KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION

VAZHUTHACAUD, THIRUVANANTHAPURAM

C.C. No.37/2016

JUDGEMENT DATED: 22.11.2023

PRESENT:

COMPLAINANTS:

(by Adv. N. Satheeshkumar)

Vs.

OPPOSITE PARTIES:

(by Adv. V. Manikantan Nair)

JUDGEMENT

HON’BLE JUSTICE SRI. K. SURENDRA MOHAN : PRESIDENT

This is a complaint filed under Section 12 of the Consumer Protection Act, 1986.  This complaint is filed claiming a compensation of Rs.81,00,000/-(Rupees Eighty One Lakhs) from the opposite parties for losses sustained through fire.  According to the complainant, though there was a valid insurance policy covering the mishap, his claim has been repudiated by the opposite parties.  Therefore, deficiency in service is alleged against them.  The facts and circumstances under which this complaint is filed are summarized hereunder:

          2.       The 1^st complainant is a partnership firm.  Complainants 2 to 5 are the Partners of the 1^st complainant’s firm.  2^nd complainant is the Managing Partner of the firm.  1^st complainant is engaged in the business of distribution of Pharmaceuticals and allied goods.  According to the complainants, their business was flourishing day by day and had touched a peak of rupees six crores turnover in the year 2012.  The business of the complainants was very brisk and profits were also soaring.  Their business was being conducted from a building by name ‘Govindam’ bearing Door No.TMC/28/124/2 of the Thrissur Corporation.

          3.       For the purpose of securing the pharmaceutical goods stored in the business premises the complainants have been insuring the goods and the premises with the opposite parties against risks including fire, earthquake and other natural disasters from the year 2008 onwards.  The policy of insurance was being renewed from time to time and the last policy was taken on 12.07.2013 with policy no.441106/11/2014/113 for a period commencing from 15.07.2013 to midnight 14.07.2014.

          4.       It is further stated that, with the growth of their business, the accommodation in the building ‘Govindam’ was found to be grossly insufficient for their requirements.  Therefore, they shifted their business to a suitable premises, TMC No.10/725(11), Chiramel Towers, Pallikkulam Road, Thrissur.  The entire business operations of the complainants along with the stock in trade were shifted to the new premises by the complainants.  The business operations of the complainants commenced in the newly shifted building w.e.f. 30.09.2013.  The fact of shifting of their business was duly intimated to the opposite parties vide letter dated 29.09.2013 which was handed over to the agent of the opposite parties, Smt. Geetha Krishnankutty who had endorsed and acknowledged receipt of the said notice on 29.09.2013 itself. 

          5.       Accordingly, the complainants commenced their business in the new premises on 30.09.2013.  To the utter shock and dismay of the complainants, a fire broke out in the new premises of the complainants during the midnight of 01.10.2013.  The fire was of such a nature that in spite of the best efforts of the firefighting agents, it could not be put out expeditiously.  By the time the fire was put out, the entire goods stored, the furniture, fixtures, records, documents, computers and all other accessories required for the business had been gutted ad destroyed.  Nothing was left for recovery and everything had been burned. The documents pertaining to purchase, the stock registers, the computers for accounting and all other documents were completely destroyed in the fire.  Only a backup of the stock register was available with the Accountant stored in a pen drive.  The complainants suffered heavy losses because of the fire.

          6.       The 1^st complainant submitted a claim before the opposite parties in respect of the losses and damages sustained by them on account of the fire that had occurred in the said building.  The total loss claimed was Rs.61,00,000/-(Rupees Sixty One Lakhs).  The opposite parties deputed a surveyor and loss assessor to estimate the losses sustained by the complainant.  As required by them, the complainants had produced the documents available with them for the purpose of processing their claim.  A copy of the stock register showing the stock available in the premises of the 1^st complainant was also produced before the surveyor.  The surveyor assessed the loss at Rs.58lakhs.

          7.       In spite of the above, after a lapse of more than 1½ years, the claim of the complainants was repudiated by the opposite parties on 02.07.2015.  the reasons stated for such repudiation were firstly, that the complainants had not informed the opposite parties about the transfer of the stock and business from the original premises to the new business premises.  Secondly, that the shop to which the 1^st complainant had shifted their business had been provided with a temporary floor at a height of eight feet from the floor level for which the Corporation has not given sanction.  The minimum floor height as per the Corporation requirement was three metre.  The floor caused obstruction to the firefighting operations and prevented the free escape of smoke and caused contamination on the mission packs and it raised the internal temperature inside the main hall during the incident thereby causing more damage.

          8.       According to the complainant, the shifting of the 1^st complainant’s business premises was duly intimated to the opposite party through the agent of the 1^st opposite party, Geetha Krishnankutty, on 29.09.2013, prior to the occurrence of the fire, but ignoring the same, after knowing about the occurrence of the fire, with a view to avoiding the liability in terms of the policy conditions, the opposite parties falsely informed the 1^st complainant that they had received the letter dated 29.09.2013 only on 03.10.2013.  The said contention, according to the complainant is an afterthought.  The knowledge of any agent duly recognised by the principal on his behalf would tantamount to knowledge of the principal.  On the letter dated 29.09.2013, Geetha Krishnankutty had signed and duly acknowledged receipt of the same.  The failure of the opposite party to pay compensation to the complainants amounts to deficiency in service for which a compensation of Rs.10,00,000/-(Rupees Ten Lakhs) is claimed and a further amount of Rs.10,00,000/-(Rupees Ten Lakhs) for the loss of business consequent to the repudiation to their claim.  Thus, they claim a total amount of Rs.81,00,000/-(Rupees Eighty One Lakhs) with interest @10% per annum from 01.10.2013 till date of realisation.

          9.       The complaint is contested by the opposite parties who have filed a common version.  According to them, the complainant is not a consumer as defined under Section 2(1)(d)(ii) of the Consumer Protection Act, 1986.  The said definition excludes a person who avails services for any commercial purposes.  In paragraph 2 of the complaint itself it is stated that the business of the complainant was prospering day by day and it had reached a peak of Rupees six crores turnover in the year 2012.  It is further stated that the business was brisk and the profits were also soaring.  It is clear from the above that, the complainants were involved in commercial activities.  Therefore, they are not consumers under the Consumer Protection Act.  The opposite party admitted that they had issued a policy covering risks against fire, earthquake etc. for the building bearing No.TMC/28/124/2 of the Thrissur Corporation by name “Govindam”.

          10.     The averment of the complainant that the shifting of the business to the new premises had been duly informed to the opposite parties by a letter dated 29.09.2013 is denied by the opposite parties.  According to them the letter dated 29.09.2013 was handed over to Smt. Geetha Krishnankutty only on 03.10.2013 and was received by the opposite parties on the same day itself.  It is a letter created by the complainants and ante-dated to make it appear that such intimation had been given on 29.09.2013 itself.  Further, such intimation ought to have been given directly to the opposite parties and not to the agent.  Such intimation could have been given either over phone or through e-mail, SMS or fax or by sending a letter directly to the opposite parties.

          11.     The nature of the fire that caused losses to the complainants and other details are not known to the opposite parties.  After receiving the claim intimation at the 2^nd opposite party’s office, Sri. P. Rajan, a licensed surveyor was deputed for a preliminary survey on 03.10.2013 itself and he reported the damage caused by fire on 03.10.2013 and 04.10.2013.  He submitted a preliminary report on 07.10.2013.  Thereafter, the opposite parties deputed Mr. K.A. Varunni of M/s Zanders, General Insurance Surveyors to assess the loss and he submitted his final survey report dated 28.12.2013 to the opposite parties.  As per the final report, the loss assessed by the surveyor was Rs.58,68,306/-(Rupees Fifty Eight Lakhs Sixty Eight Thousand Three Hundred and Six).  They have reported that the complainants had submitted a claim for Rs.61,00,000/-(Rupees Sixty One Lakhs) as the loss sustained by them on account of the fire.  It is specifically averred that the letter dated 29.09.2013 was subsequently created and handed over to Geetha Krishnankutty with her connivance to make it appear that the intimation regarding the change of premises had been given prior to the occurrence of the fire.  The complainants had forced the agent to make such an endorsement only to establish that knowledge of the agent would tantamount to knowledge on behalf of the principal.

          12.     The case of the opposite parties is that, the complainants had not informed them of the transfer of the stock and the business from the earlier business premises to the new business premises.  It is also contended that the shop building to which the 1^st complainant had shifted its business had been provided with a temporary floor at a height of eight feet from the floor for which the Corporation had not given sanction.  The minimum floor height as per the requirements of the Corporation was three metres.  The floor caused obstruction to the firefighting operations, prevented the escape of smoke and caused contamination of the mission packs and raised the internal temperature inside the main hall during the incident, causing extensive damage.

          13.     According to the opposite parties there was no imperfection or default in the service provided by the opposite parties.  The decision taken by the opposite parties was strictly in accordance with the policy conditions.  The opposite parties never committed breach of contract.  On the other hand, it was the complainants who have committed violation of the policy conditions by not intimating the shifting of their business to the new premises.  Since the new premises was not the subject matter of the insurance policy the complainant is not entitled to the claim of Rs.81,00,000/-(Rupees Eighty One Lakhs) made in the complaint.  On the above grounds, they contend that complaint is only to be dismissed.

          14.     Though the contention that the complaint was not maintainable has been raised in their version by the opposite parties, no serious attempt was made at the time of hearing, to pursue the said contention.  Both sides have proceeded on the basis that the complaint was maintainable.  Therefore, we refrain from considering the said contentions.  The evidence in this case consists of the oral evidence of the 1^st complainant as PW1 and Exhibits A1 to A12 documents.  On the side of the opposite parties, their Deputy General Manager has been examined as DW1 and Exhibits B1 to B7 documents have been marked.

           15.    After close of evidence, both sides have been heard. The following points arise for consideration:

1. Whether the complainants are entitled to recover the compensation claimed in the complaint?
2. Reliefs and costs?

For convenience both these points are considered together.

Point Nos. 1 & 2

16.     According to the counsel for the complainants, the occurrence of the fire is not disputed by the opposite parties.  It is also a fact that the complainants have suffered substantial losses.  Even according to the surveyor deputed by the opposite parties, the losses are more than 58,00,000/-(Rupees Fifty Eight Lakhs).  The issuance of the policy covering the risk of fire is also not in dispute.  Exhibit A10 is a copy of the letter dated 29.09.2013 which bears an endorsement made by Smt. Geetha Krishnankutty with her signature acknowledging receipt thereof on 29.09.2013.  it is clear from the above that the shifting of business to the new premises had been duly intimated to the opposite parties through their agent before the incident of fire, the counsel points out.  The marking of the document was objected to by the counsel for the opposite parties since it was only a photocopy.  For the above reason, it has been marked only subject to proof.  According to the learned counsel, though the original of Exhibit A10 is with the opposite parties they have not chosen to produce the same.  Therefore, according to him Exhibit A10 should be relied upon to find that the first ground for repudiation was unsustainable.  According to the counsel, subsequent to the fire, on 15.10.2013 an endorsement policy has been issued to the complainants with respect to their new premises.  It is clear from the above that, the objections regarding the new premises are without any basis.  Therefore, according to the learned counsel, this complaint is only to be allowed as prayed for. 

          17.     Counsel for the opposite parties meets the above contentions, pointing out that the policy issued to the complainants was with respect to the premises at “Govindam”.  But the fire occurred in the premises of Chiramel Towers, which is not covered by the insurance policy.  For the above simple reason, it is submitted that the claim of the complainants is only to be rejected.  Though it is contended that an intimation regarding the shifting of business had been given to Geetha Krishnankutty on 29.09.2013, the same was actually received only on 03.10.2013 after the incident of fire.  It has been created as an afterthought and ante-dated to make it appear as though it was given on 20.09.2013.  According to the counsel, it was actually received by the agent only on 03.10.2013 and was submitted to the 2^nd opposite party on the same day itself.  She had been forced by the 1^st complainant to make the endorsement dated 29.09.2013.  To the objection that the original of A10 which is in the possession of opposite party has not been produced by them, it stated that no steps had been taken for its production by the complainant.  It is further pointed out that, they could also have examined Geetha Krishnankutty as a witness, which was also not done.  Therefore, the best evidence has not been placed before this Commission, it is contended.  For the above reasons, the counsel seeks dismissal of the complaint.

          18.     We have carefully examined the pleadings of the respective parties and the evidence adduced on both sides, both oral and documentary.  We have given our anxious consideration to the rival contentions advanced before us.  As rightly pointed out by counsel for the complainants, issue of the insurance policy is admitted by the opposite parties.  The incident of fire is also admitted.  The losses caused to the complainants had been estimated and assessed to be more than fifty eight lakhs.  The contention of the opposite parties is that, since there has been violation of the policy conditions, they are not liable to settle the claim.  1^st complainant shifted their business from the premises of the building by name “Govindam” to the new premises in Chiramel Towers on 30.09.2013.  The fire occurred during the midnight of 01.10.2013.  According to the complainants, they had informed the shifting of their business to the 2^nd opposite party on 29.09.2013.  In support of their contention, they have produced Exhibit A10 which is the photocopy of a communication alleged to have been issued by them to the opposite parties by handing over the same to the insurance agent by name Geetha Krishnankutty.  She has made an endorsement on Exhibit A10 acknowledging receipt thereof, showing the date, 29.09.2013.  However, the said document is a photocopy and is disputed by the counsel for the opposite parties.  The answer of the counsel for the complainant is that since the original is with the 2^nd opposite party, the same is admissible.  But the fact remains that since Geetha Krishnankutty has not been examined as a witness in this case, there is no proof regarding the endorsement which is a serious infirmity.  According to the opposite parties, Exhibit A10 is a subsequent creation, after the fire with the connivance of Smt. Geetha Krishnankutty.  Had she been examined as a witness, the said aspects would have been clearer.  Therefore, in the present state of the evidence, there is nothing on record to show that an intimation regarding the shifting of business was given to the opposite parties before the incident of fire.  The policy document which is produced as Exhibit B1 shows that the premises in respect of which the policy has been issued is at “Govindam”, Souhrida Lane, Pattunikkal, Thrissur.  The incident of fire had admittedly occurred at Chiramel Towers, Pallikkal Road, Thrissur.  There is no insurance policy in respect of the relevant period covering the premises of the 1^st complainant at Chiramel Towers. It does not stand to reason as to why an intimation regarding the shifting of premises had not been directly given to the opposite parties at the relevant time.  Since covering of the risk is dependent on the nature of the premises, we hold that an omission to inform the shifting of business to the insurer/opposite party has been a crucial lapse on the part of the complainants.  We also bear in mind the admission of PW1 that the distance between their premises and the office of the 2^nd opposite party was only one kilometre.  In the absence of any reliable evidence to support the contention of the complainants that they had intimated the shifting of their business to the opposite parties on 29.09.2013, the said contention is rejected.  Since the shifting of business had not been intimated to the opposite parties before the incident of fire, they are fully justified in repudiating the claim of the complainants.  We do not find any deficiency in service on their part.

          For the foregoing reasons, we do not find any grounds to allow the claim of the complainants.  This complaint is therefore dismissed.  No costs.

SL

C.C.No.37/2016

APPENDIX

1. COMPLAINANT’S WITNESS

2. COMPLAINANT’S DOCUMENTS

3. OPPOSITE PARTY’S WITNESS

4. OPPOSITE PARTY’S DOCUMENTS

5. COURT EXHIBITS

PRESIDENT