C.D.No.26 & 27 of 2005

Between:

1. M/s.Desai Bros. Ltd.,

    (a company registered under companies Act, 1956)

    having its Regd. Office at 1436,

    Kasbapet, Pune, rep. by

   Sri Prabhudas, Branch Manager,

   Kamaredy Branch, Nizamabad Dist.,                                          Complainant in

                                                                                                              C.D.No.26/2005.

2. Smt.Gousiya Begum, W/o.late Ahmed Fasiuddin

    aged 57 years, Occ:Household.

3. Sri Mohd. Rasheeduddin, S/o.late Ahmed Fasiuddin

    aged 32 years, Occ:Business.

4.  Smt.Hajra Tahseen, D/o.late Ahmed Fasiuddin

     aged 30 years, Occ:Household.

5. Smt.Hafsa Farhen, D/o.late Ahmed Fasiuddin

    aged 29 years, Occ:Household.

6. Sri Ahmed Mizbhabuddin, S/o.late Ahmed Fasiuddin

    aged 27 years, Occ:Business.

7. Smt.Asia Jabeen, D/o.late Ahmed Fasiuddin

    aged 25 years, Occ:Household.

8. Sri Ahmed Arifuddin, s/o.late Ahmed Fasiuddin

    aged 23 years, Occ:Business.

9. Sri Ismail Zabi, S/o.late Ahmed Fasiuddin

     aged 21 years, Occ:Student.

    All residents of Fakeerpet Village,

    Karimnagar Mandal & District.                                                                ..Complainants.

                                                                                                                       in C.D.No.27/2005

                        And

1.  The Oriental Insurance Co. Ltd.,

     No.6-3-871, Snehalatha Buildings

     Post Box No.45, Greenlands Road,

     Begumpet, Hyderabad.

2. The Oriental insurance Company Ltd.,

     Nizamabad Branch Office, duly rep. by

     Senior Branch Officer, 7-10-910/2/1,

     Besides Hotel Mayur, Nizamabad-1.

3. The Divisional Forest Officer

     Mancherial Division, Mancherial

     Adilabad District.

4. The Andhra Pradesh Forest Development

     Corporation Ltd., UNI Building, 3^rd floor,

     A.C.Guards, Hyderabad.                                                                        ..Opp.parties.

                                                                                                             in C.D.Nos.26 & 27/05

Counsel for the Complainants: Mr.P.Rajendra Reddy

Counsel for the Opp.Parties: Mr.E.Venugopal Reddy –O.Ps. 1 and 2

                                                    G.P. for O.Ps.3 and 4.

CORAM: THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.

          SMT.M.SHREESHA, MEMBER

AND

                       SRI G.BHOOPATHI REDDY, MEMBER.

MONDAY, THE TWENTY NINTH DAY OF SEPTEMBER,

TWO THOUSAND EIGHT

Oral Order:(Per Smt.M.Shreesha, Hon’ble Member)

***

These complaints are disposed of by a common order, since the facts are similar in both these cases.

C.D.No.27/2005:

The brief facts as set out in the complaint are that  complainant No.2 on behalf of himself and complainants 1, 3 to 8, who are legal heirs of Ahmed Fasiuddin submitted that the deceased was a Registered Forest Contractor, registered for purchase of Abnus leaves (“Beedi leaves” for short) for 2001 season.  Pursuant to tenders for sale of Abnus leaves being collected on an annual basis in Telengana region by A.P.Forest Development Corporation Ltd., (i.e. 4^th opposite party).  First complainant’s husband had successful bid and was allotted Unit No.160-Bhimaram in Mancherial Division of Adilabad District and the contracted rate at which the abnus leaves were allotted was Rs.687.00/- per thousand bundles (comprising one standard bag).  Pursuant to the bid being accepted, the deceased duly signed an Agreement dated 26-2-2001 with the Divisional Forest Officer, Mancherial Division, Adilabad District.  As per the terms and conditions, more particularly clause 10 mandate that A.P.F.D.C. Ltd., would not be liable for damage to the Tendu leaves on account of loss caused due to force majuers conditions or for destruction to the B.L. stock caused due to fire or, any untoward accident etc.,   Therefore to cover the risk, A.P.F.D.C. Ltd., and Forest Contractors approached the insurance company to insure the entire Beedi leaves stock proposed to be colleted under insurance policy whereby both A.P.F.D.C. Ltd., and  the contractor/purchaser would be insured under the policy and that the premium payable would be initially remitted by 3^rd respondent and thereafter the Contractor would reimburse the said amount to the Department.  Accordingly D.F.O., Mancherial Division remitted the premium amount for STANDARD FIRE AND SPECIAL PERILS POLICY from 1^st opposite party, who issued a policy bearing No.F/260/2002 & Cover Note No.054884 dated 7-5-2001 and the risk  commenced w.e.f. 14.00 hours of 7-5-2001 to 6-5-2002 which also extended to Beedi leaves of Unit No.160 Bhimaram stocked in the godown No.15-67 Jyothi Tiles, Old Mancherial, Adilabad.  

The complainants submitted that in the year 2001, there was a bumper crop of Beedi  leaves in the unit No.160-Bhimaram and that a total extent of 2137.290 standard bags belonging to complainants were stored  in Door No.1 of Jyothi Tiles as on 9^th June, 2001 along with other purchasers amounting to around Rs.1,35,13,239/-.  On 9^th June, 2001 a Thunder Bolt struck and fire broke out in the said godown in the early hours of 5.30 a.m. and fire engulfed all the rooms bearing Door Nos.1 to 4 of the Godown and also the complainant’s Beedi leaves stock room bearing Door No.1.  The Fire Service Departent, Mancherial was immediately intimated of the outbreak of Fire and the Fireman used water hoses extensively as the fire was threatening to engulf  the entire godown building and the fire could be fully extinguished after 3 days.  The complainants submitted that the officials of the 3^rd respondent immediately informed  the 1^st and 2^nd opposite parties, Police and Revenue Officials about the striking of thunder bolt and consequent outbreak of fire on 9-6-2001 itself and all the officials including the higher officials of Forest, Police, Revenue and Oriental insurance were present and witnessed the fire fighting operations.  The Fire Department controlled and extinguished the fire and prevented it from spreading to other adjoining buildings wherein stocks of Beedi leaves valuing about 7 crores pertaining to 16 other Beedi leaf units bearing Nos.167, 165, 225, 231, 161,214, 152,109, 150, 200, 203, 197, 198, 204, 201, 205, 202 & 178 were stored.  However, the total Beedi leaves of unit No.160-Bhimaram, 171-Yenchapalli, 105-Nacharam, 227-Jannaram, 220-Dandepalli totalling to 11,065.059 standard bags of Beedi leaves worth Rs.1,35,13,290/- were completely gutted by fire.  It is submitted that the entire cost for the operation of putting off the fire, as per report in letter No.1805/2001-S 8, dt.13-6-2001 submitted by 3^rd respondent to Conservator of Forests, Adilabad is as follows:

             a) Engaging of one Proclain from              63 x 900         56,700-00     

19-6-2001 12.00 Noon to 7.00 P.M.

of 12-6-2001 @ Rs.900/- per hour

for 63 working hours.

b)     Engaging another proclaim from                     42 x 900           37,800-00

9-6-2001 7.00 P.M. to 10.00 P.M.

of 11-6-2001 @ Rs.900/- per hour

for 42 working hours.

c)      Engaging one Dozer from 9-6-2001                 66 x 600         39,600-00

3.00 P.M. to 7.00 P.M. of 12-6-2001

@ Rs.600/- per hour for 66 working

hours.

            d) Engaging of (20) labourers to assist                  20 x 50 x 3      3,000-00

               the fire personnel from 9-6-2001 to

               12-6-2001 @ Rs.50/- per labour per day

            e) Engaging of Generator at the godown   3 x 1000            3,000-00

                site for (3) days from 9-6-2001 to 11-6-2001

                at night for lighting purpose to enable the fire

                personnel and labourers to work @ Rs.1000/-

                per day.

            f) Engaging of Lorries to transport the                    50 x 600                     30,000-00

              burnt material from the godown site

              to other place, so as to clean the

               godown site and prevent further fire

              to safe guard the Beedi leaf stocks

               in other godown @ Rs.600/- per trip

               for 50 trips.                                                                                                  ----------------

                                                                                                Total                            1,70,100-00

                                                                                                                                    ----------------

            The complainant submitted that the total value of the aforesaid standard bags damaged due to fire and by inundation of water during fire fighting operation (constituting collateral loss as a direct consequence of fire due to strike of thunder bolt)  of unit No.160-Bhimaram is Rs.33,72,623/- and the loss to other Beedi leaves Units 171-Yenchapalli, 105-Nacharam, 227-Jannaram, 229-Dandepalli is Rs.1,01,40,616 and the Forest Contractor along with 3^rd and 4^th opposite parties had immediately intimated the 1^st opposite party regarding the fire and made a claim detailing the loss.  The complainant submitted that the total loss suffered by him for Unit No.160-Bhimram on account of aforesaid fire accident is as follows:

            No. of S.B.stored in the Godown and burnt                        2137.290 S.Bs.

L O S S

            i) Sale price 2137.290x Rs.687.99 =                  Rs.14,70,434.00

            ii)Collection charges 2137.290 x Rs.540 =                   Rs.11,54,137.00

            iii)other expenditure 2137.290 x Rs.350    =                  Rs.  7,48,052.00

                                                                                                -------------------------------

                                                                                    Total             Rs.33,72,623.00

                                                                                                -------------------------------

The complainant submitted that 1^st and 2^nd opposite parties had deputed a surveyor for assessing the loss, who were also present when the fire was fought and the said  surveyor conducted inspection with the Forest Department Officials.  The complainant submitted that after exchanging various letters, meetings and assurance, 1^st opposite party neither processed nor allowed his claim and on account of their inaction, 3^rd opposite party and their officials issued several letters dated 9-6-2001, 10-6-2001 and 4-8-2001 to 1^st an 2^nd opposite parties requesting them to settle the claim.  1^st and 2^nd opposite parties thereafter issued various letters dt.25-6-2001, 9-2-2002 and in their letter dt.26-3-2003 stated that the claim is unsubstantiated as the policy holder failed to prove the thunder bolt and by letter dated 1-7-2003 stated that the damage to Beedi leaves due to thunder bolt could not be established and repudiated the claim.  The complainant submitted that the 1^st and 2^nd opposite parties did not believe  the striking of thunder bolt and sought proof of thunder bolt inspite of 3^rd opposite party providing adequate material of proof.  The complainant also submitted that 3^rd opposite party also requested INDIA METEROLOGICAL DEPARTMENT for a certificate to the effect that Thunder Bolt had struck on 9-6-2001 but they replied stating that they do not have an Observatory at Mancherial.  The complainant submitted that Panchanamas were conducted by the Forest Department independently and so also M.R.O., Mancherial conducted a separate panchanama and both these officials examined and found that the Fire occurred due to Thunder bolt and the Police also in their final report concluded that the Fire occurred due to striking of thunder bolt.  The complainant submitted that there was no electricity connection to the godown, Jyothi Tiles and so also arson was ruled out by the Forest officials, M.R.O. and police officials.  The complainant submitted that opposite parties 1 and 2 are stating that there is no privity of contract with the contractor and he submitted that the policy was obtained by opposite parties 3 and 4 on behalf of 24 purchasers of various Beedi leaf units and a list of the units was also submitted to opposite parties 1 and 2 by opposite parties 3 and 4 for which cheque No. 124101 drawn on State bank of Hyderabad, Mancherial dt.7-5-2001 was issued by 3^rd opposite party  for Rs.3,02,937/- and thereafter a cover note was issued by opposite parties 1 and 2.  The complainant submitted that opposite parties 1 and 2 are liable to pay the claim amount to them as the policy has been obtained by respondents 3 and 4 on behalf of Beedi Leaf Contractor.  Hence the complaint for a direction to  opposite parties 1 and 2 to  produce the Register of Policies maintained by them along  with entire correspondence relating to policy No.F/260/2002 and also produce the report of the insurance surveyor, for the purpose of adjudicating the claim of the complainant.  To further direct 1^st and 2^nd opposite parties to remit the insurance claim of Rs.33,72,623/- under Standard Fire and Special Perils Policy bearing No.F/260/2002 and cover Note No.054884 dated 7-5-2001 along with interest at 24% p.a. from 9-6-2001 till the date of realization together with special damages of 5,00,000/- and costs.

         Opposite party No.1 filed counter contending that the complaint is not maintainable under the provisions of C.P.Act, 1986.  They denied the allegation that they issued a policy to the complainant.  They submitted that the policy was proposed and the quotations of premium were called by opposite party No.3 and the premium rating were given to opposite party No.3 and that the proposal was submitted by opposite party No.3 to opposite party No.2.  They submitted that the first complainant’s husband never approached for either proposing insurance or obtaining the policy.  They submitted that the documents filed by the complainant i.e. Exs.A1 to A32 none of the correspondence was addressed by the complainant to them and that there is no privity of contract between them and the complainant. They submitted that opposite party No.3 proposed the insurance and paid the premium and their claim was repudiated.  They submitted that opposite party No.3 alone is a party to the contract and the name of the complainants is mentioned nowhere in the correspondence by opposite party No.3 and no where it is revealed that the complainants are connected to the contract.  Opposite party No.1 also submitted that the complainants did not file any document to show that there was an agreement between the deceased and opposite party No.3 to show that opposite party No.3 has to insure and the claim, if any, can be filed by the complainants.  The relevant column in the agreement reveal that “the department shall insure the leaf at godowns and pay the premium to the insurance companies.  The purchaser shall reimburse the insurance charges paid by the department along with first instalment.  Opposite party No.1 submitted that in view of the above, it is clear that opposite party No.3 is the insured and the insurance company was the insurer and as per the proposal the name of the proposer is D.F.O., Mancherial.   They submitted that the claim form was submitted by Divisional Forest Officer, Mancherial and on 9-6-2001 the telegram was also issued by Divisional Forest Officer, Mancherial stating that ‘about 11.065 S.Bs. of beedi leaves stocks stored in godown No.15-67, Jyothi Tiles, Old Mancherial caught fire due to failing of thunderbolt with lightening received at 5.30 A.M. on 9-6-2001.  They denied the value stated by the complainants and submitted that they not aware that various purchasers in different rooms stored the stocks and that the complainant did not state the actual stock stored in the godown and its value with relevant records. 

Opposite party No.1 denied that there was any thunderbolt on 9-6-2001 as the complainants did not file any information to show that there was thunderbolt from the Meterological Department which is situated  at 5 kilometres away from the spot.  They further submitted that the complainants did not disclose the cause of fire and that the control of fire by Fire extinguishers is all matter of follow up and that the Divisional Forest Officer failed to submit the information from the Meteorological Department certifying that there was a thunderbolt at Mancherial.  Opposite party No.1 further submitted that the unit numbers and the time taken for extinguishing fire are all completely observed by the surveyor and he submitted his report for making elaborate discussions with the District Forest Officer, the insured.  They submitted that the values mentioned in the complaint for various items is not supported by any material and denied the value of damage @ Rs.34,19,044.  They submitted that they appointed a surveyor and the surveyor conducted his survey along with forest officials and made elaborate correspondence with 3^rd opposite party, who made the claim and sought for material proof of cause of loss and on failure to furnish the same by 3^rd opposite party, the surveyor had released the report on 28-3-2003 stating that the cause of loss was not substantiated and as such the claim cannot be entertained.  On examination of the report and also the material submitted by opposite party No.3, they came to  a  conclusion that the claim cannot be entertained and accordingly intimated opposite party No.3 but respondent No.3 has not made any complaint.  They submitted that even before repudiating the claim, the surveyor had sought for clarification through various letters but there was no convincing material submitted by opposite party No.3 and thereafter also correspondence was made with opposite party No.3 and they failed to show the proximate cause of loss.  Opposite party No.1 further submitted that the claim was repudiated on 1-7-2003 and the complaint was filed on 2^nd June, 2005 and as per the terms and conditions of the policy, if claim is rejected and if there is no action taken within 12 calendar months it is deemed that the claim is abandoned and therefore the complaint is barred by provisions of Limitation Act.  Opposite party No.1 submitted that there is no privity of contract between the complainants and submitted that as per the allegations made in the complaint which reads that the forest official may demand the sale price as per contract dated 2-2-2001 postulates that the A.P.F.D.C. Ltd. is not liable for the damage caused to beedi leave to the force measures.   It is submitted that the insured is Divisional Forest Officer and the complaint’s apprehension is A.P.F.D.C. may realize the amount and on close perusal of the agreement, the agreement was entered by APFDC Ltd., whereas the policy proposed and obtained by Divisional Forest Officer and the entities of the organizations are completely different and is totally misconceived by the complainants in claiming the amount and prayed for dismissal of the complaint.

Opposite parties 3 filed counter on his behalf as well as on behalf of opposite party No.4 contending that the contentions of the complainants are true and that they are eligible for the relief prayed for.  They submitted that the complainant’s husband and father being a registered Exporter of Abnus Leaf has submitted tender for unit No.160-Bheemaram of 2001 Season  in pursuance of tenders invited by APFDC Ltd., vide Tender notice No.2828/2000-M2(STC), dated 20-12-2000 to purchase B.L. of Unit No.160-Bheemaram of 2001 season to be collected during 2001 season.  The complainant’s husband offered a rate of Rs.687.99 per standard bag and his bid was accepted and he was appointed as purchaser for unit No.16—Bheemaram of 2001 season and he had executed an agreement with Divisional Forest Officer, Mancherial on 2-2-2001 to abide by the tender notice and agreement conditions. Opposite party No.3 submitted that they insured the entire B.L.stocks of all units of Mancherial Division with Oriental Insurance Co. Ltd., Nizamabad and paid the premium of Rs.2,85,437/- for the stocks stored at various godown, for a period of one year from 7-5-2001 to 6-5-2002.  The risks covered under the above insurance were Fire, Flood, terrorism, earth quake, spontaneous combustion etc. and the insurers i.e. opposite parties 1 and 2 agreed to insure the stocks at various Godowns as per the list lodged with them and issued Standard Fire and Special Perils Poicy No.F/260/2002 and cover note No.54884 dated 7-5-2001 in favour of Divisional Forest Officer, Mancherial account of 24 unit purchasers.  The complainant’s husband is one of the purchasers.  They further submitted that as per the Agreement conditions, once the leaf is collected at Khalla site is entered in Form 1A or 1B, it is deemed to be handed over to the purchaser and the purchaser himself is responsible for its curing, bagging and transportation to the Godown and any loss sustained during the above process.  The department will pay the collection charges to the laborers initially and the purchaser has to reimburse the same to the Department along with sale amount and insurance charges later on.  As per agreement condition No.10, the Department is not responsible for any loss sustained by the purchaser on account of fire, rain, gale, tempest, disease, pest, flood, drought or any other natural calamities or by reason of any wrongful acts of third party and in all circumstances the purchaser is liable to reimburse the collection charges, sale amount and insurance charges to the department. 

They submitted that the purchaser of Unit No.160-Bheemaram of 2001 season had cured the B.L. stocks collected in the unit and transported and stored a total stock of 2137.290 SBs in Door No.1 of Godown No.15-67, Jyothi Tiles complex, Old Mancherial as on 9-6-2001.  On 9-6-2001 there were heavy rains and a thunder bolt with lightening had fallen on B.L godown at about 5.30 A.M. wherein the stocks of 5 units viz. 105-Nacharam, 160-Bhimaram, 160-Bheemaram, 227-Jannaram and 229-Dandepally caught fire.  Immediately, the fire personnel were informed and 5 fire engines from Mancherial, Jannaram, Godavarikhani, Bellampally and also proclainers were used for fire extinguishing operations and the fire could be extinguished after 3 days.  The  insurance authorities were informed about the accident telegraphically and also an FIR was lodged with the Station House Officer and at the time of fire extinguishing operations, Forest Department, Revenue Department, Police Department and Oriental Insurance company officials visited the site and witnessed fire extinguishing operations and they had incurred an expenditure of Rs.1,70,100/- to extinguish the fire totally and save the B.L. stocks of other 16 B.L. units stored in the surrounding godowns.  They further submitted that the surveyor of Oriental Insurance Company had also visited the site and requested the department to furnish certain information on the points mentioned and the information was furnished to the surveyor as requested but the insurance company informed by letter dated 1-7-2003 that the claim is unsubstantiated and that the policy holder failed to prove that the loss was due to thunder bolt.  They submitted that after the accident, Forest department had conducted panchanama, Revenue Department had also conducted panchanama separately.  From the documents and final investigation report of Police and Fire Department Certificates, the cause of fire was established as due to thunder bolt but the insurance authorities have not considered the above proofs.  They submitted that they approached metrological department for issue of a certificate to the effect of falling of thunder bolt on 9-6-2001 but they replied that there is no observation center at Mancherial and the department cannot issue such certificate.  They submitted that in the absence of Metrological Department Certificate, the insurance authorities have to rely on the panchanama conducted by Revenue Department and Police investigation report but they denied and repudiated the claim and submitted that the complainant is eligible for the relief prayed for in the complaint and prayed to allow the appeal.

Complainant No.2 filed affidavit on his behalf and on behalf of complainants 1, 3 to 8 in lieu of evidence reiterating the facts stated in the complaint and got marked Exs.A1 to A33.  Opposite parties 1 and 2 filed affidavit in lieu of evidence reiterating the facts stated in the counter and got marked  Exs.B1 to B4   and opposite parties filed affidavit evidence in lieu of evidence reiterating the facts stated in the counter and further stated cheque No.124101 was issued by 3^rd respondent for Rs.3,02,937/- in favour of insurance company and thereafter a cover note was issued by opposite parties 1 and 2.  They further submitted that as per Section 14 of Insurance Act, 1930, the insurer shall maintain:

a)     a register or record of policies in which shall be entered, in respect of every  

      policy  issued by the insurer, the name and address of the policy holder, the

      date when the policy was effected and record of any transfer, assignment or

      nomination of which the insurer has notice, and

b)     A register of record of claims, in which shall be entered every claim made

     together  with the date of the claim, the name and address of the claimant and

     the date  on   which the claim was discharged, or, in the case of a claim which

     is rejected, the  date of rejection and the grounds.  

They further submitted that opposite parties 1 and 2 are liable to pay the claim amount to the complainants as the policy was obtained by opposite party Nos. 3 and 4 on behalf of Beedi Leaf Contractor/complainant (24 unit purchasers) and got marked Exs.B5 to B42.

            Ex.A1 is Agreement dated 26-2-2001 between the complainant and opposite parties 3 and 4.  Ex.A2 is insurance policy bearing No.F/260/2002 dated 7-5-2001.  Ex.A3 is cover note No.054884 dated 7-5-2001.  Ex.A4 is receipt dt.7-5-2001.  Ex.A5 is Police complaint dated 9-6-2001.  Ex.A6 is Telegram issued by 3^rd respondent dated 9-6-2001.  Ex.A7 is F.I.R. issued by S.H.O. Mancherial dated 9-6-2001.  Ex.A8 is final report in Cr.No.112/2001 of S.I. of Police, Mancherial before J.F.C.M., Luxxetipet, dated 26-3-2002.  Ex.A9 is Panchanama of Forest Department dated 9-6-2001.  Ex.A10 is Panchanama of M.R.O., dated 11-6-2001.  Ex.A11 is letter from Dy. Conservator of Forests to Conservator of Forests dated 9-6-2001.  Ex.A12 is letter from Conservator of Forests to Principal Chief Conservator of Forests dated 10-6-2001.  Ex.A13 is letter from Dy.Conservator of Forests to the Conservator of Forests dated 13-6-2001.  Ex.A14 is News paper clipping from Eenadu telugu daily dated 11-6-2001.  Ex.A15 is letter from Finteq surveyors and loss assessors dated 25-6-2001.  Ex.A16 is Fire Service Attendance Certificate issued by Fire Station, Mancherial dated 13-9-2001.  Ex.A17 is report in letter No.1806/2001 submitted by D.F.O. Mancherial to Conservator of Forests, Adilabad dated 13-6-2001.  Ex.A18 is Map plan of godowns at Jyothi Tiles at Mancherial.  Ex.A19 is Layout plan of godown.  Ex.A20 is certificate issued by D.F.O., dated 17-9-2001.  Ex.A21 is Minutes of discussion held with the insurance companies at Hyderabad with Addl. PRL. Chief Conservator of Forest (Production) at 3.00 P.M.  dated 25-4-2001.  Ex.A22 is  reply letter from Divl. Forest Officer to Anur Navin of Finteq dated 7-8-2001.  Ex.A23 is letter from Dy. Conservator of Forests & D.F.O. Mancherial to Finteq dated 21-9-2001.  Ex.A24 is letter from Dy. Conservator of Forests & D.F.O. Mancherial to Finteq Surveyors & Loss Assessors  dated 9-2-2002.  Ex.A25 is letter from Dy. Conservator of Forests & D.F.O. Mancherial to Finteq, Surveyors & Loss Assesssors dated 7-8-2002.  Ex.A26 is letter of Finteq to Conservator of Forests, Mancherial dated 23-11-2002.  Ex.A27 is letter from Oriental Insurance Company Ltd., dated 26-3-2003.  Ex.A28 is reply from Dy. Conservator of Forests & D.F.O., Mancherial dated 30-3-2003.  Ex.A29 is letter I.M.Department dated 9-4-2003.  Ex.A30 is letter of Finteq to D.F.O., Mancherial dated 4-4-2003.  Ex.A31 is letter of Oriental Insurance Co.  to D.F.O.,Mancherial dated 1-7-2003.  Ex.A32 is Death Certificate of Ahmed Fasuddin.  Ex.A33 is Family Members Certificate.

Ex.B1 is copy of STANDARD FIRE AND SPECIAL PERILS POLICY bearing No.F/260/2002 and the risk  commenced w.e.f. 14.00 hours of 7-5-2001 to 6-5-2002.  Ex.B2 is survey report of Finteq dated 28-3-2003.  Ex.B3 is repudiation letter dated 1-7-2003.  Ex.B4 is policy.  Ex.B5 is Tender form. Ex.B6 is Confirmation orders of Conservator of Forests.  Ex.B7 is Agreement executed by the purchaser.   Ex.B8 is the letter of Development Officer of Oriental Insurance Co. Ltd., calculating thepremim of stocks.  Ex.B9 is list and details of stocks insured.  Ex.B10 is cheque issued towards premium.  Ex.B11 is receipt of premium amount.  Ex.B12 is letter of D.F.O. Mancherial dated 7-5-2001 to Branch Manager, Nizamabad.  Ex.B13 is insurance cover note No.054884. Ex.B14 is insurance policy.  Ex.B15 is panchanama conducted by F.R.O. Mancherial.  Ex.B16 is statements of eye witnesses recorded by Forest Department.  Ex.B17 is intimation to insurance authorities by telegram dated 9-6-2001.  Ex.B18 is letter dated 9-6-2001 of D.F.O., Mancherial.  Ex.B19 is letter dated 1`3-6-2001 of D.F.O., Mancherial.  Ex.B20 is letter dated 13-6-2001 of D.F.O., Mancherial.  Ex.B21 is letter of Chief Conservators of Forests dated 22-6-2001 to Prl.Chief Conservator of Forests.  Ex.B22 is letter from insurance surveyor requesting documents.  Ex.B23 is letter dated 28-7-2001 by D.F.O. Mancherial to Police authorities.  Ex.B24 is letter dated 28-7-2001 of D.F.O., Mancherial to Fire Department.  Ex.B25 is letter dated 28-7-2001 of D.F.O., Mancherial to M.R.O.  Ex.B26 is Fire Service Attendance Certificate.  Ex.B27 is Panchanama conducted by M.RO., Mancherial.  Ex.B28 is Copy of FIR No.112/2001 dated 9-6-2001.  Ex.B29 is letter dated 21-9-2001 of D.F.O. Mancherial to surveyor.  Ex.B30 is letter from surveyor requesting further information.  Ex.B31 is reply letter dated 7-8-2002 by D.F.O. Mancheiral to surveyor with further information.  Ex.B32 is final investigation report by Police Department.  Ex.B33 & 34 are letters from surveyor dated 23-11-2002 and 24-3-2003.  Ex.B35 is letter from Branch Manager, Nizamabad dated 01-7-2003.  Ex.B36 is letter dated 29-3-2003 of D.F.O. Mancherial to Metrological Department.  Ex.B37 is letter from Branch Manager, Nizamabad dated 26-3-2003.  Ex.B38 is D.O. letter of D.F.O. Mancherial to  Branch Manager, Nizamabad dated 30-3-2003.  Ex.B39 is letter from Metrological Department dated 9-4-2003.  Ex.B40, 41 are letters from D.F.O., Mancherial to Branch Manager, Nizamabad dated 24-4-2003 and 27-9-2003.  Ex.B42 are photographs.

The main point for consideration is whether the opposite parties have committed any deficiency of service and if the complainants are entitled to any relief sought for in the complaint?

We have perused the material on record.  The facts not in dispute are that the first    complainant’s husband was a Registered Forest Contractor and he registered for purchase of Abnus leaves (“Beedi leaves” for short) for 2001 season and was allotted Unit No.160-Bhimaram in Mancherial Division of Adilabad District and the contracted rate at which the abnus leaves were allotted was Rs.687.00/- per thousand bundles (comprising one standard bag).  Pursuant to the bid being accepted, an Agreement dated 26-2-2001 was signed with the Divisional Forest Officer, Mancherial Division, Adilabad District.  It is also not in dispute that as per clause 10 of that agreement any loss on account of fire or any untoward incident, opposite parties 3 and 4 would not be responsible for the damage and therefore opposite parties 3 and 4 approached opposite parties 1 and 2 to issue a STANDARD FIRE AND SPECIAL PERILS POLICY and remitted the premium and thereafter a Policy bearing No.F/260/2002 was issued  and the risk  commenced w.e.f. 14.00 hours of 7-5-2001 to 6-5-2002  extending to Beedi leaves of Unit No.160 Bhimaram.  It is the case of the complainant that on  9^th June, 2001 a Thunder Bolt struck and fire broke engulfing all the rooms in the godown bearing Door Nos.1 to 4 and also the complainant’s Beedi leaves stock was in room bearing Door No.1 of Jyothi Tiles.  It is not in dispute that the  Fire Service Departent, Mancherial  and the Police were informed, the Fire Department controlled the fire  and the Beedi leaves of unit No.160-Bhimaram, 171-Yenchapalli, 105-Nacharam, 227-Jannaram, 220-Dandepalli totalling to 11,065.059 standard bags of Beedi leaves worth Rs.1,35,13,290/- were destroyed by fire.  The complainants’ submit that the first and second opposite parties have deputed a surveyor for assessing the loss and thereafter they neither processed nor allowed his claim inspite of several representations and correspondence.  Several letters dated 9-6-2001, 10-6-2001, 4-8-2001 were addressed by opposite party No.3 to opposite parties 1 and 2 and subsequently opposite parties 1 and 2 issued various letters dated 25-6-2001, 9-2-2001 and finally by their letter dated 1-7-2003 repudiated the claim on the ground that the damage to beedi leaves due to thunder bolt was not established.

It is the case of opposite parties 1 and 2 that there is no privity of contract between the complainants and them since the policy was issued to opposite party No. 3 and the premiums were also paid by opposite party No.3 and that they are no way connected with the complainants.  The learned counsel for opposite parties 1 and 2 drew our attention to a clause in the agreement which states as follows:

“the department shall insure the leaf at godowns and pay the premium to the insurance companies.  The purchaser shall reimburse the insurance charges paid by the department along with first instalment

In view of this opposite parties 1 and 2 contend that opposite party No.3 is the insured and the name of the proposer in the proposal form is D.F.O., Mancherial.  They also contend that  the fire accident due to thunder bolt was not established since there is no certificate from the Meteorological Department. 

            Opposite parties 3 and 4 contend that as per clause 10 of their agreement with the complainants, they are not liable for any loss or damage caused due to fire or any other untoward incident and to safeguard the interest of the complainants, they have approached opposite parties 1 and 2 and an insurance was taken to cover 24 unit purchasers.  They submit that opposite parties 1 and 2 are liable to pay the claim amount as the policy was obtained by them on behalf of the 24 unit purchasers i.e. beedi leaves contractors.

            We first address ourselves to the issue whether there is any privity of contract between the complainants and opposite parties 1 and 2?

            It is not in dispute that opposite parties 3 and 4 i.e. Forest Department have taken a policy from opposite parties 1 and 2 i.e. a Standard Fire and Special Perils Policy  bearing No. F/260/2002 and Cover Note No.054884 dated 7-5-2001 in favour of Divisional Forest Officer, Mancherial  account of 24 unit purchasers.  Opposite party No.3 in their counter stated that they insured the entire beedi leaves stock of all units of Mancherial division with opposite parties 1 and 2 and paid a premium of Rs.2,85,437/- for the stocks stored at various godowns.  It is also not in dispute that the first complainant’s husband is one of the 24 unit purchasers.  Ex.B1 is the copy of Standard Fire and Special Perils Policy with the risk commencing from 7-5-2001 to 6-5-2002.  It is pertinent  to note that in this Ex.B1 filed by opposite parties 1 and 2 i.e. insurance company, it is stated as follows:

  Name:                                                           D.F.O.

 Address of                                                    A/c 24 Unit Beedi leaves stock in godowns

 insured                                                          at various places

Location:

Risk address                                                 Various godowns as per list lodged

                                                                        With the company.

Risk Description                                           Stock of Beedi leaves in Godown

Item Description                                            Beedi leaves and Beedies

It is also pertinent to note that Ex.B13, which the cover note clearly states that description of risk includes:

            ‘ on stock of Beedi leaves in the godown stored or lying in the building

          of first class construction situated at various places as per list lodged

          with the company’.

Ex.B9 clearly shows the Statement of Units whereas the premium payable for the stocks of Beedi Leaves at godowns in which in Sl.No.11 Unit 160-Bheemaram  is clearly written and the premium is at 0.00285, 5% service tax on premium and the amount collected was Rs.16,527/-.  The total amount collected from all these 24 unit purchasers is Rs.2,85,437/-.  Ex.B12 i.e. letter No.R.C.1805/2001 dated 7-5-2001 clearly states the break up of the total premium paid by opposite parties 3 and 4 to opposite parties 1 and 2 as follows:

             1. B.L. stocks at various godowns                   Rs.2,85,43-00

            2. Money in transit                                     Rs.   17,500-00

                                                                             -----------------

                                     Total                                Rs.3,02,937-00

                                                                           ================

 All these exhibits clearly show that the total premium was paid by opposite parties 3 and 4 to opposite parties 1 and 2 and these premiums were payable by the 24 unit purchasers to opposite parties 3 and 4.  It is no body’s case that these unit purchasers need not reimburse the premiums to opposite parties 3 and 4.  The contention of opposite parties 1 and 2 that there is no privity of contract between them and the complainants i.e. Beedi leaves contractors in unsustainable on the ground that Ex.B1, which the insurance cover note and also Ex.B9 which is the unit wise premium of the 24 unit purchasers clearly shows that the insurance was taken by opposite parties 3 and 4 i.e. Forest Department only on behalf of the 24 unit purchasers.  It is clearly described in the risk cover and the location as well as risk description.  The unit purchasers are beneficiaries of the insurance policy and therefore the contention of opposite parties 1 and 2 that there is no privity of contract cannot be sustained.

            Now we address ourselves to the contention of opposite parties 1 and 2 that the complainants’ could not establish that the fire was due to thunder bolt.

Opposite party No.1 denied in their counter that there was any thunder bolt on 9-6-2001 and that the complainants did not file any information to show that there was any thunder bolt from the Meteorological Department.  We observe from the record that after the accident, Forest Department and the Revenue Department had conducted panchanamas separately in which the cause of fire was clearly described as due to thunder bolt.  Ex.A7 is the F.I.R.  in which it is stated that the accidental fire is due to striking of thunder bolt.  Ex.A8 is the Final report of the fire accident in which it is clearly stated as follows:

            ‘ In this case no foul play or suspicion is established on anybody.

          Apparently this is an accidental fire due to striking of thunder

          Bolt.  Hence this case is referred as “Accidental Fire”.

In this final report, 160-Bheemaram is clearly listed that 2514 bags have been destroyed.    Further the  opposite parties 3 and 4 have also tried to obtain a certificate from the Mancherial Meteorological Department and received a reply vide Ex.B39 dated 9-4-2003 that there is no Meteorological Department’s observatory at Mancherial and hence the data is not available.  Keeping in view the Panchanamas which were recorded by the Revenue Department and Police Department separately i.e. Exs.A9 and A10 and also Ex.A8 which is the final Police report, we are of the considered view that the contention of opposite parties 1 and 2 in stating that the cause of fire is not established is unsustainable.

          Now we address ourselves to the issue whether there is any deficiency of service on the part of opposite parties 1 and 2 in not settling the claim and what is the quantum of compensation that has to be paid to the complainants?

          Keeping in view the aforesaid discussion, we hold that there is deficiency of service on behalf of the insurance company in not settling the claim.  To reiterate we observe that the complainants’ are beneficiaries to the policy taken by opposite parties 3 and 4 and that the cause of fire was established by the complainants to be on account of thunder bolt. 

Now we address ourselves to the quantum of amount that has to be paid by opposite parties 3 and 4 to the complainants?

Ex.B2 is the insurance report by FINTEQ dated 28-3-2003 in which the surveyor has stated the claim as follows: