IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 23rd day of January, 2023
Present: Sri. Manulal V.S. President
Smt. Bindhu R. Member
Sri. K.M. Anto, Member
C C No. 110/2020 (filed on 14-08-2020)
Petitioner : P.S. Babu Raj,
S/o. Sekharan Nair,
Proprietor,
Puthuyakalathil Rubbers,
Nechipuzhoor P.O.
Pala – 686574.
(Adv. Jeeva Elsa Abraham)
Vs.
Opposite parties : (1) SBI General Insurance Co. Ltd.
No.82 ‘A’ Block 3rd Floor,
Good Shephered Square,
Kodambhakkam High Road,
Nungambakkam,
Chennai – 600034
Rep. by its Deputy Manger
Commercial Claims.
(Adv. Agi Joseph)
(2) State Bank of India,
Valavoor Branch,
Valavoor P.O. Pala
Rep. by its Manager.
(Adv. Sunny George Chathukulam)
O R D E R
Smt. Bindhu R. Member
Complaint is filed under Section 35 of Consumer Protection Act, 2019
The complainant is conducting a rubber business under the name and style M/s. Puthiyakalathil Rubbers. The complainant took a loan for the same from State Bank of India, Valavoor Branch, the 2nd opposite party herein. At the time of issuance of loan, the complainant was compelled to take an insurance policy in order to get compensation in case of any casualities such as fire, Riot, Storm, cyclone, typhoon flood inundation etc. The bank authorities assured that the entire stock and buildings were covered by the insurance. The complainant put signatures in the printed blank forms given by the 2nd opposite party. Thereafter, they have been debiting premium from the account of the complainant every year. Though the deduction of premium was regular neither the policy nor the policy conditions were issued to the complainant by the bank or the insurer. The complainant took the policy only because of the assurance given by the bank authorities that any type of damage upto Rs.32,00,500/- caused to the building and stock of the complainant was covered by the said policy. While so on 22-01-2019 at about 8.00 pm, a fire broke out in the smoke house, which is the part of main building. Immediately the fire force was informed and they extinguished the fire. The next day itself, the complainant reported the occurrence of the fire to the bank and accordingly the insurance company deputed a surveyor to assess the damage and he visited on 25-01-2019. According to the Surveyor, the loss sustained would come nearly Rs.20,00,000/-. After the assessment, the 1st opposite party has not taken any steps for the payment of the amount and on repeated demand credited an amount of Rs.4,02,149/- in the account of the complainant. Even after repeated demands, the opposite parties did not pay the balance amount. The respondents have not sent any communication to the complainant regarding the balance payment. Finally, he obtained a copy of the survey report by applying through Right to Information Act and only from the survey report, it is revealed that there was an exclusion clause in the policy condition and the survey report was prepared accordingly. Thereafter, the complainant demanded the second opposite party to give the policy copy and the conditions if any. At that time only, the bank served a copy of conditions, which was not part of the policy. Moreover there was no such exclusion clause. The smoke room is the part of insured building and an integral part of the business. The smoke room is not a separate building. The bank authorities never intimated or gave any policy conditions which excludes heating or drying process. If it was noticed or intimated, the complainant would not have taken the policy since smoking and drying of rubber sheet are integral part of the business. Without covering that risk, there is no scope for taking any policy. As per the policy and survey report, the complainant is entitled to get Rs.16,81,473/- as compensation. But instead of granting said amount an amount of Rs.4,02,149/- is only allowed by the 1st respondent. The opposite parties are bound to pay the balance amount and the nonpayment of the balance amount amounts to deficiency in service and unfair trade practice on the part of opposite parties. Hence this complaint is filed for the balance amount and compensation.
Up on notice, opposite parties appeared through counsels and filed separate versions.
The 1st opposite party contented that the complaint is untenable as the claim of the complainant was rightly settled by the 1st opposite party based on the survey report submitted by the independent 3rd party Statutory surveyor and the precincts of policy coverage. The complainant has not produced any material to disprove the assessment of the surveyor. The complainant had accepted the amount of Rs.4,00,606/- towards full and final discharge of liability and issued a discharge voucher. Hence the complainant is estopped from the dispute in the claim settlement. The complaint is filed as an afterthought. There is no banafide cause of action. Moreover the complainant is engaged in a commercial activity and hence he is not a consumer within the meaning of Consumer Protection Act.
The policy is admitted. The policy conditions are the part and parcel of the policy. A claim was lodged in the said policy on 23-01-2019 alleging fire damage to the insured property. Upon information, the 1st opposite party appointed a 3rd party independent statutory surveyor Mr. P.T.R. Babu bearing license No.SLA-15095/2020 to assess the loss. He filed a report No.PTR/SBI/CNNI/27606/2019 dtd.16-03-2019. The Surveyor assessed the loss as
- The rubber sheets 9000 nos. (7200 kgs) kept in the smoke house for heating and drying process were damaged due to the fire from firepit. However not payable under the policy, since the policy excludes any goods undergoing heating and drying process.
- Smoke house building is not insured as per the policy. Hence the damage to Smoke House is not payable. However, the loss to the building situated at the risk location as stated in the policy is covered (Building No. III/430, Karoor Panchayath, Kottayam, Kerala – 686574)
Computation of loss
| Amt. Assessed | |
Stock of rubber sheet in smoke house | -
| Not payable- Exclusion: undergoing any heating or drying process |
Stock of rubber sheets outside smoke house | -
| |
Smoke house building | -
| Not payable – Not covered –policy under risk location mentions “Building No.III/430, Karoor Panchayath, Kottayam, Kerala – 686574” Smoke house a new building constructed in 2017 not covered under the policy |
Storeroom building | -
| |
Therefore, the gross loss is only Rs.4,23,315/-.Further, a salvage was adjusted for Rs.1,500/- and there is a clear stipulation in the policy that 5% of claim amount shall be deducted under policy excess. ie. Rs.21,091/-.Accordingly, the Net Loss was arrived at Rs.4,00,724/-
The report of the surveyor is categorical on the assessment of loss and extend
of coverage under the policy, which is undisputable. It is a well-established position of law by various rulings of apex Court that the report of the statutory surveyor is a sacrosanct document and it should not be brushed aside unless found contrary. The surveyor is not an employee or agent of the 1st opposite party. Hence utmost credence should be given to the survey report. The 2nd opposite party duly processed the claim for a some of Rs.4,00,606/- after the adjustment of reinstatement premium of Rs.118/- through NEFT UTR No.151076036 dtd.03rd July, 2019. Subsequently the complainant issued a discharge voucher also. So there is no deficiency in service or unfair trade practice on the part of the 1st opposite party. Hence the complaint is liable to be dismissed.
The 2nd opposite party contented in its version that the complainant had accepted the claim amount without objection and issue a discharge voucher for Rs.4,00,606/- towards full and final discharge of liability. Hence the complaint is estopped from disputing the claim settlement. The complaint is an afterthought and without any bonafide cause of action. The complainant is not a consumer as he was engaged in commercial activity and trade. The amount of loan availed by him was Rs.20,000/-. Hence the complainant is not a consumer within the meaning of Consumer Protection Act and so the complaint is not maintainable.
The 2nd opposite party insisted for taking policy for continuing the loan facility is true. As per the terms of sanction and loan agreement insurance of secured asset is a mandatory requirement. The allegation that the bank authority assured that the entire stock and building are covered by the insurance are totally false.
The complainant had executed an agreement of hypothecation cum working capital dtd.30-03-13 and according to this the loan was sanctioned. By this agreement the bank is appointed as the attorney of the borrower for the purpose of claiming, settling, compromising all the claims with respect to such policies with the insurance company and to receive the claim amount and adjust the same against the loan dues. As per the terms and conditions of the agreement it is for the petitioner to take the insurance policy, but on the failure of the petitioner to take the insurance bank has insisted him to take the policy and deducted the premium periodically from the account of the petitioner’s as per the conditions of the agreement. It is the usual practice that the original insurance policy is kept with the bank and a copy of the same would be given to the complainant. The 2nd opposite party had never informed the complainant that the entire stock and building were covered by the insurance policy. The policy and terms and conditions were served on the complainant. The allegation that any type of damages upto Rs.32,00,500/- caused to the building and stock of the complainant is covered by the policy is false and the 2nd opposite party did not make any such assurance. As per the terms of insurance policy dtd.23-03-2018, the sum assured for the building is Rs.4,00,500/- and that for stock of rubber sheet and rubber scraps is Rs.28,00,000/- On receipt of information of the fire the 2nd opposite party informed the 1st opposite party for necessary action. The allegation that the opposite party informed the complainant that the balance amount would be paid is not correct. The copy of the policy was given to the complainant after taking the policy. The insurance policy certificate includes the policy conditions also. It is not true that the smoke room was a part of insured building and an integral part of the business. The 2nd opposite party has intimated the essential condition of the policy to the complainant. It is to the 1st opposite party to pay to the complainant if any amount is due to him. There is no deficiency in service or unfair trade practice from the side of 2nd opposite party. Hence the complaint is liable to be dismissed.
Towards the evidence part, the complainant filed proof affidavit in lieu of chief examination along with Exhibits.A1 and A2 whereas the opposite parties filed proof affidavit along with Exts B1 to B3 from the side of 2nd opposite party and B4 to B7 from the side of 1st opposite party.
Cutting through the welter of pleadings of both the parties and scrutinizing the documents placed on record we frame the issues,
- Whether the complainant has established a deficiency of service or unfair trade practice on the part of the opposite parties?
- If so, what are the reliefs?
Issue Nos.1 and 2 together.
The case of the complainant is that he had taken a loan from the second opposite party for the assurance of the repayment the 2nd opposite party insisted to take a business package insurance policy no. 0000000000808540-05for the period from 30-03-2018 to 29-03-2018 with the 1st opposite party. When the stock of rubber in the smoke house attached to his shop where all the processing and storage is carried out, got fire , though he was eligible for insurance amount as per the survey report, the opposite parties denied the full payment and hence the complaint is filed. The Opposite parties on the other hand reiterated in their version that they paid the eligible amount as per the survey report according to the policy conditions and the complainant received the money by issuing a receipt discharging them from further liability.
On a meticulous scrutiny of the pleadings and evidence on record, we see that the policy taken by the complainant is admitted by both the opposite parties. The 2nd opposite party bank admits that they insisted the complainant to take the policy as the complainant failed to take one insurance policy of his own for the assurance of the loan repayment because it was a mandatory condition for the sanction of business loan. The complainant alleged that the proposal form was filled by the 2nd opposite party and he was informed that the entire building and stock were insured under the policy. The policy and the incident of fire is admitted by the opposite parties though no documents regarding the fire incident are produced before this Commission.
The survey report has been produced by the complainant as Exhibit A1 and the 1st opposite party produced the same as Exhibit B7. On a detailed perusal of the survey report, the surveyor has taken the statement of the complainant wherein he has stated that the new smoke room was constructed in 2017. The loan agreement and insurance was taken in 2008. In the loan agreement the building number insured is shown as 3/430 whereas in the claim form the loss location address is given as 3/256. The complainant has not produced any document to prove that the smoke house was part of the main insured building. As the smokehouse was built subsequently, the presumption under ordinary prudence is that it is out of cover of the already existing insurance policy. There is no cogent evidence produced by the complainant to prove that the smoke house which was built subsequently was also insured at the inception of the policy or subsequently.
So we see that the 1st opposite party cannot admit the claim outside the insurance coverage. Moreover, we cannot see that the complainant has informed the 2nd opposite party that he had made an addition to the building which was covered under the business package insurance policy.
In The Manager vs Jameela Aboobacker, on 6 October, 2010, the Honourable State Consumer Commission, Kerala has set aside the order of the district forum of allowing a claim of insurance under fire while heating and drying which is clearly excluded in the policy. Here though the 1st opposite party has not proved that they had supplied the terms and conditions to the insured, the act of the insured of extending the insured building and moving the insured stock to the new premises without intimating the opposite parties itself defies his right to claim for the loss occurred in such extended premises.
Moreover, the surveyor has assessed the loss sustained to the stock of rubber outside the stock room as Rs1,98,000/- and the loss occurred to the store room building which is also insured as Rs.2,25,315/-. A total amount of 4,23,315/- from which a salvage of Rs.1500/- and a policy excess of Rs.21,091/- was again deducted as per the report and the final amount of Rs.4,00,606/- was given which was received by the complainant as per Exhibit B4as full and final settlement.
Hence we find that there is no deficiency of service on the part of the opposite parties and hence the complaint is dismissed.
Pronounced in the Open Commission on this the 23rd day of January, 2023
Smt. Bindhu R. Member Sd/-
Sri. Manulal V.S. President Sd/-
Sri. K.M. Anto, Member Sd/-
Appendix
Exhibits marked from the side of complainant
A1 - Copy of survey report dtd.16/03/19 by P.T.R. Babu
A2 – Copy of policy by SBI
Exhibits marked from the side of opposite party
B1 – Letter dtd.27-03-2013 by SBI by SBI, Region III Zonal Office, Kottayam to the
Branch / Chief Manager SBT Valavoor Branch
B2 – Hypothecation cum working capital agreement
B3 – Business package insurance – policy schedule
B4 – Copy of discharge voucher
B5 – Copy of policy with terms and conditions
B6 – Copy of claim form issued by opposite party
B7 – Copy of survey report dtd.16-03-19 by P.T..R. Babu
By Order
Sd/-
Assistant Registrar
