PER SHRI. S.M. RATNAKAR – HON’BLE  PRESIDENT

1)        By this complaint the Complainant has prayed that it be held and declared that the Opposite Parties are guilty of deficiency in service as well as unfair trade practices under the Consumer Protection Act, 1986 (referred to as the Act).  The Complainant has also prayed to direct the Opposite Parties to pay Rs.2,95,753/- towards loss incurred to the Complainant with interest @ 12% p.a. from the date of order till realization of the amount.  It is also prayed that the Opposite Parties be directed to pay Rs.50,000/- towards compensation for mental agony and cost of Rs.20,000/- towards the incidental expenses. 

2)        According to the Complainant, he is a consumer within the meaning and definition under Sec.2(1)(d) of the Act.  The Opposite Parties are guilty of deficiency in service and unfair trade practice under Sec.2(1)(g) and (iv) of the said Act.  It is alleged that the Opposite Party No.2 has sanctioned demand cash credit in favour of the Complainant to the tune of Rs.2 Lacs on July, 2001.  The Complainant had taken insurance policy of New India Assurance Co. Ltd., and he was satisfied for coverage of the said insurance policy.  In the year 2004 the policy was renewed for the period 2004-05 by the Opposite Party No.2 without consent and permission of the Complainant and it obtained the insurance policy from the Opposite Party No.1 bearing Policy No.251300/11/04/31000259 which was valid between 27/08/2004 to 26/08/2005.

3)        It is submitted that by the flood of 26/07/2005 the grain shop of the Complainant was fully affected.  The Complainant accordingly lodged the claim to the Opposite Party No.2.  The Opposite Party No.2 did not consider the claim of the Complainant positively within the reasonable time. The Complainant therefore, issued notice to Opposite Party No.1 through Advocate dtd.26/12/2005 and copy of it was also forwarded to Opposite Party No.2.  However, the Opposite Parties did not settle the claim and made some queries to the Opposite Party No.2 as per Exh.‘A’, dtd.22/11/2005.  It is submitted that therefore, the Complainant feels that he has been deceived by the Opposite Party No.1 as it did not consider the claim of the Complainant to which the Complainant is legally entitle.  It is further submitted that the Opposite Party No.2 is responsible for appointing such Insurer who is acting against the legitimate interest and rights of the Complainant. 

4)        According to the Complainant, lastly the Opposite Party No.1 had sanctioned an amount of Rs.44,762/- only against the sum insured to the tune of Rs.3,20,000/- towards the claim submitted by the Complainant to the tune of Rs.2,95,753/-.  The copy of the said letter of Opposite Party No.1, dtd.08/02/2006 is marked as Exh.‘B’.  It is submitted that the said offer given by the Opposite Party No.1 is unreasonable, arbitrary and not based on proper consideration.  The Complainant is not ready and willing to accept the said amount.  The Complainant thereafter also issued notice through his advocate dtd.26/04/2006 for reconsideration of his claim.  The copy of which is marked as Exh.‘C’.  It is contended that the Opposite Party No.1 did not reconsider claim of the Complainant and replied to the said notice.  The Complainant has therefore, approached to this Forum for the reliefs claimed in the para 1 of this complaint. 

5)        It is submitted that the Opposite Parties are responsible for deficiency in services.  The Opposite Party No.1 has not properly considered the claim of the Complainant and the Opposite Party No.2 had not tendered all the records stock statements of materials and other records of the Complainant’s shop with Opposite Party No.1.  It is therefore, submitted that both the parties are liable for the claim made in this complaint.

6)        The Opposite Party No.1 filed written statement and contested the claim.  It is submitted that the Complainant has claimed excessively high amount on the basis of bank statements which were apparently fabricated from the actual loss/stock that could have been damaged in the alleged flood.  It is contended that however, without prejudice to the aforesaid the Opposite Party No.1 assessed the claim despite non cooperation from the Complainant and Opposite Party No.2 at Rs.44,762/- and offered the same to the Complainant towards the full and final satisfaction of the claim.  The Complainant wrongfully declined the said offer of the Opposite Party No.1 which was made on good faith.

7)        It is admitted that the Opposite Party No.1 had issued Standard Fire Policy effective from 27/08/2004 to 26/08/2005 covering the stock to the extent of Rs.3,20,000/-.  It is contended that the Complainant had lodged the claim form dtd.19/08/2005 for the sum of Rs.2,95,753/- on account of loss of 17658 Kg. Grains (i.e. 176 bags of 100 Kg. each) Plus other items like sugar, oil, soap powder, dry fruits tea, masala, hair oil, tooth brushes, etc. as per list dtd.07/07/2005.  The copy of which is marked as Exh.‘I’.  It is contended that it transpired by the Opposite Party No.1 that the shop of the Complainant is admeasuring approximately 110 sq. ft. and it was practically impossible for such shop to have contained aforesaid huge stock.  The Opposite Party No.1 by considering the said fact and circumstances of the case assessed the loss to the tune of Rs.44,779/- and offered the same to the Complainant which he had declined to accept.  It is submitted the Opposite Party No.1 vide letter dtd.16/11/2005 addressed to the Complainant called upon him to furnish the requisite document to the Ld. Surveyor or else informed that the claim would be closed as “No Claim” within 15 days.  The copy of the said letter is marked Exh.‘II’.  It is contended that the Opposite Party No.1 by letter dtd.22/11/2005 also asked the Opposite Party No.2 to give explanation as regards the exorbitant claim made by the Complainant to the tune of Rs.2,95,753/-.  It was also requested to Opposite Party No.2 to give explanation that whether the stocks were specifically verified by the bank officials and whether the Complainant was submitting stock statements regularly.  The copy of the said letter is marked as Exh.‘III’.  It is contended that neither the Complainant nor Opposite Party No.2 offered any explanation to the above queries.  It is submitted that vide letter dtd.26/12/2005 addressed to the Advocate of the Complainant certain queries were made. The copy of which is marked as Exh.‘IV’.  It is contended that after forwarding discharge voucher of Rs.44,762/- to the Complainant, the Complainant could not produce any document to substantiate his claim with due explanation.  The copy of the letter dtd.08/02/2006 and discharge voucher are marked at Exh.‘V’. It is contended that the Complainant’ Ld.Advocate by letter dtd.26/04/2006 requested the Opposite Parties to reconsider the claim, but did not offer any explanation as regards alleged quantum of the claim qua the storing capacity of the shop.  It is contended that the Opposite Party No.1 vide letter dtd.03/07/2006 issued to the Opposite Party No.2 recorded that there was no response form the Complainant or the Opposite Party even sufficient time and opportunity were given to them to substantiate the claim and again forwarded discharged voucher in order to enable the Opposite Party No.1 to forward the cheque.  The copy of the said letter is Exh.VI.  It is contended that the Opposite Party No.1 is not guilty of any deficiency of service or unfair trade practice as alleged by the Complainant as it offered Rs.44,762/- as assessed by the surveyor towards full and final satisfaction of the Complainant’s claim.  It is contended that however, the Complainant wrongfully declined to accept the same.  It is thus, submitted that the complaint be dismissed with exemplary cost.

8)        The Opposite Party No.2 by filing written statement contested the claim.  It is contended that the Complainant has availed demand cash credit limit of Rs.2 Lacs and to secure the said facility the Complainant had executed various security documents in favour of Opposite Party No.2. The Complainant had hypothecated all the stocks of M/s. Jay Ambe Grains & General Stores.  The copies of the Hypothecation Deed and Supplemental Hypothecation Deed are marked at Exh.‘A’ & ‘B’.  It is contended that the Complainant failed to regularly maintain the demand cash credit account and therefore, the Opposite Party No.2 has filed Suit No.2429/2007 before the Hon’ble High Court, Bombay for recovery of outstanding amount of Rs.2,43,793.04 alongwith interest and cost.  It is contended that as per the clause of Hypothecation Deed the Complainant was under an obligation at all times during availment of facility from the Opposite Party No.2 to keep the hypothecated stocks of the shop of the Complainant insured with an Insurance Office approved by the Opposite Party No.2. The Complainant was also under an obligation to deliver to the Opposite Party No.2 the Insurance Policy duly assigned in favour of the Opposite Party No.2.  The Opposite Party No.2 denied the averments made in the complaint that without the consent and permission of the Complainant it changed the office of insurance in favour of Opposite Party No.1.  It is submitted that the Opposite Party No.1 is reputed Insurance Company and the same was considered to be among the best in the market.  It is contended that there was default on the part of the Complainant in keeping the hypothecated stocks insured as required under the terms of the security documents which resulted in the Opposite Party No.2 taking steps for ensuring the hypothecated stocks.  The Opposite Party No.2 had shown diligence in keeping the hypothecated stocks duly insured so as to secure the recovery of the dues payable by the Complainant to it.  It is denied that the Opposite Party No.2 was under any obligation to tender any records to the Opposite Party No.1 for the purpose of consideration of the insurance claim lodged with it in respect of the hypothecated stocks as alleged by the Complainant.  It is submitted that the Opposite Party No.2 as the assignee under the insurance policy is entitled to the proceeds under insurance policy but it is under no legal obligation to follow with the insurer or provide any documents to the insurer as regards the claim.  It is contended that however, the Opposite Party No.2 being interested in the proceeds of the insurance policy as being the assignee in respect thereof has vigorously followed with the Opposite Party No.1 and the Complainant and has furnished to the Opposite Party No.1 all records which were available with it.  It is thus, contended that the allegations made by the Complainant as regards non furnishing of records by the Opposite Party No.2 to the Opposite Party No.1 are without substance.  It is contended that the Opposite Party No.2 has been wrongly impleaded in this proceeding and therefore, the complaint against Opposite Party No.2 deserves to be dismissed.  The other allegations made in the complaint are specifically denied.   It is contended that the claim being vexatious under the provision of the Act be dismissed with compensatory cost.

9)        The Complainant has filed his affidavit.  The Opposite Party No.1 in support of written statement has filed affidavit of Divisional Manager of Opposite Party No.1- Shri. R. Raghu.  The Opposite Party No.2 filed affidavit of Anil Kumar Khanna, Chief Manager.  The Complainant has filed his written argument.  The Opposite Party No.1 submitted synopsis of argument.  The Opposite Party No.2 did not file written argument.  We heard the oral argument of the Ld.Advocate Shri. S.L. Mhatre for the Complainant and Ld.Advocate Shri.S.R. Singh for Opposite Party No.1. The Ld.Advocate for Opposite Party No.2 remained absent on 20/08/2013 even after issuing notice to him.    

10)      While considering the claim made by the Complainant it is undisputed that the policy issued by the Opposite Party No.1 was Standard Fire and Special Perils Policy.  It was valid for the period 27/08/2005 to 26/08/2005 for Rs.3,20,000/-.  It appears from the documents produced by the Opposite Party No.1 on 28/12/2011 before this Forum.  The Opposite Party No.1 appointed Dixit & Co. as Surveyors to assess the loss sustained by the Complainant to his shop due to flood dtd.26 & 27/07/2005.  The said Surveyor made survey of the Insured’s premises, Santacruz (E) on 12/08/2005.  In the report of the said Surveyor which is placed on record by the Opposite Party No.1 dtd.02/09/2005, it is mentioned that the shop of the Complainant is covered under insurance policy for last 8 years.  As per the report of the surveyor the occurrence of damage to the shop of the Complainant was caused due to flood and water logging in low line area due to heavy rain fall on 26 & 27/07/2005.  Surveyor also observed that the shop of the Complainant is situated in the low line area of Santacruz (E).  According to the Surveyor, after careful inspection and discussion with their representative and as reported by them that the said shops were totally under water upto about 10-12 ft. in height.  The neighbouring shops were also submerged under flood water.  All items such as, grains, sugar and other general eatable items were under water for several hours.  These items were badly damaged due to socking in the water for long time alongwith the documents, such as purchase bills, files, registers, bank statements and sales register, etc. were also completely submerged and could not be recovered.  According to the said Surveyor, the insured had submitted stock statement as on 30/06/2005 which was submitted to the bank worth Rs.2,95,753/- for Kirana & General Eatable Items.  In the Survey Report it is also mentioned that the Insured had submitted the copy of stock statement as on 30/06/2005 submitted to Bank of India, Dadar Branch, duly certified by the Bank.   The Surveyor alongwith his report also filed copy of the letter submitted by the Complainant to the Bank of India dtd.04/07/2005 in which it is mentioned that the Complainant had given stock position to the Bank on 04/07/2005 with the list of the items.  The said letter was acknowledged by the said Bank by putting its seal on it.  The Complainant submitted the report to Tahasildar on 09/08/2005 stating that he sustained loss to the tune of Rs.3,30,753/- towards food grains materials including furniture, etc. and also lost the bills and important documents of his shop.  The Surveyor assessed the loss due to flood water to the tune of Rs.2,38,820/- as per the criteria provided under the Insurance Act and also observed that as the sum insured is Rs.3,20,000/- which is adequate to cover the loss therefore, there is no under insurance in this case.  It is pertinent to note that upon receiving the Survey Report by the Opposite Party, the Opposite Party No.1 did not call any explanation from the Surveyor as to how he had assessed the loss to the tune of Rs.2,38,820/-.  But by letter dtd.16/11/2005 filed at Exh.‘II’ to the written statement  informed the Complainant that the Opposite Party confirmed with the appointed Surveyor and it had information from the surveyor that the Complainant has not still submitted the complete set of requirements to him as a result of which the Surveyor is not in a position to finalize the Surveyor Report. We find that when the Surveyor had submitted the report dtd.02/09/2005 which is placed on record by the Opposite Party No.1 as discussed above wrongly communicated to the Complainant that he did not submit the complete set of requirements to the Surveyor.  The said letter is after 2 months of submission of Survey Report. We therefore, find that the correspondence which is relied by the Opposite Party filed with written statement cannot be relied upon. Addendum to survey report placed on record dtd.30/11/2005 wherein it is shown that the assessment of the net loss to the tune of Rs.44,799/- by the same Surveyor - Dixit & Co.  In the said addendum to survey Report No.3539/2005 which earlier submitted on 02/09/2005 there is no mention for what reason this addendum report has been filed on 30/11/2005.  In the present case the Opposite Party No.1 as discussed above did not call any explanation from the Surveyor – Dixit & Co. or also did not appoint second Surveyor which the Opposite Party No.1 could appoint under the provisions of Insurance Act, 1938.  As per the provisions of Sec.64 UM of the Insurance Act, there is no prohibition for appointment of Surveyor by Insurance Company but while doing so, the Insurance Company has to give satisfactory reasons for not accepting the report of the first Surveyor and need to appoint second Surveyor.  In the present case the Opposite Party No.1 did not bring on record as to how the addendum report was filed by the same Surveyor on 30/11/2005 when he had already assessed the loss sustained by the Complainant to the tune of Rs.2,38,820/- and that too on verification of stock statement as on 30/06/2005 submitted by the Complainant to Opposite Party No.2 which was dully certified by it.  In our view the defence raised by the Opposite Party No.1 that the shop of the Complainant is of 110 Sq.Ft. and could not have stored such huge stock quantity mentioned in the claim form by the Complainant and therefore, the net assessed loss sustained by the Complainant assessed to the tune of Rs.44,779/- and the Opposite Party No.1 sent claim settlement voucher of that amount towards full & final settlement which the Complainant did not accept and therefore, the Complainant is not entitled for any relief cannot be accepted.  In our view without showing any fault or any discrepancy in the first report of the Surveyor, the Opposite Party No.1 has wrongly tried to settle the claim made by the Complainant as full & final settlement by offering Rs.44,779/-.  In our view, the Opposite Party No.1 by keeping aside the first survey report of the same Surveyor wrongly offered the amount of Rs.44,779/- and thereby adopted unfair trade practice against the Complainant.  We hold that the same can be considered as deficiency in service.  We also hold that the first survey report is based on the Police Panchanama and the circumstances which the Surveyor had considered in his report and as such the Opposite Party No.1 without giving any cogent reasons improperly kept aside the said report and wrongly offered an amount of Rs.44,779/- to the Complainant. In our view the Complainant is therefore, entitled to an amount of Rs.2,38,820/- as assessed by the Surveyor of Opposite Party No.1 vide his report dtd.02/09/2005.  The Complainant had made some grievances against Opposite Party No.2 and prayed for the reliefs against both the parties, but in our view the reliefs as regards the damages sustained due to flood and covered under the insurance policy issued by Opposite Party No.1 can be entertained only against Opposite Party No.1 and no reliefs can be granted in favour of the Complainant against the Opposite Party No.2.  We therefore, hold that the complaint filed against the Opposite Party No.2 is liable to be dismissed with no order as to cost.  In our view the Opposite Party No.1 is liable to pay an amount of Rs.2,38,820/- to the Complainant with interest @ 9% p.a. from the date of order of this complaint till its realization and compensation towards deficiency in service and mental agony caused to the Complainant to the tune of Rs.25,000/- and cost of Rs.8,000/-.  Hence, the following order is passed –

                                                                                O R D E R

i.                    Complaint No.312/2007 is partly allowed against the Opposite Party No.1.

ii.                 The complaint is dismissed with no order as to cost against the Opposite Party No.2

iii.               The Opposite Party No.1 is directed to pay an amount of Rs.2,38,820/- (Rs. Two Lacs Thirty Eight Thousand Eight Hundred Twenty Only) towards deficiency in service with interest @ 9% p.a. from the date of this order till its realization to the Complainant.   

iv.            The Opposite Party No.1 is directed to pay Rs.25,000/- (Rs.Twenty Five Thousand Only) as compensation for deficiency in service and mental agony suffered due to deficiency in service to the Complainant

v.               The Opposite Party No.1 is directed to pay an amount of Rs.8,000/- (Rs.Eight Thousand Only) towards the cost of this proceeding to the Complainant. 

vi.               The Opposite Party No.1 is directed to comply the aforesaid order within one month from the date of receipt of this order.

vii.             Certified copies of this order be furnished to the parties.