BEFORE THE DISTRICT CONSUMER FORUM AT NALGONDA
PRESENT: SRI D.SINGARA CHARY, B.A., LL.B.,
PRESIDENT.
SRI K.VINODH REDDY, B.Sc.,
MEMBER.
. . .
THURSDAY, THE TWENTY THIRD DAY OF AUGUST, 2012
CONSUMER COMPLAINT No. 102 OF 2011
Date of filing:29-12-2011
Date of Disposal:23-08-2012
Between:
, Mamillagudem Village of
Nalgonda Mandal and District, represented by its Proprietor
Smt.Julakanti Sukanya W/o Indra Reddy, Age: 55 years,
Occ: Housewife and Business, R/o Mamillagudem Village of
Nalgonda Mandal and District.
…Complainant.
AND
1) The New India Assurance Company Limited, represented by its
Branch Manager, D.No.5-6-140/A, Santhamithra Complex,
Second Floor, Prakasham Bazar locality of Nalgonda Town and
District.
2) State Bank of India, Main Branch, Nalgonda. Represented by its
Chief Manager, Clock Tower to Ramagiri Road, Nalgonda Town
and District.
…Opposite Parties.
This complaint coming on before us for final hearing on 04-07-2012, in the presence of Sri S.Sathyanarayana, Advocate for the Complainant, and Sri D.Amarendar Rao, Advocate for the Opposite Parties, and on perusing the material papers on record, and having stood over for consideration till this day, the Forum passed the following:
ORDER OF THE FORUM DELIVERED
BY SRI K.VINODH REDDY, MEMBER
1. The Complainant filed this complaint Under Section 12 of Consumer Protection Act, 1986 to direct the Opposite Party No.1 to pay a total sum of Rs.6,15,843/- towards loss sustained by him in her Rice Mill on account of fire accident.
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2. The facts leading to the filing of this complaint are as follows:
The Complainant has been running Parboiled Rice Mill in the name and style of M/s Sri Balaji Parboiled Modern Rice Mill, Mamillagudem. She obtained loan facility from the bank of the Opposite Party No.2 vide Account No.10711073148. While granting the loan, the Opposite Party No.2 got insured the entire mill of the Complainant for a sum of Rs.10,00,000/- towards building, plinths and foundations, Rs.90,000/- towards plant/machineries and accessories and a sum of Rs.3,00,00,000/- for stock in trade vide Policy Ex.B-1 with validity from 19-12-2010 to 18-12-2011. The said insurance policy was issued by the Opposite Party No.1. On 18-01-2011 there was a fire accident in the said Mill. A labourer Mrs.Venkatamma noticed fire and smoke and raised cries. In the meantime, the fire had spread to the roof of the building as well as wiring. The husband of the complainant by name Indra Reddy rushed to the spot and closed the plant and informed the fire station over telephone. Two fire engines rushed to the spot and brought the fire under control, but by then heavy number of empty gunny bags and the gunny bags loaded with rice were gutted. The matter was informed to the Opposite Party No.2 through the Opposite Party No.1. The Opposite Party No.1 appointed a surveyor who estimated the loss of the stock in trade at Rs.5,01,332/- and on 02-07-2011 the Opposite Party No.2 addressed a letter to the Complainant intimating her that the loss was estimated at the said sum and required her to sign a receipt for that amount. The assessment by the Surveyor of OP-1 was totally wrong. In fact the Complainant sustained heavy loss and she informed op-2 through
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e-mail about the dissatisfaction of the assessment made by the surveyor of OP-1. The damage to the walls and windows to the tune of Rs.40,000/- was not taken note of by the surveyor. After verifying, it was found that due to fire accident and water poured to control the fire, several new gunny bags costing a sum of Rs.6,244/- and old gunny bags costing a sum of Rs.5,776/- were damaged and they were rendered useless and a total sum thereof was Rs.12,020/-. The other gunny bags costing about Rs.12,500/- were damaged due to the water and fire. A sum of Rs.50,000/- was incurred towards labour charges to shift the materials. On all counts, the Complainant had incurred a sum of Rs.1,14,520/-. Thus the total loss sustained by the Complainant is Rs.6,16,852/-. On 11-10-2011 OP-1 addressed a letter to OP-2 intimating that due to oversight they had wrongly taken plinth and foundations values and confirmed that they were rectifying the same by way of endorsement. The claim remained unsettled and the Complainant put to loss.
3. The Opposite Party No.1 filed a written version and the Opposite Party No.2 adopted it by a memo.
4. The fact that the Opposite Party No.1 insured the stock in trade is admitted. The fire accident is also not denied and it is stated that one Julakanti Indra Reddy on behalf of the Complainant informed about the same stating that on 18-01-2011 fire broke in the Mill in question due to which some empty gunny bags and some new gunny bags, without mentioning their number, were gutted in fire and
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electrical fittings were also damaged. The Opposite Party No.1 appointed M/s Chandak Associates, Hyderabad for surveying and assessing the damage and the surveyor assessed the loss at Rs.5,01,323/- taking into account of the three intimations given by the Complainant to OP-1. At the time of taking insurance policy, the Complainant declared the value of stock at Rs.3,00,00,000/- whereas the value of the stock at the time of fire accident was worked out to Rs.5,62,14,449/- and, therefore, the stock is under insured. In fact, it was under insured to the tune of Rs.43.99% which is against the contract of insurance. After receiving the surveyor’s report, OP-1 without deducting any amount towards under insurance, had offered to pay Rs.5,01,323/- as estimated by the surveyor. On demand, a copy of the surveyor’s report was also sent to the Complainant. The Complainant was not satisfied with the amount and requested for re-assessment of the loss. She wanted re-assessment of the loss caused to the building, walls, windows, plastering etc. to the tune of Rs.1,14,520/-. The same is malafide and in the three intimations submitted to the Opposite Party No.1, the Complainant had not taken the said stand. The plea of the Complainant that OP-1 rectified the insurance of the building by way of endorsement does not change the assessment made by the surveyor. The fire accident is attributable to the conduct of the Complainant since she has not provided proper wiring and fire fighting equipments and allowed the electrical fittings without good conductor of heat. Still OP-1 came forward to pay a sum of Rs.5,01,323/- and requested the Forum to dismiss the rest of the claim.
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5. The parties filed their respective proof affidavits. While the Complainant marked Exs.A-1 to A-22 the Opposite Parties marked Exs.B-1 to B-4.
6. The point for consideration is:
Whether the Complainant is entitled to the amounts claimed?
7. POINT:
There is no dispute as to the fire accident that took place in the premises of the Complainant on 18-01-2011 in which stock in trade and gunny bags etc. were gutted. It is also not in dispute that under Ex.B-1 the stock in trade etc. was insured to the extent of Rs.3,00,00,000/-. The Complainant claims a sum of Rs.6,224/- towards new gunny bags and a sum of Rs.5,776/- towards old gunny bags. She also claims a sum of Rs.12,500/- towards the gunny bags which became useless on account of the fact that they were effected by water and Rs.50,000/- towards labour charges for shifting the gunny bags and Rs.40,000/- towards loss caused to the building on account of the fire. These amounts come to Rs.1,14,500/-.
8. Ex.A-22 is the report of the surveyor and according to it, he had taken into consideration the loss caused to the old and new gunny bags, the paddy, broken rice, plastic bags etc. Even though the Complainant is said to have suffered loss to the extent of Rs.40,000/- towards damage caused to the windows and that she incurred a sum of Rs.50,000/- towards shifting charges, she did not file the receipt of the labourers. Therefore, the said amount is liable to be disallowed.
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9. As far as loss caused to the building is concerned, in the complaints lodged by the Complainant marked as Exs.B-2 to B-4, no whisper is made regarding loss caused to the building. The entire loss is focused only towards the stock in trade, loss of old and new gunny bags and current fittings. The loss caused to the building is not stated in Exs.B-2 to B-4 and the labour charges incurred for shifting the material is also not stated and, therefore, the claim under those two heads namely; Rs.40,000/- towards the loss caused to the building; and Rs.50,000/- towards shifting charges are after thought and, therefore, they are disallowed.
10. In Ex.B-3 loss to the cables and plastic buckets elevators are claimed to the extent of Rs.12,325/- and they were not referred to in the first information dated 18-01-2011. Therefore, the said amount also is disallowed.
11. Now remains, the stock in trade and loss to gunny bags and the same were considered by the surveyor in Ex.A-22. According to Ex.A-22, the stock in trade that was stored in the premises was valued Rs.5,62,14,449/-. As seen from Ex.B-1 the sum assured is Rs.3,00,00,000/- only. The surveyor states in his report Ex.A-22 that as the value of the stored articles out weigh the sum assured, the insurer is liable only to pay in proportion to the insurance taken. The learned counsel for the Opposite Party No.1 relies on Clause-10 of Ex.B-1 Policy to submit that where there is over stock at the time of destruction, the insured is liable to pay not to the entire loss, but only in proportion of the liability. Clause-10 is hereby reproduced:
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If the property hereby insured shall at the breaking out of any fire or at the commencement of any destruction of or damage to the property by any other peril hereby insured against be collectively of greater value than the sum insured thereon, then the insured shall be considered as being his own insurer for the difference and shall bear a rateable proportion of the loss accordingly. Every item, if more than one, of the policy shall be separately subject to this condition.
12. According to the above clause, if the property insured at the breaking out of the fire or destruction is greater than the value of the sum assured, then the insured shall be considered as insurer for the difference of the stock. In this case, the total loss of stock found stored is valued at Rs.5,62,14,449/- as against the insured sum of Rs.3,00,00,000/-. The total loss of the stock in trade, gunny bags etc. were found to be Rs.9,44,232/-. As stock stored at the time of the accident is found to be Rs.5,62,14,449/- as against the insured sum of Rs.3,00,00,000/- there was under insurance to the extent of Rs.2,62,14,449/- which comes out to 46.63%. Thus the insured shall be considered insurer to the extent of 46.63% of the loss suffered by him. If 46.63% is to be deducted from the total loss of Rs.9,42,232/- the amount payable comes to Rs.5,03,937/-. The Opposite Party No.1 offered to pay the almost said amount as seen from the correspondence exchanged. The said offer is in tune with clause-10 of the agreement. Therefore, an award can be passed for the said amount.
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In the result, the complaint is allowed in part and the Opposite Party No.1 is directed to deposit in this Forum a sum of Rs.5,03,937/- (Rupees Five lakh three thousand nine hundred and thirty seven only) with interest @ 9% p.a. from the date of the complaint till realization within one month from today. No amount is awarded towards deficiency of services and costs since the Opposite Party No.1 came up with an offer to pay the said amount in the notices and also in the written version submitted in this Forum. The claim against the Opposite Party No.2 is dismissed.
Dictated to Steno-Typist, transcribed by him, corrected and pronounced by us in the open Forum on this 23rd day of August, 2012.
MALE MEMBER PRESIDENT
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant: For Opposite Parties:
Affidavit of the Complainant. Sri Kolanupaka Krishna,
Divisional Manager of Opp.Party No.1 Company at Nalgonda filed his affidavit on behalf of the Opposite Party No.1.
EXHIBITS MARKED
For Complainant:
Ex.A-1 Dt.19-12-2010 Original Insurance Policy issued by
Opposite Party No.1.
Ex.A-2 Dt.19-05-2011 Photostat copy of letter addressed by
Opp.Party No.1 to Opp.Party No.2.
Ex.A-3 Dt.01-06-2011 Xerox copy of letter addressed by
Opp.Party No.2 to the Complainant.
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Ex.A-4 Dt.02-07-2011 Original letter addressed by the
Opp.Party No.2 to the Complainant.
Ex.A-5 Dt.02-09-2011 Letter addressed by the Complainant
to the Opposite Party No.2.
Ex.A-6 Dt.11-10-2011 Xerox copy of letter addressed by
Opp.Party No.1 to Opp.Party No.2.
Ex.A-7 Dt.22-10-2011 Original letter addressed by the
Opp.Party No.2 to the Complainant.
Ex.A-8 Dt.24-10-2011 Photostat copy of letter addressed by
Opp.Party No.2 to Opp.Party No.1.
Ex.A-9 Dt.05-11-2011 Original letter addressed by the
Opp.Party No.2 to the Complainant.
Ex.A-10 Dt.22-11-2011 Office copy of legal notice issued by the
counsel for the Complainant to OP-1.
Ex.A-11 Dt.02-12-2011 Office copy of legal notice issued by the
counsel for the Complainant to OP-1.
Ex.A-12 Dt.13-12-2011 Office copy of Rejoinder legal notice issued
by the counsel for the Complainant to OP-1.
Ex.A-13 Dt.22-11-2011 Postal Receipt.
Ex.A-14 Dt.02-12-2011 Postal Receipt.
Ex.A-15 Dt.02-12-2011 Postal Receipt.
Ex.A-16 Dt.13-12-2011 Postal Receipt.
Ex.A-17 Dt.13-12-2011 Postal Receipt.
Ex.A-18 Dt. Postal Acknowledgement.
Ex.A-19 Dt. Postal Acknowledgement.
Ex.A-20 Dt. Postal Acknowledgement.
Ex.A-21 Dt. Postal Acknowledgement.
Ex.A-22 Dt.08-12-2011 Xerox copy of letter addressed by OP-1
to OP-2 along with Survey Report.
For Opposite Parties:
Ex.B-1 Dt. Terms and Conditions of Standard Fire
and Special Perils Policy.
Ex.B-2 Dt.18-01-2011 True copy of letter addressed by the
Complainant to OP-1.
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Ex.B-3 Dt.20-01-2011 True copy of letter addressed by the
Complainant to M/s Chandak Associates,
Surveyors, Hyderabad.
Ex.B-4 Dt.20-01-2011 True copy of letter addressed by the
Complainant to M/s Chandak Associates,
Surveyors, Hyderabad.
PRESIDENT
DISTRICT CONSUMER FORUM
NALGONDA
TO
1). Sri S.Sathyanarayana,
Advocate for the Complainant.
2). Sri D.Amarendar Rao,
Advocate for the Opposite Parties.
