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

And

         Smt. S.Nazeerunnisa, B.A., B.L., Lady Member

Friday the 10^th day of February, 2012

C.C.No.83/2011

Between:

P.Sarvothama Reddy, S/o.P.Rami Reddy,Proprietor of Sree Guru Krupa Lodge,

Opp.APSRTC Bus Stand, S.Y.No.29/A,Mantralayam Post and Mandal - 518 345,Kurnool District.

    …Complainant

                                       -Vs-

1. M/s.New India Assurance Company Limited,Represented by its Branch Manager,

   D.No.19/19, 20/21, Municipal Main Road, Adoni Post - 518 301, Kurnool District.

2. State Bank of India, Represented by its Branch Manager,        Bank is situated in Mantralayam Temple premises,

   D.No.3-159, Mantralayam Post - 518 345, Kurnool District.            

               ....Opposite ParTies

This complaint is coming on this day for orders in the presence of Sri D.Kumara Swamy, Advocate for complainant and opposite party No.1 called absent and Sri M.Parameshappa, Advocate for opposite party No.2 and upon perusing the material papers on record, the Forum made the following.

                                     ORDER

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

C.C. No. 83/2011

1.     This complaint is filed under section 12 of C. P. Act, 1986 Praying to direct the opposite parties:-

1. To pay assured amount of Rs.7,25,000/- with interest;

1.  To pay Rs.10,000/- as the complainant suffered lot for the last nine months;

And

1.  To pay costs of the complaint;

And

1.  To grant any relief as the Honourable Forum deems fit and proper in the circumstances of the case.

2.    The case of the complainant in brief is as under:- The complainant is the proprietor of Sree Guru Krupa Lodge, Mantralayam.  Opposite party No.2 bank granted a loan of Rs.7,25,000/-.  Opposite party No.1 issued the policy covering the risk of the lodge for Rs.7,25,000/-.  OP.No.1 issued policy bearing No.610702/11/09/11/00000244.  The period of the policy is from 02-10-2009 to 01-10-2010.  Due to the floods from 30-09-2009 to 03-10-2009 the complainants lodge with furniture, material building was damaged.  The complainant sustained huge loss.  The complainant informed about the loss to opposite party No.1 through opposite party No.2.  The surveyor was appointed by opposite party No.1.  The surveyor assessed the loss and collected relevant documents.  The complainant approached opposite party No.1 with a request to settle the claim but opposite party No.1 postponed it.  In the month of July, 2010 the complainant received a letter from opposite party No.1 where in it is mentioned that the claim was closed as the date of loss is prior to risk period.  Opposite party No.1 closed the claim illegally.    Hence the complaint.

3.     Opposite party No.1 set exparte.

Opposite party No.2 filed written version stating that the complaint is not maintainable.  The complainant obtained a loan of Rs.6,90,000/- from the bank on 20-12-2007 and executed an agreement of loan cum hypothecation.  The complainant insured his lodge for Rs.7,25,000/- and obtained the policy. The entire Mantralayam Village was affected with floods at 1.00 A.M. on 02-10-2009.    The premium amount sent by opposite party No.2 bank was received by opposite party No.1.  It is the duty of opposite party to settle the claim of the complainant.  The bank is not liable to pay any compensation to the complainant.  The complaint is liable to be dismissed.

 4.    On behalf of the complainant Ex.A1 and Ex.A2 are marked and sworn affidavit of the complainant is filed.  On behalf of the opposite party No.2 Ex.B1 to Ex.B9 are marked and sworn affidavit of the opposite party No.2 is filed.

5.     Complainant and opposite party No.2 filed written arguments.

6.     Now the points that arise for consideration are:

1. Whether there is deficiency of service on the part of Opposite Parties?

1. Whether the complainant is entitled for the reliefs as prayed for?

1. To what relief?

7.      POINTS i and ii:- Admittedly the complainant is running Sree Guru Kurpa Lodge in Mantralayam Village and the said lodge was insured for Rs.7,25,000/-.  Ex.A1 is the policy issued by opposite party No.1 in favour of the complainant.  It is stated by the complainant that he took a loan of Rs.7,25,000/- from opposite party No.2.  According to the opposite party No.2 bank the complainant availed loan of Rs.6,90,000/- on 20-12-2007.  Opposite party No.2 bank filed Ex.B1 hypothecation agreement where in it is mentioned that the complainant obtained loan of Rs.6,90,000/-.

8.     It is the case of the complainant that his lodge and material was damaged due to floods from 30-09-2009 to 03-10-2009, that the opposite party No.1 did not pay any amount and the claim was closed illegally stating that the date of loan was prior to risk.  Ex.A2 is the letter addressed to the complainant by opposite party No.1.  The complainant in his affidavit stated that there were floods from 30-09-2009 to 03-10-2009, and he sustained loss.   Opposite party No.2 filed Ex.B4 Certificate issued by Tahsildar Mantralayam.  It is mentioned in Ex.B4 that opposite party No.2 bank was badly affected with flood water on 02-10-2009 at 1.00 A.M.  It is mentioned in Ex.A2 that the complainant sustained loss prior to risk.  Ex.A1 is the policy issued by opposite party No.1 in favour of the complainant.  It is mentioned in Ex.B1 that the policy commenced at 8.33 hours on 02-10-2009.  As seen from Ex.A2, it is the case of opposite party No.1 that by evening of 01-10-2009 the Mantralayam Town was inundated.  The date on which the building of the complainant was affected with flood water is crucial.  In Ex.B4 Certificate issued by Tahsildar, Mantralayam there is no mention that the Mantralayam Town was affected in the flood water on 30-09-2009 and 01-10-2009.  There is a clear mention that the Mantralayam Town was affected with flood at 1.00 A.M. on 02-10-2009.  The contention of the opposite party No.1 that the building of the complainant was damaged prior to 02-10-2009 cannot be accepted.  Merely because there was heavy rain in Mantralayam area on 30-09-2009 and 01-10-2009 it cannot be said that the building of the complainant was damaged prior to 02-10-2009.  It is clearly stated in the affidavit filed in support of opposite party No.2 that the Demand Draft towards premium amount was handed over to opposite party No.1 at 8.00 A.M. on 01-10-2009.  It is submitted learned counsel appearing for the complainant that the policy becames operative from the date of commencement.  In support of his contention he relied on a decision reported in [1995] 2 CPR 40.  The said decision was rendered basing on the Supreme Courts decision reported in New India Assurance Company Limited (Versus) Ram Dayal and others.  In the said decision the Apex Court held that when the policy is taken on a particular date, its effectiveness is from the commencement of the date.   In the present case also sEx.A1 policy commenced on 02-10-2009.  It is deemed to have commenced from 00 hours of 2^nd October. 2009.  As already stated the entire town of Mantralayam was affected with flood water on 02-10-2009.  Ex.A1 policy was in force on 02-10-2009 when the building of the complainant was damaged. The contention of opposite party No.1 that the flood occurred prior to 02-10-2009 and that it is not liable to pay any amount to the complainant it is not just and proper.

9.     Opposite party No.2 is the bank.  It is argued by the learned counsel appearing for the opposite party No.2 that the bank is not under obligation to get the policy renewed.  In support of its contention the bank filed Ex.B2 arrangement letter between the complainant and bank where in clause 6, it is stated that the renewal of the policy should be done by the borrower.  The learned counsel appearing for the opposite party No.2 also cited a decision of National Commission in First Appeal No.272/2010 (Shri Subhash Chand Jain, Late Shri Hiralal Jain, United India Insurance Company Limited and Bank of Maharashtra), where in it is held that it is not obligatory of the bank to get policy of the borrower renewed.   Merely because bank did not send premium to renew the policy to opposite party No.1, it cannot be held responsible.  Ex.A1 policy was issued by opposite party No.1 Insurance Company.  The building and furniture of the complainant was damaged due to floods on 02-10-2009 when the policy was in force.  The opposite party No.1 did not pay any amount to the complainant.  There is deficiency of service on the part of the opposite party No.1. 

10.    Admittedly the lodge of the complainant was insured with opposite party No.1 insurance company under Ex.A1 policy for Rs.7,25,000/-. The complainant did not place any documentary evidence showing the actual loss sustained by him.  There is also no surveyors report.  The bank granted a loan of Rs.6,90,000/-.  As there is no material on record showing the actual loss sustained by the complainant we think it is just and proper to direct the opposite party No.1 to pay an amount of Rs.69,000/- to the complainant.

11.    In the result, the complaint is partly allowed directing the                                      opposite party No.1  to pay an amount of Rs.69,000/- to the complainant within one month from the  date of the order along with cost of Rs.500/-.  The complaint against opposite party No.2 is dismissed.

        Dictated to the stenographer, transcribed by her, corrected and pronounced by us in the open bench on this the 10^th day of February, 2012.

  Sd/-                                    Sd/-                                 Sd/-

MALE MEMBER                      PRESIDENT                 LADY MEMBER

              APPENDIX OF EVIDENCE

                                    Witnesses Examined

For the complainant : Nil                 For the opposite parties : Nill

List of exhibits marked for the complainant:-

Ex.A1                Photo copy of policy bearing

No.610702/11/09/11/00000244.

Ex.A2.       Letter dated 07-07-2010 by opposite party No.1 to

                complainant.

List of exhibits marked for the opposite parties:-

Ex.B1                Photo copy of Agreement of Loan-Cum-Hypothecation

                dated 20-12-2007.

Ex.B2                Photocopy of Arrangement Letter dated 20-12-2007.

Ex.B3                Statement of Account No.30296862892 of the

                complainant dated 10-09-2011.

Ex.B4                Photo copy of Certificate issued by Tahsildar,

                Mantralayam dated 17.06.2010.

Ex.B5                Office copy of Letter dated 18-04-2010.

Ex.B6                Photo copy of Statement showing transfer

                transactions dated 01-10-2009.

Ex.B7                Photo copy of Demand Draft No.791558 for

 Rs.60,523/- dated 01-10-2009.

Ex.B8                Photo copy of Fax Massage from S.B.I., Mantralayam

                dated 02-10-2009.

Ex.B9                Photo copy of Fax Massage of S.B.I., Adoni

dated 04-12-2010.

  Sd/-                                  Sd/-                                    Sd/-

MALE MEMBER                 PRESIDENT                   LADY MEMBER

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

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

Copy to:-

Complainant and Opposite parties  :

Copy was made ready on             :

Copy was dispatched on               :