BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, SIRSA.

                                                Consumer Complaint no. 374 of 2019                                                                 

                                              Date of Institution:          16.07.2019

                                                Date of Decision   :        07.09.2022

1. M/s Mahak Textile, 10 feet Gali Jamankan wali Sirsa through its proprietor Rajender Singh.
2. Rajender Singh (aged about 46 years) son of Sh. Nand Lal, Proprietor of M/s Mahak Textile, 10 feet Gali Jamankan wali, Sirsa, resident of House No. 229 C-Block, Sirsa.   

                     ……Complainants.

                                      Versus

1. Punjab National Bank, B.O. Rori Bazar, Sirsa through its Manager.
2. Oriental Insurance Company, opposite, Janta Bhawan Sirsa through its Branch Manager.

                                                                        ...…Opposite parties.

                    Complaint under section 12 of C.P. Act, 1986

Before:       SH. PADAM SINGH THAKUR…….PRESIDENT

MRS. SUKHDEEP KAUR…………MEMBER        

SH. SUNIL MOHAN TRIKHA………MEMBER

Present:       Sh. Saurabh Nagpal, Advocate for complainant.

Sh. Ravinder Monga, Advocate for opposite party no.1.

Sh. A.S. Kalra, Advocate for opposite party no.2.

ORDER

                   The complainant has filed the present complaint under Section 12 of the Consumer Protection Act, 1986 (after amendment as under Section 35 of the Consumer Protection Act, 2019) against the opposite parties (hereinafter referred to as Ops).

2.       In brief, the case of complainant is that complainant is a sole proprietor of M/s Mahak Textiles which is doing its business on day to day basis. The complainant upon persuasion of the official of op no.1 agreed to avail financial limit facility for the firm and fulfilled all the required formalities. The official of op no.1 further asked the complainant to purchase insurance policy known as shop keeper insurance policy schedule from paneled insurance company i.e. op no.2 and complainant upon the persuasion of op, also agreed to purchase insurance policy. The policy no. 261503/48/ 2013/516 was issued by showing the name of agent/ broker i.e. Punjab National Bank, Rori Bazar, Sirsa. The policy covered the risk of stock in trade of Rs.25 lacs covering the risks from 6.11.2012 to 5.11.2013 and the premium of Rs.3750/- was deducted. Thereafter, the policy No. 261503/48/2015/402 was renewed with the same description i.e. on the stock of all kinds clothes suiting shirting. The risks of the stock in trade of Rs.50 lakh were covered from 6.11.2014 to 5.11.2015 by receiving the premium from the account of complainant. Similarly, the stock of all kinds i.e. clothes, suiting, shirting was further renewed with policy No. 261503/48/2016/370 covering the risks from 6.11.2015 to 5.11.2016 by deducting the premium from the account of complainant. Thereafter, the policy further renewed from 6.11.2016 to 5.11.2017, 23.11.2017 to 22.11.2018 and premium of all the policies have also been deducted from the account of complainant.

3.       It is further averred that op no.1 issued a certificate to op no.2 on 1.12.2018. That on 20.03.2018 there was short circuit in the building premises of complainant and due to fire, the stock lying in the building premises at 2^nd floor was burnt. The complainant suffered huge financial losses and intimation in this regard was given to the ops on 20.03.2018, The op no.2 promptly appointed Surveyor Sh. N.K. Gupta, who got conducted the spot survey. The said appointed Surveyor by verifying the stock disclosed that there is a heavy loss due to the fire and further informed to the complainant for handing over estimated loss taken place on the spot, as the cloth destroyed in fire was with the silk and superior quality, so the approximate loss of Rs.2,10,260/- was disclosed to the ops. The said Surveyor after closely analyzing the entire record assured that he will recommend the loss of Rs.2.50 lakh approximately due to spreading of water and there was also possibility of increase of loss. It is further averred that Surveyor also obtained signatures from the complainant on prescribed form, few documents and also recorded the statement of neighbourers etc.  for the purpose of authentication of the loss. The Surveyor submitted his report to the insurance company and surprisingly he had deducted the amount of loss of complainant to the tune of Rs.1,36,541/- (actually Rs.1,26,541/- as mentioned in Surveyor’s report). Though the complainant raised objection that amount assessed by the Surveyor is less than the actual loss, the ops by using pressure advised the complainant to keep mum so that his claim could be proceeded and released. The said situation was really shocking for the complainant as he was already under the pressure, tension on account of sudden loss. It is further averred that complainant for a number of times contacted with the ops and inquired about the status of the loss/ claim pending with op no.2. The op no.1 on the request of complainant contacted with op no.2 for inquiring about the pending claim, but op no.2 postponed the matter on the lame excuses. The op no.1 had also left to respond for the pending claim of complainant. Ultimately, the complainant moved a letter for knowing the status of his claim but in vain. Thereafter, complainant was shocked to receive letter dated 5.2.2019 and claim of complainant was declared as No Claim with the elusive, evasive and applying hyper technical plea that the stock lying on 2^nd floor which is not covered under the policy. The complainant taken so many rounds to the office of ops and requested them to release their claim and to withdraw the alleged No Claim letter but to no effect. The act and conduct of the ops amounts to deficiency in service and unfair trade practice due to which complainant has suffered unnecessary harassment and mental agony. Hence, this complaint.

4.       On notice, opposite parties appeared. Op no.1 filed written version raising certain preliminary objections regarding maintainability, estoppal, complainant cannot be termed and treated as consumer, no deficiency in service, suppression of true and material facts and that as per the provisions of Consumer Protection Act, society does not fall within the definition of Consumer, so the complaint is out rightly liable to be dismissed being not maintainable and against the jurisdiction. It is also submitted that as a matter of fact and in reality, the complainant is maintaining business limit with the answering op. As per the guidelines of RBI upon renewal and to secure the stock under lien of bank the same was insured from the Govt. Insurance Company i.e. op no.2. The work of answering op no.1 is to secure the stock of the complainant. The op no.2 through their representative/ agent inspected same and after fulfillment of necessary formalities, insurance policy was issued in favour of complainant. The authorized person like Manager or agent of insurance company are personally responsible to carefully inspect and compare the record from the account statement and thereafter to make report before issuing of insurance policy. It is further submitted that answering op came to know from the complainant that the insurance company has declined their claim by imposing technical objections. The answering op followed the guidelines of the higher authorities as well as with the intention to secure the stock under lien get the same insured from op no.2. The answering op inquired the fact from the complainant and observed that the claim lodged by him is genuine and he is entitled to receive his losses from the insurance company which is bound to indemnify their liability. On merits also, it is submitted that answering op upon the renewal of limit of the complainants’ shop advised them to follow the guidelines issued by their higher authorities in the interest of borrower. The complainant after verifying the fact and with free will and consent purchased the policy from op no.2. The insurance policy got renewed from time to time with the free will and consent of complainant, so there was direct privity of contract between the complainant, answering op and insurance company.  Remaining contents of complaint are denied to be wrong and prayer for dismissal of complaint qua op no.1 made.

5.       Op no.2 also filed separate written statement taking preliminary objections that complainant is estopped by his own act and conduct to file the present complaint as insurance coverage is by way of taking shop keeper policy and not a policy covering the stock or material lying in godown. In this case admittedly shop Mehak Textiles was being run at ground floor and there was residential accommodation at 1^st floor and 2^nd floor was used as godown and there was no risk coverage either for 1^st or 2^nd floor as all the three floors are to be treated independently, differently rather than considering entire building as shop having coverage under the shop keeper policy. It is further submitted that for remaining two i.e. 1^st and 2^nd floor (residential and godown) distinct, separate policy was required to be purchased, hence answering op does not have any obligation to make payment for the loss of Rs.1,26,541/- assessed by technical expert Shri N.K. Gupta Surveyor & Loss Assessor, which after being tallied with the entire record of statement, applying excess clause, average clause was concluded to be Rs.1,06,876/- by the Competent Authority, which has been noted with the ball pen writing on the report submitted by Surveyor. It is further submitted that when Competent Authority was applying his mind for taking decision over the liability of payment and after concluding the amount, after going through the policy, term and conditions, insurance norms, guidelines, Competent Authority decided the claim as No Claim, hence there is no deficiency in service in any manner on the part of company or its officials. It is further submitted that average clause and excess clause is part of policy, term and conditions and has binding effects upon Bank and complainant. That complainant has concealed true and material facts from this Commission about three distinct and separate usage of the building and running the Mehak Textiles shop at ground floor. The complaint is false and frivolous and same is liable to be dismissed with special costs. On merits, the pleas of preliminary objections are reiterated, contents of complaint are denied to be wrong. It is also submitted that no coverage was taken for the building premises, which was used as godown at 2^nd floor and residence at 1^st floor. Hence there arises no question of liability of the amount assessed by Surveyor. It is submitted that it is wrong that complainant suffered heavy losses and amount was assessed by the Surveyor less than the actual loss. Loss of Rs.1,26,541/- was assessed by technical expert person Sh. N.K. Gupta, Surveyor & Loss Assessor. It is further submitted that 2^nd floor was used as godown and there was no coverage for stock of godown and there was no loss of any stock lying at the shop, which was at ground floor and policy in this case was shop keeper policy about stock lying in the shop. Before passing an order of No Claim, Competent Authority has taken the expert legal opinion, apart from calculating the amount, after receipt of report of Surveyor. It is further submitted that it is wrong that stock kept in the building premises was fully insured with answering op. As per own admission of complainant, it was a shop keeper policy and according to the policy stock lying in the shop was under coverage which was lying in the shop premises and all the three floor cannot be considered the premises of shop. With these averments, dismissal of complaint prayed for.

6.       Complainant Rajinder Singh has tendered his affidavit Ex.CW1/A, copies of documents i.e. insurance policies schedules Ex.C1 to Ex.C6, repudiation letter dated 5.2.20219 Ex.C7 and certificate of the bank dated 1.12.2018 Ex.C8.

7.       On the other hand, op no.1 bank has tendered affidavit of Sh. Sukhwinder Singh, Branch Manager as Ex.RW1/A. OP no.2 has tendered affidavit of Sh. S.K. Malhotra, Divisional Manager as Ex.RW2/A and copies of documents i.e. repudiation letter dated 5.2.2019 Ex.R1, legal opinion Ex.R2, surveyor report Ex.R3, DDR Ex.R4, statement of complainant/ proprietor Rajinder Singh Ex.R5, fire insurance claim form Ex.R6, estimated loss Ex.R7, insurance policy schedule from 23.11.2017 to 22.11.2018 Ex.R8 and shopkeeper’s insurance policy Ex.R9.

8.       We have heard learned counsel for the parties and have perused the case file carefully.

9.       Learned counsel for complainant while reiterating the contents of complaint has contended the op no.2 has repudiated the genuine claim of the complainant on the ground that as per policy the stock lying in the 2^nd floor of building is not covered under the policy which is wrong, illegal and is liable to be set aside. The complainant purchased the policy insuring the stock in trade i.e. all kinds of cloth suiting shirting of the amount of Rs.50,00,000/- and due to fire complainant suffered loss of Rs.2,50,000/-. The complainant is entitled to the above said amount of Rs.2,50,000/- from insurance company op no.2 besides compensation for harassment and litigation expenses and prayed for acceptance of the complaint.

10.     On the other hand, learned counsel for op no.1 while reiterating the contentions of written statement has contended that matter of claim amount is between complainant and op no.2 insurance company and op no.1 has no liability of any kind in this regard. The op no.1 bank inquired the fact from complainant and observed that claim lodged by him is genuine and therefore, he is entitled to receive the claim amount from op no.2 and complaint qua op no.1 is liable to be dismissed.

11.     Learned counsel for op no.2 while reiterating the contentions of its written version has contended that op no.2 has rightly and legally repudiated the claim of the complainant after getting legal opinion as the 2^nd floor where the alleged stock was kept was not insured and only ground floor which was being used as shop was insured. The second floor of the building is not covered under the policy and the competent authority has closed claim of complainant as No Claim and prayed for dismissal of the complaint.

12.     We have duly considered the rival contentions of the parties. Admittedly, Rajender Singh complainant proprietor of Mahak Textile who has availed financial assistance from op no.1 bank has been purchasing insurance policy known as Shop Keepers Insurance Policy from op no.2 insurance company through op no.1 bank for insuring his stock in trade i.e. all kinds of cloth suiting shirting since 6.11.2012 and getting renewing the said insurance from op no.2 insurance company after payment of requisite premium amount and this fact is also evident from copies of insurance policy schedules Ex.C1 to Ex.C6. From the copy of insurance policy schedule Ex.C6, it is evident that complainant purchased above said insurance policy from op no.2 for the period from 23.11.2017 to 22.11.2018 for covering the risk of stock of all kinds of cloth suiting shirting of the amount of Rs.50,00,000/- and premium amount of Rs.16,614/- in this regard was paid to op no.2 insurance company by the complainant. It is also an undisputed fact that on 20.03.2018 i.e. during the above said period of insurance policy (Ex.C6), there was short circuit in the building premises i.e. M/s Mahak Textile of complainant and due to fire, the stock lying at 2^nd floor of building premises was burnt. According to the complainants, they suffered approximate loss of the amount of Rs.2,50,000/- and Surveyor appointed by the op no.2 after analyzing the entire record assured that he will also recommend the loss of Rs.2,50 lakh approximately to be paid to the complainant by op no.2 insurance company, but however, surprisingly the Surveyor reduced the amount of loss as Rs.1,26,541/-. The op no.2 insurance company has not denied the factum of incidence i.e. taking place of fire at the building premises of the complainant but however, the insurance claim of complainant has been repudiated by op no.2 vide letter dated 5.2.2019 on the ground that stock lying in the 2^nd floor of building was not covered under the insurance policy and therefore, the Competent Authority has closed the claim of complainant as No Claim. The complainant has also not denied the factum that stock which was burnt in the fire was not kept on 2^nd floor of the shop/ building and was kept in the shop i.e. at ground floor. However, in the insurance policy schedules Ex.C1 to Ex.C6, it is no where mentioned that stock kept in the shop at ground floor only is insured and the stock lying on 1^st floor or 2^nd floor is not insured. The complainant purchased the insurance policies from op no.2 for stock in trade i.e. cloth, suiting shirting and same was kept on 2^nd floor of the shop and when there is no specific condition in the insurance policy that stock kept in the shop i.e. ground floor is insured, the op no.2 insurance company cannot repudiate the claim of complainant on the basis of hyper technicalities. The complainant got insured the stock worth Rs.50,00,000/- and therefore, it cannot be said that stock of Rs.50,00,000/- will be kept in the shop only. It is possible that stock of Rs.50,00,000/- may not have been adjusted in the ground floor and when at the time of issuance of insurance policy op no.2 insurance company has covered the risk of the stock of Rs.50,00,000/- without inspecting the actual place of storing stock and there is no condition in the insurance policy about specific place of storing of stock, the op no.2 insurance company has wrongly and illegally repudiated the claim of complainant. Moreover, complainant has stored the stock in the same premises of the shop i.e. on its 2^nd floor and not anywhere else, so the repudiation of the claim of complainant on the basis of these technicalities is liable to be set aside.

13.     Now the question arises that to what amount of claim amount, the complainant is entitled from op no.2 insurance company?. In this regard, Surveyor in his detailed report has assessed the actual loss to the tune of Rs.1,26,541/-. On the other hand, complainant is claiming approximately loss to the tune of Rs.2,50,000/- and has also submitted estimated loss document in which he has given loss amount of Rs.2,10,260/-. The op no.2 insurance company after assessment of loss by the Surveyor to the tune of Rs.1,26,541/- again made cuttings on the assessment of amount on the ground that Surveyor has made wrong calculation and has reduced the amount to the tune of Rs.1,06,876/-. However, it is not clear that who has made this cutting/ again calculation of the amount of Rs.1,06,876/- on the report of Surveyor. The name, designation and authority of the person who made cutting/ again calculation with ball pen on the Surveyor report has not been given on this report. When the Surveyor appointed by the insurance company op no.2 in his detailed report after analyzing all the entire record and while discussing each and every aspect of the incident in question, verification of account books etc., coverage has assessed loss of Rs.1,26,541/-, the op no.2 insurance company was not justified in getting reduced the amount to  the tune of Rs.1,06,876/-. We are of the considered opinion that amount assessed by Surveyor to the tune of Rs.1,26,541/- after applying less clauses and deduction of the salvage value is just and proper to be paid to the complainant and it is also settled principle of law that report of Surveyor who is an independent third party is an important document and has to be given due weight-age and cannot be brushed aside unless and until there is any ambiguity in the same.  Therefore, op no.2 insurance company is liable to make payment of Rs.1,26,541/- to the complainant as assessed by Surveyor appointed by op no.2. Besides this amount, the complainant is also entitled to compensation for harassment and litigation expenses from op no.2 insurance company. However, no liability of any kind of op no.1 bank is made out as op no.2 bank has simply given financial assistance to the complainant and in turn got secured the stock of the complainant through op no.2 insurance company.

14.     In view of our above discussion, we allow the present complaint qua op no.2 insurance company and direct the op no.2 to pay the above said claim amount of Rs.1,26,541/- alongwith interest @6% per annum to the complainant from the date of filing of present complaint i.e. 16.07.2019 till actual payment within a period of 45 days from the date of receipt of copy of this order. We also direct the op no.2 insurance company to further pay a sum of Rs.10,000/- as compensation for harassment and also to pay a sum of Rs.5000/- as litigation expenses to the complainant within above said stipulated period. In case op no.2 fails to comply with the above said order within above said stipulated period, the complainant will be at liberty to initiate proceedings under Sections 71/72 of the Consumer Protection Act, 2019 against op no.2. However, complaint qua op no.1 bank stands dismissed. A copy of this order be supplied to the parties as per rules. File be consigned to the record room.

Announced:                             Member     Member               President,

Dated: 07.09.2022.                                                         District Consumer Disputes

                                                                            Redressal Commission, Sirsa.

JK