BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL FORUM, JALANDHAR.

Complaint No.95 of 2012

Date of Instt. 15.2.2012

Date of Decision :18.11.2014

M/s Kumar Trading Company, Near HMV Chowk, Jalandhar, through its Prop.Hem Raj.

..........Complainant

Versus

1. The Oriental Insurance Company Ltd, Branch Office II, SCO 50, Jeevan Raksha Building, PUDA Complex, Opposite Tehsil, Jalandhar through its Branch Manager.

2. Dena Bank, Civil Lines, Jalandhar through its Branch Manager.

3. Shri Rajesh Gupta, Surveyor & Loss Assessor, 51-R, Model Town, Jalandhar City.

4. Ramesh Kohli, Development Officer, The Oriental Insurance Company Ltd, Branch Office-II, SCO 50, Jeevan Raksha Building, PUDA Complex, Jalandhar.

.........Opposite parties

Complaint under section 12 of the Consumer Protection Act.

Before: S. Jaspal Singh Bhatia (President)

Ms. Jyotsna Thatai (Member)

Present: Sh.KC Malhotra Adv., counsel for complainant.

Sh.AK Arora Adv., counsel for OP No.1.

Sh.JKS Chhabra Adv., counsel for OP No.2.

Opposite parties No.3 and 4 exparte.

Order

J.S.Bhatia (President)

1. The complainant has filed the present complaint under section 12 of the Consumer Protection Act, against the opposite parties on the averments that the complainant is proprietorship concern under the name and style M/s Kumar Trading Company established in the year 1994. Hem Raj is a proprietor of this firm from the inception. The firm of the complainant from the beginning started functioning and dealing in all kinds of stationery goods, gift items and subsequently added the retail sale and repair of mobile phones, its accessories and recharge coupons for purpose of earning livelihood by means of self employment. The complainant firm managed its business as self finance but later on in the year 2005, it availed of cash credit limit(CC Limit) of Rs.2 Lacs and got enhanced CC Limit to Rs.7 Lacs of opposite party No.2. Ever since grant of CC limit to the complainant firm, opposite party No.2 bank has been taking insurance policy in respect of risk of stock of the complainant firm insured with opposite party No.1 and the premium for insurance risk covered was paid by opposite party No.2 to opposite party opposite party No.1 insurance company which was debited to the account of the complainant firm. In the normal course, opposite party No.2 deducted the amount of insurance premium as consideration for the risk coverage for each year of insurance paid to opposite party No.1 from bank account of the complainant firm. it is pertinent to mention that opposite party No.2 is also insurance agent appointed by opposite party No.1 as its corporate agent. Opposite party No.1 issued cover note No.529364 dated 5.5.2010 for renewal of policy of insurance for the period from 6.5.2010 to 5.5.2011 for sum assured Rs.10,00,000/- in insured's name Kumar Trading Company to opposite party No.2 in the agency of Dena Bank, Jalandhar corporate insurance agent of opposite party No.1. The renewal premium for insurance in the sum of Rs.3568/-(gross premium Rs.3225/- plus Rs.333 service tax) was debited to bank account of the complainant in the normal course as usual by opposite party No.2 and paid to opposite party No.1. However, cover note No.529364 dated 5.5.2010 was issued about 5 months earlier than expiry of period of insurance of validly enforce and subsisting policy which was to expire on 15.10.2010 covering risk of renewal of insurance for the period from 16.10.2009 to 15.10.2010(midnight). Further as per cover note No.427737 dated 15.10.2009 sum assured was Rs.16,00,000/- but in the next renewal of insurance sum assured was decreased to Rs.10,00,000/- vide cover note dated 5.5.2010 by opposite party No.2 and 1 at their own volition unilaterally and arbitrarily without any information or knowledge/consent of the complainant. Opposite parties neither have delivered/supplied cover note nor policy document to the complainant throughout the period of insurance or renewal thereof from inception. In this way, the complainant was kept in dark by opposite parties. Not supplying/delivering cover note and policy document to the insured amounts to deficiency in rendering service and unfair trade practice on the part of insurance company and its agent as envisaged under the provisions of Consumer Protection Act, 1986 as amended upto date (in short 'the Act') and the terms and conditions and exclusion clause can not be enforced against the complainant for negligence, deficiency and default on the part of opposite parties No.1 & 2 and 4 in renewal of insurance policy and covering the risk. To misfortune of the complainant, theft/burglary occurred by breaking side wall/showroom of Kumar Trading Company of the insured complainant on the intervening night of 20/21.10.2010. The complainant closed the shop/showroom on the night of 20/21.10.2010 at about 10.00 PM as usual as per normal practice and went home. Next day on 21.10.2010 when the complainant came to shop/showroom at about 9.30 AM, the complainant found that in the right side wall near entrance a big hole had been made. The goods in the shop/showroom were lying scattered/ransacked and costly mobiles phone, accessories, SIM Cards and recharge coupons etc were found missing and large number of empty mobiles boxes were also seen in the shop/showroom. The large hole was made by breaking the wall enough for the person to pass through and from the hole entry was made in the shop/showroom to steal the mobiles. The use of force for gaining the entry was evident at the site. The complainant lodged FIR with Police Station Division No.1, Jalandhar which registered FIR No.157 dated 21.10.2010 under section 457/380 of India Penal Code against unknown persons for theft of mobiles accessories and recharge coupons of different brand of various mobiles. The police also visited site. The local newspapers had published the incident of theft/burglary in the shop/showroom of the complainant. The complainant informed opposite party No.2 which in turn intimated the incident of theft/burglary in the shop/showroom of the complainant. The opposite party No.1 appointed opposite party No.3, penal surveyor of the choice from its outfit to assess the loss and damage caused by theft/burglary. The surveyor, opposite party No.3 visited the place of incident in shop/showroom of insured complainant on 11.11.2010 in the afternoon to assess loss and damage and took photographs and also asked the complainant to submit estimate of loss alongwith other documents. The complainant submitted to opposite party No.3 estimate of loss and reply dated 27.11.2010 to his letter dated 24.11.2010 for loss and damage of stolen mobile phones, accessories and recharge coupons detailed list and declaration, to the tune of Rs.17,78,916. The complainant extended full cooperation and all possible help to opposite party No.3 and furnished copies of documents and/or information as asked for. The complainant explained and brought to the notice of surveyor, opposite party No.3 that insurance risk for mobile phones being integral part pertaining to insured's trade of the complainant fully known to opposite parties is/was covered alongwith stock of all kinds of stationery goods, gift items and such other goods whilst stored at above place of the shop. Moreover, opposite party No.1 and 2 had granted to the complainant insurance risk coverage of mobile phones from inception of taking of insurance vide cover note 343568 dated 28.3.2005. The description of risk reads thus:-

"On stock of all kinds of stationery goods, Photostat machine, STD Phone, mobile phone and such other goods pertaining to insured's trade whilst lying stored at above address".

2. Opposite party No.1 vide its letter dated 25.2.2011 through registered post intimated to opposite party No.2 that claim is not payable under the policy terms and conditions and stands repudiated and copy endorsed to the complainant. The purported ground of repudiation of insurance claim subject matter covered under the above said cover note was that the policy is "on all kinds of stationery goods, gift items and such other items pertaining to the insured's trade whilst stored at above said shop". However, at the time of loss the insured was engaged in the business of sale, repair, recharge and mobile hand sets. The subject matter insured under the said policy is not the same for which theft loss has been reported. Telecommunication devices like mobile hand sets, sim cards, recharge cards and repairs etc do not fall under the scope of the subject matter covered under the policy that is stationery goods and fit items. Repudiation of claim was arbitrary, malafide, illegal, wrong and perverse, unilateral and made without application of independent mind, nor germane to risk covered pertaining to insured trade whilst stored at the above address shop and as such is not sustainable on facts and law. The complainant is entitled to be indemnified for theft/loss to the tune of Rs.10,00,000/- sum insured alongwith interest at the rate of 12% from the date of theft upto the date of actual payment for depriving the complainant from using the amount to its advantage and also on account of Rs.7,78,916/- uninsured due to negligence and carelessness besides compensation damages for harassment mental tension, paid and agony quantified to Rs.50,000/- and cost of litigation Rs.10,000/-. On such like averments, the complainant has prayed for directing the opposite parties No.1 and 2 to pay him the sum insured i.e Rs.10 Lacs besides Rs.7,78,916/- alongwith interest. It has also claimed compensation and litigation expenses.

3. Upon notice, opposite parties No.1 and 2 appeared and filed their written replies. In its written reply, opposite party No.1 insurance company pleaded that immediately on the receipt of information qua the loss caused to the goods of the complainant on account of burglary allegedly insured under the shopkeepers insurance policy issued by the answering opposite party for the period 6.5.2010 to 5.5.2011, Shri Rajesh Gupta, Chartered Accountant, B.Com,LL.B, FCA, LIII, surveyor and loss assessor was appointed as surveyor to assess the loss, who has submitted his report dated 20.1.2011 with the answering opposite party, vide which he has recommended no claim, since the mobiles were not covered under the policy of insurance and the loss is out of the ambit of the policy as the items stolen are not covered by the policy of insurance. As per the policy of insurance, risk was covered on all stocks of all kinds of stationery goods, gift items and other items pertaining to the insured trade whilst stored at the shop of the insured at HMV Collage Chowk, Jalandhar. However, at the time of loss, the complainant/insured was engaged in the business of sale, repair, recharge of mobile handsets. Thus the subject matter insured under the policy of insurance is not the same for which the loss to theft/burglary has been reported. Telecommunication devices like mobile handsets, sim cards, recharge card and repair etc do not fall under the scope of the subject matter covered under the policy i.e stationery goods and gift items. Since the claim was not payable under the policy of insurance and as such it was made as not payable under the policy terms and conditions and was accordingly repudiated. Letter dated 25.2.2011 to this effect was written to the complainant as well as to opposite party No.2. It is wrong that answering opposite party has not issued/delivered either cover note or policy throughout the period covered by the policy and earlier thereto as alleged. It is wrong that terms and condition including exclusion clauses were not communicated and does not form part of the contract of insurance. It is wrong that the answering opposite party is negligent and deficient is rendering service, as alleged. It is wrong that there is any act of negligence, carelessness, omissions or commissions on the part of the answering opposite party or its agent, as alleged. It denied other material averments of the complaint.

4. In its separate written reply, opposite party No.2 bank took preliminary objections regarding want of cause of action, complainant being not consumer, limitation etc. It admitted that complainant has taken CC Limit of Rs.2 Lacs in the year 2005 which was enhanced to Rs.7 Lacs subsequently. It is wrong that the opposite party No.2 has been taking insurance policy in respect of risk stock of complainant firm. However, it is wrong that the opposite party No.2 is the insurance agent and otherwise also the same is legal. However as the insurance is required under the law from the Ltd company for that reason the same was insured from the opposite party No.1. The premium which was paid as per the demand and calculations made by opposite party No.1. The premium was paid by opposite party No.2. It is matter of record that the complainant lodged the FIR with the Police Station Division No.1. It further pleaded that it is not liable and it is duty of opposite party No.1 and 3 to indemnify the complainant as the premium was received by opposite party No.1. It further pleaded that there is no relationship of master and servant between the opposite party No.1 and 2. It denied other material averments of the complaint.

5. Upon notice, opposite parties No.3 an4 did not appear inspite of notice and as such they were proceeded against exparte.

6. In support of his complaint, learned counsel for complainant has tendered into evidence affidavits Ex.CA and Ex.CB along with copies of documents Ex. C1 to C31 and closed evidence.

7. On the other hand, learned counsel for opposite party No.1 has tendered affidavits Ex.OP1/B and Ex.OP1/C alongwith documents Ex.OP1/1 to Ex.OP1/3 and closed evidence. Further learned counsel for opposite party No.2 has tendered affidavit Ex.OP1/A and closed evidence.

8. We have carefully gone through the record and also heard the learned counsel for the parties.

9. It is not disputed that theft took place in the shop of the complainant during the intervening night of 20/21.10.2010. Ex.C-2 is cover note regarding the insurance policy w.e.f 6.5.2010 to 5.5.2011, the sum insured was Rs.10 Lacs. In the cover note Ex.C-2 name and address of the insured is mentioned as Dena Bank account Kumar Trading Company, Opp HMV Collage, Jalandhar. So this fact clearly show that policy was obtained by opposite party bank as it has given cash credit limit to the complainant. In clause No.7 relating to description of risk/stock of all kinds of stationery goods &/or other stock of similar nature pertaining to the insured's trade is mentioned. This fact is also evident from the policy schedule Ex.OP1/1 produced by opposite party No.1. After theft complainant intimated the loss to the opposite parties and opposite party No.1 insurance company appointed Rajesh Gupta, CA as surveyor and loss assessor. In its report, the surveyor has confirmed the theft by mentioning that it looked that some one jumped from the vacant land into the side plot from back side and came to the front. The hole was made by breaking the wall. From the hole they entered the shop and took away the mobiles. The matter was reported to the police. In the report it is further mentioned that Police Station Division No.1, Jalandhar registered the incident vide FIR No.157 dated 21.10.2010 under section 457/380 of Indian Penal Code and in the FIR it has been mentioned that some burglars have taken away the mobiles and the details and bills will be submitted later on. In its reply, the surveyor has further mentioned that it was found that the insured was engaged in retail sale of all kinds of mobiles and accessories and there were no stocks of stationery or gift items in the shop. In the report, the surveyor has further mentioned that mobiles were stolen whereas the coverage provided was for stationery and gift items and mobiles were not covered by policy and as such the loss is out of the ambit of the policy. So the surveyor recommended no claim. The opposite party No.1 insurance company repudiated the claim of the complainant vide letter dated 25.2.2011 on the above said ground. According to the own version of the complainant, the mobile phones, accessories and recharge coupons to the tune of Rs. 17,78,916/- has been stolen. He has submitted the loss to the surveyor. This fact is mentioned in the complaint. Since the mobiles and its accessories and further recharge coupons were not covered under the policy, as such in our opinion, opposite party No.1 insurance company rightly repudiated the claim of the complainant. The mobile phones can not be treaded as stationery goods or even gift items. So opposite party No.1 insurance company is not liable for the loss.

10. Further counsel for complainant contended that policy was obtained by the opposite party No.2 bank and the complainant had been submitting the stock statements to the bank regularly wherein mobile phones are specifically mentioned. He contended that opposite party No.2 bank was deficient in its service while obtaining the policy on behalf of complainant. He contended that either the opposite party No.2 bank should not have taken policy and should have asked the complainant to take the policy itself or it should have taken proper policy covering the risk of all items mentioned in the stock statements submitted by the complainant. On the other hand, it has been contended by learned counsel for opposite party No2 bank that theft is not proved and FIR has not been placed on record. He further contended that in the present case, the loss can not be determined. He further contended that for sale of more than Rs.5 Lacs VAT number is required but the complainant has not obtained the VAT number. He further contended that opposite party No.2 bank is not liable in any manner. We have carefully considered the contentions advanced by learned counsel for both the parties. It is not disputed that insurance policy was taken by opposite party No.2 bank. So it was duty of the opposite party No.2 bank to take proper policy covering risk of all the items as per statements submitted by the complainant firm. Counsel for complainant had moved an application for production of documents i.e stock statements etc. Vide order dated 19.3.2014, the opposite party No.2 bank was also directed to produce the stock statements of six months submitted by complainant immediately before obtaining insurance policy by the bank but the same were not produced. So an adverse influence is liable drawn against the bank for not produced the stock statements. However, the complainant has produced the stock statements submitted by it to the bank Ex.C23 to Ex.C31. Ex.C23 is stock statement dated 30.9.2010, Ex.24 is stock statement dated 31.8.2010, Ex.25 is stock statement dated 21.7.2010, Ex.C26 is stock statement of June 2010, Ex.27 is stock statement dated 31.5.2010, Ex.28 is stock statement dated 30.4.2010. In all the stock statements, mobile phones etc are mentioned. The policy commenced w.e.f 6.5.2010 and before May 2010, there is stock statement dated 30.4.2010 Ex.C28 in which mobile phones of all qualities GSM as well as CDMA, recharge paper card, DTH box, spare parts and accessories etc are mentioned. Ex.29 is stock statement as on 31.3.2010 wherein also mobile phones are mentioned. Earlier the bank has been taking policy in respect of mobile phones. Ex.C-3 is cover note from 28.3.2005 to 27.3.2006 issued by opposite party No.1 insurance company, wherein mobile phones are mentioned. Ex.C-8 is application of credit facility of Rs.7 Lacs and in clause No.2.5 mobile phones and phone accessories are mentioned. Counsel for opposite party contended that genuineness of stock statements Ex.C23 to Ex.C31 can not be established. All stock statements are bearing stamp of opposite party No.2 bank and on all the statements it is mentioned that verified with bank copy. Counsel for complainant has also placed on record copies of stock statements supplied by opposite party No.2 bank under RTI Act. Statement Ex.C23 dated 30.9.2010 tally with statement supplied by the bank under RIT Act. The opposite party no.2 bank has not produced the stock statements inspite of direction as such we have no reason to disbelieve the stock statements placed on record by the complainant. Ex.C23 is stock statement dated 30.9.2010 and whereas the theft in the shop of the complainant took place on the intervening night of 20/21.10.2010 i.e just after 20/21 days of submitting stock statement Ex.C23. So this stock statement can form basis for assessing the loss suffered by the complainant in the theft. As per this stock statement, the complainant was having mobile phones of all qualities GSM worth Rs.6,75,000/- and mobile sets of all qualities CDMA worth Rs.55,000/- and further spare parts and accessories worth Rs.2,50,000/-. The total of these items comes to Rs.10,80,000/- leaving aside cost of recharge paper, DTH box etc as mentioned in Ex.C23. However the complainant has intimated the loss at Rs.17,78,916/-, the details which is given in Ex.C-6. In the detective agency report Ex.C-15, it is also mentioned that according to Hem Raj thieves had stolen goods worth Rs.17,78,916/- which included costly mobiles, accessories and recharge coupons of various mobiles. The maximum sum insured was Rs.10 Lacs. So at the most the complainant is entitled of Rs.10 Lacs. If the complainant has not obtained VAT number then it is for the concerned department to take action against it. So far as theft is concerned the same stand proved from the affidavit of the complainant, report of surveyor and report of detective agency which was produced by the insurance company. In its report, the detective agency has mentioned that their further inquiry from the neighbours revealed similar details and theft in M/s Kumar Trading Company on the intervening night of 20/21.10.2010 was a common knowledge in the area. In its report, the detective agency has mentioned that they then proceed to Police Station Division No.1, Jalandhar and got the FIR No.157 dated 21.10.2010 (verified) and checked the original documents and found the details of theft in M/s Kumar Trading Company on 20/21.10.2010 entered therein. He has further observed FIR is correct. So in this view of the matter non production of FIR is of no significance. In its findings, the detective agency has mentioned that M/s Kumar Trading Company has been submitting their stock statement and trade sheet to the bank and has been reflected in the stock. Therefore the stock of mobile has been part of the stocks covered in the insurance since 2005 but the same stock was not found covered in the cover note covering period of theft on 20/21.10.2010. In this report it is further mentioned that all the documents, stock statements, trade sheets and bank statements have been checked and found in order and no evidence contrary to above has come to their knowledge during their investigation. The detective agency has opined that theft had actually occurred in M/s Kumar Trading Company in the intervening night of 20/21.10.2010 by breaking of side wall and there are recommended the case of the insured to the underwriters for their consideration as per terms of the policy on merits. So in the above circumstances, theft is not in doubt. In our considered opinion, the bank was deficient in service in obtaining the policy without covering the risk of mobiles and its accessories, as it was in the knowledge of the bank that complainant firm is dealing in mobiles and its accessories etc. As already discussed above this fact is evident from the stock statements submitted by the complainant and also from the earlier policy obtained by the bank covering the risk of mobile phones. So for the mistake or deficiency in service on the part of opposite party No.2 bank, the opposite party No.1 insurance company repudiated the claim of the complainant. So complainant is entitled to compensation from the opposite party No.2 bank.

11. In view of above discussion, the present complaint is accepted against the opposite party No.2 bank and it is directed to pay Rs.10 Lac to the complainant alongwith 9 % interest from the date of filing of the present complaint till payment. Further complainant shall furnish undertaking to the opposite party NO.2 bank that in case the police recover the stolen articles then he will be inform the bank in this regard and the same shall be property of the opposite party No.2 bank. It is clarified that interest amount is being granted by way of compensation. Complainant is also awarded Rs.3000/- on account of litigation expenses. Copies of the order be sent to the parties free of costs under the rules. File be consigned to the record room.

Dated Jyotsna Thatai Jaspal Singh Bhatia

18.11.2014 Member President