Sikkim

East

CC/07/2020

Wangchuk Namgyal Bhutia - Complainant(s)

Versus

Regional Claim Manager - Opp.Party(s)

19 May 2023

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, GANGTOK, SIKKIM

 

DATED: 19.05.2023

 

CONSUMER CASE NO. 7 OF 2020

 

1.    Shri Wangchuk Namgyal Bhutia,

    Son of Late Choden Bhutia,

    Aged 35 years.

 

2.    Smt. Norkit Lepcha,

    Wife of Late Choden Bhutia,

    Aged 55 years.

 

Both residents of Ralung, West Pendam,

P.O and P.S Singtam, Gangtok, Sikkim.

                                                 …       COMPLAINANTS.

 

Versus 

 

1.    Regional Claim Manager,

    Commercial Claims,

    SBI General Insurance Co. Ltd.

    1508, 15th Floor, PS Srijan Corporate Park, 

    Sector V, Bidhannagar, Kolkata, West Bengal.    

 

2.     C.S.M,

    SBI General Insurance Co. Ltd.

    Parthiba (1st Floor), Opposite Staduim Main Gate, 

    Bidhan Road, Siliguri, Darjeeling, West Bengal. 

 

3.    The Branch Manager,

    State Bank of India, Zero Point Branch,  

    Development Area, Gangtok, Sikkim.

                                    …      RESPONDENTS.

 

For the complainants: Ms. Kesang C. Tamang, Learned Counsel.   

 

For Respondent No.1 and 2: Mr. Thupden G. Bhutia and Ms. Sushmita Ghalay, Learned Counsel. 

 

For Respondent No.3: Ms. Yankeela Bhutia, Learned Counsel.

 

CORAM:

1. K.W.Bhutia, President

2. Anita Shilal, Member

3. Rohit Kumar Pradhan, Member

 

Per: K.W.Bhutia, President

 

O R D E R

    By this complaint filed under Section 35 of the Consumer Protection Act, 2019, the complainants seek compensation for harassment and deficiency in services against the  respondents.

2.    The case of the complainants is that they had taken housing loan from LIC Housing, Gangtok which was later taken over by respondent no.3. As a security for repayment of loan, the complainants mortgaged their land measuring 0.1180 hectare on plot no. 4350/4691 and 600/4690 located at Ralang, West Pandem along with their two storeyed residential RCC building. While the loan was being sanctioned, respondent no.3 persuaded the complainant to purchase property insurance from respondent no.1 and 2. After the spot visit and survey conducted by respondent no.3 with the agents of respondent no.1 and 2 in December 2018-January 2019, the insurance of the said building was approved on 08.01.2019 vide policy no. 0000000011372387 (valid from 08.01.2019 to 07.01.2039). In April 2019, the agents of respondent no.1 and 2 further persuaded the complainants to enhance the premium amount to ₹ 8,802 which they complied. However, revised policy deed for enhanced premium was not issued to the complainants. 

3.    It is the case of the complainant that in July-August, 2019 Ralang, West Pandem was hit by continuous torrential rain and storm resulting in a landslide in front of the complainant’s building. Subsidence in the surrounding land caused the building to cave in as a consequence of which it developed major cracks, movement in the retaining walls, cracks in tie-beam, beam-walls and floors. The seepage of water into these cracks worsened the matter. The complainants immediately informed the incident to respondent no.3 and after much searching, the insurance policy was located in the loan file (which was in custody of respondent no.3). It was noticed by the complainants that the insurance policy was registered only in the name of complainant no.2 and in their joint names. The anomaly was brought to the attention of all the respondents which did not take any initiative to rectify the defect but assured them that the said policy in the name of complainant no.2 will suffice. 

4.    It is further the complainants’ case that they lodged their claim on 17.12.2000 in the toll free number of SBI General Insurance Company. On 26.12.2019, a surveyor and loss assessor deputed by respondent no.1 and 2 visited the building and made the assessment. On the advice of the said surveyor and loss assessor, the complainants (at their own cost) engaged B-Tech Civil Engineer for evaluation of the damages, which was assessed at ₹ 31,55,000 and meteorological report was also filed. Despite providing all relevant documents and photographs, the complainants’ claim was declined by respondent no.1 and 2 citing unjustifiable grounds. The complainants exchanged numerous email communication with respondent no.1 and 2 but to no avail. Though the respondents assured them of settlement, the claim made by the complainants was not resolved and further rains deteriorated the condition of the building. Further, legal notices were issued to the respondents on 17.10.2020 but the claim of the complainants remained unsettled. Hence, prays for the following reliefs:-

(i)    compensation of ₹ 31,55,000 for damages caused to the     building;

(ii)    payment of monthly EMI @ ₹ 36,700 by respondent no.1     and 2 to respondent no.3 from the date of damages to the     building until settlement of claim;

(iii)    ₹ 2,00,000 as compensation for harassment/agony;

(iv)    ₹ 4,874 as fees paid for obtaining IMD report;

(v)    ₹ 25,000 as fees paid to B.Tech Civil Engineer for     obtaining damages assessment report;

(vi)    issuance of enhanced policy; and 

(iv)    cost of proceedings.

 

5.    Respondent no. 1 and 2 filed their joint written objection stating that the said policy was registered in the name of complainant no.2 yet, the title holder of the property was complainant no.1. Though the survey was conducted on 26.12.2019 and final survey report submitted on 24.02.2020, the claim of the complainants were repudiated vide letter dated 17.03.2020 due to serious breach of the policy terms and conditions, which are as under:

(i)    No insurable interest;

(ii)    Alleged perils not established physically or     documentarily;

(iii)    Unusual delay in intimation of loss;

(iv)    No opportunity for surveyor to conduct admissibility; and

(v)    Risk location not matching with the actual location.

6.    Respondent no.3 in his written objection denying the complainants’ version altogether and sates that the Bank being the custodian of insurance policy of mortgaged property, had kept the said policy in their possession. That any mistakes in the insurance policy is the liability of respondent no.1 and 2, and the Bank is not responsible. 

7.    ISSUE FRAMED:

(1)    Whether the complaint is maintainable?

(2)    Whether there was any breach of terms and conditions of the insurance policy on the part of the complaints?

(3)    Whether there was undue delay in lodging the claim by the complainants with the respondents?

(4)    Whether respondent no.1 and 2 rightly repudiated the claim of the complainants on the breach of terms and conditions of insurance policy?

(5)    Whether there is any cause of action against respondent no.3?

(6)    Whether there has been any deficiency in service on the part of the respondents?

(7)    Whether the complainants are entitled to the reliefs prayed for by them?

8.    In support of her contention that this complaint is maintainable, Learned Counsel for complainants submitted that they fall within the meaning of the term ‘consumer’ defined under Section 2(7) of the Consumer Protection Act, 2019. That the complainants have proved that the concerned policy was taken by then from respondent no.1 and 2, for which premium of ₹ 23,538 had been paid and sum insured enhanced from ₹ 33,60,000 to ₹ 48,00,000. Learned Counsel for the respondents would contend otherwise.

9.    In this regard, we are in agreement with the submission made by Learned Counsel for the complainants that they  are ‘consumer’ within the meaning of the Act of 2019. Further, there is no denial that complainant no.2 was the registered holder of insurance policy no. 11372387 and that the policy premium was being paid. A dispute has arisen due to repudiation of the claim by respondent no.1 and 2 which was made by the complainants. The dispute falls within the meaning of ‘consumer dispute’ under Section 2(8) of the Consumer Protection Act, 2019. Hence, issue no.1 is decided in affirmative. The complaint is indeed maintainable.

10.    Issue no. 2, 3 and 4 poses the vital questions and since they are inter-connected, all the three issues are taken up together. 

11.    There is no dispute to the fact that joint housing loan of the complainants (from LIC Housing, Gangtok) was taken over by respondent no.3. In that process, insurance policy no. 11372387 was obtained by the complaints from respondent no.1 and 2. There is also no dispute that RCC building of the complainants was damaged due to landslide triggered by torrential rain/storm, which is substantiated by the report of Indian Meteorological Department dated 24.01.2020 (Exhibit-10) and Panchayat report dated 17.01.2020 (Exhibit-21). The concerned Panchayat (CW-2) has deposed that there was heavy and continuous rain in their locality between July-August 2019 resulting in landslide that occurred on 30.08.2019 and subsidence of the complainants’ land around the building. CW-2 (D.B. Rai) has also confirmed the said incident. 

12.    It is seen that though the claim was filed by the claimants after about four months of the incident, yet respondent no.1 and 2 considered and deputed a Surveyor to assess the damages. The assessment was made on 26.12.2019. Immediate loss advice prepared by the Surveyor shows the approximate damage worth ₹ 22,50,000 and the final survey report dated 05.06.2020 would show estimated loss at ₹ 31,55,000. The report of Civil Engineer (Exhibit-9) would confirm that the damages to the complainants’ building is  ₹ 31,55,000. We will come back to the assessment of damages later but at the moment, we may see the reasons for repudiation of claim by the insurance company and ascertain whether it is correct or illegal. 

13.    Amongst the five points raised by respondent no.1 and 2 for repudiation of the complainants’ claim, point no. 1 is crucial, i.e. there was no insurable interest. According to the repudiation letter dated 17.03.2020, the reason cited for point no.1 is stated as follows:- “Mr. Wangchuk Namgyal Bhutia, your Son, happens to be the Co-borrower in bank document, but both of you are not jointly holding the policy of insurance. You are not having the title (insurable interest) to subject matter of insurance although the Policy is issued in your name. As you are not the title holder of the insured property, you are not entitled to any benefit under the Policy.”

14.    In this regard, we may mention that when the housing loan was taken over by respondent no.3 from LIC Housing, the respondents were co-borrowers and the property mortgaged with the Bank was registered in the name of complainant no.1. The loan appraisal-cum-control report would show that the property was inspected by Bank staff, Empanelled Valuers and Advocates. It is also palpable that when the insurance policy was approved by the insurance company, survey of the said building was conducted. It is on record that all the while, the insurance policy was in possession of respondent no.3 (which would mean that the complainants may not have known in whose name the policy was registered). Even otherwise, the fault as we see, is clearly of the insurance company for not verifying the title deeds and property documents before issuing of the policy in the name of complaint no.2. When the insurance company and respondent no.3 shared corporate ties, it would not have been difficult for them to verify the loan file which was in possession of respondent no.3. By their  negligence (jointly and severally), the complainants cannot be made to suffer. Hence, the reasons cited by respondent no.1 and 2 for point no.1 to repudiate the insurance claim is clearly misplaced and illegal being mechanical and on technical grounds. 

15.    The other four points cited at the repudiation letter dated 17.03.2020 (Exhibit-13) are without any foundation and need not be gone into. Reverting back to the assessment of damages sustained by the said building, the reports of the surveyor and Civil Engineer coupled with the photographs of the site would show the extent and gravity of damages. The reports of the Bank Surveyor would support the case of the complainants that there was major landslide on the lower portion of main road in front of the building due to torrential rains, causing/aggravating losses inducing the subsidence. Therefore, we find the assessment to be reasonable and accept it to be correct.

16.    For the discussions made above, we find that there was no breach of terms or conditions of the insurance policy on the part of the complaints. There was also no undue delay in lodging the claim by the complainants with the respondents. The reason for delay has been explained by the complainants. Further, the repudiation of complainants claim by respondent no.1 and 2 was not correct. Issue no. 2, 3 and 4 are all answered in negative.

17.    It is palpable from the evidence of respondent no.3 that all the loan documents including the insurance policy concerning the said building was in custody of respondent no.3. Since the insurance policy was taken by the complainants at the behest of respondent no.3 and as the Bank was informed about the calamity and the complainants’ claim, it cannot be said that there is no cause of action against respondent no.3. Issue no. 5 has to be answered in affirmative.

18.    In support of the contention that there was deficiency in service on the part of the respondents, Learned Counsel for the complainants cited several judgments. However, in the light of the findings arrived at issue no. 1 to 5 (supra), we conclude that there was deficiency in service on the part of the respondents. Issue no.6 is answered in affirmative.

RELIEF:

19.    In view of our findings above, the complainant is entitled to the reliefs as under:-

(i)    Respondent no.1 and 2 shall indemnify the complainants to the tune of ₹ 31,55,000 (Rupees Thirty-One Lakhs Fifty-Five Thousand only) for damages caused to their building due to landslide/heavy rain; 

(ii)    Respondent no.1, 2, and 3 will jointly pay a sum of ₹ 2,00,000 (Rupees Two Lakh only) to the complainants for deficiency of services/harassment/pain and agony;

(iii)    Respondent no.1, 2, and 3 will jointly pay a sum of ₹ 30,000 (Rupees Thirty Thousand only) to the complainant as cost/lawyers fees;

(iv)    Respondent no.1 and 2 will pay a sum of ₹ 29,874 (Rupees Twenty-Nine Thousand Eight Hundred Seventy-Four only) to the complainant as expenses incurred in obtaining IMD report and damage assessment report from the Civil Engineer; and

(v)    The above-mentioned amount shall be paid with interest @ 10% per annum from the date of filing of this complaint (i.e. 11.12.2020) until full realization.

(vi)    Respondent no.1 and 2 however, cannot be fastened with the liability of paying monthly EMI @ ₹ 36,700 to respondent no.3. This is the responsibility of the complainants.

 

(Anita Shilal)              (Rohit Kumar Pradhan)         (K.W.Bhutia)           

     Member                                 Member                 President  

 

WITNESSES EXAMINED BY THE COMPLAINANTS:

1.    Wangchuk Namgyal          -    CW-1.

2.    D.B. Rai                -    CW-2.

3.    Sonam Tshering Lepcha        -    CW-3.

WITNESSES EXAMINED BY RESPONDENT NO.1 & 2: NIL

WITNESSES EXAMINED BY RESPONDENT NO.3:

1.    Sunil Kumar            -    R3/1.

DOCUMENTS EXHIBITED BY THE COMPLAINANTS:

1.    Exhibit 1        -     Original power of attorney

2.    Exhibit 2        -    Certified copies of parcha khatiyan and                 sale deed

3.    Exhibit 3       -    Certified copy of mortgage deed

4.    Exhibit 4        -    Certified copies of bank documents

5.    Exhibit 5      -    Original insurance policy

6.    Exhibit 6      -    Photographs

7.    Exhibit 7        -           Cash memo

8.    Exhibit 8       -    Copy of long term home endorsement                 slip

9.    Exhibit 9        -    Damage estimation of loss/evaluation

10.    Exhibit 10         -    Copy of meteorological report

11.    Exhibit 10A      -    Original meteorological report

12.    Exhibit 11      -    Original deposit slip

13.    Exhibit 12      -    Copies of various emails

14.    Exhibit 13      -    Letter dated 17.03.2020

15.    Exhibit 14      -    Original office copies of complaints,                     requests and reply

16.    Exhibit 15      -    Print-outs of screen shots

17.    Exhibit 16      -    Original office copy of legal notice

18.    Exhibit 17      -    Original postal receipts

19.    Exhibit 18      -    Print-outs of postal tracking records

20.    Exhibit 19      -    Deposit slips

21.    Exhibit 20      -    Court fees receipts

22.    Exhibit 21      -    Certificate

23.    Exhibit 22      -    Evidence-on-affidavit of CW-1

24.    Exhibit 23      -    Evidence-on-affidavit of CW-3

25.    Exhibit 24      -    Evidence-on-affidavit of CW-2

DOCUMENTS EXHIBITED BY RESPONDENT NO. 1 & 2: NIL

DOCUMENTS EXHIBITED BY RESPONDENT NO. 3:

1.    Exhibit A      -    Evidence-on-affidavit of R3/1

 

(Anita Shilal)                 (Rohit Kumar Pradhan)          (K.W.Bhutia)             

      Member                                    Member                   President