Kunnathurmedu, Palakkad.                       -        Opposite parties   

    (By Adv.P.K.Devadas)                                     

O R D E R

            By  Smt.PREETHA G NAIR, MEMBER

The complainant is running  a photo studio in the name and style Lakshmi Digital Studio and Video.  He had availed a loan from 1^st opposite party for the  development of business and has purchased new zoom lens, Vivittar camera, Nikon 1:1.4 lens and 10 film rolls, which were insured under the 2^nd opposite party. The premium of the insurance policy was paid by 1^st opposite party from the account of the complainant deducted automatically from the installments remitted.  On 9/2/2007 when the complainant reached his shop it was found that the equipments were stolen from the studio.  On enquiry it was understood that the theft has taken place between 1.00 AM to 3.00 AM of 9/2/2007.  The incident  was reported to the police officials and the opposite parties in time.  When no positive response was received regarding the claim amount, the complainant sent a letter to the 1^st opposite party on 15/2/2007, who in turn informed the 2^nd opposite party letter dated 26/2/2007 for compensation.  The 1^st opposite party also informed the 2^nd opposite party regarding the theft and for granting compensation for lost articles as per the policy covered under 2^nd opposite party again on 6/3/2008 on request  of complainant’s letter dated 4/3/2008.  On repeated demands by the complainant  there was no positive response except the reply made by 1^st opposite party that the matter will be looked into at the earliest  as per letter dated 20/8/2010.  The complainant has availed loan and has paid the premium directly from the account of complainant to 2^nd opposite party.  The 2^nd opposite party being the insurer is liable to compensate the complainant for the loss suffered.  The complainant has lost his equipments worth Rs.24,300/- The theft has affected the complainant’s business in all sense including financially and mentally.  The act  of opposite parties  has caused much mental agony, hardship and irreparable injury to the complainant.  The deficiency in service of opposite parties to  the complainant has to be compensated.  Hence the complainant prays an order directing the opposite parties to

1. Pay Rs.24,300/- as cost of stolen articles with 16% interest from 8/2/2007 till the payment and
2. Pay Rs.50,000/- as compensation for the deficiency in service and
3. Pay the entire cost and expenses of the complaint

Opposite parties filed version.  1^st opposite party stated that the complaint filed under section 3 of the Consumer Protection Act is not maintainable.  Theft is alleged to have taken place on 9/2/2007.  But the 1^st opposite party was intimated only on 25/2/2007.  The 1^st opposite party admitted that the complainant is running a photo studio in the name and style Lakshmi Digital  Studio.  Also 1^st opposite party admitted that premium of the insurance policy  was paid by debiting the account of the complainant.  The complainant has availed a term loan of Rs.1,34,000/- for starting a digital studio and the loan amount was for furnishing the studio and the purchase of digital camera, computer, UPS, printer and two ordinary cameras at a total cost of Rs.1,78,950/-. The assets were insured under Standard Fire and Special Perils Policy and Burglary and House Breaking Policy from 2^nd opposite party.  This was done to facilitate the borrower to get compensation of loss in case of any eventuality  like fire, theft etc. and to ensure that the claim amount route through the bank so as to set off the liability under the term loan.  The complainant intimated the 1^st opposite party regarding theft only on 15/2/2007.  The 1^st opposite party has intimated the 2^nd opposite party insurer by letter dated 26/2/2007.  If any loss is occasioned to the complainant on account of theft it is for the 2^nd opposite party insurer to satisfy the claim covered by the policy.  The 2^nd opposite party vide letter dated 25/9/2007 rejected the claim stating  that the policy commence from 00.00 hrs of 9/2/2007 and the theft was taken place in the night of 8/2/2007, hence the claim is beyond the purview of policy issued.  The matter was clarified to the insurance company vide letter of the Bank dated 16/10/2007 stating that the bank has credited the insurance renewal premium in their current account on 8/2/2007 and the theft was taken place during the period covered by the policy on  9/2/2007.  Upon the reminder of 1^st opposite party dated 12/12/2007 requesting earlier settlement of claim the 2^nd opposite party vide letter  dated 18/2/2008 addressing the complainant with a copy to 1^st opposite party informed that the claim could not be entertained as it was submitted after 14 days of the event cause to the  knowledge of the insured, in terms of the general conditions of the policy.  The 1^st opposite party has  intimated the 2^nd opposite party regarding the theft on 26/2/2007 within the period of 14 days from the date on which it was intimated to the bank.  There is no delay on the part of 1^st opposite party in intimating the 2^nd opposite party within 14 days.  The bank has taken the insurance policy in the name of the complainant with lien to the bank covering the value of assets purchased out of the loan proceeds to protect the interest of the complainant.  The policy was kept in force by 1^st opposite party and initial rejection of the claim by the 2^nd opposite party was properly clarified.  The complainant can seek remedy only against the 2^nd opposite party.  Since the complainant defaulted repayment  the 1^st opposite party has issued a lawyer notice to the complainant demanding the loan amount.  Later a suit filed before the Sub Court, Palakkad as O.S.520/11 for realization of amount due from  the complainant and it is pending. It is suspected that the complaint is filed as a counter blast to the proceedings initiated against him.  There is no deficiency  in service  on the part of 1^st opposite party.  Hence the 1^st opposite party prayed that dismiss the compliant with cost.

2^nd opposite party stated that the complaint is filed after a long delay and  is time barred.  The 2^nd opposite party admitted that except the printer EPSM, digital camera, Kodak DX 7590, Umbrella light, CDR back grounds, Vivitar cameras & lens, Nikon FM3A body, Nikon lens, Zoom lens, Yashica Camera, Computer monitor, CD writer, key board, UPS, mouse, motherboard, RAM accessories nothing  else is insured with them.  The policy for the year       2006-07 with No.2005/5707546057500000173 has expired  on 4/2/2007.  Thereafter the policy was renewed only from 9/2/2007 with policy No.570705/46/06/7500000134 which was valid from  9/2/2007 to 8/2/2008.  The alleged theft has taken place on the night of 8/2/2007.  The 2^nd opposite party is intimated only on 1/3/2007 i.e. after expiry of 14 days of the date of knowledge of the event which is prescribed in the general condition 4 (b) of the policy.  The insured has also to give a detailed statement which is not seen duly complied by the insured even though informed him.  The policy is renewed only after 4 days, from 9/2/2007 after the expiry of the previous policy.  The premium is credited directly to Branch Office account of 2^nd opposite party on 8/2/2007.  The bank credit  of 1^st opposite party on 8/2/2007 is seen as the last entry of the day.  Since software permit back dated entry cannot be accepted unless 1^st opposite party produce some computer generated report to support the date and time of making the entry and whether the transfer was made during the working hours on 8/2/2007.  The policy is under written on 12/2/2007 giving cover  from  9/2/2007, 00.00hrs on the basis of the credit entry.  Apart from this the theft is not immediately reported to the police or opposite parties by the insured.  As the policy commences from 00.00 hrs of 9/2/2007 to midnight of 8/2/2008 the loss is beyond the purview of the policy issued.  Thus the claim was repudiated and duly intimated to the insured by registered post with Acknowledgment Due with a copy to 1^st opposite party.  The registered letter to the complainant returned with endorsement not known.  The 2^nd opposite party denied the purchase of accessories by the complainant.  It is also  denied that these items were in the studio before the alleged theft and they were stolen from there.  The intention of the complainant is only to avail the compensation from 2^nd opposite party by projecting a false story.  Repudiation was intimated as early as 27/9/2007.  But the complaint is filed on 14/6/2011.  The 2^nd opposite party is not liable to compensate the complainant.  Deficiency in service has been done by 1^st opposite party by not transferring the premium in time.  Hence the 2^nd opposite party prayed that dismiss the compliant with costs.

Complainant and opposite parties filed affidavits alongwith documents.  Ext.A1 to A9 marked on the side of the complainant.  Ext.B1 to B8 marked on the side of the opposite parties.

Matter was heard.

Issues to be considered are

1)    Whether the complaint is maintainable ?

2)    Whether there is any deficiency in service on the part of opposite  parties ?

3)    If so, what is the relief and cost entitled to the complainant ?

Issue 1

The 1^st opposite party stated that the assets  were  insured under Standard Fire and Special Perils Policy and Burglary and House Breaking Policy with the 2^nd opposite party on behalf of owner / borrower duly noting their Bank’s  lien.  Also in  Ext.B1 the 1^st opposite party has credited the insurance renewal premium of the complainant.  In Ext.A9 letter dated 20/8/2010 1^st opposite party stated  that “the matter is being looked  into and we will revert on the matter at the earliest”.  Moreover the 2^nd opposite party sent  all letters to 1^st opposite party regarding the claim of complainant. We find that the complainant and opposite parties considered the claim amount on 2010 also.  In Ext.A8 the complainant issued a letter dated 12/8/2010 to the 1^st opposite party regarding the settlement of claim amount.  In Ext.B5 dated 25/9/07 the 2^nd opposite party repudiating  the claim of complainant.  But in Ext.A9 letter dated 20/8/2010 the 1^st opposite party stated that the matter is being looked into and revert on the matter at the earliest.  In Ext.A7 letter dated 6/3/2008 the 1^st opposite party recommended to the 2^nd opposite party that consider the matter as genuine and reasonable ground and settle the claim as early as possible. So the complainant received the last letter of 1^st opposite party on 20/8/2010.  There is continuous cause of action from 9/2/2007 to 20/8/2010.  So the complaint is within time and has no delay.  Hence the 1^st issue answered in favour of the complainant.

Issue 2 & 3

We perused relevant documents on record.  In Ext.B2 the policy period of complainant was 00.00 hrs on 9/2/2007 to midnight of 8/2/2008.  In Ext.B3 the policy period was 00.00 hrs on 5/2/2006 to midnight of 4/2/2007.  In Ext.B1 the amount of Rs.3,000/- credited in the account of complainant.  On 8/2/2007 debited the renewal of insurance of Rs.751/- in the account of complainant.  The 1^st opposite party stated that premium for the insurance policy has been paid on 8/2/2007 at 12.00 noon and the theft took place the next day at the early hours of 9/2/2007.  Also the 1^st opposite party admitted that the complainant has availed a loan amount of Rs.1,34,000/-  from the bank for furnishing his studio.  Admittedly the complainant has availed  the loan and has paid premium directly from the account of the complainant to the 2^nd opposite party.  In Ext.B3 there is a break in the policy from 4/2/2007 to 8/2/2007.  But the 1^st opposite party debited the insurance premium amount only on 8/2/2007.  In Ext.B5 the 2^nd opposite party stated that the policy commenced from 00.00 hrs on 9/2/2007 to midnight of 8/2/2008 and so the loss is beyond the purview of the policy.  But in Ext.B1 shows that the premium for the insurance policy has been paid on 8/2/2007 at 12 noon.  The theft took place the next day at the early hours of 9/2/2007.  Hence the policy covered the date  of incident.  Another contention raised by the 2^nd opposite party that the theft is not immediately reported to the police or opposite parties.  In Ext.A1 shows that the complainant informed the theft in the police station on 9/2/2007 at 12 AM. Also in Ext.B7 the final report shows that the complainant informed to the police on 9/2/2007 at  12 AM regarding the theft. 

In Ext.A2 is the news paper dated 10/2/2007 shows the news of theft.  In Ext.A3 the complainant informed the theft to the 1^st opposite party on 15/2/2007 i.e. within 14 days from the date of incident. But the 1^st opposite party informed the theft to the 2^nd opposite party letter dated 26/2/2007 as per Ext.B4. The premium of the policy was paid by the 1^st opposite party from the account of the complainant deducted automatically from the installments remitted by him.  The complainant stated that the theft was reported to the police officials and the opposite parties in time.  No contradictory evidence was produced by the opposite parties.  In Ext.B8 the Surveyor visited the complainant’s Lakshmi Digital Studio and assessed the loss/damage occurred due to burglary and filed report.  In Ext.B7 the police registered the case under Section 457 & 380 of IPC and informed the case is “undetectable”. In Ext.B8 the survey report, the net assessed amount was Rs.15,040/- In Ext.B2 the equipments in the studio of complainant was insured from 2^nd opposite party. In Ext.B2 4 (b) of the General Conditions “The insured shall deliver to the company, within 14 days of the date on which the event shall have come to his knowledge, a detailed statement in writing, of the loss or damage, with an estimate of the intrinsic value of the property  lost and the amount of damage sustained.”  In Ext.B4 the 1^st opposite party intimated the event of theft to the 2^nd opposite party letter dated 26/2/2007.  It is the violation  of policy conditions.  But the complainant intimated to the 1^st opposite party on 15/2/2007 i.e. within 14 days from the date of theft.  We find  75% of the net assessed amount  allowed on non standard basis i.e. 75% of Rs.15,040 is Rs.11280/-.  

In the above discussions, we are of the view that there is deficiency in service on the part of opposite parties.  In the result the complaint allowed.  We direct the 1^st opposite party to pay Rs.11,280/- (Rupees Eleven thousand two hundred and eighty  only) as the insured amount to the complainant. And both opposite parties jointly and severally directed to pay Rs.10,000/- (Rupees Ten thousand only)  as compensation for mental agony and pay Rs.1,000/- (Rupees One thousand only)  as cost of the proceedings to the complainant.  Order shall be complied within one month from the date of receipt of order, failing which the complainant is entitled for 9% interest per annum for the whole amount from the date of order, till realization.

Pronounced in the open court on this the 31^st  day of  October 2011.

   Sd/-

Seena.H

President

   Sd/-

Preetha G Nair

Member

              Sd/-

Bhanumathi.A.K.

Member

APPENDIX

Exhibits marked on the side of the complainant

Ext.A1 –  Copy of FIR dated 9/2/07 of Palakkd North Police Station

Ext.A2 –  Paper news of theft in Malayalam daily dated 10/2/2007

Ext.A3 –  Copy of letter dated 15/2/2007 by the complainant to 1^st opposite

              party  

Ext.A4   – Copy of letter dated 26/2/2007 by the 1^st opposite party 

               to 2^nd opposite party    

Ext.A5 – Copy of letter dated 27/2/2008 by complainant to the 2^nd opposite

             party    

Ext.A6  – Copy of letter dated 4/3/2008 by complainant to the 2^nd opposite

              party    

Ext.A7 – Copy of letter dated 6/3/2008 by 1^st opposite party to the 2^nd opposite

              party    

Ext.A8 – Copy of reminder letter by the complainant to the 1^st opposite party 

            dt.12/8/10

Ext.A9 – Reply to Complainant dated 20/8/10 by 1^st opposite party 

Exhibits marked on the side of the opposite party

Ext.B1 – True copy of loan account statement of the complainant.    

Ext.B2 – Certified copy of Insurance Policy No.570705/46/06/7500000134  valid

             from 00.00 hrs of 9/2/07 to midnight of 8/2/2008 with terms and

             conditions of  the policy    

Ext.B3 – Certified copy of Insurance Policy No.570705/46/05/7500000173 valid

            from 00.00 hrs of 5/2/06 to midnight of 4/2/2007   

Ext.B4 – Original letter of 1^st Opposite party dtd.26/2/07  with cover alongwith

             the original letter of complainant dated 15/2/07  

Ext.B5 – Copy of registered letter sent to the complainant repudiating the claim

             by the 2^nd opposite party 

Ext.B6 –  Returned registered letter with A/D with endorsement “Not Known”

Ext.B7 –   Final report in crime no.60/07 of Town North Police Station

Ext.B8 – Survey Report (Original) by M.A.Jacob dtd.17/9/07

Cost Allowed

Rs.1,000/- allowed as cost of the proceedings.