Tamil Nadu

StateCommission

CC/48/2006

A.M.Tradiers, Proprietor - Complainant(s)

Versus

The Branch Manager New India Assurance Company Ltd.,& another - Opp.Party(s)

N.Kirubanandan

16 Apr 2015

ORDER

IN THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.    

               

             Present:  Hon’ble Thiru. Justice. R. REGUPATHI,                    PRESIDINT,   

                                           Thiru.J. JAYARAM,                                        JUDICIAL MEMBER.

 

C.C.No.48/2006

DATED THIS THE 16th   DAY OF APRIL 2015.

 

                                                    Date of complaint filed       :  04.08.2006  

                                                    Date of orders pronounced:   16.04.2015  

 

M/s. A.M. TRADERS,

Represented by its Proprietor,

SRI HARI,

No.46/2, Nethaji Street,

Ponniamman Medu,

Madavaram,

Chennai – 600 110.                                                                Complainant

                                                                    

                           Vs

 

1.  The Branch Manager,

     New India Assurance Company Ltd.,

     No.80, Arcot Road,

     Porur, Chennai – 116. 

 

2.  The Branch Manager,

     Tvl. State Bank of India,

     Ambattur Industrial Estate Branch,

     Chennai – 600 058.                                                           Opposite Parties

                                             

Counsel for Complainant      :   Mr.S.N. Kirubanandan,  Advocate. 

Counsel for Opposite Party-1:   Mr. Elveera Ravindran,  Advocate.

Counsel for Opposite Party-2:   Mr.P.D. Adikesavan, Advocate.  

      

   This complaint coming before us for final hearing on 10.03.2015            and on hearing the arguments of both sides and upon perusing the material records, this Commission made the following:

                                    ORDER

THIRU.J. JAYARAM, JUDICIAL MEMBER

 

1. The case of the complainant is as follows:

 The complainant is an S.S.Iunit having C.S.T. and TNGST Registration Certificates. The complainant was trading in edible oil for the past several years and, the complainant erected 2 numbers of underground sump tanks (Each 2 Tons capacity), 4 Nos. rectangular Tanks (Each 11 ½ tons capacity) and 2 Nos. rectangular over head tanks (Each 3 Tons capacity, all these tanks were connected with necessary pipe lines for the purpose of loading and  downloading packing of oils, apart from this packing machine,  filtering machine was also installed at the factory premises along with necessary electrical fittings inside the main shed.      

2.         In the Southern side of main shed, 2 cylindrical storage tanks ( Each 200 tons capacity) connected to underground sump (with capacity of 13 tons) which is used for loading and downloading from the lorry tanker to cylinderical storage tanks along with pipe lines.  Valves and one motor with pump are connected to cylinderical storage tanks. The complainant’s factory premises are located in a plot area approx 10,000 sq.ft which was protected on all the four sides with eight ft.  height compound wall, a main steel paneled gate and a wicket gate was also provided to the compound wall and thus the factory i.e., the business premises was well secured in all aspects. 

3.             The complainant availed financial assistance from the 2^nd opposite party and the complainant’s unit was insured with the 1^st opposite party and the policy number is 712403/11/05/00268, valid from 13.08.2005 to 12.08.2006.  In the month of September and October 2005, the entire Tamil Nadu recorded heavy incessant rains particularly on 26^th and 27^th October 2005 There were continuous and heavy rains due to which heavy floods ran into the roads and particularly in and  around  Chennai  rendering thousands of people homeless and one such incident was also recorded at Ponniammanmedu where the complainant’s factory is located.  Due to heavy and continuous rains on 26^th and 27^th October 2005, the floods entered into the complainant’s factory premises eroded the soil around in the underground sump (capacity of 13 tons) tanks pulled out underground sump tank damaging the pipelines connected to cylinderical  storage tanks for loading and downloading purpose, the valves were also completely  damaged and the entire stock of R.B.D Pamolein oil around 1,37,549 kgs worth Rs.57,77,058/- packing materials worth of Rs.1,20,000/- were leaked out and washed out with the floods causing heavy loss besides damage to the factory and assets of the unit worth about Rs.1,50,000/- in all sum of Rs.60,47,058/- due to inundation.  This fact was intimated to the opposite parties on 28.10.2005 through phonogram, telephone and telegrams on 29.10.2005 and followed by a detailed complaint in writing and thereafter a police complaint dated 31.10.2005  was lodged on 01.11.2005.  The 1^st opposite party inspected the unit on 29.10.2005 through their officer/surveyor Mr.R.Jagadesan, and the said surveyor through his letter dated 03.11.2005 called upon the complainant to furnish the claim form together with other documents and the complainant filed all the documents as required by the officer of the 1^st  opposite party with a request to settle the claim early and on 24.11.2005, the unit was inspected by another officer of the 1^st opposite party by name Mr.R. Selvaraj and the complainant once again submitted necessary documents together with lease agreement copy, E.B. card and sales tax registration certificates both under T.N.G.S.T. and C.S.T. Act and copy of the letter was marked to the 2^nd opposite party for early settlement of the claim.  On 29.12.2005 surveyors, under the name and style of M/s. J.B. BODA SURVEYORS (P) LTD., inspected the unit and furnished their observations contained in their report dated 30.12.2005 and the surveyor report says that the incident/accident occurred on 26^th and 27^th December 2005 whereas the incident/loss actually occurred on 26^th and 27^th October 2005 but this aspect was ignored by the surveyor.  The surveyor report clearly proves that there was total loss of stock stored in the unit and further the documents required by the surveyor were submitted once again on 05.01.2006 with a request to process the claim at the earliest but till today the 1^st opposite party has not settled the claim whereas the 2^nd opposite party who is obligated to get the claim at the earliest  is threatening the  complainant  for  repayment  of  the  financial  assistance  availed   by

the complainant.  Therefore, both the opposite parties are liable for the loss caused/ incurred by the complainant due to the inaction/dereliction of duty which amount to insufficient service by the opposite parties.

4.            On 03.01.2006, i.e, is nearly after 70 days of the incident, the officers of the 1^st opposite party collected samples of remnants at the bottom of storage tank for testing.  The test report alleged to have obtained by the 1^st opposite party states that the analysis reveals that the sumps collection not meeting the required specifications.  The entire stock of oil stored in the tanks were washed out with floods on 26^th and 27^th October 2005, the surveyor report also confirms the said fact and therefore, it is obvious that the remnants collected after 70 days of the incident will not meet the required specifications and hence the report and the analysis will not be of any use or base in settling the claim.     

5.      On 13.02.2006, the complainant requested the 1^st opposite party to settle the claim, but neither the 1^st opposite party nor the 2^nd opposite party showed any interest in settling the claim and hence the complainant sent a legal notice on 12.04.2006 to the opposite parties 1 and 2 but the opposite parties did not send any reply. All these amount to deficiency in service on the part of the opposite parties and hence the complaint praying for direction to the 1^st opposite party to pay the loss of Rs.60,47,058/- together with interest at the rate of 18% per annum till the date of settlement and for direction to the 2^nd opposite party to waive the entire interest charged on the financial assistance extended to the complainant from the date of accident/loss i.e., on 26^th and 27^th October 2005 and also direction to the 1^st opposite party to pay a sum of Rs.20,00,000/- as compensation towards estimated costs to the complainant and Rs.2,00,000/- towards mental agony and torture suffered by the complainant due to non settling the claim and to pay costs.

6.      The 1^st opposite party filed version stating as follows:

         The dispute relates to commercial transaction which does not come under the purview of the Consumer Protection Act.   The complainant had taken Fire policy with them covering the period from 13.08.2005 to 12.08.2006 on the stock of edible oil and pulses for sum assured of Rs.66,00,000/-.  The complainant did not take even the least care to engage watchman or security to safeguard the provisions.  Hence, the complainant failed to do their mandatory duty and violated the terms and conditions of the policy.  The averments in the complaint that the complainant had given a complaint on 28.10.2005 through phonogram, telephone, telegram is denied.  The letter dated 29.10.2005 was received by the opposite party only on 31.10.2005 and immediately on having knowledge of the claim, the opposite party deputed their surveyor to ascertain the genuineness of the claim and extent of loss if any and as per the rules governing the appointment of surveyors and the monetary limit of loss the 1^st opposite party appointed independent surveyors M/s. J.B. BODA SURVEYORS PRIVATE LIMITED.  It came to light from the inspection of the premises that there was no transaction at the premises for several months and the storage tanks were empty.  It is only to cover their business loss; the complainant has come with a false complaint.  The complainant has lodged a police complaint only on 01.11.2005 after an inordinate delay without any proper reason.  The complainant did not submit the required documents and he has not co-operated with the proceedings in spite of letters dated 30.04.2006, 12.05.2006 and 17.05.2006 calling upon the complainant to submit all the original purchase bills as well as sales bills and stock register, cash book,  day book, ledger for the past three years  along with the account details and the extract copy of the purchase and also the details incorporating the serial numbers, invoice  number, date, parties name , description, product, quantity and the value for the past three years since 2002-2003, 2003-2004, and 2004 – 2005. But, the complainant did not comply with the same and submitted concocted and fabricated documents for the purpose of the claim.  The test conducted at the complainant’s premises on the available specimen of oil by independent surveyor shows that the oil was saggy and contaminated due to its being kept there for a long time and hence it loses self-life and it did not conforme to PFA specifications.  In the absence of quality certificates in respect of various purchases of the stock inwarded into storage tank, long storage of the product without affecting any sale, mixing of product of stores from various supplies etc., has given rise to downgraded quality.  The claim is fraudulent and fictitious for the following reasons:-

(a)         There was no rain at the specified time as alleged by the complainant on 26^th and 27^th October 2005.

(b)        There was no transaction of business for the past several months and the stock statements given to the independent surveyor was manipulated for the purpose of making the claim.

( c )         It is mandatory on the 2^nd opposite party to insist upon the customer while submitting the stock statements a declaration to be duly obtained from the customer as to the value stocks as on date and outstanding sundry debtors for each quarter which is not complied with by the complainant. Hence, the claim cannot be entertained on the basis of stock statement relied on by the complainant.

7.           Owing to non-cooperation of the complainant, the opposite party is yet to receive the investigation report and final report.  There are glaring defects in the documents submitted by the complainant and such omission is a grave error.  There is no  laches or negligence or delay on the part of the 1^st opposite party.  Therefore there is no deficiency in service on their part.   

8.              The 2^nd opposite party filed version stating as follows:  The complaint against the 2^nd opposite party is neither maintainable in law nor on facts and it is devoid of merits suppressing the vital and material facts of the case and so the complaint is liable to be dismissed in limine. The complainant who is trading in edible oil is banking with the 2^nd opposite party since 2003 and has availed cash credit (hypothecation) facility of Rs.60,00,000/- and executed security documents for the same in favour of the 2^nd opposite party.  The 2^nd opposite party is an unnecessary party in the complaint.

9.     All the parties filed their proof affidavits and Exhibits A1 to A29 have been filed and marked on the side of the complainant and Exhibits B1 to B7 and B17 are filed and marked on the side of the 1^st opposite party and Exhibits B8 to B16 are filed and marked on the side of the 2^nd opposite party.    

10.     The points for consideration are:

          (1)    Whether there is deficiency in service on the part of the opposite

                  parties?

         (2)     Whether the complainant is entitled to claim the compensation from

                  the opposite parties. ?

         (3)     To what relief the complainant is entitled?

11.     Points No.1 & 2:   It is first contended by the 1^st opposite party that the complaint is not maintainable under Consumer Protection Act since it involves commercial transaction. It is pertinent to note that stock of oil is insured with the 1^st opposite party and the question of commercial purpose does not arise and we hold that the complaint is maintainable under Consumer Protection Act.

12.      It is further contended by the complainant that due to heavy and incessant rains on 26^th and 27^th October 2005 floods entered into the complainant’s factory premises and eroded the soil in and around the underground sump ( capacity of 13 tons) pulled out the underground sump tank damaging the pipelines which is connected to cylindrical storage tanks for loading and downloading purpose and the valves were also completely damaged and the entire stock of RBD Palmolein oil around 1,37,549 kgs worth Rs.57,77,058/- and the packing materials worth Rs.1,20,000/- leaked out and washed out in the floods causing heavy loss besides damages to the factory and assets of  the unit worth about Rs.1,50,000/- and in all, a sum of Rs.60,47,058/-.  The claim of the complainant has not been settled by the 1^st opposite party even after so many years of submitting the claim.  Per contra, the contention of the 1^st opposite party is that no such incident/accident took place and there was no heavy rain on 26^th and 27^th October 2005 and the complainant has filed claim and the documents produced by the complainant are manipulated and fabricated for the purpose of the claim and the claim of the complainant is fraudulent and fictitious.

13.           The 1^st opposite party has contended that there is delay in intimating the accident/incident to the 1^st opposite party and in lodging the police complaint and that there was no watchman or security for the complainant’s premises. On perusing the exhibits filed by the complainant, we come to know that proper intimation has been given to the 1^st opposite party at 8.45 a.m(booking time) and received at 9.25   a.m. on 29.10.2005 as evidence by Ex A2, copy of phonogram. The 1^st opposite party has submitted a citation of Hon’ble National Commission in F.A.321/2005 dated 9.12.2009

               New India Assurance Company Limited

                                            Vs

                                  Trilochan Jane 

The above case relates to the delay in reporting theft of vehicle and the facts in the instant case are different. 

 14.   The letter has been sent by the complainant to the 1^st and 2^nd opposite parties on 29.10.2005 as evidenced by Exhibits A3 and A4 with the postal acknowledgements for receipt of the intimation.  The police complaint Ex A5 dated 31.10.2005 has been lodged on the advice of the insurance surveyor as seen from the surveyors report Ex A’.24 and a case has been registered by the police on 01.11.2005 under Ex A6.  Further, the opposite party has contended that there was no watchman or the security for the premises.  But, it is clearly stated in the surveyors report, Ex A.24 that the watchman who was staying inside the factory had been admitted in the hospital due to illness.  Therefore, the contention of the opposite party that there were no watchman or security personnel for the premises is untenable.  As stated above, there is no deliberate delay on the part of the complainant in intimating the 1^st and 2^nd opposite parties about the accident/incident and the contention of the opposite parties in this regard is untenable.

15.           We further find that SSI unit certificate copy, photographs and TNGST and CST certificates were given to the insurance surveyor by the complainant at the time of inspection of the factory premises and the remaining documents viz.,

stock statement, bank statement, purchase bills, lease and insurance policy copies and copy of the police complaint were sent to the 1^st opposite party as seen from Ex A8.  Ex A15 is the letter sent by the 2^nd opposite party/manager of the State Bank of India addressed to the 1^st opposite party stating that the unit was inspected by their officials and the purchase invoice number 63 dated 03.08.2005 for the value of Rs.3,81,724/- and stocks of RBD Palmolein (loose) quantity 1,38,629 kgs and Soyabean oil (loose) quantity 16690 kgs were verified by the officers and stock/records were verified by the officials.  In Ex A16, it is pertinent to note that M/s. J.B. Boda Surveyors Private Limited have wrongly noted the dates of accident/incident as 26^th and 27^th December 2005 (26.12.2005 and 27.12.2005).  We have to further note from Ex A 17 that the  sample of RBD Palmolein has been taken by the M/s. Boda Surveyors only on 03.01.2006 that is after 70 days after the accident/incident as evidenced by Exhibit A17 and we find that sample has been taken from the remnants/sediments at the bottom of the tank and it goes without saying that the quality of the residual oil would not be the same after 70 days and the report will not reflect the actual quality and undoubtedly the sample oil would have undergone chemical changes and got contaminated making it unfit to be taken as sample and therefore, the laboratory report Ex A17 cannot be accepted and cannot be acted upon.

14.       It is relevant to note that as already stated, the date of incident/accident is 26.12.2005 and 27.12.2005 according to J.B. Boda Surveyors Private Limited as stated in Ex A16 which is repeated in Ex A21 and further the J.B. Boda Surveyors have taken sample after 70 days.  Moreover, it is significant to note that the complaint was filed before this Commission on 04.08.2006 whereas the report of M/s. J.B. Boda Surveyors Private Limited, dated 23.03.2009 has been forwarded to the 1^st opposite party which has been received by the 1^st opposite party on 25.03.2009 which has been submitted before this Commission only on 15.12.2011 under Ex B17 nearly after 5 ½ years after filing of the complaint assessing the net adjusted loss at Rs.21,27,332/-.  Further, in addition to the reasons stated above, with regard to investigation by M/s. J.B. Boda Surveyors Private Limited., we find that the report Ex B17 is based on assumptions and presumptions and the report is based on  too much of technicalities and on hypothetical facts and figures and the report does not reflect the factual loss particulars and therefore it is not desirable to act on the report.  However, the earlier report, Ex A24 reflects the correct position from which we can assess the actual loss placing  safe reliance on it, which reads as follows:-

    “Due to the continuous rain the factory was surrounded by water, Due to the water pressure the underground tank which was empty has been lifted.  The pipeline connecting the underground tank and the storage tank was bent and twisted.  The pipeline has broken the A/c sheet roof and at the ball wall joint it was cut off.  Since the pipeline was cut off, the palmolein oil of 137’549 tones which was stored in the first storage tank has been leaked out and washed away by the running water.  The other tank was at the back of the first tank which was empty.  The oil was stored only in the first tank.

        The rate of 1 litre of palmolein oil is Rs.39.60 and the value of 137.549 tones of oil which was lost is Rs.54,46,940/-“and accordingly we fix the loss at Rs.54,46,940/-. which is quite reasonable.

15.      For the reasons aforesaid we hold that the failure to settle the claim of the complainant by the 1^st opposite party for years together amounts to deficiency in service on the part of the 1^st opposite party.  As regards the 2^nd opposite party, they are unnecessary parties in the complaint and the complainant cannot claim any relief from the 2^nd opposite party and therefore we hold that there is no deficiency in service on the part of the 2^nd opposite party and that the complainant is entitled to claim compensation from the 1^st opposite party alone and the points are answered accordingly. 

16.          Point No.3:  The complainant has claimed Rs.60,47,058/- towards loss, together with interest at the rate of 18% per annum and the complainant has claimed Rs.20,00.000/- as compensation towards the estimated loss and Rs.2,00,000/- as  compensation for mental agony and suffering by him and costs.  Having regard to the facts and circumstances of the case and on consideration of relevant factors, we hold that the complainant is entitled Rs.54,46,940/-towards loss with interest at the rate of 9% per annum from the date of filing of the complaint viz., 04.08.2006 till payment.  We further feel that Rs.25,000/- would be the reasonable compensation for mental agony and sufferings with costs of Rs.10,000/- and the point is answered accordingly. 

17.     In the result, the complaint is allowed in part directing the 1^st opposite party to pay a sum of Rs.54,46,940/-(Rupees Fifty Four Lakhs Forty Six Thousand Nine Hundred and Forty only) towards loss together with interest at the rate of 9% per annum from the date of complaint viz., 04.08.2006 till payment and a sum of Rs.25,000/-(Rupees Twenty Five Thousand only) as compensation for mental agony and sufferings and to pay Rs.10,000/- (Rupees Ten Thousand only) as costs. Time for compliance – two months from the date of receipt of copy of this order.    

           The complaint is dismissed as against the 2^nd opposite party without costs.    

 

 

   

   J. JAYARAM,                                                                        R. REGUPATHI,

JUDICIAL MEMBER                                                                  PRESIDENT

 

List of documents filed on the side of the complainant.

 

Ex   A1   11.08.2005       Assurance Policy

Ex   A2   28.10.2006       Phonogram

Ex   A3   29.10.2005       Letter to the 2^nd opposite party

Ex   A4   29.10.2005       Letter to the 1^st opposite party

Ex   A5   31.10.2005       Police complaint

Ex   A6   01.11.2005       Receipt

Ex   A7   03.11.2005       Proceedings of the surveyor

Ex   A8   03.11.2005       Letter to the 1^st opposite party

Ex   A9   09.11.2005       Claim Form

Ex A10   02.12.2005       Telegram

Ex A11   10.12.2005       Representation to the 1^st opposite party

Ex A12   11.12.2005       Proceedings

Ex A13   30.12.2005       Report of the surveyor

Ex A14   05.01.2006       Representation to J.B. Boda Surveyors Private Ltd.,

Ex A15   18.01.2006       Proceedings of the 2^nd opposite party

Ex A16   24.01.2006       Report by the surveyor

Ex A17   30.01.2006       Laboratory Report.

Ex A18   31.01.2006       Representation

Ex A19   13.02.2006       Representation

Ex A20      NIL               Correspondence between 1^st and 2^nd Opposite parties

Ex A21   07.03.2006       Proceedings of the surveyor

Ex A22   14.03.2006       Representation to the 1^st opposite party

Ex A23   12.04.2006       Legal notice to the 1^st opposite party

Ex A24   22.12.2005       Preliminary survey report by R. Jagadeesan.

Ex A25   30.07.2009       Assessment order for the year

                                    TNGST/1082511/2005-2006

Ex A26   06.04.2009       Letter to the Insurance Company by the complainant

Ex A27   27.06.2009       Letter by the surveyor to the Insurance Company

Ex A28   10.07.2009       Letter to the Insurance Company by the complainant

Ex A29       .03.2010       Counter filed by Insurance Company

                                     in W.P.18262 of 2009            

List of documents filed by the first opposite party

 

Ex   B1    09.03.2001     Xerox copy of the certificate of registration issued to the

                                   complainant 

Ex   B2    14.04.2004     Xerox copy of the Permanent Registration Certificate of

                                   the complainant

Ex   B3                         Xerox copy of the policy covering the period from   

                                   13.08.2005 to 12.08.2006 along with terms and

                                   conditions of the policy

Ex   B4   30.04.2006      Xerox copy of the letter sent by the independent

                                   surveyor to the complainant

Ex   B5   12.05.2006      Xerox copy of the letter sent by the independent

                                   surveyor to the complainant

Ex   B6   17.05.2006      Xerox copy of the letter sent by the independent

                                   surveyor to the complainant

Ex   B7   14.10.2006      Xerox copy of the letter sent by the independent

                                   surveyor to the complainant 

Ex  B17   23.03.2009     Final Survey Report 

List of documents filed by the second opposite party

 

Ex   B8    29.10.2005     Copy of Letter sent by the complainant to the 2^nd OP

Ex   B9    11.12.2005     Copy of letter by 2^nd OP to the 1^st OP  

Ex B10    17.01.2006     Copy of letter by the complainant to the 2^nd OP

Ex B11    18.01.2006     Copy of letter from the 2^nd OP to the 1^st OP

Ex B12    23.02.2006     Copy of letter from 2^nd OP to the 1^st OP

Ex B13    23.03.2006     Copy of letter from 2^nd OP to the 1^st OP

Ex B14    30.08.2006     Copy of letter from 2^nd OP to the 1^st OP

Ex B15    08.09.2006     Copy of letter from 2^nd OP to the 1^st OP

Ex B16    29.08.2006     Copy of letter by 2^nd OP to the complainant  

 

 

 

   J. JAYARAM,                                                                        R. REGUPATHI,

JUDICIAL MEMBER                                                                  PRESIDENT