MR.BIJAYA KUMAR DAS,PRESIDENT:-
Deficiency in service in respect of illegal and arbitrary repudiation of insurance claim of the complainant are the allegations arrayed against the Opp.parties.
2. Complaint,in brief, reveals that complainant to maintain her livelihood started a Fabrication Unit at Village:-Garapur over Plot No.2407/3131 situated at bypass road in front of Kendrapara High School. The unit was financed and hypothicated to OP-State Bank of India,Kendrapara and the unit was insured with OP-Insurance Company through OP-Bank by debiting the premium amount from the complainant’s account. The insurance of the unit was valid from dtd.26.02.2016 to dtd.25.02.2017. Unfortunately the unit of the complainant gutted fire on dtd.26.02.2016 at about 11 AM and by the help of fire brigade staffs the fire was extinguished causing extensive damage to the building and property of the complainant. Complainant immediately reported the matter to OP-Bank, who informed the OP-Insurance Company, registered the claim as 244227 and deputed Mr. S.K.Das and Associates to assess the loss and on dtd.05.03.2016 Surveyor conducted the survey and complainant submitted required documents before the Surveyor. On delayed settlement of claim legal correspondences communicated between complainant and OP-Insurance Company on dtd.22.11.2016, January,2017 and on dtd.07.02.17 and after correspondence the complainant came to know that her claim has been repudiated on ground that “The risk location endorsed in the policy copy is different from that of the loss/fire affected location”. It is also alleged that, submission of proposal form for insurance of the unit is an internal matter between OP-Insurance Company and OP-Bank as the unit was hypothicated with OP-Bank and OP-Insurance Company’s grounds for repudiation of claim is illegal as all the documents and lease agreement, sanctioned letter of the OP-Bank clearly reveals that the location of the unit is situated at Ranapada bypass road,infront of Kendrapara High School. Thus, the illegal repudiation is deficiency in service of Ops and prayed this Forum to direct the Ops to pay Rs.8,60,000/- which includes the compensation for mental agony and cost of litigation. The cause of action of the instant case arose on February,2016 when the unit was insured and gutted fire and on February,2017 when OP-Insurance Company denied to compensate the loss.
3. On receipt of notice OP No.1 & 2 SBI General Insurance Company Ltd.appeared through their Learned Counsel Mr. Md. Nayeem and filed joint written version into the dispute. OP-Insurance Company in the written version averred that, OP-Insurance Company issued a SME insurance policy bearing No.001607602-02 in favour of complainant in respect of the fabrication unit and the insurance was valid from dtd.26.02.2016 to dtd.25.02.2017. Copy of the policy and its conditions are filed as Annexure A & B. The unit covers for Rs.36,82,000/- and as per the proposal form submitted by the complainant-insured the location of risk is mentioned as Fakirabad,Badahat,Kendrapara. The proposal form is annexed with the written version marked as Annexure-C. The Station diary entry, Fire Officer’s report are filed as Annexure D & E. It is averred that, the complainant has not approached the Form in a clean hand, as premium received on dtd.27.02.2016. On receipt of the claim intimation, OP-Insurance Company deputed Er. S.K.Das & Associates as Surveyor to assess the loss, as per the survey report of the surveyor the net adjusted loss to the tune of Rs.1,08,188/- and the location of the risk mentioned in proposal form is different from the site where the occurrence took place. The survey report is annexed as Annexure-F. It is further averred that the claim of the complainant was repudiated and intimated to complainant on dtd. 18.07.2016 basing on the report of Surveyor as the affected fabrication unit was not covered under the policy. The repudiation letter dtd.18.07.2016 is filed herewith as Annexure-G. In parawise replies, OP-Insurance Company denies the allegation of the complainant and states that after due application of mind and basing on the report of independent Surveyor, the claim has been repudiated and no deficiency in service has been committed by the OP-Insurance Company, accordingly, the complaint is to be dismissed with cost.
4. State Bank of India( OP No.3 & 4) upon receipt of the notice appeared through their Learned counsel Mr. R.P.Lenka and associates and filed joint written version into the dispute. The contesting OP-Bank in their parawise reply formally denies the allegations and submitting the facts of the dispute, it is averred that complainant’s fabrication unit was financed by the OP-Bank under Govt. sponsored scheme and financed an amount of Rs.23,74,000/-. It is averred that except the loan application form of complainant dtd. 20.06.2012, where the complainant mentioned the proposed unit at Badahat, Fabairabad,Kendrapara. The lease deed dtd. 08.09.2012 and letter of arrangement and agreement of loan-cum-hypotheciation deed dtd. 06.12.2012, the location of the fabiraction unit of the complainant situated at Bypass Road,Garapur, though the complainant’s permanent residence is mentioned as Fabairabad,Badahat,Kendrapara. It is also averred that complainant insisted OP No.3-Bank to make her unit insured with OP-Insurance Company and officials of OP-Insurance company accepted the proposal and visualize the relevant documents of complainant’s unit available with OP No.3-Bank. It is equally averred that OP-Bank has no role to play in the settlement of insurance claim of the complainant and OP-Bank has taken steps to expedite the settlement of claim by issuing a letter to OP-Insurance Company on dtd.27.01.2017 and the OP-Bank came to know that repudiation of claim from the complainant. Accordingly, OP-Bank submits that no deficiency in service has been committed and complaint is to be dismissed against OP No.3 & 4.
5. Heard the arguments advanced by Learned counsel appearing for the parties, perused the documents filed into the case as per the list and Annexures. The admitted facts of the case are that complainant’s hypoticated fabrication unit was insured with OP-Insurance Company under SME package insurance policy, which covers the risk period from dtd.26.02.16 to dtd.25.02.17. It is also admitted fact that on setting fire of the insured unit a surveyor was deputed to conduct the loss assessment on claim of the complainant, which was repudiated by the OP-Insurance company on solitary ground that the risk location endorsed in the policy copy is different from that of the loss/fire affected location.
Complainant challenges the grounds of repudiation and it is her case that, all the documents presented before OP No.3-Bank clearly reveals that her hypothecated fabrication unit is located at Village-Garapur, Plot No.2407/3131, situates at Bypass road,in front of Kendrapara High School, Kendrapara and her residential address is Fakirabad, Badahat,Kendrapara. It is the further case of the complainant that, officials of OP-Insurance Company on visiting the office of the OP No.3-Bank and verifying the loan documents and obtaining the required information insured the unit, as complainant’s unit is hypothecated with OP No.3-Bank. Complainant to substantiate her case filed attested Xerox copy of lease agreement dtd. 08.09.2012 and attested Xerox copies of application form MSES which discloses that the complainant’s fabrication unit is located at Garapur, bypass road, in front of Kendrapara High School,Kendrapara. The written version and documents filed by the OP No.3-Bank further strengthens the claim of the complainant. OP-Bank in their written version categorically states that except the loan application form under PMEGP, all the relevant documents i.e. lease agreement deed dtd.08.09.2012, letter of arrangement dtd.06.12.12 and letter of loan-cum-hypothecation clearly reveals that the complainant’s disputed fabrication unit is located at Garapur bypass road, in front of Kendrapara High School,Kendrapara and complainant’s residential address is Fakirabad,Badahat,Kendrapara(the attested xerox copies of documents are filed by the oP No.3-Bank in the present dispute). On the otherhand, it is the case of the OP-Insurance company that as per the proposal Form(Annexure-C) the risk place was mentioned as Fakirabad,Badahat,Kendrapara. During course of hearing Learned Counsel appearing for the complainant draw our attention that the Annexure-C filed and projected as proposal Form is not a ‘Proposal Form’, but the same is claim Application form submitted by the complainant-claimant before OP-Insurance Company to settle her claim. On perusal of case record it is noticed that the submission of Learned Counsel for complainant is a fact and has considerable force on his argument. In the dispute it is quite clear that to decide the fate of the case and to upheld the ground of repudiation, the proposal form signed by the proposer/complainant regarding location of her fabrication unit is a vital piece of document is not filed into the dispute, though the same is available with OP-Insurance Company. On the other side, the OP-Insurance Company has tried to mislead the Forum by stating and filing proposal form as Annexure-C. It is a fact that on non-existence of ‘proposal form’, all the documents presented before this Forum by the complainant and OP-Bank, which includes the lease agreement dtd. 28.09.2012, the letter of arrangement dtd. 06.12.12 clearly indicates that the location of the insured farbrication unit is located at bypass road, in front of Kendrapara High school,Kendrapara. Thatapart before accepting the proposal of insurance of complainant’s unit by OP-Insurance company, it is their legal obligation to verify the documents and declarations of the proposal form, when the said unit is hypothecated with OP-Bank and all other connecting documents are available with the OP-Bank and the unit is running since the year 2012 and the proposal of insurance is submitted within the knowledge of the OP-Bank who supports the version of the complainant-insured that her Unit was located at Ranapada, bypass road, infront of Kendrapara High School. In a fire insurance policy, the risk location mentioned in the proposal is to be verified and examined by the OP-Insurance Company, whether any safety measures etc. are adopted by the insured or not ? It is difficult to digest that, OP-Insurance Company without verifying the address of risk location in the proposal form, stocks, assets etc. accepted the proposal and issued the policy bearing No. 001607602-02 under SME package insurance policy. In absence of proposal form no strong evidence is filed before this Forum to believe their version except the Surveyor’s report(Annexure-F). In paragraph-13 of the written version of OP-Insurance Company, it is averred that one of the reason of repudiation of claim is report of the Surveyor Er. S.K.Das & Associates insurance Surveyor/loss Assessor and as per the Surveyors report the location of risk as per policy is at Fakirabad,Badhat,Kendrapara,Odisha-75425, but the loss occurred in the building situated at Ranapada,in front of Boys High School,Building Hawa Traders, VIP Road,Near Court Chowk,Kendrpaara. It is a fact that the said Surveyor’s report is not supported by any affidavit. Hence, the Surveyor’s report(Annexure-F) is not an evidence before the Forum and same can not be accepted. In this regard, we rely on a decision of Hon’ble National commission reported in 2012(1)CPR 386(NC) in case of National Insurance Company Ltd.-Vrs- Mohd. Ishaq. Accordingly, the Surveyor’s report filed into the dispute is rejected in its entirety.
6. Complainant has claimed an amount of Rs.8 lakh sixty thousand towards loss claim amount alongwith compensation and cost. This Forum at this stage can not take a definite decision on the Surveyor report, where the loss has been assessed and the same is held as illegal and arbitrary, as per our earlier observation, however, another chance is given to OP-Insurance Company to settle the claim of the complainant. As the OP-Insurance Company illegally repudiated the claim, and on allegation of delayed settlement of insurance claim for which complainant sustained financial loss and prays for compensation for mental agony. It appears from the case record that on the legal notice of complainant dtd. 22.11/16 and dtd.21.1.17 OP-Insurance Company issued 2 replies on dtd.23.1.17 and 7.2.17 narrating the facts that her claim has been repudiated on aforesaid grounds and as per of the written version of OP-Insurance Company reveals that vide its letter dtd.18.7.16 claim of the complainant has been repudiated and the repudiation letter is filed into the case as Annexure-G. But the 2 legal notices issued by complainant i.e. on dtd.22.11.16 and dtd.21.01.17 are completely silent in respect to receipt of repudiation letter dtd. 18.07.16(Annexure-G). Equally the OP-Insurance has failed to substantiate that the Annexture-G, repudiation letter dtd.18.07.16 has been duly served to complainant-claimant. If for a moment, it is believed that the repudiation letter dtd.18.07.2016(Annexure-G) is served to the complainant, then it is quite clear that OP-Insurance Company has taken near about 4(four) months to take a decision of repudiation. The date of loss assessment dtd.05.03.2016 by the Independent Surveyor as revealed from the complainant which according to us is an inordinate delay on part of the OP-Insurance Company, to decide the fate of the claim,when same arises out of a fire accident. The delayed information in this regard definitely caused financial loss and mental agony, the complainant deserves a compensation as victim of deficiency in service, our observation is supported by a decision of Hon’ble National commission reported in 2016(2) CPR 468(NC) in case of Mahajan Overseas Pvt.Ltd.-Vrs-New India Assurance company Ltd. & another. In para 19 of the said decision Hon’ble National commission opined that “ xxxxxxxx”. This was a cause of fire and the matter should have been settled within a week Surveyor supposed to give the initial report immediately xxxx”. We do not see any fault with the OP-Bank on deficiency in service and no specific relief is sought against the OP-Bank, in the result OP-Bank is freed from any such liability of deficiency in service.
Having observations reflected above, it is directed that, OP-Insurance Company will settle the claim of the complainant as per the procedure within one month of receipt of this order. In addition to the same the OP-Insurance Company will pay Rs.20,000/-(Rupees Twenty thousand)only as compensation for mental agony and Rs.1,000/-(Rupees One thousand)only as cost of litigation. The ordered amount will be paid simultaneously with and within the settlement period of the claim of the complainant, failing which action will be initiated against OP-Insurance Company as per the provisions of C.P.Act,1986.
Accordingly, the complaint is allowed in part with cost on contest.
Pronounced in the open Court, this the 8th day of March,2018.
I, agree. I, agree
Sd/ Sd/- Sd/-
MEMBER MEMBER PRESIDENT
