BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL FORUM, JALANDHAR.

Complaint No.163 of 2015

Date of Instt. 23.04.2015

Date of Decision :19.11.2015

Ajay Kumar son of Narotam Kumar R/o Garden Colony, Nakodar, District Jalandhar.

..........Complainant Versus

1. M/s The New India Assurance Co.Ltd., Branch Office:- Kamaldeep Mansions, GT Road, Phagwara, District Kapurthalla, through its Branch Manager.

2. The New India Assurance Co.Ltd., Divisional Office-II, GTB Nagar, Jalandhar through its Divisional Manager.

3. Union Bank of India, Nakodar Branch, Noormahal Road, District Jalandhar through its Branch Manager.

.........Opposite parties.

Complaint Under Section 12 of the Consumer Protection Act.

Before: S. Jaspal Singh Bhatia (President)

Ms. Jyotsna Thatai (Member)

Sh.Parminder Sharma (Member)

Present: Sh.PMS Narang Adv., counsel for complainant.

Sh.AK Arora Adv., counsel for OPs No.1 & 2.

Sh.Vikas Gupta Adv., counsel for OP No.3.

Order

J.S.Bhatia (President)

1. The complainant has filed the present complaint under section 12 of the Consumer Protection Act, against the opposite parties on the averments that the complainant is owner in possession of one shop measuring 1 marla 04 sarsai, situated at Nakodar, comprised in Khasra No.90//23/2, purchased on the basis of sale deed No.469 dated 3.5.2007 Jt.SR Nakodar and the property in said sale deed is described as a shop and is also registered as a commercial property. The complainant has been doing business in the above said shop alongwith his father, proprietor of Karyana shop under the name & style of M/s N.A Enterprises which obtained a CC Hypothecation Limit of Rs.5,00,000/- from opposite party No.3 vide sanction letter dated 20.12.2007 and said limit was duly secured by hypothecation of the stock of the shop and by way of equitable mortgage of the above mentioned shop. The opposite party No.3, after mortgaging the property/shop, in the CC Hypothecation Limit granted to M/s N.A Enterprises, got insured the above said shop building and the stock stored and or lying in it from opposite party No.1, under Standard Fire and Special Perils Policy, vide insurance policy No.36100311110100 000241 dated 17.11.2011, effective from 17.11.2011 to 16.11.2014. The sum assured of the policy is Rs.22,00,000/- and a premium of Rs.2476/- was paid to the opposite party No.1 which is debited to the account of the complainant. The opposite party No.3, also got the valuation report of the property from its approved paneled valuer M/s Bhasin & Associates, who gave their report dated 8.9.2011 and approved valuer M/s Oberoi Associates, who gave their report dated 30.1.2012 and in both the said valuation reports the property is described as a shop property. Unfortunately a fire broke out on 24.1.2012 in the shop premises owned by the complainant and insured with the opposite party No.1 and mortgaged with opposite party No.2. In the said incident the shop premises/building and the stock of business M/s N.A Enterprises, lying in the shop premises was damaged. The opposite parties were informed regarding the fire loss occurred in insured shop premises vide information letter dated 24.1.2012. The stock of M/s N.A Enterprises, lying at the above said shop premises, was also insured by the opposite party No.1 vide policy No.36100348110600000010 dated 12.4.2011 and the claim regarding the loss of stock, under the said policy has been given by the opposite party No.1. Earlier also the stock of M/s N.A Enterprises, lying at the above said shop premises was insured by The New India Assurance Company Limited, Branch Office D.C.Chowk, Kapurthala vide policy No.360902/48/08/34/00000758 dated 16.1.2009 and vide policy No.360902/48/08/34/00000582 dated 8.10.2008, under shopkeepers insurance. The opposite party No.3 wrote a letter dated 15.2.2012 to the opposite party No.1, informing them that they have taken various insurance policies from them and further informing/ giving list of eight insurance policy documents, in which the description of property is stated erroneously as residential instead of commercial or commercial cum residential and further asked the opposite party No.1 to rectify the discrepancies. The complainant also wrote letter to the opposite party to rectify the discrepancy in the insurance policy, wrongly stating the shop premises as residential, but inspite of the said fact the opposite party No.1, vide its letter dated 11.12.2012, repudiated the claim of the complainant. On such like averments, the complainant has prayed for directing the opposite parties to pay him Rs.2,25,000/- i.e the assessed value of the building alongwith interest. He has also claimed compensation and litigation expenses.

2. Upon notice, opposite parties appeared and filed their written replies. In its written reply, opposite parties No.1 & 2, inter-alia, pleaded that the real facts are that policy of insurance bearing No.361003111101000000241 was issued by the opposite parties through its branch office at Phagwara, District Kapurthala for the period 17.11.2011 to 16.11.2014 in respect of building above plinth level on Kapurthala Road, Nakodar used for residential purposes. On the receipt of intimation qua the loss caused to the building Mr.Rajesh Gupta Surveyor & Loss Assessor was appointed as surveyor to assess the loss, who has submitted his report on 20.10.2012 with the opposite parties. In his report, he has submitted that the coverage is for the building used for residential purposes and whereas the loss took place in a building used as a shop in which Karyana Goods were sold and has further concluded that the building mentioned in the insurance policy and the building where the fire took place are two different buildings and as such the building which has been damaged in the fire is not covered by the policy of insurance. Taking into consideration the aforesaid facts that the building which was insured with the opposite parties was not being used for residential purposes as insured by the complainant and as such the claim was accordingly repudiated by the opposite parties as per terms and conditions of policy of insurance. Letter dated 11.12.2012 to this effect was written to the complainant. The complainant vide letter dated 4.3.2013 requested that there is an inadvertent mistake on the part of the officials of the company, who prepared the final policy document and typed it as being used for dwelling purpose and requested to rectify the mistake. The said letter was duly replied to the complainant on 14.3.2013. The claim of the complainant has been rightly repudiated by the company since building mentioned in the insurance policy and the building where the fire took place are two different buildings, thus the building which has been damaged in the fire is not covered by the policy of insurance. They denied other material averments of the complainant.

3. In its separate written reply, opposite party No.3 bank pleaded that opposite party No.3 has nothing to do in the claim settlement of the complainant. It is important to mention that the role of the opposite party No.3 is limited in introducing the complainant with the opposite parties No.1 & 2 in obtaining the insurance policy and beyond that there is no role of the complainant in the present transaction. It is submitted that opposite party No.3 is the beneficiary under the insurance contract since the property in question is mortgaged with the opposite party No.3. It is submitted that it is the opposite parties No.1 & 2 who has to decide the claim of the complainant as per the terms and conditions of the insurance policy and opposite party No.3 being the banker has no role in the claim settlement. It is submitted that opposite party No.2 being the beneficiary under the contract of insurance has issued several letters to the opposite parties No.1 & 2 for the settlement of the claim. It denied other material averments of the complainant on the ground that it does not relates to it.

4. In support of his complaint, learned counsel for the complainant has tendered into evidence affidavit Ex.CA alongwith copies of documents Ex.C1 to Ex.C31 and evidence of the complainant was closed by order.

5. On the other hand, learned counsel for the opposite parties No.1 & 2 has tendered affidavits Ex.OP1/A and Ex.OP1/B alongwith copy of document Ex.OP1/1 and closed evidence. Further learned counsel for opposite party No.3 has tendered affidavit Ex.OP3/A and closed evidence.

6. We have carefully gone through the record and also heard the learned counsels for the parties.

7. Ex.C4 is Standard Fire and Special Perils Policy. The real dispute between the complainant and insurance company is, whether shop where fire took place was insured with the opposite parties No.1 & 2 or some other residential house?

8. In the Karyana Shop of the complainant the fire took place as a result of which the same was damaged. The stock lying in the shop was also insured but the claim regarding the same has already been paid by the insurance company to the complainant. The complainant had obtained cash credit limit from opposite party No.3 bank and the shop was equitably mortgaged with opposite party No.3 bank. In the policy Ex.C4 insured name is mentioned as Ajay Kumar and address is mentioned as son of Narotam Kumar, Shop on Kapurthala Road, Nakodar, Punjab. However, in the policy in the column of description of property “On building above plinth level used as residential purpose at as above address” is mentioned. Counsel for the complainant contended that in the column of description of property building used as residential purpose has wrongly been mentioned and infact shop was insured with the insurance company. On the other hand learned counsel for the insurance company contended that infact some other residential building was insured with the insurance company and the shop in question was not insured with it and as such the insurance company has rightly repudiated the claim of the complainant. So we are to see if the shop was infact insured with opposite parties No.1 & 2 insurance company or some other residential building. In the column of description of property building above plinth level used as residential purpose at as above address is mentioned. In the column of address shop on Kapurthala Road, Nakodar is mentioned. Ex.C5 is valuation report in respect of the shop. Ex.C6 is also valuation report in respect of the above said shop. Ex.C22 is affidavit of the complainant wherein he has mentioned that he is owner of the shop at Kapurthala Road, Nakodar and this shop has been pledged with Union Bank of India i.e opposite party No.3 as collateral security since December 2007 for availing cash credit limit. It is further in his affidavit that the above said shop is same shop which was got insured by the above said bank. Complainant moved one application for directing the opposite parties No.1 & 2 for producing proposal form obtained at the time of issuing of insurance policy in question, pre-inspection report of the property and total documents obtained by the insurance company. In reply to the above said application, the insurance company has pleaded that insurance in the present case was done through the bank and as such no proposal form whatsoever was obtained from the bank by the opposite parties No.1 & 2. So according to the opposite party insurance company, the insurance was obtained by the opposite party No.3 bank. The opposite party No.3 bank had written letter Ex.C13 to the insurance company wherein it is mentioned as under:-

“Sub:- Correction in policy details

We have taken various insurance policies from your company. In the following policy documents description of property is stated erroneously as residential instead of commercial or commercial cum residential. Also risk description column may be changed accordingly in following policies.

Kindly rectify discrepancies in these policies at your earliest and inform us accordingly”.

9. So according to the bank commercial shop was got insured by it but in the policy it has wrongly been mentioned as residential instead of commercial. Moreover, in the policy, in the description of property covered under the policy it is also mentioned that building above plinth level at above address. The address mentioned above is that of shop. So from the above stated circumstances, it is clear that infact shop was insured by the opposite party insurance company and in the column of description of property it has been described as residential one. In case the opposite party No.3 had not got insured the shop then it would not have written letter Ex.C13 to the insurance company to rectify the mistake in the policy. So the opposite party insurance company has wrongly repudiated the claim of the complainant. The surveyor vide its report Ex.OP1/1 has assessed the net loss at Rs.2,34,482/-.

10. In view of above discussion, the present complaint is accepted and opposite parties No.1 & 2 are directed to pay Rs.2,34,482/- to the complainant alongwith 9% interest per annum from the date of repudiation of his claim till the date of payment. It is clarified that interest amount is being granted by way of compensation. As the shop was equitably mortgaged with opposite party No.3, the insurance company shall firstly pay the amount due to the bank from the complainant and balance, if any shall be paid to the complainant. The complainant is also awarded Rs.3000/- on account of litigation expenses. Copies of the order be sent to the parties free of costs under rules. File be consigned to the record room.

Dated Parminder Sharma Jyotsna Thatai Jaspal Singh Bhatia

19.11.2015 Member Member President