Per :- Mr. Joshi, Member Place : BANDRA JUDGMENT The Complainant is the proprietor of Hasan Steel Company dealing in CRCA, GP, GC, AC Sheets. [2] The Opposite Party No.1 is an insurance company, whereas the Opposite Party No.2 is a nationalized bank. [3] The Complainant submits that his aforesaid company borrowed loan by availing cash credit facility from the Opposite Party No.2 – Bank; against hypothecation of stock in trade, furniture and fixtures. The Opposite Party No.2 – Bank; wanted to insure the stock of borrower company to secure their advances and hence, at their instance a Shop-keeper’s insurance policy was taken from the Opposite Party No.1 – Insurance Company; vide Policy No.14100/48/04/01633 for the period ranging from 29/6/2004 to 28/6/2005 and the same was renewed vide policy No.140100/48/ 05/00289 for the period from 30/6/2005 to 29/6/2006 on payment of insurance premium in sum of Rs.7,899/-. The total sum insured was Rs.15,00,000/-. [4] The Complainant states that the Opposite Party No.2 – Bank; used to pay the insurance premium directly to the Opposite Party No.1 – Insurance Company; by debiting the Complainant’s company’s bank account and used to collect the policy document from the Opposite Party No.1 – Insurance Company; directly as the insurance was done at the instance of the Opposite Party No.2 – Bank; to secure their loan advances to the Complainant’s Company. [5] The Complainant submits that on 25/5/2005 his place of business was shifted to the address given in this complaint from the place mentioned in the policy document and the changed address was informed by the proprietor of the company to the Opposite Parties Nos.1 & 2, vide letters dated 25/5/2005 and 26/5/2005 respectively. But despite the intimation, the Opposite Party No.1 – Insurance Company; did not effect the change of address in the renewed insurance policy document and the Complainant did not come to know about it at the relevant time as the policy document was directly sent to the Opposite Party No.2 – Bank; and the Opposite Party No.2 – Bank; did not check the change in address after receipt of the policy document from the Opposite Party No.1 – Insurance Company. [6] Incidentally, there was heavy downpour on 26/7/2005 in Mumbai. The Complainant Company’s place was badly affected and stock was damaged and hence, the Complainant incurred heavy loss to their stock which was duly insured with the Opposite Party No.1 – Insurance Company. [7] The Complainant intimated about the loss incurred due to floods to the Opposite Party No.2 – Bank; who in turn, intimated the Opposite Party No.1 – Insurance Company. A claim for loss of an amount in sum of Rs.12,63,188/- was filed by the Complainant. The Opposite Party No.1 – Insurance Company; appointed a surveyor who surveyed the stock affected and assessed the final loss to the tune of Rs.7,32,913/-. The Surveyor in his survey report confirmed the damage and assessed the loss but mentioned specifically about the existing address which according to him is not incorporated in the policy document. The Opposite Party No.1 – Insurance Company; had invited clarification on the matter of difference in address of the insured goods. The Complainant informed the Opposite Party No.1 – Insurance Company; that he had already intimated change of address. Also he had approached the Opposite Party No.2 – Bank; and informed them that the change in address is already effected in their records and the same is manually marked in their cash credit stock inspection register. [8] Complainant submits that despite proper intimation to the Opposite Parties about the change of address, the Opposite Party No.1 – Insurance Company; repudiated the claim, vide its letter dtd.15/5/2006, on the ground of different address and closed the file. Subsequently, the Complainant found the acknowledgement copies of intimation about change in address to the Opposite Parties Nos.1 & 2, with his brother. [9] Due to negligence on the part of the Opposite Parties Nos.1 & 2, the Complainant had been refused to compensate with the legitimate compensation towards the loss incurred and hence the Complainant was left with no other alternative but to file this consumer complaint. The Complainant has prayed for the following reliefs:- (a) Insurance claim amount of Rs.7,32,913/- as assessed by the surveyor with interest @ 15% p.a., (b)Fees and costs of proceeding. [10] The Opposite Parties Nos.1 & 2 contested the complaint by filing their written versions. [11] The Opposite Party No.1 denied the allegations of the Complainant and submitted that the Complainant is false, frivolous and bad in law and the same is not maintainable and deserves to be dismissed. [12] The Opposite Party No.1 states that insurance policy issued for the period 30/6/2005 to 29/6/2006, bearing No.140100/48/05/ 00289, clearly showing the address other than the address mentioned in the survey report. [13] The Complainant is misguiding the Forum by stating that he has informed the change of address. Such letter of intimation is not traceable in the office of the insurer. Under the terms of the policy, the Insured is obliged to specify the location to be added to the policy with complete details. The surveyor is appointed as per the procedures laid down, but it does not compel the insurer to pay the compensation. [14] The Opposite Party No.2 – Bank; denied all the allegations made by the Complainant and specifically submitted that the Complainant has claimed compensation from the insurance company only after receipt of government compensation for flood affected people. The Complainant is not entitled for compensation for flood since the policy was issued under the Shopkeeper’s Insurance, which does not provide protection from flood. [15] The Opposite Party No.2 – Bank; states that the Complainant did not bother to verify the change in address in the subsequent policy issued on 30/6/2005. The Complainant is making allegations without verifying the steps taken by the Opposite Party No.2. On receipt of intimation of change in address, the Opposite Party No.1 – Insurance Company; was promptly informed about it. The Opposite Party No.2 totally denied the responsibilities of technical operations and aspects of the policy documents and submits that as per banking rules, the borrower who enjoys the said facility has to insure the said goods, which is hypothecated. [16] We heard the learned advocate for the Complainant. We have read the complaint and written version as well as written arguments of the Opposite Parties Nos.1 & 2. Perused the documents filed by both the parties in support of their contentions. [17] We take the points that arise for our consideration and record our findings there-against as below:- Sr. No. | Points for consideration | Findings | 1. | Whether the Complainant could prove the deficiency in service and unfair trade practice on the part of the Opposite Parties? | YES | 2. | Whether the Complainant is entitled to receive insurance claim amount from the Opposite Parties? | YES | 3. | Whether the Complainant is entitled to receive costs of proceeding? | YES | 4. | What order? | The complaint is partly allowed. |
REASONS FOR FINDINGS [18] As regards the Point No.(1) above, it is pertinent to note that the Opposite Party No.2 has insured the goods of the Complainant, which were hypothecated against the loan borrowed. The insurance premium was paid towards the said insurance policy by the Opposite Party No.2, by debiting the Complainant’s account with them and policy document was directly received by the Opposite Party No.2 from the Opposite Party No.1. Looking at the aforesaid facts and circumstances, it was the responsibility of the Opposite Party No.2 to look into the proper details appearing in the policy document, since the insurance policy was taken towards the security of the goods hypothecated. [19] The Complainant has promptly informed the Opposite Party No.2 and the Opposite Party No.1 about the change of address and shifting of the company’s premises, which was duly acknowledged by both the Opposite Parties. (Refer Exhibits G/1 and G/2). Inspite of intimation, received by the Opposite Party No.1, the insurance claim of the Complainant was repudiated by the Opposite Party No.1. This is sheer negligence on the part of the Opposite Party No.1, which leads to deficiency in service. [20] The Opposite Party No.2 has raised the point, in their written version, that this insurance policy being a Shopkeeper’s policy, it does not cover the protection of flood. This statement on the part of the Opposite Party No.2 is untenable because in the policy document there is no mention in the exclusion clause as well as the claim of the Complainant was not repudiated on this ground by the Opposite Party No.1. We are surprised to note that the Opposite Party No.2 – Bank; supported the Opposite Party No.1 – Insurance Company; instead of their own client, whose goods were hypothecated and insured with the Opposite Party No.1. [21] Admittedly, the goods were hypothecated and insured against the loan borrowed by the Complainant and not the premises or the building of the Complainant. Hence, the liability of the Opposite Party No.1 – Insurance Company; lies to the extent of goods and the place was immaterial. Undoubtedly, it was clearly established that the shifting of location of goods was informed to both the Opposite Parties in advance. [22] The Opposite Party No.2 – Bank; has mentioned about the government compensation received by the Complainant, but failed to inform about the quantification. The Opposite Party No.2 failed to understand that it was a legitimate right of the Complainant to receive the insurance claim, once the insurance premium was paid and policy document was received. Compensation received from other sources does not affect the Complainant’s claim. [23] The conduct on the part of the Opposite Party No.2 appears to be doubtful and suspicious. After knowing well that change in address was informed well in advance, the Opposite Party No.2 is supporting the Opposite Party No.1 and depriving its client from getting legitimate dues. This leads to indulgence in unfair trade practice on the part of the Opposite Party No.2. Moreover, the Opposite Party No.2 has stated different grounds for repudiation, for which the Opposite Party No.2 no authority or reason to do so. [24] In view of the aforesaid facts, deficiency in service and indulgence in unfair trade practice is established on the part of the Opposite Parties. Hence, we have no hesitation to hold both the Opposite Parties guilty. We deem it fit and proper to award the Complainant to receive the insurance claim of Rs.7,32,913/- together with interest thereon @ 9% p.a., and Rs.10,000/- towards costs of the proceeding. With this, we proceed to pass the order as below:- ORDER (1) The complaint is partly allowed. (2) The Opposite Party No.1 is directed to pay to the Complainant, an amount in sum of Rs.7,32,913/- towards insurance claim together with interest thereon @ 9% p.a., as from 01/Oct/2007 till the date of payment. (3) The Opposite Party No.2 is directed to pay to the Complainant, an amount in sum of Rs.10,000/- towards costs of the proceeding. (4) The Opposite Parties shall comply with the aforesaid order within a period of sixty days from the date of receipt of copy of this order else shall pay interest @ 18% p.a., for the delayed period. (5) Parties shall be informed accordingly, by sending certified copies of this order.
| | [HONABLE MRS. Mrs.DEEPA BIDNURKAR] Member[HONABLE MR. Mr. J. L. Deshpande] PRESIDENT[HONABLE MR. MR.V.G.JOSHI] Member | | 
