BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD
C.C.NO.20 OF 2010
Between:
V.K.Telecom (India) Pvt Ltd.,
A company incorporated under Companies Act
having registered office and Factory at Plot No.7/A
Phase-V, IDA, Cherlapally, Hyderabad-051 rep. by its
Managing Director, Sri A.Srinivasa Rao
S/o Sri A.Prasada Rao, aged about 35 years,
R/o Hyderabad
Complainant
A N D
- The New India Assurance Co.,Ltd.
(a wholly Govt. of India Company)
Divisional Office:610100, Anasuya
Complex, Himayathnagar, PB NO.1051
Hyderabad-029 - Union Bank of India
Begumpet Branch Prabha Plaza, 1st Floor
1-10-9/2, Airport Road, Begumpet,
Hyderabad-016, rep. by its Branch Manager
Opposite parties
Counsel for the Complainant Sri Sunil Deshpande
Counsel for the opposite parties Sri Ch.Pratap Lingam(OP1)
Served (OP2)
QUORUM: SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER
AND
SRI THOTA ASHOK KUMAR, HON’BLE MEMBER
MONDAY THE NINETH DAY OF JULY
TWO THOUSAND TWELVE
Oral Order (As per Sri R.Lakshminarasimha Rao, Hon’ble Member)
***
1. The complaint is filed seeking direction to the opposite parties to pay a sum of `32,00,000/- being the sum insured with interest @ 18% per annum, `32,00,000/- towards compensation for mental agony and `1,00,000/- as the costs of the proceedings.
2. The complainant company is engaged in the business of fabrication procurement and erection of various types of microwave self-supporting telecommunication towers and allied communication systems designing supplying and installation of antennas mounting alignment and installation of communication of accessories and related equipment as per the specifications prescribed by the customers. The first opposite party issued insurance policy in favour of the second opposite party in respect of the plant, machinery accessories and stocks of all kinds of raw material finished and semi-finished goods of the complainant company against burglary and housing breaking for a total sum of `32,00,000/- under insurance policy bearing No.610100/46/04/00247 for the period from 5.11.2004 to midnight of 4.11.2005. The second opposite party bank had also insured the stocks of the complainant with the first opposite party insurance company under Standard Fire and Special Perils policy. The complainant submitted statement its stock position every month to the opposite party no.2 bank.
3. The complainant company procured security personnel from Krishna Security Services Agencies, Balanagar Hyderabad for the security of its land, building plant and machinery as also accessories and stocks. On 26.5.2005 theft took place in the factory of the complainant company when one R.Raji Reddy with his henchmen, in the absence of the management and staff of the complainant company, intended to take dishonestly the machinery and stocks out of the possession of the complainant company and moved the entire machinery and stocks from the factory premises without knowledge and consent of the management of the complainant company.
4. An employee of the complainant company N.Srinivas noticing Raji Reddy and his henchmen loading goods and machinery of the complainant company into DCM Truck, lodged complaint with the police Kushaiguda which was not received as the Station House Officer was not available. The Managing Director of the complainant company immediately rush to the police station but could not lodge complaint as the Station House Officer was not available continuously. The machinery, stocks and records of the complainant company were stolen. The complainant company gave intimation of theft to the first opposite party insurance company on 31.5.2005 through letter dated 28.5.2005. Subsequently, the property lost in theft was estimated at `28,02,358/-.
5. The police Kushaiguda registered a case on 4.6.2005 in Cr.No.189 of 2005 u/s 379 IPC and initiated investigation by conducting panchanama on the same day at the factory premises of the complainant company. The accused Raji Reddy and S.Venkateswara Rao, @ Chitti Babu surrender before X Metropolitan Magistrate, Cyberabad and on the same day they were released on bail. No material could be recovered from the accused by the police. On 31.5.2005 the complainant company lodged claim with the opposite partyno.1 insurance company which appointed I.Sudhakar, Chartered Accountant to investigate into the matter and assess the loss. The complainant company submitted all the details and documents required by the surveyor.
6. The surveyor carried on investigation of the theft and submitted his report to the opposite party no.1 insurance company and did not furnish copy of the report to the complainant company. The complainant company issued several reminders on 26.5.2006, 3.7.2006, 24.8.2006, 10.11.2006 and 5.4.2007 with a request to settle the claim. On 11.4.2007 the first opposite party insurance company informed the complainant that the matter was referred to their higher office. After about three years, the opposite party company repudiated the claim on 1.4.2008 on flimsy, speculative and untenable grounds.
7. R.Raji Reddy used to place order on the complainant company for job work and during the course of business their arose a civil dispute between the complainant and Raji Reddy. Raji Reddy exerted influence on the police to settle the civil dispute and the police started harassing the Managing Director of the complainant company and the father of the Managing Director who filed Writ Petition NO.10522 of 2005 before the High Court of Andhra Pradesh on 28.4.2005. The higher directed the police, P.A.Kushaiguda not to interfere with the civil dispute between Raji Reddy and the complainant company.
8. The police Kushaiguda under the influence of Raji Reddy registered case in Cr.No.167 of 2005 against the Managing Director and two directors of the complainant company u/s 420 and 406 of IPC. The Managing and the father surrender before X Metropolitan Magistrate, Cyberabad on 24.5.2005 and they were released on bail on the same day. On 26.5.2005 Raji Reddy with his henchmen broke open the lock of the factory gate and committed theft of machinery and stocks.
9. The opposite party filed written version contending that the claim was repudiated as per the terms and conditions of the insurance policy and that no burglary has taken place and that civil dispute has been pending between one Raji Reddy and the complainant company. It is contended that the case is still pending before the Court of the Magistrate and that as per the letter addressed by the security service to the Police, Kushaiguda that the Managing Director of the complainant –company and his father had taken away the machinery and stock informing the security that they would pay their salary as also that they locked the gate of the premises.
10. The Managing Director of the complainant-company has filed his affidavit and the documents,ExA1 to 36. On the side of the opposite party-insurance company, the Senior Divisional Manager has filed his affidavit and got marked ExB1 to B10.
11. The counsel for the complainant-company and the opposite party no.1 have filed written arguments.
12. The point for consideration is whether the repudiation of the claim is arbitrary?
13. Several disputed questions of facts involved in the matter came to surface in the form of pleadings and documentary evidence. We would discuss the admitted facts and the disputed facts one after the other so that there would not be any doubt in considering the position of the parties and the ambit of the Consumer Protection Act whether would provide platform for entertainment and adjudication of the matter.
14. The admitted facts are the complainant-company is engaged in the business of fabrication, procurement and erection of micro-wave self supporting towers and allied communication systems; designing, supplying and installation of antennas ; mounting and aligning and installation of communication accessories and related equipotent as per the specification prescribed by its customers. The complainant-company holds account with the second opposite party-bank since 2001 and it has been enjoying credit facility extended by the bank. The opposite party no.2-bank extended over draft facility to the complainant-company to the tune of `32,00,000/- against hypothecation of plant, machinery, accessories and stock of raw materials, semi-finished and finished goods.
15. On behalf of the complainant-company, the second opposite party-bank obtained “Burglary & House Breaking Policy bearing number 610100/46/04/00247 for sum assured of `32,00,000/- covering risk on the Plant, Machinery, Accessories and Stocks of all kinds of raw material, finished and semi-finished goods for the period from 5.11.2004 till 4.11.2005. By debiting the premium from the account of the complainant-company, the second opposite party-bank had also obtained Standard Fire and Special Perils Policy bearing number 610100/11/04/01420 for the period from 5.11.2004 to 4.11.2005.
16. The contention of the complainant-company is that on 26.05.2005 one Raji Reddy drove away the security personnel from the factory premises and taken away the entire machinery, stock and the Police, Kushaiguda had not registered case though an employee of the complainant-company approached them immediately after the incident took place and though the Managing Director of the complainant-company rushed at the same night there , case could not be registered till 28.05.2005 and on 4.06.2005 the police registered case in crime number 189 of 2005 under Section 379 of IPC.
17. Admittedly, there have been business transactions between Raji Reddy and the complainant-company and in the course of business a dispute arose between them resulting in filing of a civil case whereupon the Managing Director of the complainant-company approached the Hon’ble High Court with a prayer for direction to the Police not to interfere with the civil dispute between Raji Reddy and the complainant-company.
18. A criminal case is pending against the Managing Director and two directors of the complainant-company before the Metropolitan Magistrate, Cyberabad. The directors and the Managing Director have been facing the case on the complaint lodged by the said Raji Reddy.
19. In the back drop of the aforementioned facts, the Managing Director of the complainant-company lodged complaint with the police against the said Raji Reddy that he had caused theft of the Machinery and the Stocks of the complainant-company. The case was registered with an inordinate delay and cause for delay according to the Managing Director of the complainant-company is that the SHO of the police station was not available. The absence of SHO at the police station would not arise since one or the other police personnel will be kept in charge of the police station round the clock. The surveyor’s report and the letter addressed by the security personnel of the complainant-company to the Police, Cyberabad would speak a different fact that the Managing Director and his father had taken away the Machinery and the Stock of the complainant-company and basing on these facts the insurance -company would contend that there was no burglary nor theft of the insured items caused by Raji Reddy and the incident does not attract application of the terms of the insurance policy.
20. The insurance company will not be liable to pay the amount unless it is proved by the complainant-company clinchinlglly that in fact theft of insured Machinery and Stocks had taken place. As the disputed questions of fact, as to whether theft had taken place or not and if it is proved that the Managing Director of the complainant company and his father had taken away the machinery and stocks of the complainant company, the question of the insurance company settling the claim would not arise. Viewed for any angle the complexity of the facts involved in the dispute is of such a magnitude that they cannot be adjudicated on the basis of affidavits by this Commission.
21. The Senior Divisional Manager of the first opposite party –insurance company has stated in his affidavit that the claim was repudiated as per the terms and conditions of the insurance policy and that the letter of the security personnel of the complainant-company is sufficient to show that it is the Managing Director of the complainant-company who had taken away the insured Machinery and Stocks. Several such disputed facts cropped up in the course of hearing the matter and we are of the considered opinion that the matter involving such complex and complicated questions cannot be adjudicated in summary proceedings by this Commission, basing on affidavits and it requires full-fledged trial.
22. The Hon’ble Supreme Court considered the aspect of adjudication of matter involving complex questions by a civil suit and not by State Commission in “Oriental Insurance Company limited Vs Muni Mahesh Patel” reported in IV (2006) CPJ 1, SC, the Supreme Court held that disputed questions of fact cannot be decided on affidavits in summary proceedings by a consumer court. The Apex Court held:
Proceedings before the Commission are essentially summary in nature and adjudication of issues which involve disputed factual questions should not be adjudicated. It is to be noted that Commission accepted that insured was not a teacher. Complainant raised dispute about genuineness of the documents (proposal form) produced by the appellant”….
23. It was further held that
“ the nature of the proceedings before the Commission as noted above are essentially in summary nature. The factual position was required to be established by the documents. The commission was required to examine whether in view of the disputed facts it would exercise the jurisdiction. The State Commission was right in its view that the complex factual position requires that the matter should be examined by an appropriate court of law and not by the Commission”.
24. The National Commission had an occasion to deal with the circumstances where the matter involving the complex questions of fact and law can be adjudicated by the Consumer Forum or Civil Court.
25. In the light of the ratio laid in the aforementioned decisions and in view of the complexity of the facts beyond the ambit of adjudication by this Commission, we are of the view that the complaint is not maintainable before this Commission and the complainant company can seek its remedy in civil court.
26. In the result the complaint is dismissed. The complainant shall be at liberty to approach Civil Court or any other appropriate Forum. In case he files a suit he will be entitled to seek exclusion of the time spent before the Commission under Section 14 of the Limitation Act in view of the judgment of the Hon’ble Supreme Court in the case of Laxmi Engineering Works v. P.S.G. Industrial Institute, II (1995) CPJ 1 (SC). There shall be no order as to costs.
MEMBER
MEMBER
Dt.09.07.2012
KMK*
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
NIL
EXHIBITS MARKED
For the complainants
Ex. A1 Letter addressed by the OP-1, dated 01.04.2008
Ex. A2 Courier Consignment Note No.H48115376, dated 27.03.2008
Ex. A3 Courier Consignment Note No.H48115377, dated 27.03.2008
Ex. A4 Office copy of Letter addressed to OP-1, dated 14.03.2008
Ex. A5 Courier Consignment Note No.H47599575, dated 14.03.2008
Ex. A6 Courier Consignment Note No.H47599576, dated 14.03.2008
Ex. A7 Office copy of Letter addressed to OP-1, dated 25.02.2008
Ex. A8 Courier Consignment Note No.H46434506, dated 25.02.2008
Ex.A9 Courier Consignment Note No.H46434507, dated 25.02.2008
Ex.A10 Office copy of Letter addressed to OP-1, dated 12.02.2008
Ex.A11 Office copy of Letter addressed to OP-1, dated 07.12.2007
EX.A12 Letter addressed by OP-1, dated 11.04.2007
Ex.A13 Office copy of Letter addressed to OP-1, dated 05.04.2007
Ex.A14 Sale Deed in respect of the land belonging to the Complainant –Company registered as Document No.4101/2007 in the Office of the Sub-Registrar of Uppal, dated 28.03.2007.
Ex.A15 Office copy of Letter addressed to OP-1, dated 10.11.2006
Ex.A16 Office copy of Annual Report for the year 2005-2006, dated 04.09.2006
Ex.A17 Consignor copy of Courier Receipt NO.A26153520, dated 25.08.2006
Ex.A18 Consignor copy of Courier Receipt NO.A26153521, dated 25.08.2006
Ex.A19 Office copy of Letter addressed to OP-1, dated 24.08.2006
Ex.A20 Office copy of Letter addressed to OP-1, dated 03.07.2006
Ex.A21 Office copy of Letter addressed to OP-1, dated 26.05.2006
Ex.A22 Office copy of Letter addressed to the Surveyor, dated 10.01.2006
Ex.A23 Office copy of Charge Sheet filed by Kushaiguda Police station in FIR. No. 189/2005, dated 31.12.2005.
Ex.A24 Letter from the Surveyor of the OP-1, dated 30.12.2005
Ex.A25 Office copy of Annual Report for the year 2004-2005, dated 03.09.2005
Ex.A26 Office copy of Letter addressed to the Surveyor of the OP-1, dated 19.07.2005
Ex.A27 List of items lost in the Theft
Ex.A28 Letter addressed by the Surveyor of OP-1, dated 25.06.2005
Ex.A29 Letter addressed by the Surveyor of OP-1, dated 06.06.2005
Ex.A30 Office copy of Letter addressed to the Surveyor of the OP-1, dated 05.06.2005
Ex.A31 Office copy of FIR.No.189/2005, on the file of the Kushaiguda Police Station, dated 04.06.2005.
Ex.A32 Office copy of Burglary Claim Form submitted to OP-1/Insurance Company, dated 28.05.2005.
Ex.A33 Intimation of Theft duly acknowledged by OP-1, dated 28.05.2005
Ex.A34 Intimation of Theft duly acknowledged by OP-2, dated 28.05.2005
Ex.A35 Office copy of Burglary Policy No.610100/46/04/00247, dated 10.11.2004
Ex.A36 Office copy of stand fire and special Perils Policy No.610100/11/04/01420, dated 08.11.2004
Opposite parties
Ex.B1 Surveyor report, dated 26.10.2006
Ex.B2 Letter addressed to complainant, dated 06.06.2005
Ex.B3 Letter addressed to complainant, dated 25.06.2005
Ex.B4 Letter addressed to complainant, dated 24.07.2005
Ex.B5 Repudation Letter, dated 01.04.2008
Ex.B6 Copy of charge sheet, dated 31.12.2005
Ex.B7 Copy of release order, dated 24.05.2005
Ex.B8 Copy of letter regarding intimation, dated 25.05.2005
Ex.B9 Copy of policy, dated 05.11.2004
Ex.B10 Copy of Rules & Conditions.
MEMBER
MEMBER
