DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, PALAKKAD

Dated this the  23^rd  day of February, 2023

Present      :   Sri. Vinay Menon V.,  President

                  :  Smt. Vidya A., Member                        

                  :  Sri. Krishnankutty N.K., Member                                Date of Filing: 10/10/2019    

                         CC/284/2019

Rasiya H.,

W/o Anvarudeen,

Pyaari Manzil, Pothampadam,

Palakkad – 678 507                                                    -                       Complainant

(By Adv. K. Siyavudeen)

V/s

1. South Indian Bank,

Rep. by its Manager,

Muthalamada Branch,

Muthalamada (PO),

Palakkad – 678 507

2. Bajaj Allianz General Insurance Co.Ltd.,

Rep. by its Manager,

Door No.2, 1^st Floor, Mangalam Tower,

T.B.Road, Palakkad – 678 014                                    -                      Opposite parties.  

(O.P. 1 by Adv. M/s G. Ananthakrishnan & K.B. Priya

O.P. 2 by Adv. Ullas Sudhakaran)

O R D E R

By  Sri. Vinay Menon V., President

1. The complainant claims to be a borrower of the 1^st opposite party Bank. In order to avail the financial assistance provided by the 1^st opposite party, the complainant had insured her immovable property, offered as security to the 1^st opposite party, with the 2^nd opposite party. Insurance was the responsibility of the 1^st opposite party. A fire had gutted a shed/godown in the complainant’s property, which was leased out to the complainant’s husband, while the property was having a valid and subsisting insurance coverage provided by the 2^nd opposite party. The 2^nd opposite party has repudiated the claim of the complainant for indemnification of the losses sustained. Aggrieved thereby, this complaint is filed.
2. (1)        The 1^st opposite party filed version pleading ignorance of the contents alleged in the complaint pleadings except for the condition in the hypothecation agreement requiring the complainant to insure the properties offered as security for granting the financial assistance. 

(2)        The 2^nd opposite party filed version countering the complaint pleadings. Per O.P. 2, the godown/shed in the property was stated to be used for vegetable sales. Hence, coverage was provided to a shop in the name of complainant used for selling vegetables. Thus insurer not bound by the terms and conditions of the policy if there is any variance and the complainant had used the property for any other purposes. It was on this ground that claim of the complainant was repudiated.   

3. Reading of pleadings and counter pleadings give raise to the following issues ; 

1. Whether the 2^nd opposite party went wrong in repudiating the complainant’s claim?

2.         Whether there is   deficiency in service/unfair trade practice on the part of the opposite parties?

3.         Whether the complainant is entitled to any of the reliefs sought for?

4.         Reliefs, if any?

4. (i)                Complainant filed proof affidavit and marked Exts.A1 to A6.
Ext. A3 was objected to on the ground it is a photocopy. As this Commission is not bound by the Evidence Act, and in the absence of a case that Ext. A3 is forged or fabricated, this objection is overruled.  

   (ii)                 Opposite parties filed proof affidavit. OP2 marked Exts. B1 to Ext.B6(b). There was no objection in marking the documents.

Issue No.1

5. The complainant’s case is that the complainant’s husband had taken the godown for lease from the complainant and was keeping agricultural implement in the destroyed shed.  The total cost of reconstruction comes to Rs.7 lakhs. The damage suffered is Rs.5 lakhs.  The opposite party no.2 repudiated the claim on the ground that the insured premises were being used for an entirely deferent purpose than that was shown in the proposal form.
6. The opposite party has no case that the gutted building and the insured premises were two different buildings. In the absence of such a pleading, we must resort to  documentary evidence to appreciate the legality of the contents of the pleadings.

7. A)     Ext.B1 is executed in the name of Raziya, the complainant herein.  In the facing sheet of Ext. B1, under the sub-heading “Basic Details”, in reply to unnumbered query 8 “if Risk is Occupied as: 1) Shops / godown, please specify nature of stocks”, the complainant has answered as “shop:- vegetable shop”. A perusal of Ext.B1 would show that the statement made therein is not a clerical mistake but a clearly thought out answer.

B)         (i)         Ext.B2 series are the policy schedule and the annexures appended to the policy schedule. In facing sheet of Ext.B2 policy schedule,  Risk covered is shown as “Standard Fire and Special Perils Addons as detailed under Annexure I”. 

(ii)         Annexure I is marked as Ext. B2(a). Ext. B2(a) shows the details of risk covered. The location description is stated “Occupied as Vegetable Shop”.  Location address shown is the address of the complainant. The occupation description is shown as “Shops – Others”. 

(iii)        There under, there is a schedule showing the block description, and other details of the location.  In the 2^nd coloumn, Block description is “occupied as vegetable shop”. In the 4^th coloumn, the Super Structure is seen to be  insured for Rs. 12,50,000/-.

(iv)        Ext. B2(c) is the Policy Wordings. Preamble in the said document reads as follows:

  “IN COSIDERTION OF the Insured named in the Schedule hereto having paid to the BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LTD (herein after called the Company) the full premium mentioned in the said schedule, THE COMPANY AGREES, (Subject to the Conditions and Exclusions contained herein or endorsed or otherwise expressed hereon) that if after payment of the premium the Property insured described in the Schedule or any part of such Property be destroyed or damaged by way of the perils specified herein and there during the period of insurance named in the said schedule or of any subsequent period in respect of which the Insured shall have paid and the Company shall have accepted the premium required  for the renewal of the policy, the Company shall pay to the  Insured the value of the Property at the time of the happening of its destruction or the amount of such damage or at its option reinstate of replace such property or any part thereof”

C)       Ext.B3 is the Survey Report filed by the Surveyor. In page 2, line 1 of Ext.B3,  against  the clause “total sum insured” the answer is “Rs.12,50,000/-, for super structure of building.

8.        A joint reading of  Ext.B1 to B3 would show that what was insured was the super structure of the building and not the contents therein.

9.        The only case put forward by the opposite party 2 for repudiating the claim of the complainant is that there was a difference in the contents of the materials that was kept in the shop/godown. i.e. the building was not put to the use that the complainant stated in Ext.B1.

Hence the next question that is to be answered is whether such a change in the contents of the buildings is a material, vital and fatal change. It is true that the complainant has stated in Ext.B1 that the shop was a vegetable shop. And later on she has raised a statement that the contents were agricultural implements.  Considering the nature of the goods kept in the building we do not find any material or fatal variance of  so grievous nature as to render the entire contract invalid.  Had the contents be changed from vegetable to some inflammable or explosive substances, the scenario would have been different. In such an eventuality there would have been a contributory negligence invited by the complainant herself, which could not be foreseen in an agreement as Ext. B2, generating a higher risk factor, which the opposite party 2 would not have contemplated.

10.      Resultantly we hold that  the  2^nd opposite party went wrong in repudiating Ext.B2 policy.

Issue No.2

11.      Considering the finding in Issue No.1 we hold that there is deficiency in service on the part of opposite party No.2

12.      In the facts and circumstances of the case we hold that   there is no deficiency in service on the part of opposite party No.1 Bank.  

            Issue Nos.3 & 4

     13.                    As per Ext.B3 Surveyor’s report (Page 5)  gross assessed loss for the godown building damaged is shown as Rs.6 lakhs.   Complainant is entitled to receive this amount in view of the fact that the complainant has to disputed this document nor the amount arrived as by the Surveyor

14.       We therefore hold as follows:

1. Opposite party No.2 is directed to pay an amount of Rs.6 lakhs to the complainant together with interest @10% per annum from 17/12/2017 till date of payment.
2. The complainant is entitled to a compensation of Rs.30,000/- for deficiency in service on the part of opposite party No.2.
3. The complainant is entitled to a cost of Rs.20,000/- from the 2^nd opposite party.
4. Order shall be complied by the 2^nd opposite party within 45 days from date of receipt of a copy of this order, failing which the complainant shall also be entitled to a solatium of Rs.250/- per month or part thereof till the date of final payment.

 Pronounced in open court on this the 23^rd  day of February, 2023.       

                                                                                   Sd/-

                                                                                             Vinay Menon V

                                                      President

                                                            Sd/-

   Vidya.A

                       Member        

      Sd/-                                                          Krishnankutty N.K.

                                                                                                      Member

APPENDIX

Exhibits marked on the side of the complainant :

Ext.A1 –  Copy of FIR bearing No.1445 /2017 of Kollengode PS

Ext.A2 –  Copy of report dated 335/17 of Kerala Fire Force, Palakkad

Ext.A3  -  Copy estimate for proposed works dated 14/2/2018

Ext.A4  -  Copy of repudiation letter dated 20/3/2018

Ext.A5 –  Copy of communication from complainant to OP1

Ext.A6 –  Copy of repudiation letter dated 11/4/2018  

Exhibits marked on the side of the opposite party: Nil

Ext.B1 – Copy of proposal form 

Ext.B2 –  Copy of policy schedule

Ext.B2(a) – Copy of Annexure I of Standard Fire And Special Perils Policy

Ext.B2(b)  –  Copy of Annexure III of Standard Fire And Special Perils Policy

Ext.B2(c)  –  Copy of Policy Wording  of Standard Fire And Special Perils Policy

Ext.B3 – Copy of Surveyor’s report dated 18/3/18

Ext.B4 –  Copy of communication from complainant to Surveyor

Ext.B5 –  Copy of communication from complainant to OP2

Ext.B6 (a) –  Copy of Ext.A6

Ext.B6(b) – Copy of acknowledgment card

Court Exhibit:  Nil

Third party documents:  Nil

Witness examined on the side of the complainant: Nil

Witness examined on the side of the opposite party:  Nil

Court Witness: Nil

NB : Parties are directed to take back all extra set of  documents submitted in the proceedings in accordance with Regulation 20(5) of the Consumer Protection (Consumer Commission Procedure) Regulations, 2020 failing which they will be weeded out.