STATE CONSUMER DISPUTES REDRESSAL COMMISSION OF TELANGANA :

                                           At  HYDERABAD

                                                      FA 441 of 2017

                                                   AGAINST

                 CC  42 of 2013, DISTRICT FORUM, MAHABUBNAGAR

Between :

The United India Insurance Company Ltd.,

through its Branch Manager, 1st floor,

Behind Vysya Bank, New Town,

Mahabubnagar. …                                                  Appellant /Opposite Party

R.V.R. Poultries, represented by its Managing Partner

Mr. R. Madhava Reddy S/o R. Venkat Reddy,

 aged 56 years, R/o Bokkalonipally village,

 Mahabubnagar mandal and District. …               Respondent/complainant

Counsel for the Appellant                  :   M/s. D.R. K. Reddy

Counsel for the Respondent               :    Sri A. Naveen Kumar.

Coram                :

                 Honble Sri Justice B. N. Rao Nalla         …      President

                                           And

                          Sri Patil Vithal Rao              …      Member

                          Friday, the Twenty Seventh Day of April

                                  Two Thousand Eighteen

Oral order : ( per Hon’ ble Sri Justice B.N.Rao Nalla, Hon’ble President )

                                                            ***

1)       This is an appeal filed under Section 15 of the Consumer Protection Act by the opposite party praying this Commission to set aside the impugned order dated 16/10/2017 passed in CC 42 of 2013  on the file of the  DISTRICT FORUM, Mahabubnagar.

2)       For the sake of convenience, the parties are described as arrayed in the complaint before the District Forum.

3).      The case of the complainant, in brief, is that he  is doing poultry (layers) business with a total capacity of 1,20,000 layer birds. He used to purchase and store heavy quantities of feed ingredients regularly as the daily consumption of  the feed for the unit would be 14 tons. He availed loan (open cash credit) from the Andhra Bank, Mahabubnagar branch for purchase of the feed ingredients to meet the daily requirement and to maintain the stocks under hypothecation of the same bank and used to submit the daily/monthly stock statements showing stock position and its value of feed ingredients. On 1-8-2012 at about 10.30 p.m., a fire accident occurred in his feed godown due to electrical short circuit, due to which, 102 tons of Dry Fish (4275 bags) and 1 ton of Soya Bean, de oiled cake (20 bags) amounting to Rs.20,00,000/- were gutted away. On  2-8-2012, he personally intimated the same to the opposite party with whom he had insured the poultry ingredients and the opposite party sent their surveyor and he inspected the accident. On his complaint on 31.08.2012, the police registered Cr. No. 267/2012 and the District Fire Officer on 2.8.2012 opined that the casue of fire may be due to ‘ electrical origin’. the Addl. Asst. Engineer, Operation/APCPDCL, inspected the premises and opined that “on inspection of service connection No.49, dt.31-8-2012 and found that as per their field observation they found poultry feed ingredients damaged in the fire due to the poor internal wiring of the feed godown”.  When he submitted the claim on      17-9-2012 with all relevant documents, the opposite party sent a letter dated     7-12-2012 to the Manager, Andhra Bank, Mahabubnagar repudiating the claim showing the reason as “Spontaneous Combustion” and as the same is excluded in the policy which amounts to deficiency in service. Hence the complaint to direct the opposite party to pay a sum of Rs.20,00,000/- along with interest @ 18% from the date of fire incident i.e., 1-8-2012 till the date of realization and to pay damages and costs of the complaint.

04.     The  opposite party  opposed the above complaint by way of written version, while admitting that the Andhra Bank, Mahabubnagar branch granted the complainant’s firm with open cash credit and to maintain the stocks under hypothecation by mentioning in the stock register,  denying  the alleged loss in the fire accident. The police complaint was made on  31-8-2012 i.e., after 30 days of alleged accident. Their surveyor reported that the fire was due to “Spontaneous Combustion”, which is one of the exclusion of the policy conditions. As per the opinion of the expert i.e., Surveyor, spontaneous combustion means “ignition of a substance, such as oily rags or hay caused by a localized heat increasing reaction between the oxidant and the fuel and not involving addition of heat from an outside source”. Hence they repudiated the claim of the complainant. There is no deficiency in service on their part. Hence prayed to dismiss the complaint.

5)       During the course of enquiry before the District Forum, in order to prove his   case, the complainant filed his evidence affidavit and got marked Ex.A1 to A-10 and the Opposite Party has filed an evidence affidavit and got marked Ex.B1 to Ex.B3.

6)       The District Forum, after considering the material available on record, held and directed the opposite party liable  to pay a sum of Rs.15,23,592/- along with interest @ 9% p.a., from the date of filing of the complaint till its realization and to pay Rs.25,000/- towards compensation to the complainant within one month.

7)       Aggrieved by the said order, the opposite party preferred this appeal before this Commission.

8).      Both sides have advanced their arguments reiterating the contents in the appeal grounds, rebuttal thereof along with written arguments.

9)       The points that arise for consideration are,

(i)       Whether the impugned order as passed by the District Forum suffers from any error or irregularity or whether it is liable to be set aside, modified or interfered with, in any manner?

(ii)      To what relief ?

10).   Point No.1 :

There is no dispute that the stock of the Poultry Feed of the respondent/ complainant, which was under the hypothecation of  Andhra Bank,  was insured vide Standard Fire and Special Perils policy bearing No. 051103/11/12/ 11/ 00000278 for the period from 14.05.2012 to Midnight of 13.05.2013  for an amount of Rs.80,00,000/- vide Ex.A2, copy of the policy.

11).    The claim submitted by the respondent/complainant for an amount of Rs. 20,00,000/-,  on the ground that on 1-8-2012 at about 10.30 p.m., a fire accident  had  occurred in his feed godown due to electrical short circuit, due to which, 102 tons of Dry Fish (4275 bags) and 1 ton of Soya Bean, de oiled cake (20 bags)  were burnt,  was repudiated  which amounts to deficiency in service. On the other hand, the appellant Insurance company informed through the Andhra Bank contending that accident had occurred due to “Spontaneous Combustion” and the same is excluded as per the terms and conditions of the policy and hence there is no deficiency in service on their part in repudiating the claim.

12).    The District Forum observed that the policy does not expressly exclude the fire by natural heating or spontaneous combustion and accepted the net loss of Rs.15,23,529/-assessed by the surveyor of the appellants Insurance company.

13).    Counsel for the appellant Insurance company argued that the District Forum failed to see that the “ Spontaneous Combustion” is not covered under the policy. As per the contention of surveyor report ‘spontaneous combustion’ means “ignition of a substance, such as oily rags or hay caused by a localized heat increasing reaction between the oxidant and the fuel and not involving addition of heat from any outside source”.   The surveyors, themselves, admitted in their report that, as per the FIR and Panchanama of the Mahabubnagar Police, Fire brigade Certificate and Electricity Department confirmed  that the origin of the fire is  ‘electrical origin’. The surveyors were  appointed by the appellant’s Insurance company to survey and assess loss, but, they are not technical experts to arrive at the right conclusion of the fire accident. Further, the surveyors came to the conclusion that the accident is due to Spontaneous Combustion without any cogent technical expert opinion.  Of course, the surveyors are private persons, that too, they were appointed by the Insurance company by themselves. It is to be considered the reports of the Government Departments rather than that of the private surveyors. We have to find out whether the insured material is combustionable. Admittedly, the insured stock  was poultry feed and the appellants have to prove  that the said  material may be ignited naturally. All the three Government Departments came to the conclusion that the cause of fire is due to electrical origin and poor internal wiring belonging  to godown and hence the cause of accident was due to ‘Spontaneous combustion ‘ cannot be considered. The surveyors,  who were appointed by the appellants themselves,  assessed the net loss at Rs.15,23,529/- and hence the District Forum awarded the said amount and we do not find any irregularity in the impugned order of the District Forum.

14).              After considering the foregoing facts and circumstances and also having regard to the contentions raised on both sides,   this Commission is of the view that there are no merits in the appeal and hence it is liable to be dismissed.  Hence, the point framed at para 9, supra,  is answered accordingly. 

15).    Point No. 2 :

In the result, the appeal is dismissed confirming the impugned order dated 16.10.2017 in CC 42 of 2013 passed by the District Forum, Mahabubnagar. There shall be no order as to costs. Time for compliance four weeks.

                                                            PRESIDENT                     MEMBER                                                                           Dated :  27.04.2018.