BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SIRSA.
Consumer Complaint no. 158 of 2014
Date of Institution : 14.09.2015
Date of Decision : 02.09.2016
M/S Bhim Jhunthra, Brick Kiln Owner, through its Proprietor, Smt. Basant Jhunthra, Rangri-Jamal Road, Khaja Khera, Sirsa, Tehsil and District Sirsa (Haryana).
….Complainant.
Versus.
1. State Bank of India, through its Branch Manager, Sadar Bazar Branch, Sirsa-125055, Tehsil & District Sirsa (Haryana)
2. SBI General Insurance Company Limited, through its Authorized Signatory, 1st and 2nd Floor, SCO No.457-458, Sector-35C, Chandigarh-160035.
3. SBI General Insurance Company Limited, through its Authorized Signatory, 7B, Ground Floor, Pusa Road, Opposite to Metro Pillar No.153, Rajendra Park, New Delhi-110060.
….Opposite parties.
Complaint under Section 12 of the Consumer Protection Act,1986.
Before: SHRI S.B.LOHIA…………………PRESIDENT
SHRI RANBIR SINGH PANGHAL……MEMBER.
Present: Sh. Anil Bansal, Advocate for the complainant.
Sh.S.L.Sachdeva, Advocate for opposite party no.1
Sh.R.K.Mehta, Advocate for opposite parties no.2 & 3.
ORDER
The case of the complainant is that complainant M/s Bhim Jhunthra, BKO, Khajakhera, Sirsa is a proprietorship concern and has been carrying on business of manufacturing bricks for the last many years. The complainant has obtained a cash credit limit of Rs.20,00,000/- from op no.1 against hypothecation of stocks of bricks, mustard straw (Tura) and coal etc. lying at brick kiln. The mustard straw is stored in the premises of complainant which is being used for manufacturing of bricks. The complainant is submitting periodical inventories/ statement of bricks (finished goods), mustard straw and coal etc. lying stored in the premises of the concern to op no.1. The op no.1 got insured all kind of strocks viz. bricks, coal, mustard straw etc. of complainant concern from SBI General Insurance Company Limited w.e.f. 19.4.2014 to 18.4.2015 vide insurance policy No.917952-01 for a sum of Rs.35,00,000/- against all type of risks of fire and in this regard on 18.4.2014, an amount of Rs.4471/- was debited by op no.1 as insurance premium in the account of complainant. The said insurance was got done by op no.1 of its own even without any consultation with the proprietor of complainant concern to safe guard its hypothecation. The complainant concern had stored mustard straw in the shape of heaps and total of around 4300 quintals of straw worth Rs.12,90,000/- was lying at Brick Kiln, which is clear from the stock statement dated 1.2.2015 submitted to op no.1. On 26.3.2015, at around 3.30 p.m., an incident of sudden fire took place at the site of brick kiln and stock of Tura/mustard straw was burnt. There was loss of around 4000 quintals of tura which was worth Rs.12,00,000/-. The reason of fire was not known to anybody. On 26.3.2015 itself, the matter of fire was immediately reported to Fire Brigage Office, Sirsa and fire could be controlled after 4 hours of continuous efforts. On the same day, SBI General Insurance Limited was also informed about the above said incident. It is further averred that after lodging fire claim bearing No.167782, the insurance company appointed M/s Mittal Surveyors Pvt. Ltd., Bathinda (Punjab) for assessment of loss. On next day i.e. 27.3.2015, Mr. Himanshu Mittal, CA, of above named firm inspected the brick kiln site and took certain photographs and measurement etc. of damaged area for assessment of loss. After inspection, Surveyor firm demanded numerous documents from complainant from time to time, which were duly supplied to them on 9.5.2015 and finally on 14.5.2015. However, the complainant was shocked to receive the repudiation letter dated 5.6.2015 from op no.3. The claim was rejected on the ground that Tura is not covered under the insurance policy and cause of loss was attributable to “Spontaneous Combustion.” The complainant concern made a representation against repudiation of fire claim to SBI Grievance Redressal Committee, Mumbai vide its detailed letter dated 2.7.2015 which was also denied vide letter dated 4.8.2015 on the same line of op no.3. The insurance company has repudiated the claim of Rs.12,00,000/- for the loss to Tura illegally and arbitrarily without any plausible reason. As a matter of fact, entire stock of brick kiln (bricks and related items) were fully covered for Rs.35,00,000/- under the insurance policy and insurance was for “Fire and Allied Perils”. At the time of insurance, no terms and conditions and exclusion clauses were ever told or supplied to the proprietor of complainant concern. The complainant was rather told by op no.1 that all kind of stocks would be covered under the insurance for any type of fire loss. The insurance policy and clarification of insurance for financial year 2015-16 has not been supplied to complainant till date despite request made by it vide letter dated 13.8.2015, especially when the insurance of complainant concern was got renewed by op no.1 of its own from ops no.2 & 3 without the knowledge of complainant and the premium of which was debited in the account of complainant on 3.4.2015 even before the expiry of previous insurance. Moreover, the Surveyor has acted beyond his jurisdiction. His duty was only to inspect the site and to report regarding assessment of loss. He had no authority to say that loss of Tura is not covered under the policy. It is further averred that huge loss of Rs.12,00,000/- has been suffered by complainant and conduct of ops is quite unfair, against insurance norms and ops have deliberately repudiated the genuine claim of the complainant. Hence, the present complaint.
2. State Bank of India, i.e. opposite party no.1 has filed its reply asserting therein that complainant itself purchased the above said policy through answering op and vide the policy only stocks of the complainant was insured for a total sum of Rs.35,00,000/-. The answering op paid the insurance premium to op no.2 after debiting the same to the account of the complainant on the same day. It is denied that insurance was done by the answering op without consultation of complainant. It is admitted that the Tura was covered under the insurance policy. It is wrong that at the time of insurance, no terms and conditions and exclusion clauses were not told and supplied to the complainant. It is also wrong that there is any connivance of answering op with op no.2 in repudiation of claim. The complainant is well educated person. At the time of insurance, the answering op supplied copy of sheet containing the terms and conditions of the insurance policy and also read over the contents thereof and only after that the complainant signed the terms and conditions and paid its premium. The insurance policy was to be supplied by op no.2. Remaining contents of the complaint have also been denied.
3. Pleaded case of the opposite parties No.2 & 3 is that they have repudiated the claim of the complainant vide repudiation letter dated 5.6.2015 on the basis of survey report and photographs confirming that loss took place due to self heating of Tura (burning fuel). The stocks got heated from inside resulting in discoloring of the stocks. As per Surveyor’s report the cause of loss was a result of spontaneous combustion which is excluded under Fire Station. Therefore, the answering ops are not liable to settle the claim of the complainant as there is negligence and fault on the part of the complainant. Moreover, Tura does not cover under the insurance policy. The complainant did not comply with the terms and conditions of the policy. The answering ops have legally and rightly repudiated the claim of the complainant.
4. By way of evidence the complainant has produced her affidavit Ex.CW1, affidavit of Sajjan Kumar, Fire Station Officer as Ex.CW2 and various documents from Ex.C1 to C38. Opposite party no.1 has placed on file affidavit of Sh. K.K. Jain, Branch Manager as Ex.R1, whereas ops no.2 & 3 placed on file affidavit of Sh. Jagdish Prasad, Authorized Signatory as Ex.R2, repudiation letter dated 5.6.2015 as Ex.R3, letter dated 4.8.2015 as Ex.R4, surveyor report Ex.R5, standard fire and special perils policy Ex.R6, letter dated 19.4.2014 Ex.R7 and proceeding of Fire and Emergency Services, Sirsa as Ex.R8.
5. We have heard learned counsel for the parties and have perused the case file carefully.
6. Admittedly, the complainant was having cash credit limit of Rs.20,00,000/- from opposite party no.1 i.e. State Bank of India, Sadar Bazar Branch, Sirsa against hypothecation of stocks of bricks, mustard straw (Tura) and coal etc. lying at brick kiln. According to the complainant, the opposite party no.1 got insured all kind of stocks i.e. bricks, coal, mustard straw of complainant concern from SBI General Insurance Company Limited w.e.f. 19.4.2014 to 18.4.2015 issued by opposite party no.2 for a sum of Rs.35,00,000/- against all type of risks of Fire and a sum of Rs.4471/- as premium for the said policy was debited by opposite party no.1 from the account of complainant. The said fact is also evident from copy of insurance policy placed on file as Ex.C1 and copy of statement of account Ex.C2. It is further the case of the complainant that about 4300 quintals of mustard straw (Tura) was lying at Brick kiln of complainant, the cost of which was of Rs.12,90,000/- and said stock of Tura was verified by State Bank of India i.e. opposite party no.1 on 1.2.2015 as is evident from stock statement Ex.C14. Further from the purchase account of Tura w.e.f. 1.12.2014 to 31.3.2015 Ex.C15, it is evident that from 1.12.2014 to 31.3.2015, total 12107.95 quintals tura for a total sum of Rs.36,07066.15/- was purchased by the complainant concern. Further the above said purchase of Tura is also corroborated by ledger account from 1.12.2014 to 26.3.2015 Ex.C23 wherein all the details of Kanta Parchis have also been given and kanta parchis have also been placed on file as Ex.C24 containing 55 receipts. So, it is proved on record that on the date of fire incident, about 4300 quintals of mustard straw (Tura) was lying at the brick kiln of the complainant. The complainant claims that on 26.3.2015 in a sudden fire incident, 4000 quintals Tura was badly damaged and on that account complainant has suffered a loss of Rs.12,00,000/- as at that time rate of tura was Rs.300/- per quintal. Sh. Sajjan Kumar Lamba, Fire Station Officer has also corroborated the version of the complainant by way of his affidavit Ex.CW2 that there was loss of 200 trolleys (about 4000 quintals) of Tura and Banchaties in fire and he has also placed on file Fire Report Ex.C10 in which it is mentioned that 200 trolleys of Tura was burnt and remaining was saved. So, it is very well proved on record by the complainant that 4000 quintals of mustard straw was burnt in the fire incident on 26.3.2015.
7. The intimation regarding the above said incident was given on the same day by the complainant to the insurance company and fire claim bearing No.167782 was lodged by the complainant upon which M/s Mittal Surveyors Pvt. Ltd. Bathinda (Punjab) was appointed for assessment of loss and accordingly Surveyor visited the spot on the next day i.e. on 27.3.2015 and submitted his report. The Surveyor in his detailed report while assessing the loss has reported that loss took place due to self-heating of Tura (burning fuel) and the cause of loss is spontaneous combustion and affected item i.e. Tura is not insured in the policy. On the basis of said report of the Surveyor, the opposite parties No.2 & 3 have repudiated the claim of the complainant vide their repudiation letter dated 5.6.2015 Ex.R3 and representation of the complainant against the said repudiation has also been dismissed vide letter dated 4.8.2015 Ex.R4. To justify their repudiation, the ops No.2 & 3 have also drawn our attention towards exclusion clause in the policy. However, we see no substance in the contentions of the opposite parties No.2 & 3 and in our view the repudiation of the claim of the complainant is wrong and illegal. According to the opposite parties No.2 & 3 the claim of complainant falls in the exclusion clause of the policy according to which loss, destruction of or damage caused to the property insured has been excluded if it is caused due to its own fermentation, natural heating or spontaneous combustion. Tura is not covered under the policy as the same is spontaneous combustion and therefore, they have acted as per the terms and conditions of the insurance policy. However, the opposite party no.1 i.e. State Bank of India who got insured the stocks of the complainant from ops No.2 & 3 has specifically pleaded in their reply that Tura was covered under the insurance policy. Moreover, the complainant has taken a specific stand that terms and conditions of the insurance policy neither were told at the time of insurance nor have been supplied to him till date and the plea of op no.1 that complainant signed the terms and conditions is not supported by any documentary evidence. No such document signed by the complainant regarding accepting of terms and conditions of insurance policy has been placed on file either by op no.1 or by ops no.2 & 3. It was the duty of insurers or the agents to disclose all material facts and therefore, the complainant is not bound by exclusionary clause. Reliance in this regard can also be placed on the judgment of Hon’ble Supreme Court in case titled as United India Insurance Co. Ltd. Vs. M.K.J. Corporation, III (1996) CPJ 8 (SC) cited by learned counsel for complainant. Moreover, from the insurance policy Ex.C1 it is evident that stocks of bricks and related items were covered under Fire and Allied Perils and therefore, it cannot be said that Tura is not covered under the insurance policy and therefore, the repudiation of the claim of the complainant is not justified.
8. Now we come to the quantum of loss caused to the complainant. The complainant has claimed loss of Rs.12,00,000/- and the Surveyor in his report Ex.R5 has mentioned that the insured has not deducted salvage value and in the statement stated that salvage is of no use. He has further mentioned that we are of the view that at many places the color of Tura is changed. It can still be used for fuel though having lower burning properties. The salvage is bulk in volume and not practically possible to sell it in the market. Therefore, it is better to assess the loss on allowance basis. Accordingly, the loss is assessed as under:-
Particulars Quantity Rate Amount
Claim of insured 4,000.00 300.00 12,00,000.00
Less Deduction @10%
for possibility of
Variation 1,20,000.00
Balance affected stocks 10,80,000.00
Loss Assessed 75% 8,10,000.00
The Surveyor has also applied average clause and excess clause on the above said amount of Rs.8,10,000/- i.e. loss assessed and has mentioned that adjusted loss is Rs.4,48,835/- but in our view the said average clause and excess clause will not apply in this case as mentioned above the complainant has proved on record that actually about 4300 quintals of Tura was lying at the brick kiln. So, we are of the considered opinion that amount of Rs.8,10,000/- for loss will be just and proper amount to be given to the complainant.
9. Resultantly, this complaint is hereby allowed with a direction to the opposite parties No.2 & 3 i.e. insurance company to pay a sum of Rs.8,10,000/- to the complainant to compensate its loss and Rs.40,000/- for harassment including litigation expenses. The opposite parties No.2 & 3 are directed to pay the above said total amount of Rs.8,50,000/- within a period of one month, failing which the complainant will be at liberty to initiate legal proceedings under the Act against the ops No.2 & 3. Copy of this order be supplied to the parties as per rules. File be consigned to record room after due compliance.
Announced in open Forum. President,
Dated: 2.9.2016 Member District Consumer Disputes
Redressal Forum, Sirsa.
