Tamil Nadu

North Chennai

CC/69/2019

M.Nagarajan Proprietor Nagarajan bricks, - Complainant(s)

Versus

M/s.National insurance company ltd - Opp.Party(s)

M/s.S.Arunkumar

20 Aug 2019

ORDER

 

                                                            Complaint presented on:  26.09.2018

                                                               Order pronounced on:  20.08.2019

 

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHENNAI (NORTH)

2^nd Floor, Frazer Bridge Road, V.O.C.Nagar, Park Town, Chennai-3

 

PRESENT:  TMT.K.LAKSHMIKANTHAM, B.Sc., B.L., DTL.,DCL, DL & AL -  PRESIDENT

 

TMT.P.V.JEYANTHI B.A., MEMBER - I

 

TUESDAY  THE 20^th   DAY OF AUGUST 2019

 

C.C.NO.69/2019

 

M.Nagarajan,

Proprietor Nagarajan Bricks,

No.34, Vaisiyal Street,

Alangayam,

Vaniuambadi Taluk,

Vellore District.

                                                                                        …..Complainant

 ..Vs..

1.National Insurance Company Limited,

Rep by its Branch Manager,

Matha  Complex, CAN Road,

Vaniyambadi,

Vellore District.

 

2.Bank of Baroda,

Rep by its Branch Manager,

Alangayam Branch

Vellore District.

 

.....Opposite Parties

Counsel for Complainant                      : Party in Person

 

Counsel for 1^st  opposite party                 : M/s.S.Arunkumar, M.L.Ganesh                                                                    

 

Counsel for  2^nd opposite party                 : K.Ravi Kumar, S.Sathish Kumar

O R D E R

 

BY PRESIDENT TMT.K.LAKSHMIKANTHAM, B.Sc., B.L., DTL.,DCL, DL & AL

          This complaint is filed by the complainant to direct the opposite parties to pay a sum of Rs.9,00,000/- towards balance claim and also to pay a sum of Rs.10,00,000/- towards compensation for mental agony and deficiency in service  with cost of complaint  u/s 12 of the Consumer Protection Act.1986.

1.THE COMPLAINT IN BRIEF:

          The complainant is engaged in the manufacturing of Chamber Bricks in a large scale, in an extent of 2.95 acres of land owned by him. In this venture the complainant has constructed a pukka factory and installed requisite machineries at huge cost. The complainant in order to expand his business activities he required about 23 lakhs of rupees. Based on the assurance given by the 2^nd opposite party, the complainant submitted an application for a term loan of Rs.15,00,000/- along with requisite documents to the 2^nd opposite party  in 2013. After a long and tiresome wait, the 2^nd respondent sanctioned only a term loan of Rs.9,00,000/-. However, out of the above nine lakhs, the bank actually released only a sum of Rs.7,00,000/- that too in installments and balance Rs.2,00,000/- as Over Draft. After sanctioning the aforesaid loan, 2^nd opposite party insisted that the complainant should take an insurance policy with the 1^st opposite party. The complainant took the insurance policy from the 1^st opposite party for an assured value of Rs.9,00,000/-. The coverage extended under the above insurance policy was for the loss and damages to the building, as well as the bricks, Rs.7,00,000/- was segregated for the bricks. Above insurance coverage was given to the complainant by the 1^st opposite party on 27.08.2014, having validity up to the midnight of 26.08.2015. During the months of July/October 2014 there was an unprecedented and heavy downpour with cyclonic storm, in the area of the complainant which played havoc and devastated the building and the bricks. The loss and damage was estimated to Rs.9,50,800/-. One of the surveyors, deputed by the 1^st opposite party visited the spot and assessed the damages only to an extent of Rs.1,47,808/- and remitted the same in two instalments. Having issued a policy, promising coverage of loss and damages to the building to the tune of Rs.7,00,000/- and to the bricks for Rs.2,00,000/- the 1^st opposite party is legally, contractually and morally stopped from resiling the agreed terms and conditions of the contract. It is nothing but a sheer negligence and deficiency in service. Hence this complaint.

2. WRITTEN VERSION OF THE   1^st  OPPOSITE PARTY IN BRIEF:

          The complainant availed policy from Bank of  Baroda for the loan advanced by them. Though the complainant informed about the damages said to be occurred on 25.07.2014 and 21.10.2014 belatedly, this opposite party immediately after receipt of information appointed surveyors to assess the value of damages. On receipt of their reports in respect of the damages occurred on 25.07.2014 a sum of Rs.1,23,000/- was paid through the 2^nd opposite party and they have credited into complainant’s account. Similarly for damages occurred on 21.10.2014 a sum of Rs.24,808/- was credited into complainant’s account. The complainant is well aware of the same.  The surveyors have valued the damages as per law. The complainant  has not proved the alleged loss of Rs.23,50,800/- which is nothing but imaginary. Hence this Forum may kindly dismiss the complaint.

3. WRITTEN VERSION OF THE   2^nd OPPOSITE PARTY IN BRIEF:

          The  complainant availed  a fresh term loan to a limit of  Rs.7,00,000/- for construction of Shed to burn bricks and manufacture of bricks in 2.95 acres of land. At the request of the complainant the opposite party granted  Rs.2,00,000/- towards  working capital loan under over draft account to the complainant for running the business and the total amount sanctioned to the complainant was Rs.9,00,000/- for manufacturing and running the business. The Insurance claim of Rs.1,23,000/- was received by the 2^nd opposite party from 1^st opposite party on 13.03.2015 has been credited into the complainant’s "Nagarajan Bricks" Overdraft Account and the same has been duly informed to the complainant immediately. Thereafter another insurance claim of Rs.24,808/- was received by the 2^nd opposite party on 07.04.2015 and credited the same into the complainant’s "Nagarajan Bricks" account  immediately. There was no proper repayment of loan by the complainant after the natural calamity in both the accounts and therefore the accounts were classified as Non Performing Assets (NPA) of the bank on 12.10.2015. No service has been provided to the complainant for any consideration. Hence it is prayed to dismiss the complaint.

4. POINTS FOR CONSIDERATION:

1. Whether the complaint  is  a Consumer?

          2.  If so, whether there is deficiency in service on the part of the opposite

               parties?

 

          3. Whether the complainant is entitled to any relief? If so to what extent?

05. POINT NO :1        

          On the side of  2^nd opposite party  it is pointed out that  the complainant  had availed loan for construction of  building to burn  and manufacture of bricks  and  to develop the business. Since  the transactions are of commercial in nature  complainant  is not a consumer. Even though the transaction is for commercial  usage and also in a large scale and the goods are meant for commercial purpose the nature of business is only for his self employment  and the loan is utilized by himself. So it is presumed that it is for his livelihood only. Hence the complainant  comes under section 2(d) of the Consumer Protection Act. Accordingly point No.1 is answered.

6. POINT NO :2

          The complainant  is  engaged in the manufacturing of Chamber Bricks in  a large scale in an  extent of  2.96 acres.  In order to develop business he mortgaged his property to the 2^nd opposite party  and obtained a loan for an amount of Rs.9,00,000/-. No objection certificate from the fire department to run the brick chambers and license to run brick chambers was issued by the concerned Town  panchayat are in Ex.A1 & Ex.A2. Bank Pass book and the loan sanction memo are Ex.A3 & Ex.A4 . As per the loan sanction memo the term loan is for construction of shed to burn bricks and for manufacturing the same for a limit of Rs.7,00,000/-  and Rs.2,00,000/- is for working capital to run the business. Insurance Policy  bearing number 501306/11/14/3100000052  in Ex.A5  is for the period from 27.06.2014 to 26.08.2015 and for the assured amount of Rs.9,00,000/- and  policy is  taken in the name of M/s." Nagarajan brick works" through  2^nd opposite party  for standard fire and special perils policy.  The  policy is  for the assured value of Rs.9,00,000/- dated  27.08.2014 having the validity up to 26.08.2015. During the Month of October 2014 due to heavy downpour and storm, the building and the bricks got damaged and there was a heavy loss which was informed to the 1^st opposite party  by  letter dated 04.08.2014 in Ex.A6.  Claim was also lodged to the 1^st opposite party under  Ex.A6 series for an amount of Rs.3,00,000/- on 04.08.2014. Ex.A7 is the letter dated 17.08.2014 alleged to be received by  the complainant  from the Surveyor appointed by  the 1^st opposite party  and the  complainant   had also alleged in his complaint that  he stopped the work  from that date onwards expecting  further information from the 1^st opposite party. Contra to his earlier statement complainant had also alleged in his letter dated 10.11.2014 that he could not proceed the business because of the non-sanctioning of the required amount of loan by 2^nd opposite party and the complainant had also admitted that he was a defaulter in payment of EMI to the bank.

        07.  The claim was entertained by the 1^st opposite party to an extent of Rs.1,47,808/- and also disbursed in two installments to his bank account. The complainant  came to know through the 2^nd opposite party  about the disbursement of Rs.1,23,000/-  and it was credited  to the complainant’s  overdraft  account as per Ex.A11 and Ex.B8  by 2^nd opposite party  on 25.03.2015. Second claim of an amount of Rs.24,808/- was also credited to the  complainant’s  account as per Ex.A12. Both the amounts are reflected in his bank statement also.

         08.  Further to reclaim and to resume  his business activities complainant’s had approached the  2^nd opposite party  for further loan  amount of Rs.5,00,000/-  through Ex.A8 & Ex.A9 letters.  Subsequently, the loan which was proposed to be given was not granted due to some reasons. There after legal notice under Ex.A13 was issued by the complainant demanding the compensation of Rs.23,50,800/- for the alleged  dereliction   of duty  and for loss and damage   caused by opposite parties  to the complainant.

         09. The complainant had paid the   EMI to an extent of Rs.69,000/- till the calamity occurs and then he was a defaulter due to non- payment of EMI for the loan amount obtained by the complainant  from 2^nd opposite party. A Survey work was carried out in the premises of the complainant  on 25.07.2014 by name smart surveyors  on behalf of 1^st opposite party  and a report dated 31.12.2014 was filed by the surveyor estimating the damages  in Ex.B2.  It is seen from the above said report that insured had submitted a claim for Rs.3,73,000/- with reference number and dated nil and  again  a revised estimation  was also sent for Rs.4,14,800/- with split- up figures. As per the survey held by the 1^st opposite party’s  surveyor a detailed report with allowed and disallowed particulars and along with  salvage value as nil were  given in Ex.B3  and net loss  was assessed to an extent of  Rs.1,23,000/-.  Under Ex.B3 a survey report on damage to stock of bricks at the place was assessed by S.Raja  an insurance surveyor appointed by 1^st opposite party  who reported  the net loss as Rs.24,808/-. The assessed amount of Rs.24,808/- was also settled to 2^nd opposite party and credited through NEFT and it was informed to complainant's counsel by letter dated 03.06.2015 in Ex.B4. Legal notice issued to  2^nd opposite party  in Ex.A13 and reply notice by 2^nd opposite party  is  in Ex.A14. The acknowledgement is Ex.A16. The statement of loss of income mentioned by the complainant which is a self serving document is Ex.A17. The photos showing the damages are in Ex.A18.

        10. The 1^st opposite party would contend that a sum of Rs.1,23,000/- and Rs.24,808/- was paid to the complainant through the 2^nd opposite party  for the damages occurred after scrutinizing through the report of the Surveyor  appointed by 1^st opposite party.  No one has advised the complainant to stop proceeding his work as alleged by the complainant.  The 1^st opposite party had diligently dealt with the claim of the complainant within the ambit of the policy and hence the complaint is to be dismissed as there is no deficiency on the part of 1^st opposite party.

        11.  The  2^nd opposite party  had taken a stand that the complainant  is not a consumer since the transaction is for business purpose and also submitted the following points. The complainant  was given loan to the tune of Rs.7,00,000/- for the erection of the building and the rest of the sanctioned loan amount out of Rs.9,00,000/- was granted for the  working capital under overdraft facility. The complainant had hypothecated the machinaries and also had signed in the promissory note  for the loan sanctioned of Rs,7,00,000/- and the property was mortgaged by the complainant. The opposite parties had not given any assurance to the complainant for the 2^nd loan as alleged by the complainant. The complainant issued legal notice to the 1^st & 2^nd opposite parties is Ex B5. Ex.B4 is the reply of the 1^st  opposite party and Ex.B6 is the reply to  legal notice by the 2^nd opposite party.  A demand was made for the loan due repayable by the complainant to the tune of Rs.7,06,660/- as on 01.06.2015 and also for a sum of Rs.62,758/- outstanding for the working capital loan as on the same date. Insurance claim of Rs.1,23,000/- was credited in the bank account of the complainant by the 2^nd opposite party in his overdraft account on 03.06.2015, another insurance amount of Rs.24,808/- was also credited in the account of the complainant  and both were informed to the complainant as per Ex.B7 & Ex.B8. Statement of accounts of the complainant is Ex.B9 and Ex.B10 which shows the insurance amount is credited. Therefore there is no deficiency in service on the part of the 2^nd  opposite party  and hence the complainant  is to be dismissed.

            12.  The complainant in his prayer had sought  for the balance claim payable by the 1^st opposite party   a sum of Rs.9,00,000/- and compensation of an amount of  Rs.10,00,000/-  with interest by way of damages for deficiency in service by both the opposite parties and Rs.1,00,000/- for litigation expenses.

           13. The standard fire and special perils policy issued by the insurer covers on building and stock of bricks. 1^st opposite party had entered into contract of insurance with utmost good faith. Policy was issued based on the declaration given by the insured  complainant  through the 2^nd opposite party. The alleged stoppage of work as a result of the  letter dated 17.08.2014 in Ex.A7 is not reliable in view of the contradictory statement of the complainant  in his subsequent notice  as discussed earlier in para-1. The complainant had misrepresented by declaring the open shed as building. Therefore the repairs of existing A/C Tata sheet roof and replacement of iron angle estimated on the side of the complainant and replacement of brick work were not permitted since the issued policy as per Ex.B1 covers only building and stock and as per survey report by the surveyor appointed by 1^st opposite party damage had occurred only in the brick furnace which is not covered under the policy. Wet damaged bricks cannot be used for the purpose intended for and it will not fetch any salvage value as per the report in Ex.B2. There was no building in the Brick kiln warranting the reimbursement of the damages. There is no authenticity of photographs in Ex.A18 and it will not prove that there was a building at the work place of the complainant earlier and later it was damaged due to rains and it will not overweigh the report of the surveyor regarding the existence of the building. Under these circumstances complainant cannot attribute anything against the 1^st opposite party for the loss occurred to him and it is also not proved by the complainant that there is deficiency in service on the part of 1^st opposite party.

14. No proof is filed by the complainant to show  the alleged  promise by the 2^nd opposite party   to grant  the request for the additional loan for Rs.5,00,000/-.  It is argued on the side of the 2^nd opposite party  that as per banking  rules and regulations  loan cannot be granted  for a person who is more than 70 years old and therefore his request was not considered.   As argued on the side of 2^nd opposite party that the complainant would not have suffered any loss because of the 2^nd opposite party, as the 2nd opposite party   strictly acted upon the  rules as framed in the banking sector. Personal   allegations  made by the complainant  towards the bank officials is  construed  as it is  posed in order to hide the complainant’s  incompetency in  making  the repayment of loan. As per Ex.B11 the outstanding amount for the term loan was Rs.5,74,801/-+ unapplied interest and Rs.1,67,984/-+ unapplied interest on working capital account as on 29.02.2016 and the complainant  is  admittedly a defaulter, for which the  alleged burden thrown upon the opposite parties have not been proved by the complainant. Now as per Ex.B11, nonpayment of dues led to SARFASI notice and further action as the account of the complainant became NPA and a defaulter cannot file a complaint against the bank.   The reason for his stoppage of work due to non-sanctioning of loan by 2^nd opposite party  is not correct and the complainant  cannot find fault with the 2^nd opposite party  as there is no  deficiency in service on the part of 2^nd opposite party.

15. POINT NO.3:

In view of the observations in the above points, the complainant is not entitled for any amount from the opposite parties as there is no deficiency in service  by  both the opposite parties .The complaint is liable to be dismissed and accordingly it is dismissed.

In the result, this complaint is dismissed. No costs.                        

          Dictated to the Steno-Typist transcribed and typed by her corrected and pronounced by us on this 20^th day of August 2019.

 

MEMBER – I                                                                PRESIDENT

 

 

 

LIST OF DOCUMENTS FILED BY THE COMPLAINANT:

Ex.A1 dated 19.09.2013         No objection certificate from the fire department to run the brick chambers

Ex.A2 dated 20.09.2013         License to run the Brick chambers issued by Reddiyur  town Panchyath

Ex.A3  dated 14.12.2013        Bank Pass book issued by 2^nd opposite party

Ex.A4 dated NIL                     Sanction Memo issued by the bank

Ex.A5 dated 27.06.2014         Insurance Policy of the 1^st opposite party

Ex.A6 dated 04.08.2014         Request letter for claiming compensation

Ex.A7 dated 10.11.2014         Letter issued by the Surveyor

Ex.A8 dated 10.11.2014         Request letter to the Bank of Baroda

Ex.A9 dated 16.02.2015         Request letter to the Bank of Baroda

Ex.A10 dated 24.02.2015       Letter from Bank of Baroda

Ex.A11 dated 25.03.2015       Letter from Bank of Baroda

Ex.A12 dated 08.04.2015       Letter from Bank of Baroda

Ex.A13 dated 18.05.2015       Legal notice claiming damages and compensation

Ex.A14 dated 01.06.2015       Legal notice issued by the 2^nd opposite party

Ex.A15 dated 18.06.2015       Reply notice to the 2^nd opposite party

Ex.A16 dated 20.06.2015       Acknowledgement for receipt of notice

Ex.A17 dated NILL                 Particulars of los of income

Ex.A18 dated NILL                 Photos depicting the loss happened to the Bricks chambers

 

LIST OF DOCUMENTS  FILED BY THE  1^st OPPOSITE PARTY:

 

Ex.B1 dated NIL                     Policy Schedule

Ex.B2 dated NIL                     Survey Report of M/s. Smart Surveyors (For

                                                    occurrence dated 25.07.2014)

Ex.B3 dated Nil                       Survey Report of Mr.S.Raja (For

                                                     occurrence dated 21.10.2014)

Ex.B4 dated 03.06.2015         Reply sent by the 1^st opposite party to the complainant’s legal notice

 

 

LIST OF DOCUMENTS  FILED BY THE  2^nd  OPPOSITE PARTY:

 

Ex.B5 dated 18.05.2015                   Copy of legal notice issued by complainant

 

Ex.B6 dated 01.06.2015         Copy of reply to the legal notice sent to the complainant

 

Ex.B7 dated 03.06.2015         Letter from National Insurance regarding reply of the insurance amount

 

Ex.B8 dated 25.03.2015         Letter from Bank of Baroda to the complainant regarding insurance claim

 

Ex.B9 dated NIL                     Statement of Account of Nagarajan Bricks (Account No.06/0409)

 

Ex.B10 dated NIL                   Statement of Account of Nagarajan Bricks (Account No.04/70)

 

Ex.B11 dated 29.02.2016       Copy of recall notice sent to the complainant

 

                                     

 

MEMBER – I                                                               PRESIDENT