D.O.F. 09.12.2009

                                          D.O.O. 26.07.2011

IN THE CONSUMER DISPUTES REDRESSAL FORUM KANNUR

Present:      Sri. K. Gopalan                :       President

                                      Smt. K.P. Preethakumari :       Member

Smt. M.D. Jessy               :       Member

Dated this the 26^th day of July,  2011.

C.C.No.322/2009

P.P. Chinnan,

S/o. Pavunni,

Proprietor                                                    :         Complainants

Prime Plastics, Logans Road,

Thalassery

(Rep. by Adv. K.M. Vasantharam)              

The Manager,

Bajaj Allianz Insurance Co. Ltd,                 :         Opposite Party

5^th Floor, Ms Sons Arcade,

Cherooty Road, Calicut – 673 001   

(Rep. by Adv. S. Mammu)

O R D E R

Sri. K. Gopalan, President.

          This is a complaint filed under Section 12 of Consumer Protection Act for an order directing the opposite party to pay a sum of ` 1,07,100 with 12% interest from the date of complaint and cost of the proceedings.

          The case of the complainant in brief is as follows :  Complainant insured his, property of Prime Plastics that is, the entire goods of Prime Plastics hypothecated with South Indian Bank, Telicherry, against fire burglary with opposite party for ` 10,00,000.  The premium paid is          ` 5,062.  The period of insurance is from 17.06.08 to 16.06.08.  On 24.11.08 at about 11’0 clock  a fire broke out in the godown and thereby sustained a loss of ` 92,000.  Immediately on getting the information regarding fire, Fire Force came to the spot and put off the fire.  Complaint was lodged before the Thalassery police and they have registered a crime.  Complainant also lodged a claim with the opposite party regarding the loss sustained by him.  Opposite party appointed a Surveyor to survey the loss and thereby he inspected the place of incident and prepared a survey report.  As per the letter dated 22.12.08 by the Surveyor complainant submitted all the relevant documents.  After the receipt of documents the opposite party sent a letter dated 06.03.09 repudiating the claim on the following ground.

(1)     The loss has occurred to the stock kept in the godown.

(2)     The policy issued and held by complainant is a shop keepers package policy covering shop for a sum of ` 1,00,000.

(3)     Thus the loss had occurred elsewhere which is not covered under special policy.

The reason stated for repudiating of the claim is not correct since the entire stock of Prime Plastics was insured by the opposite party.  Entire goods of Prime plastics was insured for ` 10,00,000 and the articles insured are the stocks and the policy does not reveal the premises or the door number of the insured articles. Then it was informed that the opposite party was not ready to settle the claim.  Hence complainant sent a lawyer notice on 17.08.09 calling upon to settle the claim.  The opposite party did not responded to this notice.  Hence this complaint.

          Pursuant to the notice opposite party made appearance and filed version denying the main averments of the complaint.  Opposite party admitted that the complaint had taken a shop keeper’s policy for the period from 17.06.08 to 16.06.08.  Opposite party accepted the proposal and issued policy which covers the risk of stocks in the shop.  On receipt of complaint regarding the alleged fire opposite party deputed a Surveyor to survey the loss sustained by the complainant.  Survey conducted by this opposite party revealed that the premises of M/s. Prime Plastics are situated in the northern side of the Logans road, Tellicherry. It occupies in the ground floor of a three storied building.  The surveyor noted the door number of the premises OTMC XXXXIV/1914 (old No. XII/938) as per the license and building tax receipt issued from the Tellicherry Muncipality.  M/s. Prime Plastics has another 2 short rooms in the ground floor of Marshal building MNB very close to the main shop room.  The fire affected building is situated on the northern side of pier road near Ambassador Lodge at about 200 meters from the shop of the complainant.  The godown area is occupied in the ground floor of the building bearing No. XXXV/1657 (old No.XI/722) within Tellicherry Municipality.  The complainant has another godown at Customs road, Tellicherry bearing No. TMC/XXXV/840.  The complainant obtained shop keepers package policy for his premises M/s. Prime Plastics, Logans Road, Tellicherry through M/s. South Indian Bank, Tellicherry and the sum insured for the stock is ` 10,00,000.  The fire affected godown building is situated at Pier Road about 200 meters away from the complainant’s shop rooms.  As per the shop keepers Package policy godown was not covered.  The some insured for stock is    ` 10,00,000 instead of the total stock of about ` 20,00,000.  The alleged loss had occurred not from his shop but from his godown elsewhere which is not covered  under the policy.  Hence the complainant’s claim was repudiated.  There is no deficiency on the part of the opposite party.  Opposite party has discharged all the liabilities.  Hence to dismiss the complaint.

          On the above pleadings the following issues have been taken for consideration.

1.        Whether there is any deficiency on the part of opposite party?

2.        Whether the complainant is entitled for the remedy as prayed in the complaint?

3.        Relief and cost.

The evidence consists of PW1, PW2, DW1, DW2, A1 to A10, B1 and B2.  Issues No. 1 to 3  :

          Admittedly complainant Proprietor/insured had taken a shop keeper’s policy with the opposite party for a sum of ` 10,00,000 through South Indian Bank, Tellicherry.  On 24.11.08 at about 11’0 clock a fire broke out in the godown and thereby complainant sustained heavy loss.  Case was registered by police and claim was submitted before the opposite party for getting insurance amont.  But complainants claim was repudiated by opposite party.

          Complainant’s case is that the entire goods of Prime Plastics hypothecated with the bank had been insured with opposite party for      ` 10,00,000.  After reporting the incident opposite party deputed a Surveyor to assess the loss.  Complainant submitted all required documents as demanded by the surveyor.  But the opposite party repudiated the claim.  The policy does not reveal the premises or the door number of the insured articles the entire stock hypothecated with the bank was insured with the complainant.  The reason for repudiating the claim was wrong.  Complainant send the lawyer notice but the opposite party did not settle the claim.

          Opposite party on the other hand contended that complainant obtained shop keeper’s package policy for his premises M/s. Prime Plastics.  The alleged fire affected godown is situated at about 200 metres away from the shop room.   Moreover, the sum assured for the stock was                ` 10,00,000 instead of total stock of about ` 20,00,000.  Under such circumstances opposite party had no other way except repudiating the claim.

          The most important reason for the rejection of complainant’s claim is that the fire effected alleged godown is situated 200 metres away from the shop of the complainant.  It is an admitted fact that complainant obtained shop keeper’s package policy through M/s. South Indian Bank, Tellicherry.  Complainant obtained policy through the bank because the insured goods were hypothecated with the bank.  It is a contractual link that creates obligation each other.   It is clear from the face itself that the goods that are hypothecated with the bank, are the goods that had been insured.  Since the complainant obtained policy through the bank, for all the intermediary understanding of the transaction in connection with the subject matter arose between bank and insurer.  Complainant’s specific case is that he had hypothecated all goods that of M/s. Prime Plastics and insurance was taken for those goods that had been insured with the bank.  The insurer has no case that the entire hypothecated goods will not become part of the subject matter that had been covered with the insurance.  The insurer not insured insurance policy directly to complainant for the goods that had been pointed by him but it was those goods which had been hypothecated with the bank had been actually insured by the insurer through the bank.  Opposite party did not raise at any stage that the goods destroyed by fire had not been hypothecated with the bank by the complainant. There was no specification or door number to the stock room.  Complainant/PW1 adduce evidence by chief affidavit that “Prime Plastics se apgp-h³ tÌm¡pT South Indian Banksâ Thalassery imJ-bn- loan\p th­n CuSp \ÂIn-bn-«p-f-f-Xm-Wv.  South Indian Bank, Thalassery imJ-bmWv policy FSp-¯-Xv.  {]kvXpX stock South Indian Bank, Thalassery imJ-bn CuSp \ÂIn-bn-«p-f-f-XmWv F¶ Imc-yT policybn IrX-y-ambn ]d-ªn-«p-­v.  {]kvXpX policy premium A\-ym-b-¡m-c³ IrX-y-ambn AS-¨n-cp-¶p. Prime Plasticssâ  stock shopepT godownepT BbmWv kq£n-¡m-dv.”  There is no denial on the part of opposite party that the insured articles were not hypothecated with the bank, which amounts to admission that the hypothecated articles were insured with the opposite party.  When complainant says that premium has been paid for the entire goods hypothecated with the bank, it is the opposie party who has to disprove that these goods which subject to the loss of fire had been excluded from the hypothecated goods with the Bank belongs to complainants.  Since there is material importance to this aspect of contract it is necessary to examine the proposal accepted by the insurer.  The proposal has not been produced by opposite party.    This is a document exclusively in the possession of opposite party.  Proposal is the most important document in a contract.  When complainant pleaded that the insurance contract assured the insured the subject matter includes the entire goods hypothecated to the bank and it is this property hypothecated to bank, that has been insured, the insurer who is exclusively in possession of the document has to produce so as to disprove the averment of the complainant.  If it is not produced the pleading in usual course stands proved since the opposite party is at liberty throughout keeping best weapon in his hand capable of proving the truth at any point of time he chooses.  Non-production of such an important document not merely leads to accept the pleading of complainant but pave the way to conclude that this suppression is an expression of unfair trade practice, which is unsuitable for a leading institution like opposite party.

          Ext.B2 is Survey Report.  What is the purpose of appointment of a surveyor in this case? What is asked to do? What he has actually done?  Ext.B2, the Final Survey Report categorically stated that it is a ‘survey report regarding the claim of Mr. P.P. Chinnan, Prime Plastics, Logans Road, Thalassery under shop keepers package policy for reported fire damages to the stock at the godown premises on 24.11.2008.  It is pertinent to note that he was instructed Bajaj General Insurance Co. Ltd. to enquire into the complainants claim.  Surveyor clearly stated that he had on 25.11.2008 and subsequently on 28.11.2008 attended the godown premises of M/s. Prime Plastics situated at pier road, Thalassery and the shop premises to inspect, survey and assess the reported      loss/damage incurred by the insured due to a fire reportedly occured on at about 11.00 pm on 24.11.2008.  The purpose for which the surveyor was depicted is as stated above.

          The stock at the godown premises if not covered by the insurance policy there is no need to assess the damage by the surveyor in connection with the claim.  Ext.B2, Survey report has been marked through DW2, the surveyor.  In cross examination he has deposed that “Prime Plasticssâ  loss assess sN¿m-\mWv F\n¡v \nÀt±-iT X¶-Xv.” This is a plane admission that he was instructed to assess the loss sustained by the complainant when DW2 was put a question with respected to the name of the insured PW2, Surveyor answered that “Insuredsâ t]cv               P.P. Chinnan  F¶mWv ImWpI F¶p ]d-ªm icn-bm-Wv.  Report  insuredsâ t]cv South Indian Banksâ t]cv Fgp-Xn-bXv icn-bÃ.  Report clause-3bn shopDT godownDT engaged in the wholesale and retail business F¶p ]d-ªn-«p-­v.”  In the light of this evidence the contention of opposite party that opposite party has accepted the proposal resulting in the above mentioned shopkeeps policy which covers the risk of stock in the shop is absolutely false and unsustainable.  Without an iota of doubt it can be concluded that the godown also has been covered under the policy especially in the light of Ext.B2 which reported in para 4 of the survey report that the shop and godown are engaged in the whole sale and retail business of plastic goods.  Opposite party concluded in the version that the fire affected building is situated at about 200 metres from the shop of the complainant.  At the same time Ext.A10 dated 10.11.2009 reply to notice dated 12.09.2009 opposite party contended that the damage was caused to goods stored in the godown of your client which is about 50 meters away from the shop.   In the proof affidavit filed on 04.04.2011 opposite party adduced evidence the fire affected building situated at about 200 meters from the shop of the building.  Opposite party has no consistent case with respected to the distance of godown.  Opposite party did not keep a straight forward attitude was even presenting the facts before the Forum, whereas there is an inherent trend to mislead the facts and figures on an attempt of research to find a way out from the liability by one way or the other.

          In Ext.A7 dated 06.03.2009 opposite party observed on scrutiny that the policy is covering for a sum of rupees one lakh.  Same opposite party admitted subsequently that it is for ` 10,00,000.

          Moreover, DW1, the legal opinion of the opposite party deposed in cross examination that “godown\v Xo]n-Sn¨ hnh-cw Ad-nbm-w.  AXv Prime Plastics F¶ Øm]-\-¯nsâ godown BsW-¶pT Adn-bm-w.  B  godown A\-ym-b-¡m-csâ ssIh-i-¯n-ep-f-f-Xm-sW-¶pT Ad-nbm-w.”  He has also deposed that “Godown insure coverage D­v.  Policy ]cn-tim-[n-¨m coverage Ds­¶p ImWpT. AXp-sIm-­mWv  Policybn building number ]d-bm-Xn-cp-¶-Xv.” It is true that he has stated in reexamination that policybn godownse stock cover sN¿nÃ. It is pertinent to note that the above evidence is given by a person, legal officer who has prepared version and chief affidavit.  If that be so, the oral testimony of DW1 alone is sufficient to fix liability on the shoulders of opposite party.

          The relationship of opposite party with SIB is also an important aspect to be considered in evaluating the state of affairs in a different angle.  The evidence of DW1 that “policy FSp-¡p-¶Xv  South Indian Bank, Thalassery imJ aptJ-\-bmWv.  SIB aptJ\ t]mfnkn FSp-¡p-t¼mÄ B _nkn-\Êv tem¬ D­m-hm-T.  SIB¡v Bajaj Allianceambn tie up D­v. Cu case tem¬ D­v.   Insuredsâ t]cv  Chinnan P.P. F¶mWv.”  So opposite party has tie up with SIB is a proved fact.  Policybn hypothecated to SIB F¶m-Wv. Hypothication hcp-¶Xv tFXn\m-sW¶v Bank\mWv ]d-bm³ Ign-bpI. Issue sNbvX policybn Door number ]d-ªn-«nÃ.  Building numberDT ]d-ªn-«nÃ. ]cm-Xn-bn Nn¶³ SIBbn Prime Plasticse apgp-h³ tÌm¡pT hypothecated F¶p ]d-ªn-«p­v.  Hence it can be seen that the facts elicited from the mouth of DW1 also falls against opposite  party factually and in its spirit.

          On analysis of evidence oral and documentary the only possible conclusion that can be arrived at is that the opposite party is liable for the damages sustained by the complaint by the alleged fire, since it is covered by insurance policy number issued by the opposite party. 

          Ext.B2 surveyor report in its page ie para 19 detailed the assessment of loss as shown below :

          Value of damaged item as per Annexure A = ` 66,715.00

          Assessed loss                                             = ` 66,715.00

Deduct salvage value of 240 Kg @ Rs.17/Kg        = ` 4,080.00

          Adjusted loss                                             =  ` 62,635.00

          Since there is no other reliable assessment of damage we are fully agreeing the assessment of loss done by the surveyor.   Hence we are of opinion that the complainant is entitled for a sum of ` 63,000 as the loss sustained by complainant.  We are also of opinion that of complainant is entitled for an amount of ` 1,000 as cost of this proceedings.  Hence the issue No.1 to 3 are answered in favour of complainant.

          In the result, the complaint is allowed directing the opposite party to pay a sum of ` 63,000 (Rupees Sixty three thousand only) as insurance amount together with a sum of ` 1,000 (Rupees One thousand only) to complainant within one month from the date of receiving this order failing which the opposite party is also liable to pay 8% interest for the amount from the date of filing of this complaint.  Complaint is at liberty to execute the order after the expiry of 30 days as per the provisions of Consumer Protection Act.    

                    Sd/-                         Sd/-                         Sd-                     

       President                  Member                   Member

APPENDIX

Exhibits for the Complainant

A1.  Insurance policy schedule.

A2.  Fire report dated 24.11.08.

A3.  Copy of List and value of damaged items dated 24.11.08..

A4.  Letter dated 26.11.08.

A5.  Letter dated 22.12.08.

A6.  Letter dated 16.01.09.

A7.  Letter dated 06.03.09.

A8.  Copy of lawyer notice dated 17.08.09.

A9.  Acknowledgment card.

A10.  Reply letter dated 10.11.09

Exhibits for the opposite party

B1.  Policy Schedule.

B2.  Final Survey Report dated 25.02.09.

Witness examined for the complainant

PW1.  Complainant

PW2.  Rajeevan K.

Witness examined for the opposite party

DW1. Ambili George

DW2. Madhu Aeran

Forwarded by order

                                                               SENIOR SUPERINTENDENT