.BEFORE THE KARNATAKA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, BENGALURU. (ADDL. BENCH)
DATED THIS THE 2nd DAY OF AUGUST, 2023
PRESENT
SRI RAVI SHANKAR, JUDICIAL MEMBER
SMT. SUNITA C.BAGEWADI, LADY MEMBER
COMPLAINT NO.630/2015
Sri.Murari.J. S/o Manoji Rao.J,
Aged about 49 years ….Complainant/s
Proprietor, Sneha Enterprises,
No.28, Infantry Road,
Near Bellary Club,
Bellary-583101
(By Shri.P.Chidananda, Advocate)
-Versus-
1. The Manager,
SBI General Insurance Co., Ltd,
2nd Floor, Kalburgi, Hallmark,
Pinto Road, Desai Cross, … Opposite party/s
Hubli-580029
2. The Manager,
State Bank of Mysore,
Bazaar Branch, Bengaluru road,
Bellary-583 101
(OP No.1- By Sri.Ravi.S.Samprathi, Advocate)
(OP No.2- By Sri.A.Mahammed Ghouse, Advocate)
O R D E R
BY SMT.SUNITA C.BAGEWADI, MEMBER
The complainant filed this complaint against the Opposite Parties alleging deficiency in service and unfair Trade Practice and prays to direct the Opposite Parties to pay a sum of Rs.49,00,000/- with interest at 18% p.a. and grant such other relief, in the interest of justice and equity.
2. The brief facts of the complaint is that the complainant is the proprietor of “Sneha Enterprises” dealing with Glass and other articles, situated at No.28B, Infantry Road, Near Bellary Club Bellary. For the purchase of the schedule property along with a shed for stocking of the glasses, machineries and other article, the complainant had availed loan facility by mortgaging the schedule property and stock in trade with State Bank of Mysore on 21-11-2008. The 2nd Opposite Party has sanctioned a term loan of Rs.30,00,000/-. As per the terms and conditions of the bank, the complainant had to insure the schedule property measuring 7751 square meters with building along with stock in trade. Accordingly premium amount has been deducted by the bank from the account of complainant and proposal forms for the insurance was signed and given to the bank. The original policy was issued to the bank and the same was deposited with the 2nd Opposite Party. The said policy was issued covering a risk for the worth of Rs.25,00,000/-and the premium of Rs.4,036/- in the year 2008 and the said policy was thereafter renewed time to time on the instructions of the 2nd Opposite Party bank by deducting the premium amount from the complainant account for the year 2013-14 valid upto 13-06-2014.
The complainant further submitted that on 7-3-2014 at about 5.30 p.m. there was heavy down pour with strong winds, due to which the warehouse/go down on the schedule property was severely damaged and stock kept in the schedule property were destroyed. Thereafter the complainant informed the same to the jurisdictional police and the police have come to the spot, verified and have conducted the mahazar and drawn the panchanama before the witnesses showing that the warehouse/go down was completely shattered and the entire stock was ruined beyond use.
The complainant further submitted that he had intimated the 2nd Opposite Party on 8-3-2014 regarding damages to the building and stocks in the schedules property and requested the 2nd Opposite Party bank to provide them with a policy copy so that they can make a claim with the 1st Opposite Party Company. However the 2nd Opposite Party bank did not cooperate with the complainant. The complainant had to download the policy copy from the internet after the bank gave the policy number after strong insistence. On information from the tank the 1st Opposite Party visited the spot and inspected the damages caused and informed complainant that they would revert back. As per the independent surveyor who visited the spot and conducted the survey verified and assessed the damages and the loss incurred by the complainant, which was caused due to heavy rain in which the complainant had lost totally Rs.32,10,000/-.
The complainant further submitted that on 26-5-2014 the 2nd Opposite Party informed that the claim could not be considered and payment could not be made to the complainant as the risk location address mentioned in the policy was entirely different from the location address where damage was caused.
The complainant further submitted that thereafter he got issued the legal notice to the Opposite Parties on 19-6-2014 and the same was served on the Opposite Parties. The 2nd Opposite Party issued an untenable reply by denying all facts and contending that the schedule property was only given as collateral for the loan obtained by the complainant. The complainant had also sought for the information through RTI on 29-7-2015 even on expiry of 30 days the 2nd Opposite Party has not provided any documents for which the complainant has preferred an appeal before the information commissioner on 4-9-2015 and inspite of these they have failed to provide the documents till today.
The complainant further submitted that at the time of purchasing the schedule property from Sundaram Motors the complainant had availed loan to the tune of Rs.40,00,000/- from the 2nd Opposite Party mortgaging the schedule property and the said amount was paid by the 2nd Opposite Party directly to the vendors of the complainant by way of bankers cheque. All these facts being very well within the knowledge of the 2nd Opposite Party who has mortgaged the schedule property with them and having given the proposal for issuance of the insurance to cover the risks of the mortgaged property now cannot contended that the said policy was issued for different property and schedule property was only collateral to that. The 1st Opposite Party has issued the said policy after visiting the schedule property and assessing its value and they also cannot contend now stating that the risk location is not matching. Further the policy clearly states that the nature and business carried out in the property covered for risk is engineering workshop. Mentioning of risk covering location in the policy wrongly demonstrates the clear negligence on the part of the 1st Opposite Party and the 2nd Opposite Party. Now further rejecting the claim of the complainant on the flimsy ground is a case of deficiency of service on their parts. Hence, this complaint is filed.
3. After service of notice, the Opposite Party Nos.1 and 2 have appeared through their counsel and filed separate version. The Opposite Party No.1 and 2 admitted the some allegations of the complainant and denied all other allegations.
4. The 1st Opposite Party admitted the policy No.0000000001065845 under SME Package policy covering stocks for a sum of Rs.3.00 lakhs which was effective from 14-6-2013 to 13-6-2014 subject to terms and conditions and also admitted another policy No.0000000001066225 stock a sum of Rs.25,00,000/- which was effective from 25-6-2013. It is also admitted by the 1st Opposite Party that the claim intimation was received on 10-3-2014 for the damage caused to the stock of glass sheets due to storm on 7-3-2014 and surveyor after inspection at the location of Sneha Enterprises, plot No.28 & 29, 2nd Stage, Mundaragi Industrial Area, Bengaluru road, Bellary submitted report that as per the policy document risk location is different. Hence, the question of covering the damage at the said address does not arise. Further the 1st Opposite Parties has contended that the loss location as stated in the policy was amended the policy by the complainant subsequent to alleged accident. Further the 1st Opposite Party contended that the 1st Opposite Party is not liable to pay as prayed in the complaint. In case this commission came to the conclusion that the 1st Opposite Party is liable to pay the complainant, then the 1st Opposite Party liable to pay only to the extent of Rs.1,60,000/- as per the terms and conditions of the policy.
5. The 2nd Opposite Party admitted that the 2nd Opposite Party sanctioned terms loan of Rs.30,00,000/- for purchase of the property by mortgaging the same situated at Infantry road, No.25B and 351/B, Bellary but not stock yard point at Mundaragi village as stock in trade and cash credit facility of Rs.10,00,00/- as per the terms and conditions of the bank.
The 2nd Opposite Party further contended that the complainant has never insured the godown situated at plot No.28 & 29 at Mundaragi, 2nd stage, Bellary and no policy was issued on such address by the 1st Opposite Party. The 2nd Opposite Party further contended that there is no relationship between the complainant and the 2nd Opposite Party as a consumer as the complainant had closed all his four accounts on or before 19.8.2013 i.e. before the incident occurred and released mortgaged paper.
The 2nd Opposite Party further contended that the policy No.0000000001066225 dated 25-6-2013 was issued by the 1st Opposite Party at the address of the complainant at Sneha Enterprises, No.25, Infantry Road, Bellary and the risk coverage also mentioned at No.25, Infantry Road, Bellary not at industrial area, 2nd Mundaragi village, Bellary taluk. The SBI General Insurance has also issued the copy of the policy as on 14-6-2013 wherein it is clearly stipulates that the risk coverage is at Main Road, Bellary City, Bellary. After the receipt of the policy by the complainant, the complainant has not raised any objection for modification of address mentioned in the said policy nor objected its contents of the policy nor its terms and conditions. Hence, prays to dismiss of the complaint against the 2nd Opposite Party.
6. The complainant filed affidavit evidence and marked documents at Exs.C1 to C12 and also filed written arguments. The 1st Opposite Party filed affidavit evidence along with documents but not marked the documents. In spite of granting sufficient time, the 2nd Opposite Party has not filed his affidavit evidence.
7. Heard from complainant. The Opposite Parties have not submitted their arguments, despite granting sufficient opportunities.
8. On perusal, the following points will arise for our consideration;
(1) Whether the complainant has proved the deficiency of service on the part of the Opposite Parties?
(2) Whether the complainant is entitled for the reliefs as sought?
(3) What order?
9. The findings to the above points are;
(1) In the affirmative
(2) In the partly affirmative
(3) As per the final order
R E A S O N S
10. Point Nos.1 to 3:- Perused the contents of complaint; objections of the Opposite Parties, affidavit evidence of both parties and materials on records. We noticed that the 2nd Opposite Party has sanctioned a loan of Rs.30,00,000/- and term loan of Rs.10,00,000/- to the complainant by depositing the documents of the property situated at plot No.28 and 29, 2nd stage industrial areas, Mundaragi, Bellary taluk and District. The 1st Opposite Party also admitted that the 1st Opposite Party had issued insurance policy bearing No.0000000001065845 and another policy No.0000000001066225 to the complainant covering the risk of stocks for Rs.3,00,000/- and for Rs.25,00,000/- respectively.
11. It is also admitted by both Opposite Parties that the 1st Opposite Party has issued policy to the address mentioned as Main Road, Bellary, Bellary city, Karnataka. However dispute is that after receiving the intimation for the damage after incident dated 10-3-2014 to the stock of glass sheets due to storm dated 7-3-2014, the surveyor and loss assessor M/s.JB Boda inspected the damaged property i.e. Sneha Enterprises, Plot No.28 & 29, 2nd Stage Mudaragi Industrial Area, Bengaluru Road, Bellary.
12. Perused the policies, there were two policies on record one is No.0000000001066225 covering the risk of Rs.25,00,000/- and premium of Rs.4,036/- in the year 2008 which was renewed time to time for the year 2013-14 valid upto 3-6-2014 and another one policy No.0000000001065845 covering risk of Rs.3,00,000/- and premium of Rs.1,330/- in the year 2013-14 and in both policies in the column “mailing address” address was mentioned as “SNEHA ENTERPRISES, No.25, Infantry Road, Bellary, Bellary city, Bellary, Karnataka.
13. Perused the memorandum relating to deposited title deeds, the 2nd Opposite Party has sanctioned the loan by mortgaging the property situated at plots No.28 and 29 in Mundaragi, 2nd stage Industrial area, Mundaragi village, Bellary hobli, Bellary district measuring 7751 sq. mt. The purpose of purchasing the policies of the complainant from the 1st Opposite Party through 2nd Opposite Party is only to protect the mortgaged property and stock in trader. The insurance ought to have covered the entire site of hypothecated a sum against which the credit as extended, hypothecated assessed where for security of repayment to the bank a sum of Rs.40,00,000/- together with interest and other charges. Then it is the duty of the 2nd Opposite Party bank to take policies covering the entire site hypothecated assets and to mention the mortgaged property address in the policy in the risk location address. But in the risk location address, the address of mailing/business address is mentioned by the Opposite Party No.2 which is the negligence on the part of the 2nd Opposite Party. The address mentioned in “risk location” is only the address of business. Further the 2nd Opposite Party has contended that there is no privity of contract between the complainant and the 2nd Opposite Party as because before the incident the complainant had closed all his accounts from the 2nd Opposite Party bank. It is true that at the time of incident there is no privity of contract between the complainant and the 2nd Opposite Party bank. However, the 1st Opposite Party has issued the policy through the 2nd Opposite Party bank to the complainant and at the time of furnishing the policy, the bank has to mention the address of the mortgaged property to the 1st Opposite Party in “risk location”. Without noticing the address of mortgaged property mentioned the mailing address in the policy. Anyhow after receiving the intimation about the incident, the 1st Opposite Party has appointed surveyor and the surveyor after visiting the spot submitted the report that “the insurer has not submitted the relevant purchase bills for the broken glass panes. Based on observations the insured’s loss would be approximately Rs.1,60,000/-. However as the location affected is not covered under the policy we had brought this to the notice of the insured and also informed them in writing and that we are closing our files as no claim”. Here we noticed that the surveyor assessed the loss to the tune of Rs.1,60,000/-. However in contents of the complaint, in affidavit and also written arguments, the complainant has stated that the surveyor J.B.Boda has assessed the damage and loss to the tune of Rs.32,30,000/-. However, the complainant has not produced any documents regarding that. The surveyor J.B.Boda in his survey report stated that the complainant has not submitted the relevant purchase bills for the broken glass panes and the loss would be approximately Rs.1,60,000/-.
14. The complainant has produced citations similar to the said of facts of this case; one is Civil Appeal No.4645/2019 – Canara Bank –vs- M/s Leatheroid Plastics Pvt. Ltd and the second one is by Hon’ble Supreme Court of India in Civil Appeal Nos.1544 –1545/2022 between Anju Kalsi –vs- HDFC Ergo General Insurance Co. Ltd, and Ano. We relied on both citations and in the present case, came to the conclusion that the Opposite Parties are liable to compensate the complainant for loss suffered. Any how the 1st Opposite Party in his objection stated that he is ready to pay Rs.1,60,000/- as per survey report to the complainant, if this commission came to the conclusion that the 1st Opposite Party is liable to pay.
15. Hence, considering the facts, we are of the opinion that, the 1st Opposite Party is liable to pay Rs.1,60,000/- to the complainant as the loss and damage assessed by the surveyor Mr.J.B.Boda as the complainant has not produced any other surveyor’s reports or the report of J.B.Boda in which he has assessed the loss to the tune of Rs.32,30,000/-. Also he has not submitted bills for the broken glass panes etc. before surveyor and before this Commission. Accordingly, the complaint is partly allowed.
16. Point No.3: In view of above discussion, we proceed to pass the following:-
O R D E R
The complaint is partly allowed with litigation cost of Rs.25,000/- to the complainant.
The 1st Opposite Party is directed to pay Rs.1,60,000/- to the complainant along with 9% interest per annum from the date of repudiation of the claim till realization.
Further Opposite Party Nos.1 and 2 jointly and severally are directed to pay compensation Rs.1,00,000/- to the complainant for deficiency in service and mental agony.
Further the Opposite Party Nos.1 and 2 are directed to comply the above order within 30 days from the date of receipt of this order. Failing which, the payable amount shall carry interest @12% p.a. from the date of default till realization.
Send a copy of this order to both parties.
MEMBER JUDICIAL MEMBER
Jrk/
