Chandigarh

DF-I

CC/297/2020

M/s S.B. Enterprises - Complainant(s)

Versus

United India Insurance Co. Ltd. - Opp.Party(s)

S.S.Salar & Amarbir Singh Salar

13 Dec 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/297/2020
Date of Institution	:	19/08/2020
Date of Decision	:	13/12/2023

1.     M/s S.B. Enterprises, Shop No.183/1, Village Kishangarh, Post Office Manimajra, Chandigarh, 160101 through its Proprietor Manohar Lal s/o Shri Purshotam Dutt, House No.933-D, Dashmesh Nagar, Naya Gaon, Karoran, District SAS Nagar, Mohali.
2.     Manohar Lal age 45 years s/o Shri Purshotam Dutt, House No.933-D, Dashmesh Nagar, Naya Gaon, Karoran, District SAS Nagar, Mohali, Proprietor of M/s S.B. Enterprises, Shop No.183/1, Village Kishangarh, Post Office Manimajra, Chandigarh, 160101.

… Complainants

V E R S U S

1.     United India Insurance Company Limited, registered and Head Office: 24, Whites road, Chennai, through its Managing Director.
2.     United India Insurance Company Limited, Branch Office 3, SCO No.855, First Floor, NAC, Manimajra, Chandigarh through its Branch Manager.
3.     Bank of Baroda, (successor bank of Vijaya Bank), Suraj Plaza 1, Sayaji Ganj, Baroda 390005 through its Managing Director.
4.     Bank of Baroda, (successor bank of Vijaya Bank), Branch at SCO No.29, Sector-11, Panchkula through its Branch Manager.

… Opposite Parties

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER
	SHRI SURESH KUMAR SARDANA	MEMBER

                                                                               

ARGUED BY	:	Sh. Amarbir Singh Salar, Advocate for complainants
	:	Ms. Veena Bhutani Sethi, Advocate for OPs 1 & 2
	:	Sh. Rahul Garg, Advocate for OPs 3 & 4.

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by M/s S.B. Enterprises through its proprietor (complainant No.2) (hereinafter referred to as complainants) against the aforesaid opposite parties (hereinafter referred to as OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations, as projected in the consumer complaint, that complainant No.1 is the proprietorship concern of OP-2 and running the business of wholesale in very small items like chocolates, biscuits, eclairs etc. in the name and style of “M/s S.B. Enterprises”.  In order to run their business, complainants had obtained cash credit limit from Vijaya Bank, Panchkula (which has now been merged with the Bank of Baroda/OPs 3 & 4) for an amount of ₹15.00 lacs.  At the time of obtaining the cash credit limit, the address of the shop was given as 182/1 in Kishangarh.  On 1.6.2018, in the family settlement between the family members of the landlord, complainants were offered possession of adjoining shop No.183/1.  Accordingly, on 1.6.2018, the landlord and the complainants executed fresh rent deed regarding shop No.183/1 (hereinafter referred to as “subject shop”) and the copy of rent note is Ex.C-1. The rent note/deed was duly supplied with a request to the bank to change and update the address in the record and that of the insurance company as the insurance policy was always purchased by the bank and the amount of premium was being debited from the account of the complainants. Since as per the arrangement and the bank documents, bank was to get the insurance of the pledged stock from any insurance company, the aforesaid arrangement was continued for a number of years and the bank opted for United India Insurance Company Limited (OPs 1 & 2) for the insurance of the subject shop.  The latest policy (Ex.C-2), which the bank obtained was for the period from 30.6.2018 to 29.6.2019 (hereinafter referred to as “subject policy”). The subject policy was also supplied to the bank and it was kept by the bank in its record.  It is even clear from the first page of the subject policy that the name of the agent is mentioned as Vijaya Bank-Panchkula and the total  premium amount for getting the subject policy was even debited to the tune of ₹3,694/- from the account of the complainants and accordingly the subject policy i.e. Standard Fire and Special Perils Policy was issued, covering the stock of the subject shop insured for fire also to the extent of ₹20.00 lacs and all the material, which was hypothecated with the bank, was stored in the subject shop situated at village Kishangarh, Post Office Manimajra and the details of hypothecated material is Ex.C-3.  On 8.6.2019 at around 12:30 p.m. when the complainant left the subject shop for his treatment at PGI, Chandigarh, unfortunately fire broke out in the subject shop at around 1:50 p.m. and complainant was immediately informed by his maternal uncle, Sh.Vidya Sagar. When the complainant reached the spot, fire brigade vehicles were extinguishing the fire.  However, the entire material was destroyed within a few minutes and nothing was found usable as the stored items were highly inflammable.  Sub Inspector Bahadar Singh visited the spot and DDR dated 9.6.2019 (Ex. C-4) was recorded. From the letter dated 23.7.2019, it is clear that fire had broken at shop No.183/1 i.e. the subject shop and six fire tenders were despatched to extinguish the fire. As complainant was single handedly operating the shop for his livelihood with no other business, he had suffered a lot. The complainant had immediately informed the bank about the loss suffered in fire. Even the statement of goods verified by the bank was not less than ₹30 lacs on the date of incident.  Copies of the statements are Ex. C-5 and C-6.  However, after completion of the documents, complainant was stunned to receive letter dated 5.11.2019 (Ex. C-7) from OPs 1 & 2 intimating that the file of the claim has been closed for the reason that the location of the incident is not covered under the subject matter of policy. Even the insurance company was aware about the premises of the complainants since both shops No.182/1 and 183/1 were adjoining to each other and, therefore, the repudiation letter dated 5.11.2019 is illegal and wrong.  Moreover, when complainants approached the bank/OPs 3 & 4 to inform about the intimation given to the insurance company about the change in shop No., which was timely given by the complainants to the bank, it was replied by the bank that inadvertently the said change of shop No. could not be updated in the records of the bank.  In this manner, there is negligence on the part of the bank who has not informed the insurance company about the change in shop No., regarding which rent deed was also given to the bank.  In this manner, the aforesaid acts of the OPs amount to deficiency in service and unfair trade practice and the OPs cannot escape from their liability. OPs were requested several times to admit the claim, but, with no result.  Hence, the present consumer complaint.
2. OPs resisted the consumer complaint and filed their separate written versions.
3. In their written version, OPs 1 & 2, inter alia, took preliminary objections of maintainability, cause of action, concealment of facts and also that there is no deficiency in service on the part of the answering OPs.  However, it is admitted that the subject policy was issued by the answering OPs qua shop No.182/1, Village Kishangarh, Post Office Manimajra and the same was valid w.e.f. 30.6.2018 to 29.6.2019, but, specifically denied that the same was issued qua subject shop No.183/1 where the alleged fire had broken out. It is further alleged that the complainants concealed facts by mentioning that the location of shop was mentioned as shop No.182/1, Village Kishangarh since the policy was purchased prior to change of shop.  It is further alleged that the claim of the complainants was rightly repudiated by the answering OPs as the subject policy was not covering the risk of shop No.183/1 i.e. the subject shop, rather the same was qua shop No.182/1. On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainants is denied.  The consumer complaint is sought to be contested.
4. In their written version, OPs 3 & 4, inter alia, took preliminary objections of maintainability, malafide on the part of the complainants, concealment of facts and cause of action.  It is further alleged that, in fact, the complainants, with dishonest intention, sought undue benefits and unjust enrichment by making blatantly false and unsubstantiated claims against the answering OPs. It is further alleged that the consumer complaint of the complainants is not maintainable in the present form against the answering OPs as there is no deficiency in service by the answering OPs since the complainants had only availed a cash credit limit for an amount of ₹15.00 lacs from the answering OPs/bank and got the same renewed from time to time. At the time of renewal of the said cash credit limit, complainants had submitted rent deed dated 1.6.2018 of the change of address as shop No.183/1 and the said rent deed was kept in the record of the answering OPs.  Moreover, as per the agreed terms and conditions of sanction, first charge on the said stock of goods shall always be of the answering OPs and the consumer complaint of the complainant is not maintainable.  Moreover, it was incumbent upon the insurance company/OPs 1 & 2 to verify the correct details of premises before issuing or renewing the policy.  On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainants is denied.  The consumer complaint is sought to be contested.
5. In rejoinder, complainants re-asserted the claim put forth in the consumer complaint and prayer has been made that the consumer complaint be allowed as prayed for.

2. In order to prove their case, parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsel for the parties and also gone through the file carefully, including the written arguments.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that prior to the shifting of their business in shop No.183/1, complainants were running their business in shop No.182/1 (hereinafter referred to as “previous shop”), which was adjoining to the subject shop and it is only in the partition amongst the landlords the subject shop was given to the complainants, as a result of which, complainants shifted their stock from earlier shop No.182/1 to the subject shop, regarding which information was also given by the complainants to the bank (OPs 3 & 4) alongwith copy of rent deed (Ex.C-1) and also that the previous shop was got insured by the bank (OPs 3 & 4) and the bank had not given any information about the change/shifting of the stock from the earlier shop No.182/1 to 183/1, the case is reduced to a narrow compass as it is to be determined if OPs 1 & 2/ insurers are unjustified in repudiating the claim of the complainants and OPs 3 & 4/bank have also wrongly denied the claim of the complainants and the complainants are entitled for the reliefs prayed for in the consumer complaint, as is the case of the complainants, or if insurer/OPs 1 & 2 have rightly repudiated the claim of the complainants and the complainants are not entitled for any relief against them (insurer) or if the consumer complaint is also not maintainable against OPs 3 & 4 and same is liable to be dismissed, as is the defence of the OPs.
   2. In the backdrop of the foregoing admitted and disputed facts on record, one thing is clear that the liability in the present case is either of OPs 1 & 2/insurer or of OPs 3 & 4/bank, who purchased the subject policy being agent on behalf of the complainants, and for that purpose the documentary evidence adduced by the parties is required to be scanned carefully in order to determine the real controversy between the parties.
   3. Ex.C-2 is the subject policy which clearly indicates that the same was issued with agent name of “Vijaya Bank-Panchkula” (i.e. the previous bank) which had been merged into the OPs 3 & 4/bank and even the premium amount was paid by the said bank for the insurance of the complainants/insured “M/s S.B. Enterprises” with respect to shop No.182/1.  It is also clear from this policy that, in fact, the subject policy was renewed as the previous policy number of the same has been mentioned in the policy schedule and it is also evident from the policy schedule that the same was valid w.e.f. 30.6.2018 to 29.6.2019 covering the risk of ₹20,00,000/- qua the stocks(s) on payment of premium of ₹3,740/-.  Thus, one thing is clear from the subject policy that, in fact, stocks lying in shop No.182/1, Village Kishangarh, Post Office Manimajra, Chandigarh were insured by OPs 1 & 2/insurer and the subject policy was purchased by OPs 3 & 4/bank.
   4. The claim of the complainants has been resisted by OPs 1 & 2/insured on the ground that, in fact, the said stock had not been burnt in shop No.182/1, which was insured by them, rather the same was burnt when the subject shop was gutted in fire and as the stock was shifted by the complainants to the subject shop without any intimation to OPs 1 & 2/ insurer, OPs 1 & 2 have no liability even as per the terms and conditions of the subject policy.
   5. Perusal of the relevant portion of the subject policy containing the general exclusions is reproduced below for ready reference :-

“A.   General exclusions

        xxx                   xxx                   xxx

13.   Loss or damage to property insured if removed to any building or place other than in which it is herein stated to be insured, except machinery and equipment temporarily removed for repairs, cleaning, renovation or other similar purposes for a period not exceeding 60 days.”

 

6. OPs 1 & 2 have further resisted the claim of the complainants on the ground that no intimation was given by the bank/OPs 3 & 4, who had obtained the subject policy, qua the change of shop i.e. from insured shop to subject shop, despite of the fact that OPs 3 & 4 were knowing about the change of shop by the complainants.  In order to prove this fact, learned counsel for OPs 1 & 2 has drawn our attention to the copy of rent deed (Ex.C-1) which was executed by Smt. Surjeet Kaur in favour of the complainant No.2 and the said deed was attested on 7.6.2018, clearly indicating that shop No.183/1 i.e. the subject shop was given to the complainants by the landlord instead of earlier shop No.182/1 and the complainants have informed the bank about the change of shop by filing separate application, which fact has also been admitted by OPs 3 & 4/bank vide letter (Ex.C-9), acknowledging that the complainants had submitted the rent deed to the bank for renewal of the limit held with the bank qua shop No.183/1 and inadvertently the same could not be updated by the bank/OPs 3 & 4 in their record and same could not be further forwarded to the insurer/OPs 1 & 2.
7. Learned counsel for OPs 3 & 4/bank contended with vehemence that, in fact, it was the bounden duty of the insurer/OPs 1 & 2 to verify the stock before renewing the policy if the same was lying in the subject shop or in the previous shop, which has not been done by OPs 1 & 2 and, therefore, OPs 3 & 4 cannot be held liable for the fault of OPs 1 & 2. 
8. However, there is no force in the contention of learned counsel for OPs 3 & 4 as it stands proved on record that OPs 3 & 4/bank were intimated well in time by the complainants after the execution of the rent deed (Ex.C-1) qua the change of shop i.e. shop No.183/1 i.e. the subject shop from the earlier shop i.e. 182/1, which fact has also been admitted by OPs 3 & 4 in their letter dated 12.9.2019 (Ex.C-9) and it was the bounden duty of OPs 3 & 4 firstly to update the address of the said shop in their record and thereafter to intimate the insurer/OPs 1 & 2 about the change of shop, especially when the subject policy was purchased/renewed by OPs 3 & 4, being the agent on behalf of complainants to whom the credit limit/loan was sanctioned by them. As the said error has been admitted by OPs 3 & 4 even in their letter (Ex.C-9) and further that in view of the terms and conditions in the general exclusions, as discussed above, the insurer/OPs 1 & 2 are not liable for any loss to the stock in the insured property as the same has been removed/shifted to another building/place i.e. shop No.183/1 other than the insured shop i.e. shop No.182/1. 
9. Moreover, as it an admitted case of the parties that the subject shop was gutted in fire, which fact is also evident from the copy of DDR (Ex.C-4) and in the said shop stocks to the tune of ₹19,09,125.60 (rounded off to ₹19,09,126/-) was lost/destroyed in the fire, as is also evident from the list of damaged stocks (Ex.C-3), and is unrebutted by the OPs, and the aforesaid amount has not been paid by the bank/OPs 3 & 4 bank to the complainants till date, it is safe to hold that the said act certainly amounts to deficiency in service and unfair trade practice on the part of OPs 3 & 4 and the present consumer complaint deserves to succeed and OPs 3 & 4 are liable to pay the aforesaid amount to the complainants alongwith interest and compensation etc., especially when it has come on record that the complainant has already paid the entire loan amount to the OPs/bank who have also issued the no objection certificate dated 1.8.2023, copy of which is available on case file. 

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OPs 3 & 4 are directed as under :-

1. to pay ₹19,09,126/- to the complainants alongwith interest @ 9% per annum from the date of loss i.e. 8.6.2019 onwards.
2. to pay ₹30,000/- to the complainants as compensation for causing mental agony and harassment;
3. to pay ₹10,000/- to the complainants as costs of litigation.

5. This order be complied with by OPs 3 & 4 within forty five days from the date of receipt of its certified copy, failing which, the payable amounts, mentioned at Sr.No.(i) & (ii) above, shall carry interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.
6. Since no deficiency in service or unfair trade practice has been proved against OPs 1 & 2, therefore, the consumer complaint against them stands dismissed with no order as to costs.
7. Pending miscellaneous application(s), if any, also stands disposed of accordingly.
8. Certified copies of this order be sent to the parties free of charge. The file be consigned.

Announced 13/12/2023 hg			Sd/- [Pawanjit Singh] President
			Sd/- [Surjeet Kaur] Member
			Sd/- [Suresh Kumar Sardana] Member