A.F.R.
RESERVED
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
UTTAR PRADESH, LUCKNOW
APPEAL NO. 1560 OF 2015
(Against the judgment/order dated 25-06-2015 in Complaint
Case No. 331/2015 of the District Consumer Forum, Amethi
01. Regional Officer
National Insurance Company Limited
Regional Office at Jeewan Bhawan
Phase-2, Nawal Kishore Road
Hazratganj, Lucknow
02. National Insurance Company Limited
Through Branch Manager
Branch Sultanpur
at Mohalla Golaghat City, Sultanpur
... Appellants
V/s
01. Sushma Singh
Proprietor of Naincy Rice Mill
Situated at Village Hariharpur
Post Korari Heershah, District Amethi
- Bank of Baroda
Through Branch Manager
Branch Munshiganj
District Amethi
...Respondents
AND
APPEAL NO. 1500 OF 2015
(Against the judgment/order dated 25-06-2015 in Complaint
Case No. 331/2015 of the District Consumer Forum, Amethi
Bank of Baroda
Munshiganj Branch
District Amethi
Through its Branch Manager
Pankaj Kumar
...Appellant
V/s
- Regional Manager
National Insurance Company Limited
Regional Office Jeewan Bhawan, Phase-2
Nawal Kishore Road, Lucknow
:2:
- National Insurance Company Limited
Through Branch Manager
Branch Sultanpur
Situated in Mohalla Golaghat City
Sultanpur
- Sushma Singh
Proprietor of Naincy Rice Mill
Situated at Village Hariharpur
Post Korari Heershah
District Amethi
...Respondents
BEFORE:
HON'BLE MR. JUSTICE AKHTAR HUSAIN KHAN, PRESIDENT
HON'BLE MRS. BAL KUMARI, MEMBER
For the Appellant : Mr. Deepak Mehrotra, Advocate for Insurance Co.
Mr. M P Pandey, Advocate for Bank.
For the Respondent : Mr. Abhishek Singh, Advocate for Complainant.
Dated : 22-09-2016
JUDGMENT
PER MR. JUSTICE AKHTAR HUSSAIN KHAN, PRESIDENT
These two appeals have been filed under Section-15 of the Consumer Protection Act 1986 against same judgment and order dated 25-06-2015 passed by District Consumer Forum, Amethi in Complaint Case No. 331/2015 Smt. Sushma Singh V/s Bank of Baroda and others. As such, both appeals are being decided by a common judgment.
Appeal No. 1560/2015 has been filed by Regional Officer, National Insurance Company Limited and National Insurance Company Limited through Branch Manager, Branch Sultanpur who are opposite parties no.2 and 3 of complaint. Appeal No. 1500/2015 has been preferred by Bank of Baroda through Branch Manager Sri Pankaj Kumar who is opposite party no.1 of complaint.
Vide impugned judgment and order the District Consumer Forum has allowed complaint and has ordered opposite parties no.2 and 3 of complaint to make payment of Rs.17,00,000/- within one month to complainant Naincy Rice Mill with interest @ 9% per annum from the date of information of
:3:
alleged theft i.e. 18-03-2013 till the date of actual payment. The District Consumer Forum has further ordered said opposite parties to pay Rs.50,000/- as compensation for physical and mental harassment as well as Rs.5,000/- as cost of the case.
Vide impugned judgment and order the District Consumer Forum has restrained bank opposite party no.1 from making realization of interest from the complainant since 19-03-2013.
The District Consumer Forum has further ordered that in default of payment of above amounts within time prescribed, opposite parties no. 2 and 3 shall be liable to pay interest @ 12% per annum on the above amounts.
In above Appeal No. 1560/2015 Sri Deepak Mehrotra, learned Counsel for appellants appeared and Sri Abhishek Singh, learned Counsel for respondent/complainant appeared.
In above Appeal No. 1500/2015 Sri M P Pandey, learned Counsel for appellant appeared and Sri Abhishek Singh, learned Counsel for the respondent/complainant appeared.
We have heard learned Counsel for the both parties and have gone through the impugned judgment and order as well as records of the case.
It has been contended by learned Counsel for appellants of above both appeals that the impugned judgment and order passed by District Consumer Forum is against law and evidence.
It has been further contended by learned Counsel for the appellant Insurance Company that according to complaint the complainant/respondent came to know about theft for the first time on 16-03-2013. Thereafter she informed appellant Insurance Company about theft on 19-06-2014.
It has been contended by learned Counsel for the appellant Insurance Company that on being informed about the incident of theft, Insurance Company immediately appointed a highly qualified and efficient surveyor Mr. D P Jairath, retired Lt. Col. from army. He conducted extensive enquiries and investigation and submitted a detailed report strongly making recommendation for repudiation of the claim.
It has been further contended by learned Counsel for the appellant
:4:
Insurance Company that despite several demands the complainant neither provided relevant papers nor cooperated in the investigation. Therefore, vide
letter dated 29-01-2015 the Insurance Company has closed her claim and has informed complainant accordingly.
It has been contended by learned Counsel for appellant Insurance Company that the complainant/respondent has left insured premises uninhabited and unattended for more than seven consecutive days and nights. As such, the insurance policy has ceased to remain ineffective and no claim is payable under it.
It has been contended by learned Counsel for the appellant bank that the District Consumer Forum has committed error in restraining appellant bank from realizing interest in terms of loan agreement.
Learned Counsel for the respondent/complainant has opposed both appeals.
It has been contended by learned Counsel for the respondent/complainant that the impugned judgment and order passed by District Consumer Forum is in accordance with law. The appeals filed by both appellants have no merit and are liable to be dismissed.
We have considered the submissions made by learned Counsel for the parties.
It has been alleged by complainant/respondent in complaint that she is proprietor of Nancy Rice Mill. She had taken loan of Rs.25,00,000/- from Bank of Baroda opposite party no.1 for establishing this rice mill. The mill was being run honestly. In the meantime her father-in-law Ram Kumar Singh, husband Dharam Pal Singh and dewar (younger brother of husband) Subedar Singh were sent to jail in a murder case alongwith two other persons. They remained in jail since 12-10-2012 to 16-03-2013. During this period in absence of complainant theft was committed in her above rice mill and all machines as well as stock of rice and raw materials were stolen. FIR was lodged in local police station on 18-03-2013 when above family members of complainant came out of jail on 16-03-2013 after getting bail. Information was also given to opposite party no.1 Bank of Baroda on the same day but opposite party no.1 Bank of Baroda did not give receipt of the
:5:
information. Therefore, complainant sent further information to opposite party no.1 Bank of Baroda through registered post on 18-03-2013 but no action was taken by opposite party no.1 Bank of Baroda. Thereafter complainant contacted opposite party no.1 personally whereupon opposite party no.1 Bank of Baroda informed him that opposite party no.1 shall take further steps only after registration of FIR but the local police station Munshiganj did not register FIR of complainant. Ultimately complainant moved application under Section 156(3) of Criminal Procedure Code before court for registration of FIR. Thereafter FIR was registered in police station Munshiganj with order of court.
It has been further alleged in complaint by complainant that on 16-06-2014 she sent a reminder to opposite party no.1 Bank of Baroda whereupon on 18-06-2014 the opposite party no.1 sent photocopy of insurance policy No. 450304/456/12/7500000100 issued by opposite party no.3 National Insurance Company Limited, Branch Sultanpur whereby rice mill of complainant was insured by opposite parties no.2 and 3 on 15-08-2013 covering risk upto Rs.10,00,000/- for stock and Rs.11,50,000/- for machinery. The premium of this policy had been debited by opposite party no.1 Bank of Baroda from the account of complainant. Thereafter on 19-06-2014 complainant sent information to opposite party no.2 about theft which had been committed in her rice mill. Then opposite party no.2 appointed D. P. Jairath to investigate the case. The complainant provided full cooperation to him in investigation. The complainant furnished him copies of final report as well as order of Magistrate whereby final report was accepted. The complainant further furnished all informations required by surveyor and fulfilled all formalities but opposite parties no.2 and 3 informed her vide letter dated 30-01-2015 that her claim has been made as no claim on the ground that she has not furnished required informations and documents.
In complaint the complainant has further stated that in letter dated 30-01-2015 opposite parties no.2 and 3 have further mentioned that the insured premises of her rice mill had been left unsecured for seven days. As such, insurance policy has ceased.
It has been stated by complainant in complaint that opposite parties
:6:
no.2 and 3 have wrongly repudiated claim of the complainant. The insured premises was locked and the mill was closed because the male members of the complainant’s family had been sent to jail.
In view of above averments made in complaint the complainant has alleged in complaint that opposite parties have committed deficiency in service. As such, she has no alternative but to move complaint under the Consumer Protection Act 1986.
Opposite party no.1 Bank of Baroda appeared before District Consumer Forum but did not file written statement. Only opposite parties no.2 and 3 filed written statement before District Consumer Forum and opposed complaint of the complainant.
In written statement it has been stated on behalf of opposite parties no. 2 and 3 that after receiving information from complainant on 19-06-2014 about alleged theft in insured rice mill, the Insurance Company appointed Sri D P Jairath Chartered Engineer, Lucknow to investigate the matter who visited the branch of Bank of Baroda opposite party no.1 as well as insured premises of rice mill where incident of theft is alleged to have taken place. The surveyor took photographs of the premises and recorded statements of persons present. During inspection of premises all machineries were present except generator. Electric motor was also found there. On enquiry Dharam Pal husband of complainant informed surveyor that original motor had been stolen. He has purchased present old motor.
In written statement filed by opposite parties no.2 and 3 it has further been stated that the complainant did not furnish informations as well as documents required by surveyor and could not provide details of stock and machinery allegedly stolen. However, after having completed investigation, the surveyor submitted his report. Thereafter, considering terms and conditions of policy as well as surveyor’s report, the opposite parties no.2 and 3 have repudiated the claim of complainant for violation of terms and conditions of insurance policy and non cooperation of complainant in investigation.
After having gone through the pleadings of the parties, the District
:7:
Consumer Forum has passed the impugned judgment and order as mentioned above.
Paragraph 5 of the report dated 24-11-2014 submitted by surveyor is extracted below:-
“On 07-07-2014, we accompanied by Shri Dharam Pal Singh visited the rice mill premises and noted that all machinery except for the DG Set was intact and available properly installed at the premises. In response to our inquiry about the electric motor, Shri Dharam Pal Singh stated that the motor originally installed in the mill was stolen and that the motor now seen by us had been borrowed from a friend. We also observed that one expeller and one Atta Chaki was also installed and was available in the machine room. Two adjoining rooms which were meant for the stock were now found to have been converted into residential purpose and were in use as such. There was no stock inside the mill premises.”
The complainant has not denied the above description of premises of insured rice mill allegedly found at the time of visit of surveyor on 07-07-2014.
It has been further alleged by opposite parties no.2 and 3 in written statement that the complainant had left uninhabited the insured rice mill since 12-10-2012. As such, exclusion clause 8A of the policy is applicable and the policy has ceased to remain effective.
The surveyor has referred inspection report prepared by employee of bank respondent/opposite party no.1. This report is dated 20-06-2011and it has been prepared by the bank employee after visiting rice mill of respondent/complainant. In this report it has been mentioned that two labourers were working. Dehusker and Polisher were working automatically and stock available on the date was rice 7 to 8 bags, paddy 10-11 bags, polish 3-4 bags. In this inspection note it has not been mentioned that DG set was found in the mill at the time of inspection. This inspection note shows that at the time of visit of concerned bank employee only Dehusker and Polisher were found in the rice mill.
Paragraph 5 of surveyor’s report extracted above shows that when the surveyor visited mill of respondent/complainant on 07-07-2014 all
:8:
machineries except DG set were intact and were available properly installed at the premises. The appellant has not adduced evidence to show that the machineries found available at the time of visit of surveyor have been installed subsequently after alleged theft.
It is also relevant to mention that the employee of the bank has not certified that all the machineries allegedly purchased by the complainant/respondent with the loan advanced by respondent/opposite party no.1 were available in the mill at the time of his visit.
In the case of Dabiruddin Cold Storage V/s New India Assurance Company Limited and others I(2010) CPJ 141 (NC) Honourable National Commission has held that surveyor’s report is an important document and cannot be easily brushed aside.
After having gone through whole facts and circumstances of the case, we are of the view that theft of machinery alleged by respondent/complainant has not been proved properly. Merely lodging of F.I.R. and submission of final report by police after investigation is not sufficient for proving theft alleged. It must be proved by oral and documentary evidence.
Further more exclusion clause 8B of insurance policy provides that if there is any change in the insured premises or activities of insured premises which increases risk the insurer company shall not be liable to cover risk.
In view of paragraph 5 of the surveyor’s report it is apparent that the premises insured was used to install atta chakki and expeller in addition to rice mill and the stock room was converted into residential accommodation but there is nothing on record to show that these changes were made with prior information to insurer or insurer was informed about these changes. Changes made by complainant/respondent in insured premises without information to insurer makes the whole version of respondent/complainant regarding alleged theft unreliable and untrustworthy.
There is specific exclusion clause 8A in insurance policy to the effect that the policy shall cease to attach if the premises shall have been left uninhabited by day and night for seven or more consecutive days and night unless in every case the consent of the company to the continuance of the
:9:
insurance thereon is obtained and signified on the policy. Averment made in complaint itself shows that after 12-10-2012 the premises of rice mill was locked and mill was closed. Thereafter respondent/complainant did not take care of the insured premises and machineries as well as stock kept therein. She came to know about alleged theft on 16-03-2013 when her husband, father-in-law and dewar came out of jail after getting bail. In paragraph 19 of the affidavit filed by respondent/complainant Smt. Sushma Singh in this appeal in support of objection of respondent/complainant against the appeal, also it has been stated that family members of complainant were in jail since 12-10-2012 till 16-03-2013 and during this period the functioning of mill in question had stopped and the mill was locked.
After having gone through the averment made in complaint as well as affidavit of respondent/complainant, it is apparent that after 12-10-2012 the insured premises was kept abandoned after having locked it and the respondent/complainant came to know about alleged theft only on 16-03-2013 when her family members came out from jail on bail. Neither it has been alleged by respondent/complainant that she has informed Insurance Company about closure of mill; nor there is any evidence of this effect.
It has been contended by learned Counsel for respondent/complainant that insurance policy has been obtained by Bank respondent no.2. Therefore, respondent/complainant was unaware of terms and conditions of policy. As such she did not inform Insurance Company about closure of mill.
We have considered this aspect also. Respondent/complainant is claiming benefit of policy. Therefore, she is bound by terms and conditions of policy. She cannot take plea of ignorance of terms and conditions of policy. Indisputably mill was financed by Bank respondent no.2 but complainant/respondent did not inform bank also about closure of mill.
After having gone through whole facts and circumstances of the case as well as evidence on record we are of the view that exclusion clause 8A of policy is applicable and the Insurance Company has rightly repudiated claim of complainant in view of this exclusion clause. As such the appellant Insurance Company has not committed deficiency in service. District Consumer Forum has committed error in accepting claim of
:10:
complainant/respondent and judgment and order passed by District Consumer Forum is erroneous and liable to be set aside.
Order issued by District Consumer Forum against appellant Bank whereby appellant Bank has been restrained from making realization of interest from respondent/complainant in terms of loan agreement is also erroneous.
Learned Counsel for respondent/complainant has referred judgment of Honourable National Commission rendered in the case of National Insurance Company Limited V/s Kulwant Singh IV(2014) CPJ-62 (N.C.) wherein Honourable National Commission has held that Insurance Company should not repudiate claim merely on account of delay in bringing theft to its knowledge particularly when there was absolutely no delay in lodging F.I.R. with police.
The appellant Insurance Company has not repudiated claim of respondent/complainant on the ground of delayed intimation of theft. As such the case law referred by learned Counsel for respondent/complainant is not relevant for determination of this appeal.
In view of conclusions drawn above, both the appeals are liable to be allowed.
ORDER
Above Appeal No. 1560 of 2015 Regional Officer, National Insurance Company Limited and another V/s Sushma Singh and another and Appeal No. 1500 of 2015 Bank of Baroda V/s Regional Manager, National Insurance Company Limited and others both are allowed. Impugned judgment and order passed by District Consumer Forum is set aside and complaint filed by respondent/complainant is dismissed.
Parties shall bear their own cost.
The amount deposited by appellant Insurance Company under Section-15 of the Consumer Protection Act 1986 in this appeal shall be refunded to the appellant National Insurance Company Limited alongwith interest accrued, if any, in accordance with law.
Let copy of this order be made available to the parties within 15 days
:11:
positively as per rules.
This judgment shall be placed on the record of Appeal No. 1560 of 2015 with its copy to be laid on the record of other Appeal No. 1500 of 2015.
( JUSTICE A. H KHAN )
PRESIDENT
( SMT. BAL KUMARI )
MEMBER
pnt
