This complaint coming up before us for final hearing on 13-05-14                                in the presence of Sri K.A. Prasad, advocate for complainant;                         Sri S.A.Khadar, advocate for opposite party; upon perusing the material on record, and having stood over till this day for consideration this Forum made the following:-

O R D E R

Per Sri A. Hazarath Rao,  President:-      The complainant filed this complaint under section 12 of the Consumer Protection Act seeking payment of Rs.15,00,000/- being value of stock insured: Rs.3,00,000/- towards loss of future business and interest; Rs.1,00,000/- towards compensation for mental agony; Rs.90,000/- towards expenditure besides costs.

2.      In brief the averments of the complaint are here under:

The complainant is doing business in cotton under the name and style of M/s. Deep Traders since 1996 as proprietor. The complainant used to purchase kappas of various qualities, gins them in to lint in various cotton ginning mills taken on hire/lease basis in Guntur.  The complainant obtained Insurance Policy from the opposite party in respect of the stock located in 1. M/s. Datta Sai Cotton Muills, Dr.No.19-9-176/p, Datta Estates, NH-5, Etukur By-pass Road, Guntur, 2. M/s. G.K.M.S. Cotton Pressing Pvt. Ltd., Near 5^th Mile, Kurnthala Village, Vatticherukuru Mdl., Guntur District, 3/ M/s. Koteswara Agro Products, 5^th mile, Kornepadu Village, Vatticherukuru Mdl., Guntur District.  The Insurance Policy 550504/11/10/31/00000773 issued by the opposite party   covered the period from 29-12-10 to 28-06-11.  The complainant in regular process sent 260 cotton lint boras to M/s. G.K.M.S. Cotton Pressing Pvt.Ltd., for pressing purpose on 13, 14 and 15-1-2011.  On 16-01-11 at about 8:40 p.m., fire accident took place in M/s. G.K.M.S. Cotton Pressing Pvt.Ltd due to Electric shock resulting  damage to the stock belonging to M/s. Sri Kamakshi Cotton Mills, M/s. Lakshmi Trading Company, M/s. Madhavi Cotton Traders and M/s. Sri Seetharama Cotton Traders also.  The SHO, Vatticherukuru P.S. registered said accident as crime No.5/2011 on receiving information.  Guntur fire brigade people put off the fire and issued a certificate on 16-03-11. The complainant informed the opposite party about the fire accident and damage to his stock worth of Rs.36,58,000/- with a request to settle claim.  The complainant submitted  relevant papers to the opposite party.  The opposite party appointed one V. Balaji a surveyor for assessing the loss. The surveyor verified all the relevant records and submitted reports assessing the damage. The opposite party on 4-10-12 addressed a letter to the complainant seeking certain clarifications who in turn clarified them.  The opposite party on 31-03-13 repudiated complainant’s claim alleging inaccurate accounts.  The complainant maintained accounts regularly. The surveyor and chartered accountant  appointed by the opposite party verified accounts and found them correct.  The said repudiation is illegal, arbitrary and capricious.  The complainant could not carry on business subsequently as the opposite party failed to settle the claim in time and sustained loss of Rs.3,00,000/-.  The complainant sustained mental agony and suffering on account of attitude of the opposite party.  The complainant incurred Rs.90000/- towards conveyance, accommodation and correspondence in attending to the O/o the opposite party, there surveyor, Chartered accountant and others.  The opposite party rejecting the complainant’s claim without any valid reason amounted to deficiency in service. The complainant therefore be allowed. 

3.      The contention of the opposite party in brief is thus:

The Complainant submitted certified copies of bales stock register, boras stock register pertaining to G.K.M.S, Cotton Pressing Pvt. Ltd.,   

The complainant manipulated documents to inflate the claim and thus misrepresented misdiscribed and thus violated terms and conditions of the policy.  The complainant in his statutory annual accounts for the Financial Year 2010-11 have shown the stock position of Kappas and Lint as nil.  The opening balance of Kappas and Lint was shown as nil for the period 01-04-10 to   17-01-11.  The complainant did not maintain accounts properly.  Some of the vehicle numbers mentioned in various register as carrier of goods were inactive as per RTA website.  Bales stock register and Boras stock register submitted by the complainant towards proof of existence of stock in the fire affected premises are manipulated.  The complainant in his letter dt:11-10-12 admitted that during February, 2010 some of the farmers have brought Kappas to their ginning mill and at that time price was not finalized and no entries were passed in the books of account before 31-03-10,   meanwhile, Farmers have sent kapas for ginning and lint received from ginning was sent to GKMS cotton press for pressing, the same was sent on complainant’s letter head, as the lint was sent on the complainant’s letter head GKMS cotton press has recorded these 102 bales press in the complainant’s fire name and further 44 bales were pressed by GKMS Cotton Pressing Pvt. Ltd., from 58 boras of stock sent on the complainant’s letter head dt.22-04-10 in total bales stock as on 29-04-10 is 146 bales and during the month of May, 2010, the price of Kappas purchased from riots was finalized with riots and necessary accounting books were passed in the books of account and all the 146 bales of cotton lint were sold on 08-06-10, all the cotton bales were sold out before the fire accident and the stock kept by the complainant premises of GKMS cotton Pvt. Ltd., does not have proper account and does not come under the purview of this policy.  The opposite party had rightly repudiated complainant’s claim for furnishing improper accounts to have wrongful gain and thus did not commit any deficiency of service. Rest of allegations contra mentioned in the complainant are all false and the complainant has prove them.  The complainant therefore be dismissed.

4.      Ex.A-1 to A7 on behalf of the complainant and Ex.B1 to B14 on behalf of the opposite party were marked.

5.      Now the points that arose for consideration in this case are these:

1. Whether the repudiation of claim by the opposite party is just and reasonable and if so not amounted to deficiency of service?
2. Whether the complainant is entitled to Rs.3,00,000/- towards loss of business?
3.  Whether the complainant is entitled to Rs.1,00,000/- towards mental agony?
4. Whether the complainant is entitled to Rs.90000/- towards expenses?
5. To what relief?

6.      Admitted facts in this case are these:

1. The opposite party issued the policy 550504/11/10/31/00000773 and it was in force as on the date of accident and covered the place of accident.
2. The complainant’s stock gutted to fire in accidental fire.
3. The cause of fire accident was due to electrical short circuit.
4. The complainant submitted claim form along with documents.
5. The opposite party appointed surveyor, who in turn visited the scene of offence, assessed the loss and submitted report.
6. The opposite party repudiated complainant’s claim.

7.      POINT NO.1:- The opposite party vide Ex-A6 repudiated complainant’ claim alleging inaccurate accounts. To substantiate its claim the opposite party relied on Ex-B1 i.e. copy of subject insurance policy with terms and conditions. Clause B deals with general conditions and clause (1) says that this policy shall be voidable in the event of misrepresentation, misdescription, or non-disclosure of any material particular. The misrepresentation, misdescription, or non-disclosure of any material particular in our consideration should be while submitting proposal to obtain insurance. Neither of the parties did choose to produce or cause production of proposal form given by the insured while obtaining policy. In the absence of proposal form it can not be said that the complainant made a misrepresentation, misdescription, or non-disclosure of any material particular while obtaining the policy in question. The said contention of the opposite party therefore in our consideration is devoid of merit.

1. The subject policy covered the period from 29/12/2010 to 28/6/2011 and fire broke out 16/1/11. The period of insurance was spread over to two financial years i.e., 2010-11 & 2011-12. The subject policy of insurance was taken during middle of the financial year 2010-11 and the subject claim arose during the financial year 2010-11. Under Ex-A4 the opposite party sought certain clarifications from the complainant after the surveyor submitting report.  Ex-A5 is copy of letter addressed by the complainant to the opposite party after receipt of Ex-A4. For better appreciation Ex-A5 is extracted below:

        “In response to your letter dated 014-10-12, I bring to your notice the following information for your kind perusal:

1. During February, 2010 some of the Ryots has brought Kappas to our Ginning Mill.  At that time the price was not finalized because of quality difference.  Pending finalization of price, no entries were passed in the books of account before 31-03-10.
2. In the meanwhile the Ryots has sent the Kappas for ginning.  Lint received from ginning was sent to GKMS Cotton Press for pressing and the same was sent on our letter head.  As the lint was sent on our letter head, GKMS Cotton Press has recorded, these 102 bales pressed, in our firm name. 
3. Further another 44 bales were pressed by GKMS Cotton Pressing Private Limited from the 58 Boras of stock sent on our …… on 22-04-10.  In all the total bales stock as on 29-04-10 is 146 bales. 
4. During month of May, 2010 the price of Kappas purchased from Ryots was finalized with Ryots and necessary accounting were passed in the books of account. 
5. All the 146 bales of Cotton Lint were sold on 08-06-10.
6. This fact was not brought to your notice earlier because the said stock was sold out well before the fire accident.

                                                         (Emphasis supplied) 

Considering this I request your good self to kindly process my claim as the discrepancy is due to my ignorance and not intentional.

9.   Neither of the parties produced or cause production of claim form to find out the truth or other wise of false claim. In the absence of claim form before this forum, the contents of Ex-A6 lead us to draw an inference that the complainant included those sold 146 bales of cotton lint also included in his claim. Ex B-1 is copy of subject insurance policy with terms and conditions. The surveyor appointed by the opposite party in his report estimated the net loss at Rs11,40,412/-after verifying the records. In order to over come that report the opposite party relied on clause (8) of Ex-B1.   Clause (8) of Ex-B1 says that if the claim be in any respect fraudulent, or if any false declaration be made or used in support thereof or if any fraudulent means or devices are used by the insured or any one acting on his behalf to obtain any benefits under this policy shall be forfeited.  To decide whether inclusion of those 146 bales of sold cotton is fraudulent or intentional requires a lot of evidence and elaborate trial. In addition to it the parties did not place sufficient material even to consider prima-facie. For want of material particulars we can not hold that the opposite party committed deficiency of service. The complainant is at liberty to approach competent forum for redressal of his remedy. We therefore answer this point accordingly.

10. POINTS NO.2 to 4 :  In view of our  above findings the complainant in our consideration is not entitled to those reliefs. We therefore answer these points against the complainant.  

11. POINT NO.5:- In view of the above findings the complaint is dismissed with out costs. The complainant is at liberty to approach competent forum for redressal of his remedy.

Typed to my dictation by Junior Stenographer, corrected by us and pronounced in the open Forum dated this the 31^ST day of May, 2014.

Sd/-XXX                                      Sd/-XXX                                     Sd/-XXX

MEMBER                                  MEMBER                                 PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

For opposite party:-

                                                                                      Sd/-XXX                        

                                              PRESIDENT                                                                                                                                                                                                                                               

NB:   The parties are required to collect the extra sets within a month after receipt of this order either personally or through their advocate as otherwise the extra sets shall be weeded out.