Karnataka

Bangalore 4th Additional

CC/1257/2016

M/s Samruddhi Holdings, - Complainant(s)

Versus

M/s. Oriental Insurance Company Limited., - Opp.Party(s)

29 Oct 2018

ORDER

Complaint filed on: 20.09.2016

                                                      Disposed on: 29.10.2018

 

BEFORE THE IV ADDL DISTRICT

CONSUMER DISPUTES REDRESSAL FORUM, BENGALURU

 1^ST FLOOR, BMTC, B-BLOCK, TTMC BUILDING, K.H.ROAD, SHANTHINAGAR, BENGALURU – 560 027        

 

CC.No.1257/2016

DATED THIS THE 29^th OCTOBER OF 2018

 

PRESENT

 

SRI.S.L.PATIL, PRESIDENT

SMT.N.R.ROOPA, MEMBER

	Complainant/s	V/s	Opposite party/s
	M/s Samruddhi Holdings, Aged about 54 years G-3B, Ground Floor, Gopalan Arcade Mall, 18/2, Rajarajeshwari Nagar, Mysore Road, Bangalore -98. Rep by its Managing Partner. Sri.K.Chandrahas.   By.Adv.Yessem Legal	1	M/s. Oriental Insurance Company Limited., Divisional Office 12, Jayalakshmi Mansion, Dr. Rajkumar Road, Rajajinagar 4th Block, Bangalore- 560010, Rep by its Manager.
		2	M/s. Oriental Insurance Company Limited, Head Office at Oriental House, P.B No. 7037, A 25/27, Asaf Ali Road,   New Delhi 110002, Rep by its Authorized Signatory.   By.Adv.Manoj Kumar-OP-1 OP-2 placed exparte

 

PRESIDENT: SRI.S.L.PATIL

 

1.       The Complainant has filed this complaint as against the Opposite Parties directing to pay Rs.1,71,537/- along with interest at 18% p.a. accrued thereon from the date of the incident occurred suit till realization, to pay Rs.1,00,000/- as compensation, to pay costs of the complaint and to grant such other reliefs.

 

2.       The brief facts of the case of the complainant are that the complainant is a company which is into business and having the stores at the Gopalan Mall, Mysore Road, Bangalore. The complainant is carrying the said business in the same vicinity since a year and the complainant is into the business of clothes and fabrics. The store is always filled with dress materials and clothes. The complainant is an income tax assessee and he is a regular income tax payer.   The complainant has got the stores insured with the oriental insurance company under the shop keepers insurance package policy for the period from 26.11.2015 to 25.11.2016 which includes cover for fire losses. Further submits that there was an outbreak of fire in the mall where the shop of the complainant is situated and as such the complainant has lodged a claim for damages for a tune of Rs.1,71,537/- with the oriental insurance company. The complainant has suffered more damages and  as  such  the  complainant  has  made

claim for the damages suffered by him. The claim petition for loss and damages was lodged before the original insurance company on 1.2.2016. After the claim was lodged before the oriental insurance company, the representative of the company by name Mr.Badari Prasad had visited the premises and conducted a thorough spot inspection and submitted a report to the insurance company. The representative of the company has submitted a detailed survey report to the insurance company but the company has rejected to accept and award the claim and endorsed that there is no liability of the insurer since no fire peril is acted at the risk location or insured’s premises and the cause of the loss falls under exclusions of the fire section of the shopkeeper’s policy. The said report dt.23.4.2016 stated specifically that there is no naked fire at the risk location or the insured’s premises. The insurance company has sent reply notice dt.18.5.2016 to claim petition and thereby stated that the damages to the stocks is due to soot and smoke resulting from fire which occurred at the adjoining premises. The insurance company also stated that the same did not spread to the shop of the complainant causing the said damages and as such the loss by soot and smoke without any direct flame or fire does not fall within the scope of the perils under the fire policy and accordingly, rejected the claim of the complainant. The insurer and the surveyor has wrongfully denied the rightful claim of the complainant on the pretext that the fire has not entered the premises of the complainant’s shop and thereby the loss is not covered under the policy. The principles of general insurance states and provides that the claim should be payable if the proximate cause of loss is fire. In the instant case, the proximate cause of loss is fire but the insurance company has wrongfully denied the claim of the complainant without appreciating the principles of the general insurance. The complainant has addressed a letter to the Bangalore Urban District Consumer Dispute Redressal, Basava Bhavan, Bangalore on 18.6.2016 with all details of the loss incurred and the damages occurred to the shop of the complainant during the outbreak of fire. The policy terms and conditions of the standard fire and perils policy under general exclusion No.4 amply provides for loss due to pollution or contamination is not excluded if the same is caused by operation of any insured perils. Further, it is submitted that the Condition No.12 of the policy also provides that the insurer is free to claim from the mall owners after settling the losses of the consumer. Even after several round of negotiations, the OP never made any effort to resolve the dispute. The OP for one or the other reason, is evading the issue resulting in huge losses for the complainant. The said acts of the OP amounts to deficiency of service. The complainant having no other option, resorted to sending notice through mail for the claim of damages on 1.2.2016. However, the OP never agreed to act according to the notice. The OP on 18.5.2016 sent an untenable reply contending that it is not liable to pay any damages. The complainant after receiving the reply was left with no other option but only to file this complaint. The line of defense taken up by the OP throughout is far from the factual position, baseless and only a cooked up story made up for the purpose of covering their mistakes. This contention of the OP is a wrong assumption, highly impossible fact and without any reasoning. The Op has rendered deficient service and failed to compensate for the damages covered under the policy. The complainant has suffered a huge loss because of the deficiency of service provided by the OP for which the OP is solely liable. Hence, the complainant submits to allow the complaint. 

 

3.       After the issuance of the notice, OP No.1 did appear and filed the version. The sum and substance of the version filed by the OP-1 is that the complaint is not sustainable either in law or on facts. The claim is not maintainable. In view of the fact that as per the claim intimation of the complainant to its financial advisor, who in turn had so intimated the incident to the OP-1 as “fire had occurred in other store on the ground floor” and not the insured premises of the complainant. The intimation about the alleged damage/loss caused since being intimated, the claim form was thereof, was issued immediately and the duly filled claim form with relevant documents was submitted by the complainant. Further, in view of the policy terms and conditions, the complaint is not maintainable and the same is liable to be dismissed as there was no fire at the insured premises/complainant’s premises resulting in cause loss/damages so as to enable insurer/OP-1 to consider the claim of the complainant as per terms and conditions of the policy and as such the OP-1 had so issued letter dt.18.5.2006, treating the claim of the complainant as closed, since the loss by smoke and soot without any direct flame or fire at insured premises does not fall within the scope of perils under FIRE policy. The policy issued is subject to various terms, conditions, exceptions, limitation thereof. The complaint is false, vexatious, frivolous and is aimed to harass the insurer/OP, which is a public sector fully owned by Government of India, who is the custodian of Public funds.  The policy of the present type, i.e., shop keeper’s insurance policy issued in respect of coverage of 1) fire and special perils 2) burglary and house breaking, plate glass and neon sign, is not issued to meet the requirements of any statute. The premium sought and collected is strictly in accordance with the business rule of the insurance company and the instructions issued by IRDA. There is no compulsion for the OP, to issue a policy of present type unlike the policies issued under the motor policies. The OP submits that the complainant/insured had obtained a policy of insurance in regard of in respect of 1) fire and special perils 2) burglary and house breaking, plate glass and neon sign at the insured premises, as per policy bearing No.423200/48/2016/1940 being a fresh policy, valid for the period from 26.11.2015 to 25.11.2016. Wherein, the claim in regard to the above claim does fall under fire and special perils policy and was insured with this OP, wherein the insured being M/s Samruddhi Holdings, the complainant herein. The policy issued is subject to various terms , conditions, exceptions, limitations thereof and in any event and in any view of the matter, the legal liability of the insurer, if at all, is governed by the provisions of the policy of insurance issued by the insurer in favour of the complainant/insured which is binding on the parties, therefore, due observance of statutory provisions, terms, conditions of contract of insurance is a condition precedent to admission to any liability. The present policy, clearly specifies under which circumstances, the insured is to be compensation, and the process under which the claim of the complainant is to be process, in addition to upon an incident of fire/flame having occurred at the insured premises resulting in damage/loss to the insured item as per the details so furnished and insured at the business premises, which resultant damages/loss caused to the stocks/items at the insured premises was not due to the resultant of the fire/flame having so occurred at the premises of the insured. Wherein as per the surveyor’s report dt.23.4.2016, who had so conducted the survey as well had observed as to that there was no naked fire at the risk/location, i.e., insured’s premises and that the insured/complainant as well based on documents had so reported that the stocks were damaged due to smoke and soot resulted by the fire accident which occurred at the adjoining/neighboring building i.e., Mac Donald’s in the Gopalan Arcade mall. In view of the above and as well as based on the terms and conditions of the policy, though the complainant having forwarded the relevant documents and as such the OP-1 had to issue a letter dt.18.5.2016 treating the claim as ‘CLOSED’  and that the contents of the said letter dt.18.5.2016 is since extracted hereunder:

“This has reference to the claim preferred with us against damages to your stocks on 1.2.2016. On perusal of the claim papers and the survey report, the findings of the competent authority is as follows:

The damages to your stocks is due to soot and smoke resulting from fire which occurred at the adjoining premises (Mac Donald’s in the Gopalan Arcade mall.) The flame did not spread to your shop causing the said damages. As such the loss by smoke and soot without any direct flame or fire in your premises does not fall within the scope of perils under FIRE policy.

In view of this, we regret that the claim cannot be considered and the same is treated as “CLOSED”

The OP-1 further submits that in respect of an incident said to have occurred on 1.2.2016 at around 10.30 am and in regard to claim of the above complaint in regard to the incident that said to have occurred on 1.2.2016, the claim of the complainant was thus entertained, considered accordingly, as well an IRDA licenced approved surveyor being appointed, based on the surveyor’s report, as well the policy terms and conditions, the claim of the complainant was thus rightly CLOSED vide letter dt.18.5.2016. As such, the complaint is not valid before the consumer Forum as there is no deficiency, disservice or negligence in service in handling the claim of the complainant. On these grounds and other grounds, prayed for dismissal of the complaint. Though notice was duly served on the OP-2, did not appear, hence placed exparte by order dt.22.11.2016.

 

4. The Complainant to substantiate his case, K.Chandrahasa, Managing Partner, has filed his affidavit evidence and got marked as Ex-A1 to A6. The OP has filed the affidavit evidence and got marked as Ex-B1 to B20. The Complainant as well as OP has filed written arguments. Heard both sides.                                                                                                                                                                                                                                                                                                                                                                                             

5. The points that arise for our consideration are:

1) Whether the Complainant proves the deficiency in service

    On the part of the OP, if so, whether he is entitled for

    the relief sought for?

          2) What Order?

                  

 

6.  Our answers to the above points are as under:

 

Point No.1: Partly in the affirmative

Point No.2: As per the final order for the following

REASONS

 

7. POINT NO.1 :   We have briefly stated the contents of the complaint as well as the version of the Opposite Parties. During the pendency of the complaint, the Ops filed IA-I dt.21.4.2018 under Order I rule 10 (2) R/w section 151 of CPC to implead the proposed Op 3 & 4 who are:

Proposed OP.No.3:

Gopalan Enterprise,

Rep by its Authorized Signatory,

No.5, Richmond Road, Bengaluru-05.

 

Proposed OP.No.4:

Hardcastle Restaurants Pvt. Ltd.,

Rep by its Authorized Signatory,

Reg.Office:1001:1002, Tower-3,

10^th Floor, Indiabulls Finance Centre,

Senapathi Bapat Marg, Elphinstone Road,

Mumbai-400013.

 

After due contest, the said application came to be dismissed by this Forum by order dt.27.8.2018.

 

          8.       The undisputed facts which reveals from the pleadings of the parties goes to show that there was a fire accident in the Gopalan Arcade Mall, 18/2, Rajarajeshwari Nagar Mysore Road, Bangalore. It is also not in dispute that the complainant carrying his business of stores at Gopalan Mall and he is also income tax assessee. It is also not in dispute that the complainant has got the stores insured with the oriental insurance company for the period from 26.11.2015 to 25.11.2016 which includes cover for fire losses.

 

          9.       It is the specific case of the complainant that there was an outbreak of fire on 1.2.2016 in the said mall where the shop of the complainant situated and the fabrics kept therein were damaged for a tune of Rs.1,71,537/-. Accordingly, a claim petition has been filed by him for loss and damages before the OP on 1.2.2016.

 

          10.     After the claim was lodged before the OPs, the representative of the company by name Mr.Badari Prasad has visited the premises and conducted a thorough spot inspection and submitted a report to the insurance company which can be seen ongoing through the contents of the said report marked as Ex-A3. Even though the survey report has been submitted, the Ops rejected the claim by its letter dt.18.5.2016 marked as Ex-A4 to repudiate the claim. For better appreciation, we would like to extract the said letter which read thus:

 

M/s Samruddhi Holdings,

G-3B, Ground Floor,

Gopalan Arcade Mall,

18/2, Rajarajeshwari Nagar,

Mysore Road, Bangalore-98

 

Dear Sir,

Re: Fire Claim for damages to stocks covered undersigned

      Policy No.423200/48/2016/1940

*****

 

This has reference to the claim preferred with us against damages to your stocks on 1.2.2016. On perusal of the claim papers and the survey report, the findings of the competent authority is as follows:-

 

The damages to your stocks is due to soot and smoke resulting from fire which occurred at the adjoining premises (Mac Donald’s at Gopalan Arcade Mall). The flame did not spread to your shop causing the said damages. As such the loss by smoke and soot without any direct flame or fire in your premises does not fall within the scope of perils under FIRE policy.

 

In view of this, we regret that the claim cannot be considered and the same is treated as CLOSED.

 

Thanking you and assuring you of our best services all times.

 

In our considered view, “Without fire there is no smoke”. In the instant case, the reasons assigned by the OP insurance company is that the damage caused to the complainant’s stock, is due to the soot and smoke resulting from fire which occurred at the adjoining premises., (Mac Donald’s in the Gopalan Arcade Mall). The flame did not spread to complainant’s shop causing the said damages. As such the loss by smoke and soot without any direct flame or fire in the complainant’s premises does not fall within the scope of perils under FIRE policy has no legs to stand. For the simple reasons that the reason assigned for repudiating the claim are only on the basis of assumption and presumption which cannot be sustainable in the eye of law as per the decision reported in

1. 2009 (3) CPR 53 LIC of India and others Vs Kailash Chandra Kar, Held: Consumer Protection Act is a beneficial legislation and it cannot allow insurance company to escape liability on technical grounds to deprive the consumer of benefits to which he was entitled to
2. 2010 (1) CPR 114 National Insurance Company Ltd., Vs. Nand Lal, Held: Insurance claim must be honestly settled without any delay.

Now the question that crops up for our consideration is to what extent the complainant is entitled for the reliefs sought for.  The claim of the complainant is based on the survey report which has been issued by the OP’s representative marked as Ex-A3 wherein he has verified the items and loss assessment which read thus:

LOSS ASSESSMENT:

Insured initially rejected complete stocks at stores due to smell, smoke & soot damage and expressed that the stocks cannot be sold.

However, we have explained that whatever items & qty which are kept open in hangers only consider as damage/soot & smoke affected subject to 100% inspection.

Stocks in cartons, sub packed condition will not be considered as damage and cartons can be cleaned. Finally 437 pcs have been rejected.

Refer Annexure, each item rate has been verified w r t purchase invoice.

Description	Claimed	Assessed
Cost of 437 pcs	1,71,537.00	1,71,537.00
Less salvage		25,000.00
Net of salvage		146,537.00
Less policy excess		10,000.00
Net claim		1,36,537.00

 

As against an amount of Rs.1,71,537/-, the complainant is entitled for Rs.1,36,537/-. Hence as per the survey report, we confined the claim of the complainant for Rs.1,36,537/- along with interest at the rate of 6% p.a. from the date of repudiation to till the date of realization. The complainant has also sought for damages for an amount of Rs.1,00,000/-. The OP on receipt of the claim application ought to have been considered the said claim, but by interpreting its own terms and conditions, denied the legitimate claim. For which the complainant was put in great hardship including in his business, hence, we feel just and proper to award Rs.10,000/- towards compensation and also to pay an amount of Rs.5,000/- being cost of litigation. Accordingly, we answered the Point No.1 partly in the affirmative.

 

11.     POINT NO.2: In the result, we pass the following:

ORDER

 

The complaint filed by the Complainant is allowed in part. The OPs 1 and 2 are jointly and severally liable to pay an amount of Rs.1,36,537/- to the Complainant with interest at the rate of 6% p.a. from the date of repudiation of the claim to till the date of realization.

Further, the OPs 1 and 2 are directed to pay an amount of Rs.10,000/- being compensation and also to pay Rs.5,000/- being cost of litigation.

The Ops are directed to comply this order within 6 weeks from the receipt of this Order. Failing which, the Complainant is at liberty to take proper steps as per law.

Supply free copy of this order to both the parties.

           (Dictated to the Stenographer, got it transcribed, typed by her/him and corrected by me, then pronounced in the open Forum on 29^th October 2018).

 

(ROOPA.N.R)     MEMBER

(S.L.PATIL)     PRESIDENT

 

 

1. Witness examined on behalf of the complainant/s by way of affidavit:

 

K.Chandrahasa, Managing Partner, who being Complainant was examined. 

Copies of Documents produced on behalf of Complainant/s:

Ex-A1	Shop keepers insurance policy
Ex-A2	E-mail dt.1.2.2016
Ex-A3	Survey report dt.23.4.2016
Ex-A4	Letter dt.18.5.2016
Ex-A5	Letter dt.18.6.2016
Ex-A6	Damage stock summary

 

2. Witness examined on behalf of the Opposite party/s Respondent/s by way of affidavit:

R.Mangayarkarari, Asst. Manager., who being OP-1 was examined.

Ex-B1		Claim intimation of OP-1
Ex-B2		Fire insurance claim form
Ex-B3		Survey report dt.23.4.2016
Ex-B4		Photographs
Ex-B5		News paper clipping dt.2.2.2016
Ex-B6		Salvage quotations 5 Nos.
Ex-B7		Policy copy
Ex-B8		List of items damaged
Ex-B9		Inventory list as on 2.2.2016
Ex-B10		VAT registration certificate
Ex-B11		Compt’s letter to Gopal enterprises
Ex-B12		Compt’s letter to Hardcastle restaturants
Ex-B13		Various purchase invoice copies
Ex-B14-B15		Surveyor’s letter dt.12.5.2016  a/w photos
Ex-B16		Repudiation letter dt.18.5.2016
Ex-B17		Compt’s letter dt.25.5.2016 to OP-1
Ex-B18		OP.1 letter dt.29.5.2016
Ex-B19		Photo copy of policy
Ex-B20		Policy terms and conditions
	(ROOPA.N.R)       MEMBER		(S.L.PATIL)    PRESIDENT