BEFORE THE DISTRICT FORUM: KURNOOL

Present: Sri. T.Sundara Ramaiah , B.Com B.L., President

And

Sri. M.Krishna  Reddy , M.Sc., M.Phil., Male Member

Thursday the 04^th day of November , 2010

C.C.No 146/09

Between:

M/s. Vasavi Industries, Rep.by its Propritor S.Satyanarayana,

8-142,C1, Industrial Estate, Kallur, Kurnool District-518 003.                             

…..Complainant

-Vs-              

1. M/s National Insurance Company, Rep.by its Branch Manager,

Tula Complex, 40-344,Gandhi Nagar,Kurnool-518 002.

1. M/s State Bank of India, Rep.by its Branch Manager,.

Bazar Branch, 38/157, Minchin Bazar, One Town, Kurnool-518 001.                          

     ……Opposite PartieS

                        This complaint is coming on this day for orders in the presence of Sri. M. Sivaji Rao, Advocate, for complainant, and Sri. D.A.Anees Ahamed, Advocate for opposite party No.1 and opposite party No.2 is called absent set ex-parte and upon perusing the material papers on record, the Forum made the following.

 ORDER

(As per Sri. T.Sundara Ramaiah, President)

C.C. No. 146/09

1. This complaint is filed under section 11 & 12 of C. P. Act, 1986 praying to direct the OPs

1. to pay the assured amount of Rs.10,00,000/- on whole stock

including the Bengal Gram, peas , husk,    

1. to pay the damages on machinery Rs.72,930/-
2. to pay a sum of Rs.50,000/- towards the compensation for

causing mental agony  and hardship

(d)        to pay the costs of this complaint ,

(e)        to order any other order or orders which are deems to be

fit and proper in the circumstances ofs the case.

(2)   The case of the complainant in brief is as follows:- The complainant is the proprietor of M/s. Vasavi Industries which produces  the Fried Bengal gram . The complainant obtained loan of Rs.15 lakhs from OP.No.2 to commence the business. The complainant instructed OP.No.2 to insure the machinery for an assured sum of Rs.10,00,000/- and the entire stock of Bengal gram for Rs.10,00,000/- . Accordingly OP.No.2 submitted a proposal form to OP.No.1 and obtained policy. The complainant was under the impression that the entire machinery and whole stock was insured. On 22-06-2007 and 23-06-2007 Kallur witnessed heavy rains resulting the floods to Handri River. The flood water entered into premises of Vasavi Industries and caused damage to the machinery ,raw material and finished fried gram to a tune of more than Rs.14,00,570/- . Immediately after the damage of the machinery  and stock the complainant intimated the same to the OPs. OP.No.1 sent surveyor. The complainant submitted his claim. On 18-12-2008 surprisingly OP.No.1 sent a meager amount of Rs.42,500/- towards full and final settlement of claim. OP.No.1 assessed the loss only for fried gram at Rs.42,750/-  and loss of machinery for Rs.9,750/- . The complainant protested the same and returned the receipt. The complainant insured the entire machinery and stock in the insured premises. Inspite of several requests OP.No.1 did not settle the claim. Non  settlement of claim as claimed amounts to deficiency of service. On 29-07-2009 the complainant got issued legal notice to OPs to settle the claim .There was no proper reply. Hence the complaint. 

3.     OP.No.2 remained ex-parte. OP.No.1 filed written version stating that the complaint is not maintainable. On the request of the complainant OP.No.1 appointed surveyor to assess the actual loss in the business of the complainant. The surveyor assessed the actual loss in the business of the complainant to a tune of Rs.42,500/- . As per the policy the Bengal fried gram is insured. The surveyor assessed the loss to fried gram at Rs.42,750/- and loss of machinery at Rs.9,750/- . After deducting the policy excess the net loss under the policy is worked out to Rs.42,500/-. To that effect OP.No.1 addressed a letter to the complainant enclosing the discharge voucher for Rs.42,500/- in full and final settlement of claim. The complainant without submitting the discharge voucher for the said amount filed the present complaint. There is no deficiency of service on the part of the OP.No.1 in settling the claim. The complaint is liable to be dismissed.

  4.   On behalf of the complainant Ex.A1 to A29 are marked and the sworn affidavit of the complainant is filed.  On behalf of the opposite parties Ex.B1 to B3 are marked and sworn affidavit of OP.No.1 is filed.

5.     Both sides filed written arguments.

6.     The points that arise for consideration are     

(i)     whether there is deficiency of service on the part of the OP ?

(ii)    whether the  complainant is entitled to the reliefs as prayed for?

(iv)   To what relief?

7. Point No.1 & 2:  It is the case of the complainant that he took loan of Rs.15,00,000/- from OP.No.2 and commenced business. Ex.A1 is the statement of account showing the particulars of the loan taken  by the complainant from OP.No.2 bank. It is the case of the complainant  that OP.No.2 submitted the proposal to OP.No.1 to insure the machinery and stock and that the OP.No.1 issued policy Ex.A28. The period of insurance is from 19-01-2007 to 18-01-2008. It is also mentioned in Ex.A28 that the machinery worth Rs.10,00,000/- and stock worth Rs.10,00,000/- in the premises were insured by OP.No.1. It is further case of the complainant that there were floods on          22-06-2007 and 23-06-2007 and due to the said floods the entire machinery and stock were filly damaged. Ex.A18 is the copy of the certificate issued by the Tahsildar , Kallur stating that Vasavi Industries is fully inannuatiated and damage in flood water on          22-06-2007 and 23-06-2007 . It is not the case of the OP.No.1 that there was no damage to the machinery and stock of the complainant  due to floods.        

8.     Admittedly immediately after the damage the complainant intimated about the damage to the OPs. OP.No.1 appointed a surveyor Sri. B.P.K.Reddy to assess the actual loss sustained by the complainant due to floods. The surveyor after inspecting the premises assessed the loss and submitted his report Ex.B2 stating that the net loss suffered by the complainant is Rs.5,73,495/- . The complainant submitted his claim to OP.No.1. OP.No.1 sent discharge voucher for Rs.42,500/- to the complainant stating that only Bengal fried gram and machinery alone were insured and that the complainant is not entitled to further amount.   

9.     It is the case of the complainant that the entire stock and machinery and in his business premises were insured and that the OP.No.1 is liable to pay the entire loss sustained by him as stated in the complaint. Now it is necessary to see whether entire stock and machinery in the premises of the complainant were insured or not. Ex.A2 is the proposal submitted to OP.No.1. In the said proposal it is mentioned  in page No.2 that fried and Bengal gram are proposed to be insured for Rs.10,00,000/- . It is also mentioned that the machinery is proposed to be insured for Rs.10,00,000/- . But in Ex.A28 policy it is mentioned that the risk relates to machinery and stocks of fried gram. It is submitted by the learned counsel appearing for the complainant  that the Insurance company issued wrong policy other than applied for and it amounts to deficiency of service. In support of his contention he relied on a decision reported in 2004 NCJ 591 (NC).In the above cited decision it is held that issuance of wrong policy other than applied for is deficiency of service. In the present case also as per Ex.A2 it is proposed to insure machinery fried and Bengal gram. But surprisingly it is found in Ex.A28 policy that it covers plant and machinery and stocks of fried gram. It is clearly mentioned in Ex.B2 report of the surveyor that the bankers have insured the property. For the lauches on the part of the OP.No.2 the complainant cannot be made to suffer. 

10.    Admittedly the surveyor visited the premises and submitted his report Ex.B2. In his report it is clearly stated that the stock of Bengal gram and machinery were insured for a sum of Rs.20,00,000/-. If really the policy does not cover the Bengal gram stock there was no necessity for the surveyor to assess the loss of damage of Bengal gram. According to the surveyor 285 bags of Bengal gram, 22.50 bags of fried Bengal gram and 70 bags of hask were damage due to the flood water . He assessed the net loss sustained by the insured at Rs.5,73,495/-. The report of surveyor has to be given due weight.   The complainant has claimed Rs.10,72,930/-  for the damaged stock and machinery. The said claim of the complainant can not be accepted  in view of the report of the surveyor that the net liability of the insurer is Rs.5,73,495/- . According to OP.No.1 it is liable to only Rs.42,500/-. The said contention of OP.No.1 can not be accepted in the light of the circumstances of the case. According to the report of the surveyor, insurer is liable to pay an amount of Rs.5,73,495/- for the loss sustained by the complainant  due to the floods . OP.No.1 not settled the claim as recommended by the surveyor. It amounts to deficiency of service  on the part of OP.No.1.

11. Point No;3:  In the result the complaint is partly allowed directing the OP.No.1 to pay Rs.5,73,495/- to the complainant with subsequent interest at 9% from 10-12-2007 i.,e date of report of the surveyor till the date of payment along with costs of Rs.1,000/-. The complaint against OP.No.2 is dismissed.

Dictated to the stenographer, transcribed by her, corrected and pronounced by us in the open bench on this the 04^th day of November, 2010.

               Sd/-                                               Sd/-    

     MALE MEMBER                                                    PRESIDENT

APPENDIX OF EVIDENCE

Witnesses Examined

For the complainant : Nil            For the opposite parties : Nil

List of exhibits marked for the complainant:-

List of exhibits marked for the opposite parties:

                   Sd/-                                                                       Sd/-

         MALE MEMBER                                                                    PRESIDENT

// Certified free copy communicated under Rule 4 (10) of the

A.P.S.C.D.R.C. Rules, 1987//

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Complainant and Opposite parties

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