SMT. G. VASANTHAKUMARI, PRESIDENT.
Complainant’s case is that, the complainants had availed a loan of Rs.6,00,000/- from the first opp.party for the construction of a residential building, retaining wall and compound wall in their property comprised in survey No.260/15, 260/15-1 of Angadi Village in the year 2005 vide loan account No.67004942236, that the loan is sanctioned on the basis of the total estimated cost of Rs.8,62,527/- for the whole construction, that the complainants had insured the said constructions on the estimated amount of Rs.862527/- under the scheme of the standard fire and perils policy of the 2nd and 3rd opp.parties till 2016, the period of the loan ends in that year, that the 2nd opp.party received Rs.3,329/- as the premium of the insured amount and issued policy bearing No.100783/11/05/00926 for the same in favour of the complainants, that as per the policy there is full insurance coverage for the entire constructions done by them, that meanwhile the retaining wall and the compound wall erected at the south western corner of the property was accidentally collapsed on 19..4..2008, that the retaining wall was built at a width of 3’, a length of 24’ and a height of 8’ from the ground revel by using rubbles and the compound wall and grill on it at a height of 6’ and even though the complainants informed the matter to the first and 2nd opp.parties they neither visit the spot nor take any further steps assess the loss, that by the unexpected fall of the said structures the electricity connection and the road access to the adjacent house owners were blocked and as an immediate relief from the situation the complainants reconstructed the retaining wall and the compound wall on 25..4..2008 after due notice to the opp.parties, that the complainants spent Rs.27230/- from their pocket for the said construction, that the 2nd and 3rd opp.parties are legally liable to pay the amount spent on account of the loss because the accident occurred during the insurance period, but the opp.parties repudiated the claim on false and frivolous ground vide letter dated 28..7..2008 to the complainants, that the act done by the 2nd opp.party amounts to unfair trade practice and deficiency of service, that the complainants have no claim against the first opp.party since they sanctioned the loan in time and gave material information to get proper relief against the 2nd opp.party and hence this claim application for realization of Rs.27,230/- as the cost of the construction against the 2nd and 3rd opp.party only and Rs.25,000/- towards mental agony suffered by them and Rs.5,000/- as costs of the proceedings and prayed for taking penal action for unfair trade practice.
First opp.party remained exparte to the proceedings. Opp.parties 2 and 3 filed joint version admitting the issuance of the policy in favour of the complainants vide policy No.100783/11/05/11/00000926 for a period from 8..2..2006 to 7..2..2016 and contending that the policy was issued at the initiative of the first opp.party bank in connection with a housing loan sanctioned by them in favour of the complainants, that the 2nd and 3rd opp.parties do not know anything about the terms and conditions of the loan agreement between the bank and the complainants, that it is purely a contract between the bank and the complainants and the insurance company has no role in it, that the insurance company is not a party in that loan agreement and however the 2nd opp.party insurance company issued the said policy to the complainants on the basis of proposal form filled and signed by the first opp.party for and on behalf of the complainants, that the description of risk covered under the said policy is only for a residential building in the property owned by the first and 2nd complainants and nothing else as insured item, that the proposal form submitted for and on behalf of the complainant for issuing the said policy also show that the insured property is a residential building only, that the construction details mentioned in clause 21 [a] of the proposal form shows that the material used for the construction of the building walls are made up of bricks with concrete roof and floor and therefore the retaining wall constructed or the compound wall built up on it by the complainant as described in the complaint is not included in the policy as the insured item, and since the retaining wall and compound wall are extraneous subject matter of the insured item, the damage or destruction if any sustained on need not be looked in to consideration in dealing the claim application, that it is not part of the insured residential building and as such the company has no liability to compensate the insured in respect of any loss or damage to the retaining wall or compound wall built up on it or part thereof, that the policy and its terms and conditions clearly show that [subject to the conditions and exclusions of the policy] if after payment of the premium the property insured for covering the risk described in the schedule or any part of such property be destroyed or damaged by any of the perils specified during the period of insurance named in the schedule of the policy conditions, the company shall pay to the insured the value at the time of happening of its destruction or the amount of such damage or its option reinstate or replace such property or any part thereof, that no claim under this policy shall be payable unless the terms of the conditions have been complied with, that the 2nd and 3rd opp.parties have no direct knowledge about the averments in page 3 and four of the complaint as to the nature of construction, age, location, extent, materials used for the construction of the retaining wall and their cost or its destruction and its cause, that the exact cause of the said to have loss or destruction of the retaining wall or compound wall is not even mentioned in the complaint, that the claim described in the notice send by the complainants was not relating to the insured item and as such the company has no liability to pay compensation to them, that the insurance company repudiated the claim and the matter was duly intimated after the receipt of the notice, that there is no willful latches or deficiency of service or dereliction of duty or any unfair trade practice in dealing the claim petition preferred by the complainants in this matter , that the conditions and exclusions in the policy are only salient features of the policy issued and the opp.party would go by the full conditions of the policies for settlement or rejection of the claim arising there from, that the complainant is not entitled to get any relief from these opp.parties because it is a vexatious petition with a view to harass the insurance company, that the opp.parties are not liable for the costs of the complainants and prayed for the dismissal of the complaint against the 2nd and 3rd opp.parties with cost.
Points that would arise for consideration are:
1. Whether there is any deficiency of service or unfair trade ractice on the part of the opp.parties?
2. Reliefs and cost?
For the complainant PW.1 was examined and marked Exts . P1 to P9 [a]
For the opp.parties DW.1 was examined and marked Exts. D1 and D2
The POINTS:
The first and foremost question to be considered in this case is whether the property insured is only the residential building or it includes the retaining wall and compound wall? In this case the first complainant was examined as PW.1. He would swear before the forum in tune with the allegations in the complaint. He would swear before the forum that “insure svu\ukr\r asset sRy aohUA rjGn\nuju\]kr\rfk\ estimate sr base svu\flnk\ .” Ext. P1[a] is the abstract sheet of the estimate. It includes 11 items and the 11th item is the compound wall and retaining wall, the construction value of which is fixed as
Rs.75,000/- and the total estimated amount is Rs.8,62,527/-. Admittedly the complainants availed a loan of Rs.6,00,000/- from the first opp.party for the construction of a house building , retaining wall and compound wall in their property comprised in survey No.260/15, 260/15-1 in the year 2005 vide loan account No.67004942236 . It is sanctioned on the basis of the total estimated cost of Rs.8,62,527/- for the whole construction. The complainants had insured the said construction for a sum of Rs.8,62,527/- under the scheme of the standard fire and perils policy of the 2nd and 3rd opp.party till 2016 and the 2nd opp.party received Rs.3,329/- as the premium of the insured amount and issued Ext.P2 policy. As per Ext.P2 there is full insurance coverage for the entire constructions done by them. Meanwhile the retaining wall and the compound wall erected at the south western corner of the property was accidentally collapsed on 19..4..2008. Ext.P3 is a letter issued by the first complainant to the first opp.party informing about the collapse of the retaining wall and the compound wall and calling upon them to take necessary steps to reinstate the electric connection and to assess the loss. Ext.P4 series is the photographs showing the collapsed retaining wall and the compound wall adjoining the residential building of the complainants. Ext. P5 is letter dated 26..4..2008 issued by the complainants to the first opp.party informing that though the collapse of the retaining wall and the compound wall informed, no further steps taken to assess the loss and since the unexpected fall of the said structures blocked electric connection and the road access to the adjacent house owners, as an immediate relief the complainants started reconstruction. Ext.P6 is a statement showing the cost of construction which comes to Rs.27,230/- ,Ext.P7 is labour charges, Ext.P8 is a copy of letter dated 21..7..2008 issued to the first opp.party calling upon them to take necessary steps to get the cost of construction of the collapsed retaining wall and compound wall, a copy of the same is seen issued to the 2nd opp.party. Ext.P8[a] and Ext. P8[b] are the postal receipts.
Ext P8[c] and Ext. P8[d] are the acknowledgement cards showing the receipts of the above letters by the opp.parties 1 and 2 . Ext.P9 is a letter from the first opp.party to the complainants dated 24..7..2008 which reads as “with reference to your above letter we wish to advise you that we have taken up the matter with United India Insurance Company. We have been advised by them that you are not entitled for the claim as the compound wall is not covered in the policy. For further clarification kindly take up the matter directly with M/s. United India Insurance Company Ranni.” Ext.P9 [a] is a registered letter issued by 3rd opp.party on 28..7..2008 to the complainants. It reads as “This has reference to the copy of your letter addressed to M/s. State Bank of Travancore, received by us through our Micro Office, Ranni, we hereby confirm that as per the records submitted to us on behalf of you and on verification of our records the Fire Policy No.100783/11/05/11/00000926 covered by our company for your property includes only the Residential building and the premium remitted for your policy is only to cover the residential building and no compound wall is covered in our policy. This is for your information.”
Then let us examine whether Ext.P2 policy includes only the residential building and the premium remitted for that policy is only to cover the residential building. The Asst. Manager of 2nd opp.party was examined as DW.1 and marked Ext. D1 policy and Ext. D2 proposal for standard fire and special perils policy. As we have already mentioned the complainants availed a loan of Rs.6,00,000/- from the first opp.party for the construction of a house building, retaining wall and compound wall in their property and the loan is sanctioned on the basis of Ext.P1 estimate which includes the retaining wall and the compound wall also. The sum insured is on the estimated amount under the scheme of the standard fire and perils policy of the 2nd and 3rd opp.parties till 2016. Then it is implied that the retaining wall and compound wall also is in insured property. Ext.P2 proposal is seen given to the 2nd opp.party by the first opp.party and not by the complainants. Then the omission to mention the retaining wall and compound wall in Ext. D2 may be a mistake crept in during the drafting of Ext. D2 by the first opp.party. As we have already mentioned the sum insured is Rs.8,63,000/- which is the estimated amount which includes the retaining wall and compound wall. The 2nd and 3rd opp.parties received premium on the sum insured. The basic document for preparation of Ext. D2 is Ext.P1 estimate. Its shows that on the part of the first opp.party also there is deficiency in service even if they have intimated the collapse of the retaining wall and compound wall to the 2nd opp.party soon after getting information from the complainants. They cannot be excluded from their liability. Since the sum assured includes the estimated cost of construction of retaining wall and compound wall and premium collected on the sum assured there is deficiency in service on the part of opp.parties 2 and 3 also and they cannot escape by stating that the premium collected for the policy is only to cover the residential building and no retaining wall and compound wall covered in the policy. The learned counsel appearing for the opp.parties 2 and 3 vehemently argued that when a proposal for insurance is accepted a contract of insurance will be formed and all the conditions in the contract are binding on both parties and since in Ext.D2 the insured property is the residential building only and nothing else and Ext. D1 policy issued also shows insurance coverage only for residential building the company is not liable to compensate the insured in respect of any loss or damage to the retaining wall or compound wall built upon it or part thereof. But we have already mentioned that the sum insured includes the estimated cost of retaining wall and compound wall and premium collected by opp.parties 2 and 3 on the sum insured, they cannot escape from their liability because of a mistake committed by the first opp.party while preparing Ext.P2. It follows that the opp.parties 1 to 3 are liable. Point found accordingly.
In the result, opp.parties 1 to 3 are directed to pay Rs.27,230/- towards cost of construction of the retaining wall and compound wall. Since it created mental agony to the complainants they are entitled to get Rs.5,000/- towards compensation from the opp.parties. They are also entitled to get Rs.1,000/- towards cost of the proceedings from the opp.parties. The order is to be complied with within one month from the date of this order and in default, it will carry interest at the rate of 7.5 % per annum from the date of order.
Dated this the 29th day of February, 2012.
I n d e x
List of witnesses for the complainant
PW.1. –Jacob Steaphen
List of documents for the complainant
P1 and P1[a]. – Abstract sheet of estimate
P2. – Policy
P2.[a] Sum insured portion of P2
P3. – Letter dated 21..4..2008
P4. series – Photographs showing the collapsed retaining wall and compound wall
P5. – Notice dt. 26..4..2008
P6. – Expense Statement
P7. – Extract of the account book
P8. – Registered notice dated 21..7..2008
PP8.[a] Postal receipt
P8.[b] – Postal receipt
P8[c]. – Acknowledgement card
P8 [d] – Acknowledgement card
P9. – Reply notice dated 24..7..2008
P9[a] – Repudiation letter dated 28..7..2008
List of witnesses for the opp.parties
DW.1. – Reghunathan Pillai
List of documents for the opp.parties
D1. – Certified copy of policy
D2. – Proposal form
