

                Ms. Neelam, Member.

                Sh.  Issam Singh Sagwal, Member.

       

Present:      Sh.Sandeep Madan Advocate for the complainant.

                 Sh.Gaurav Gupta Advocate for the OP No.1 and 2.

                 Sh.Rajesh Kumar Advocate for the OP No.3 and 4.

ORDER

                This is a complaint under Section 12 of the Consumer Protection Act, 1986 has been moved by Gambhir Timber Store  Chola MS General   Insurance Company etc. Opposite Parties.

 

2.            It is stated in the complaint that the complainant Gambhir Timber Store has taken loan/limit from the OP No.3 and 4. The OP No.3 and 4 have got executed an agreement of hypothecation of assets and has also got executed the stock statement for all the years including the financial year 2019. In the hypothecation of assets all the stock of wood material, wood, coal etc. lying in the building of the complainant/store was hypothecated.  Every year stock statement showing the value of raw material and finished goods including wood and wood charcoal were submitted.  Even net value of M/s Gambhir Timber Store were also mentioned in the documents executed.  It is further   submitted that for the convenience and security of the OP No.3 and 4, they got executed an insurance policy with the OP No.1 and 2 in which all the stocks of M/s Gambhir Timber Store has been insured with the OP No.1 and 2.  The OP No.3 and 4 a got  deducted the insurance premium every year from the loan account.   The policy documents were got signed by the proprietor. The previous policy of insurance was from 26.10.2017 to 25.10.2018 and in the policy schedule Oriental Bank of Commerce is mentioned as financial interest. This year also the amount was deducted  and the  Ops themselves renewed the policy.  The complainant has got damaged his stock and the material lying in the timber store on 20.04.2018 about which intimation dated 21.4.2018 was given  to the Ops. The surveyor deputed by the  company estimated the loss in which the stock of wood, charcoal and wood material was mentioned as loss and the estimated loss was mentioned  at 17 to 17.5 lakh and the surveyor also submitted his report mentioned in the report that the loss is to be paid to the complainant as per terms and conditions of the policy. But the Ops did not pay even the single penny.  Due to non settling of the claim in time and due to financial crisis Shri Kasturi Lal fell mentally and physically disturbed/ill and ultimately dead on 5.7.2018.The  Ops repudiated the claim vide letter dated 24.8.2018 on  wrong assumption and presumption mentioning that the risk is occupied as shop, whereas at the time of loss, the unit was occupied as charcoal manufacturing unit.  In fact, the insurance policy is taken for insurance of stock which is lying in the timber store which includes the stock of wood material wood coal etc. lying therein. Thus, the loss is perfectly covered un the policy schedule and by not paying the claim to the complainant, there is deficiency in services on the part of the Ops which they failed to pay even despite repeated requests and service on legal notice.  Thus,  alleging deficiency in services on the part of the Ops, the complainant has filed the present complaint and prayed for payment of the claim alongwith compensation for the mental harassment caused to the complainant together litigation expenses.

 

3.             Notice of the complaint was given to the Ops. OP No.1 and 2 appeared and filed written statement disputing the claim of the complainant. However, issuance of the insurance policy by the OP no.1 and 2 is not disputed. It is submitted that on  receipt of intimation regarding fire, answering OP immediately appointed independent IRDA approved licensed surveyor  “Absolute” who after making survey and loss assessment that complainants have suffered net loss amounting to Rs.10,54,544/- to which they are not entitled. As per details provided while obtaining the policy, the  risk occupied is shop whereas at the time of loss/survey   the unit is occupied as shop whereas at the time of loss/survey the unit is occupied as Charcoal manufacturing unit.  As  the risk occupancy is different than the insured under the policy, the risk is not the same as what answering Ops had covered and hence there is no liability under the policy. The said fact is also admitted by the complainant by providing documents relating to Charcoal during survey. There was gross violation of the terms and conditions of the policy and risk is not covered as per policy, so the claim of the complainant was repudiated by the answering OP vide letter dated 14.8.2018. It is further submitted that the  terms and conditions of the policy were explained to the complainant at the time of proposing policy and the same was served to the complainant alongwith the policy schedule.  Moreover, it is clearly stated in the policy schedule  “the insurance  under this policy is subject to  conditions, clauses, warranties, exclusions etc.  The policy is contractual in nature and the claims arising therein are subject to terms and conditions forming part of the policy.  The complainants have accepted the policy agreeing and being fully aware of such terms and conditions.  There is gross violation of terms and conditions of the policy and risk is  not covered as per policy, so the claim of the complainant was repudiated by the answering OP vide letter dated 14.8.2018. All other allegations made in the complaint have been denied by the OP no.1 and 2 specifically and preliminary objections regarding maintainability, suppression of true and material facts and cause of action have been raised and it was submitted that there  is no deficiency in services on the part of the OP no.1 and 2 and prayed for dismissal of the present complaint.

 

4.             OP No.3 and 4 filed their written statement disputing the claim of the complainant. It is submitted that the complainant had obtained CC limit from the answering Ops  and the said limit was renewed from time to time and lastly, it was renewed on 26.09.2017  for Rs.9,50,000/-. The complainants had hypothecated the stock with the answering Ops   as primary security and had mortgaged the house No.1189, Ward No.12, Shanti  Nagar, Kurukshetra as collateral security. The complainants had undertaken to repay the amount as per terms and conditions of the agreement but the complainants s had committed default in repayment.  A  sum of Rs.7,92,246/- plus interest and other charges from 1.7.2019 are outstanding against the complainants which they are liable to pay but they have failed to pay the same despite repeated demands. Moreover, as per hypothecation agreement, the insurance claim is  payable to the answering Ops and the OP No.1 and 2 may please be directed to pay the claim to the answering Ops. It is further submitted that the entire stock and material lying in the timber store was insured by the OP No.1 and 2 and thus the Ops are liable to pay the claim as the martial was damaged as per information provided by the complainants to the answering Ops. The answering Ops are entitled to recover the outstanding amount from the complainants in accordance with law.  All other allegations made in the complaint have been denied specifically and preliminary objections regarding locus standi, jurisdiction cause of action and maintainability were raised and it was submitted that there is no deficiency in services on the part of the answering Ops and prayed for dismissal of the present complaint.

 

5.             The complainant in support of his case has filed affidavit Ex.CW1/A and tendered documents Ex.C-1 to Exs.C-8 and closed his evidence.

 

6.             On the other hand, OP No.1 and 2 in support of their case have filed affidavits Ex.RW1/A and Ex.RW2/A and tendered documents Ex.R-1 to Ex.R-5 and closed their evidence.

 

7.             The  OP No.3 & 4 in support of  their  case has filed affidavit Ex.RW3/A and  tendered documents Ex.R-6 to Ex.R-7 and closed their evidence.

 

8.             The learned counsel for the complainant while reiterating the averments made in the complaint has argued that complainant Gambhir Timber Store has taken loan/limit from the OP No.3 and 4. The OP No.3 and 4 have got executed an agreement of hypothecation of assets and has also got executed the stock statement for all the years including the financial year 2019. In the hypothecation of assets all the stock of wood material, wood, coal etc. lying in the building of the complainant/store was hypothecated.  Every year stock statement showing the value of raw material and finished goods including wood and wood charcoal were submitted.  Even net value of M/s Gambhir Timber Store were also mentioned in the documents executed.  It is further   submitted that for the convenience and security of the OP No.3 and 4, they got executed an insurance policy with the OP No.1 and 2 in which all the stocks of M/s Gambhir Timber Store has been insured with the OP No.1 and 2.  The OP No.3 and 4 a got  deducted the insurance premium every year from the loan account.   The policy documents were got signed by the proprietor. The previous policy of insurance was from 26.10.2017 to 25.10.2018 and in the policy schedule Oriental Bank of Commerce is mentioned as financial interest. This year also the amount was deducted  and the  Ops themselves renewed the policy.  The complainant has got damaged his stock and the material lying in the timber store on 20.04.2018 about which intimation dated 21.4.2018 was given  to the Ops. The surveyor deputed by the  company estimated the loss in which the stock of wood, charcoal and wood material was mentioned as loss and the estimated loss was mentioned  at 17 to 17.5 lakh and the surveyor also submitted his report mentioned in the report that the loss is to be paid to the complainant as per terms and conditions of the policy. But the Ops did not pay even the single penny.  Due to non settling of the claim in time and due to financial crisis Shri Kasturi Lal fell mentally and physically disturbed/ill and ultimately dead on 5.7.2018.The  Ops repudiated the claim vide letter dated 24.8.2018 on  wrong assumption and presumption mentioning that the risk is occupied as shop, whereas at the time of loss, the unit was occupied as charcoal manufacturing unit. Thus, it has been argued that there is deficiency in services on the part of the Ops and the complainant is entitled to relief.

 

9.             On the other hand, learned  counsel for the Ops while reiterating the submissions made in the  written statements has argued that that on  receipt of intimation regarding fire, answering OP immediately appointed independent IRDA approved licensed surveyor  “Absolute” who after making survey and loss assessment that complainants have suffered net loss amounting to Rs.10,54,544/- to which they are not entitled. As per details provided while obtaining the policy, the  risk occupied is shop whereas at the time of loss/survey   the unit is occupied as shop whereas at the time of loss/survey the unit is occupied as Charcoal manufacturing unit.  As  the risk occupancy is different than the insured under the policy, the risk is not the same as what answering Ops had covered and hence there is no liability under the policy. The said fact is also admitted by the complainant by providing documents relating to Charcoal during survey. There was gross violation of the terms and conditions of the policy and risk is not covered as per policy, so the claim of the complainant was repudiated by the answering OP vide letter dated 14.8.2018 and thus it is argued that there is no deficiency in services on the part of the OP No.1 and 2.

 

10.            The learned counsel for the OP No.3 and 4 has argued that the complainant had obtained CC limit from the answering Ops  and the said limit was renewed from time to time and lastly, it was renewed on 26.09.2017  for Rs.9,50,000/-. The complainants had hypothecated the stock with the answering Ops   as primary security and had mortgaged the house No.1189, Ward No.12, Shanti  Nagar, Kurukshetra as collateral security. The complainants had undertaken to repay the amount as per terms and conditions of the agreement but the complainants  had committed default in repayment.  A  sum of Rs.7,92,246/- plus interest and other charges from 1.7.2019 are outstanding against the complainants which they are liable to pay but they have failed to pay the same despite repeated demands. Moreover, as per hypothecation agreement, the insurance claim is  payable to the answering Ops and the OP No.1 and 2 may please be directed to pay the claim to the answering Ops. It is further submitted that the entire stock and material lying in the timber store was insured by the OP No.1 and 2 and thus the Ops are liable to pay the claim as the martial was damaged as per information provided by the complainants to the answering Ops.

 

11.            The claim of the complainant has been repudiated by the OP No.1 and 2 vide letter dated 14.8.2018 Ex.C-7  on the ground that “ As  per details provided while obtaining the policy,  the risk is occupied as shop whereas at the time of loss survey the unit is occupied as Charcoal Manufacturing Unit  but  after hearing the learned counsel for the parties we are of the view that the claim in question is covered under the present policy.  In this case obtaining of the insurance police and  the loss  fire in this case are not  in dispute.  The argument of the learned counsel for the OP No.1 and 2 that the only shop was insured is devoid of any force. The argument of the learned counsel for the OP no.1 and 2 that the raw material, finished and semi finished material was not insured is also devoid of any force. The perusal of hypothecation agreement Ex.C-1 in paraa no.26 and at page 19 it is mentioned that “That the hypothecated assets including all goods/stocks, raw materials, semi furnished and finished goods etc. plant and machinery shall be insured comprehensively including fire, burglary riots, civil risks , natural calamities etc.”  Further, in  loan acceptance letter Ex.C-3  at column no.7  Primary security is  shown as “ Hypo of Timber items etc.”

 

12.            In this case the insurance policy   Ex.R-5 was obtained by OP No.3 and 4 , though the amount of premium was taken from the account of the complainant firm by the bank. In para no.7 of the preliminary objections of the written statement filed by the OP No.3 and 4 it is mentioned “Moreover, as per hypothecation agreement, the insurance claim is payable to the answering Ops and the OP No.1 and 2 may please be directed to pay the claim to the  complainant answering Ops. “It is worth mentioned herein that the entire stock and material lying in the timber store was  insured by the OP No.1 and 2  and thus the Ops no.1 and 2 are liable to pay the claim as the material was damaged as per the information provided by the complainants to the answering Ops. The answering Ops are entitled to recover the out standing amount from the complainants  in accordance with the law.”    Thus from the above discussion, it is established that the assets including   premises, woods, semi finished and finished goods were hypothecated with the bank the loss was caused in the fire and the OP no.3 and 4 also this fact and claimed the claim amount qua the CC limit granted to the complainant.               

 

13.            Further Ex.R-1 is the surveyor report. In the said surveyor report under the column of Cause of Damage it is mentioned “ Since, the fire occurred is sudden, unforeseen and accidental in nature and is an insured peril, the subject claim is admissible under the subject policy.”  Thus as per admission of the surveyor, the loss occurred in the sudden fire in the premises of the complainant is fully covered and the complainant is entitled to the claim of damages sustained in the fire.  In the said report under the column of Assessment of Loss  Surveyor has mentioned that the insured was holding the stock (closing stock) worth inr Rs,.18m18m850/-  (raw wood worth  INR Rs.15,86,350/- and charcoal worth  INR Rs,2m32m500/-. The stock of INR Rs.3,00,000/-remained safe after loss. Thus, the total stock of INR Rs.14,40,000/-  got damaged and the same has been claimed by the complainant. In the net the surveyor has assessed the  loss of Rs.13,96,000/- and after deducting the salvage of Rs.50,000/- it comes to Rs.13,46,000/-. Then the exclusion clause has been  rightly applied for 5% which comes to Rs.55,000/- and thus the net payable claim to the complainants comes (Rs. 13,46,000 – Rs.55000)  to 12,94,000/- and the complainant is entitled to this claim amount.

               

 14.               The  argument of the learned counsel for the OP No.1 and 2 that the fire in question is not covered under the policy as mentioned at page no.3 of the policy Ex.R-5 because fire due to  by own fermentation, natural hearting or spontaneous combustion undergoing any heating or drying process were not covered. But the perusal of the   surveyor report Ex.R-1 as mentioned above shows that the fire was  natural and due to short circuit therefore, the present fire is fully covered under the insurance policy Ex.R-5 and the complainant is entitled to claim of Rs.12,94,000/- as discussed above. Therefore, deficiency in services on the part of the OP No.1 and 2 is made out.          

15.                In view of our above discussion and findings, we accept the present complaint and direct the OP No.1 and 2 to pay the claim of Rs.12,94,000/- alongwith interest @ 6% per annum from the date of this order till its actual realization.  It is made clear that the OP No.1  and 2 first shall satisfy the loan account of the OP No.3 and 4 and  after satisfying the loan account of the OP No.3 and 4, the remaining amount if any shall be paid to the complainant. The complainant shall also be entitled to Rs.10000/- as compensation for the mental harassment and agony caused to him together with Rs.5000/- for the litigations expenses. The OP No.1 and 2 are further directed to make the compliance of this order within a period of 30 days from the date of preparation of certified copies of this order, failing which the complainant shall be entitled to initiate proceedings u/s 25/27 of the Consumer Protection Act. Certified copy of this order be supplied to the parties concerned and the file be consigned to the record room after due compliance.

 

Announced in the open Commission.

Dated: 02.03.2022.

 

                                                                         President.

                                               

                                                                          

                        Member             Member.