Kerala

Idukki

CC/74/2018

Najeeb T K - Complainant(s)

Versus

The Manager HDFC Bank Ltd - Opp.Party(s)

Adv.K M Sanu

25 Jul 2023

ORDER

DATE OF FILING : 12.4.2018

IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, IDUKKI

Dated this the 25^th  day of  July, 2023

Present :

SRI. C. SURESHKUMAR                  PRESIDENT

SMT. ASAMOL P.                             MEMBER

SRI. AMPADY K.S.                           MEMBER

CC NO.74/2018

Between

Complainant                                          :     Najeeb T.K.,

                                                                   Thottipparambil House,

                                                                   Thodupuzha P.O.

                                                                   Proprietor, Pockets Menswear,

          (By Adv: K.M. Sanu)

And

Opposite Parties                                     : 1. The Manager,

                                                                   HDFC Bank Ltd.,

                                                                   Thodupuzha Branch,

                                                                   Vengalloor, Thodupuzha P.O.

      2. The Manager,

                                                                   HDFC Ergo General Insurance Co. Ltd.,

                                                                   1^st Floor, 165-166 Backbay Reclamation,

                                                                   HT Palakh Marg, Charchgate,

                                                                   Mumbai – 400020.

 (By Adv: K. Pradeepkumar)

O R D E R

SRI. C. SURESHKUMAR, PRESIDENT

 

This case originates from a complaint filed under Section 12 of the Consumer Protection Act, 1986 (the Act, for short).  Complaint averments are briefly discussed hereunder :

 

          Complainant is running a shop of readymades by name ‘Pockets Men’s Wear’, in Thodupuzha.  1^st opposite party is manager of Thodupuzha branch of HDFC Bank Ltd. and 2^nd opposite party is manager of Mumbai office of HDFC, Ergo General Insurance Company Ltd.  Complainant had through 1^st opposite party, taken a standard fire and Special Peril (Material Damage) policy on 15.10.2016 of 2^nd opposite party which had an annual tenure until 14.10.2017.  Policy amount was Rs.8,26,419/-.  Complainant had paid Rs.2,851/- as premium for the policy through 1^st opposite party.  On 10.7.2017, complainants shop was gutted by fire caused owing to short circuit.  He has lost about Rs.9 lakhs worth goods kept inside the shop.  Complainant insists that only readymade garments were kept inside the shop.  Incident was duly informed to police, fire service                                                                                                           (cont….2)

• 2  -

and 2^nd opposite party.  Surveyor of 2nd opposite party had come and assessed damages.  He had taken bills found inside the shop also.  Amongst these, there were bills for  materials necessary for stitching unit. Materials are kept in stitching unit  and not inside the shop.   These are used in stitching unit for manufacture of readymade garments and upon completion of work, garments are brought and stored in the shop. After considering the claim preferred by complainant, 2^nd opposite party had only allowed Rs.3,00,772/- towards the claim.  Opposite parties had only intended to give some  money for the loss occasioned.  Though an amount equivalent to the loss sustained amounting to Rs.9 lakh was offered initially, subsequently it was reduced by taking advantage of complainant’s financial position.  Since complainant had no choice, he had signed all the papers brought to him by opposite parties for his signature.  Complainant had to open his business again as it was the only source of his livelihood.  It was only for this reason that he has put his signature in the vouchers and other documents produced by opposite party.  After received allowed claim amount, complainant had orally requested for payment of balance and subsequently upon failure of opposite party to do so,  issued a lawyer notice seeking  payment of entire claim amount.  However, this was not given.  Complainant submits that non-payment of entire claim amounts to deficiency in service and unfair trade practice on the side of opposite parties, as they had unilaterally whittled down the eligible amount to the one now granted to him, taking unfair advantage of his financial condition.  Complainant prays for remaining claim amount with 18% interest and Rs.1 lakh towards compensation for deficiency in service.  He also seeks Rs.5,000/- towards litigation costs. 

 

          Upon notice, both opposite parties have entered appearance and filed separate written versions.  1^st opposite party has only contended that there is no privity of contract in the matter of insurance between itself and the complainant.  That the 1^st opposite party is not liable for the actions, if any, of 2^nd opposite party.

 

          2^nd opposite party has filed a detailed written version disputing the claim.  According to him, there is no deficiency in service and unfair trade practice from its part.  2^nd opposite party submits that a policy bearing No.2111200596230703000 for the period from 15.10.2016 to 14.10.2017 was issued to complainant from it.  Sum insured was Rs.8,26,419/-.  At the time of fire accident, shop in question had stock of Rs.13,40,004/- and this is a case of under insurance and complainant is entitled to get indemnified proportionally only.   Upon receipt of claim, immediately an independent IRDA licensed surveyor was deputed to assess the loss.  After inspection and discussions with complainant, surveyor assessed the loss. After further discussions and deliberations with the complainant, he had voluntarily agreed to receive Rs.3,00,772/- towards full and final settlement of the claim.  This amount was paid to complainant on 13.12.2017 and complainant had issued a discharge voucher for the amount.  Complainant had settled the claim out of his free will.  Hence he is esstopped from                                                                                                                           (cont….3)

- 3  -

claiming anything more.  Surveyor had assessed gross loss of Rs.8,15,373/-. Out of this, 10% was deducted towards dead stock, salvage and under insurance,  5% was towards excess and reinsurance premium.  Net claim payable was arrived at Rs.3,00,773/-.  It was paid to complainant on 13.12.2017.  It is incorrect to say that complainant sustained a loss of Rs.9 lakhs.  It is incorrect to say that complainant signed all papers as demanded by 2^nd opposite party upon compulsion.  Complainant had, after being fully convinced that he is only entitled to get Rs.3,00,772/-, signed the discharge voucher voluntarily.  He is not entitled to receive anything more.  Complaint is to be dismissed with costs.

 

          After affording sufficient opportunity to both sides for taking steps, case was posted for evidence.  On the side of complainant, he himself was examined as PW1 and Exts.P1 to P4 were marked.  No oral evidence was tendered from the side of opposite parties.  2 documents produced by 2^nd opposite party were admitted as Exts.R1 and R2.  Thereafter evidence was closed and both sides were heard.  Now the point which arise for consideration are :

1)  Whether there is any deficiency in service from the side of opposite parties 1 and 2 ?

2)  Whether complainant is entitled for the reliefs prayed for ?

3)  Final order and costs ?

 

Point Nos.1 and 2 are considered together :

 

          As per the proceedings in main case dated 26.2.2020, 1^st opposite party was deleted from the party array.  Hence the question is only with regard to deficiency in service, if any, from the side of 2^nd opposite party.

 

          Before adverting to the merits of the case, we would once again refer to the evidence tendered in this case.  As mentioned earlier, complainant has tendered oral evidence during his examination as PW1.  He has spoken more or less on the lines seen pleaded in his complaint.  Ext.P1 is copy of policy, Ext.P2 is copy of GD entry, Ext.P3 is report of ASTO and Ext.P4 is copy of lawyer notice sent by him along with postal receipt.

 

          From the side of respondents, there is no oral evidence.  Ext.R1 is a voucher for full and final settlement as seen acknowledged by complainant after receipt of Rs.3,00,772/- towards the claim.  Ext.R2 is copy of survey report.  Able counsel for the complainant has contended that due to financial constraints, complainant had to agree to the meager amount offered by opposite parties towards settlement of the claim.  He had to start his business afresh for which money was necessary.  Complainant was relying upon the earnings from the shop for his livelihood.  He had no other way, but to agree to the amount offered and had signed Ext.P1 and other documents also under pressure.                                                                                                                 (cont….4)

• 4  -

That being so, Ext.R1 cannot be considered as given voluntarily by complainant and therefore, complainant cannot be bound by it.  There is evidence to the effect that loss sustained was nearly Rs.9 lakhs.  That being so, complainant is entitled to get remaining sum assured after deducting the amount already paid, with interest as prayed for.  He is to be compensated for deficiency in service and given his litigation costs.

 

          On the other hand, learned counsel for 2^nd opposite party submitted that Ext.R1 was given by complainant voluntarily.  He had freely signed Ext.R1 acknowledging amount received towards full and final settlement of his claim.  Under these circumstances, in view of the decision of Hon’ble High Court of Kerala in the matter of Oommen Vs. Bajaj Allianz General Insurance Co. Ltd. (Arbitration Appeal) 32 of 2011 and also in the light of decision of Apex Court in National Insurance Company Ltd. appellant Vs. Nipha Exports Pvt. Ltd. respondent (2006[9] Supreme Court 143) the complaint cannot be maintained.

 

          It could be seen from the pleadings and contentions advanced, that issuance of policy is admitted.   The only question is whether Ext.R1 will amount to full and final settlement of entire claim.  In this context, it would be apposite to refer the decision of Hon.ble High Court of Kerala mentioned supra.  Facts therein are similar to the facts of the case at hand.  That was  a case where the claimant has accepted the claim offered on non-standard basis at 80% of the amount assessed by surveyor in full and final settlement of the claim.  It was contended in that case that the claimant was under financial pressure.  However he has not given details of the financial commitments which were to be met by him.  In the absence of these details, Hon’ble High Court had found that the case projected could not be considered.  In the instant case, there pleadings to the effect that gutted shop was the only source of livelihood of complainant.  That the initial amount offered was repeatedly reduced to the present amount and complainant had no other go but to agree with 2^nd opposite party for getting the amount offered. That he was in dire need of money for beginning his business again as this was his livelihood. Complainant has tendered evidence also on these lines. 2^nd opposite party does not have a case that complainant has other means to survive. His financial contingency is not in challenge either. Contentions are to the effect that financial stringency cannot be considered as a reason for holding that discharge voucher was not voluntarily given. We do not find any such observations in the judgment of High Court. It was only observed therein that there were no details of financial pressure in that case and hence the contention did not find any favour with court. In the decision of Supreme Court also there are no observations that financial pressure/contingency will not constitute a ground for revisiting terms of contract for lack of consent. In the present case complainant had lost his source of livelihood. He was in dire need of money to start his business again. He had to feed himself and his family. What more pressure can be there than this? He has not sent any letter before or after R1 expressing his consent,                                                                                                    (cont….5)

• 5  -

unlike the case considered in the decision of Hon’ble high Court, where claimant had first sent a letter expressing his consent to receive lesser amount and thereafter issued voucher endorsing full satisfaction of claim. So also, in the decision of hon’ble Supreme Court it is observed that claimant has not put forth a case of fraud, undue influence, misrepresentation or coercive bargaining. In the present case complainant has pleaded and proved that there was coercive bargaining. Both decisions cannot be applied to the facts at hand. R1 voucher was not signed and given voluntarily by complainant and hence he cannot be bound by it. For the same reasons, the doctrine of accord and satisfaction cannot be applied here.

 

Computation table in version shows that 10% deduction is made for dead stock alone. Rs.2,20,000/- is deducted towards salvage which is 27% of gross loss. Rs.1,96,939/- is again deducted for under insurance, which constitutes 24% of gross loss. Thus deductions for dead stock, salvage and under insurance constitute 61% of gross loss assessed.  Ex.R2 report discloses that dead stock was fixed at 10% as per accounting practice which is carried forward from previous year. It is also mentioned therein that insured does not keep proper stock register. Thus fixation of 10% towards dead stock is notional based on accounting practice. As per accounting practice income generated from sale of 2^nd quality goods, or outdated stock is also shown in final accounts, which apparently is not considered here. Therefore, dead stock value  has to be recomputed so as to make it as near to actual as possible.  It is common knowledge that old stock, especially of textile goods, is sold in the next year by discount sales. Considering the condition of textiles even 50% discount is offered. That being so we are of the view that book value should be 5% and not 10%. Similarly, it is mentioned in R2 that Rs.65,940/- was maximum quote given/offered by salvage buyers for damaged items. That complainant had offered to retain salvaged goods for Rs.2,20,000/-, which is more than thrice the highest bid. This does not appear to us as correct. No written offer on these lines was given by complainant. Evidently, hiked up salvage value was the result of coercive bargaining. Assessment of net loss ought to have been done by deducting 5% for dead stock and Rs.65,940/- towards salvage value. Thus net loss will be 815373 - 1,06708.65 (40,768.65+65940) = 7,08,664.35. Average clause application will be as given here: 7,08,664.35 x 8,26,419 / 13,40,004 = Rs.4,37,053.68 rounded to Rs.4,37,054/-.  Complainant is entitled to receive Rs.4,37,054/- towards his claim. He was paid only Rs.3,00,772/-. Balance payable is Rs.1,36,282/-, which amount should carry interest @12% from date of R1, i.e., 12/12/2017. Considering the circumstances, he is entitled for Rs.30,000/- towards compensation for deficiency in service and unfair trade practice and Rs.2500/- towards litigation costs.  Point Nos.1 and 2 are answered accordingly. 

                  

 

                                                                                                                   (cont…..6)

 

• 6  -

Point No.3 :

 

          In the result, this complaint is allowed in part with costs upon the following terms:

 

1. 2^nd opposite party shall further pay Rs.1,36,282/-  towards insurance claim of complainant with interest @12% per annum from 12/12/2017 until realization.
2. 2^nd opposite party shall pay Rs.30,000/- as compensation to complainant with interest @12% per annum from the date of this order until realization.

 

3. It shall pay Rs.2,500/- to complainant towards litigation costs.

 

4. Amounts ordered shall be paid within 45 days from the date of receipt of copy of this order.

 

Parties to take back extra sets of copies without delay.

 

                             Pronounced by this Commission on this the  25^th  day of July, 2023

                                                                                      Sd/-

SRI. C. SURESHKUMAR, PRESIDENT                                             Sd/-

 SMT. ASAMOL P., MEMBER

                   Sd/-

SRI. AMPADY K.S., MEMBER

 

APPENDIX

Depositions :

On the side of the Complainant :

PW1        -   Najeeb T.K.

On the side of the Opposite Party :

Nil.

Exhibits :

On the side of the Complainant :

Ext.P1     -      Copy of policy,

Ext.P2    -      Copy of GD entry,

Ext.P3    -     Report of ASTO.

Ext.P4    -     Copy of lawyer notice sent by complainant along with postal receipt.

On the side of the Opposite Party :

Ext.R1    -    Copy of discharge voucher.                                    Forwarded by Order,

Ext.R2    -    Copy of survey and loss assessment report.

 

 

                                                                                         ASSISTANT REGISTRAR