Per:- Mr. Deshpande, President Place : BANDRA JUDGMENT The Opposite Party No.2 is the Insurance Company, carrying on business of insurance and the Opposite Party No.1 is the Divisional Office of the Opposite Party No.2 – Insurance Company. The Opposite Party No.3 is the insurance surveyor whereas the Opposite Party No.4 is the bank, carrying on business of banking. The Complainant had two accounts with the Opposite Party No.4 – Bank. Business of the Complainant consists of buying and selling of building material such as sand, lime, metals etc. The Complainant used to maintain stock of sand in bulk quantity to cater the needs of his customers. The Complainant decided to maintain stock of sand near Vaitarna Village and the sand used to be excavated from river Vaitarna. There had been contract between the contractors and the Complainant for excavation of sand from river Vaitarna. In or about the year 2001, the Complainant occupied land on leave & license basis at Village Vaitarna, near river Vaitarna, District – Thane; for storage of sand on the said land. [2] The Complainant had a stock-in-trade account with the Opposite Party No.4 – Bank; in the name of M/s. Tripathi Traders, since the year 2001 and as per the policy of the Opposite Party No.4 – Bank; the Complainant was required to insure the stock of sand with the insurance company. Pursuant thereto, the Complainant had taken Standard Fire & Special Perils Policy with the Opposite Party No.1 – Insurance Company; and the sum assured was of Rs.9,00,000/- and it was renewed from time to time and the said insurance policy was active during the period 22/6/2005 to 21/6/2006. As per the insurance policy, loss, destruction, damage due to storm, cyclone, floods etc was covered. [3] It is the case of the Complainant that on 26th & 27th of July, 2005, there had been unprecedented rainfall/deluge at Mumbai and due to the said deluge river Vaitarna got flooded and consequently, stock of sand lying on the insured premises was completely washed away. The stock approximately worth Rs.9,00,000/- lying on the insured premises was washed away. The Complainant was out of Mumbai during the period 12/7/2005 to 5/8/2005. The Complainant, by his letter dtd.21/8/2005, intimated the Opposite Party No.1 – Insurance Company; about loss of sand. The Opposite Party No.3 – Surveyor; paid visit and conducted inspection of the premises and collected necessary documents from the Complainant. [4] There had been an objection from the Opposite Party No.3 – Surveyor; that in the proposal form, stock stored in the godown was mentioned whereas the stock of the sand was never in the godown. The Complainant explained that in the insurance cover note, it was mentioned that stock of bricks, sand, rods etc., in open and thus, sand stock at the open place was covered by the insurance policy. [5] There had been correspondence between the Complainant, on one hand and the Opposite Parties on the other vis-à-vis satisfaction of the claim of the Complainant. Ultimately, vide a letter dtd.22/11/2006, the Opposite Party No.1 – Insurance Company; informed the Complainant that the existence of the property/stock has not been substantiated and there was no stock of sand and thus, there was no assessable loss and the claim should be treated as disproved claim. [6] The Complainant alleges that the Opposite Party No.4 – Bank; failed to render proper services inasmuch as the Opposite Party No.4 – Bank; failed to satisfy the Opposite Parties No.1 & 3 that the claim was to be satisfied. It is also alleged that the Opposite Party No.4 failed to furnish the documents promptly, as required by the Complainant. [7] The Complainant has claimed sum of Rs.8,50,000/- towards insurance claim and compensation on various counts from the Opposite Parties, total sum of Rs.19,52,000/-. [8] The Opposite Parties No.1 to 3 were duly served with notice of appearance issued by this Forum under RPAD. However, the Opposite Parties No.1 to 3 failed to file their written version on the record, as called for by this Forum. Thus, these Opposite Parties came to be set ex-parte. [9] The Opposite Party No.4 – Bank; filed its written version and denied the allegations of deficiency in service. [10] Alongwith the complaint, the Complainant filed his affidavit of evidence as well as copies of documents, including correspondence with the Opposite Parties No.1 to 3. The Opposite Party No.4 also filed its affidavit of evidence. The Complainant, as well as the Opposite Party No.4 – Bank; filed their respective written notes of arguments. [11] 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 has proved that the Opposite Parties No.1 & 2 are guilty of deficiency in service? | YES | 2. | Whether the Complainant has proved that the Opposite Party No.3 & 4 are guilty of deficiency in service? | NO | 3. | Whether the Complainant is entitled to claim an amount in sum of Rs.8,50,000/- towards settlement of his insurance claim? | YES | 4. | Whether the Complainant is entitled to claim compensation? | NO | 5. | What order? | The complaint is partly allowed. |
REASONS FOR FINDINGS [12] The Complainant has produced copies of license issued under the Bombay Shops & Establishments Act, as well as license issued by the Sales Tax Department. Copy of the Memorandum of Understanding, which is at page (20) of the compilation, shows that there had been agreement between the Complainant, on one hand and the contractor, on the other regarding excavation and stock of sand. Under that agreement, the Complainant had agreed to deposit a sum of Rs.5,00,000/- with the contractor. At page (26) of the compilation, there is a copy of the insurance certificate. Contents of the same reveal that insurance policy was taken to cover the risk to stock of bricks, sand, rods etc., in the open. Sum assured was of Rs.9,00,000/- and the policy was valid during the period 22/6/2005 to 21/6/2006. Thus, on the day of alleged incident of unprecedented rainfall at Mumbai, the insurance policy was effective & valid. It appears from the record that the Opposite Parties No.1 & 2 had entered into a correspondence with the Complainant with the hypothesis that in the proposal form stock in the godown was referred to whereas in the insurance policy, stock in open was mentioned. What is mentioned in the insurance policy would be material and that would be binding on both the parties. Moreover, construction material such as, bricks, sand, rods etc., would never be kept in the godown and it is bound to be kept or stocked in open spaces. [13] At pages (27) to (35) of the compilation, there are terms & conditions of the insurance policy. Under Clause No.(IX) thereof, bursting and/or over-flowing of water tanks, apparatus & pipes is mentioned. It is also not the case of the Opposite Parties No.1 to 2 that flood or water-logging and loss caused due to the same was not covered under the insurance policy. At page (36) of the compilation, the Complainant has produced on the record railway tickets, which show that the Complainant was out of station during the period 12/7/2005 to 3/8/2005. This has bearing on the question of late intimation to the Opposite Parties No.1 & 2. At page No.(38) of the compilation, there is a copy of first intimation letter dtd.21/8/2005, written to the Opposite Parties No.1 & 2 by the Complainant regarding loss of stock of sand in the flood water on 26/7/2005. In the same letter, justification was offered for giving information to the Opposite Parties No.1 & 2 at a late stage. Thereafter, there had been correspondence between the Opposite Party – Insurance Company; on one hand and the Complainant, on the other under which, the Opposite Party – Insurance Company; through its surveyor – the Opposite Party No.3; collected various documents from the Complainant. At page (42) of the compilation, there is a report dtd.22/7/2004 submitted by the Opposite Party No.4 – Bank; regarding stock of bricks, sand etc. Since, it is of year 2004, it is not material. At page (44) of the compilation, there is a report submitted by the Opposite Party No.3 – Surveyor. Under clause No.(03), the surveyor referred to the discrepancy between the proposal form and the insurance policy vis-à-vis ‘Stock in godown’ & ‘Stock of bricks & rods in open’. We have already adverted to this aspect of the matter and the Complainant rightly explained this by stating that it could not be in the godown. Moreover, the insurance policy document refers to stock in open and not in godown. It appears that the Opposite Party No.3 – Surveyor; submitted a negative report particularly on the ground that insurance policy in question attempts to cover an unidentifiable property in a non-existing and unidentifiable location. The Opposite Party No.3 – Surveyor; found that there was no ‘oneness of mind’ in proposing and granting the insurance between the proposer and the insurer. Now, the insurance policy covered construction material like bricks & rods etc., kept in open space. Sum assured was of Rs.9,00,000/-. The Opposite Parties No.1 & 2 had collected the premium from the Complainant for the same. While accepting the proposal and issuing the insurance policy, the Opposite Parties No.1 & 2 did not find any problem to insure the construction material kept at the open place, but suddenly while assessing the claim as regards loss of material due to flood water, the Opposite Parties No.1 & 2 realized that the construction material or rather the goods covered by the insurance policy were kept at the unidentifiable place. This does not stand to reason much less to logic. [14] Subsequent to the survey conducted by the Opposite Party No.3 – Surveyor; there had been some correspondence between the Opposite Party No.3 – Surveyor; and the Complainant. Vide a letter dtd.10/3/2006, a copy of which is at page (49) of the compilation, the Opposite Party No.3 – Surveyor; sought certain documents from the Complainant. This was followed by a letter dtd.27/3/2006, a copy of which is produced on the record at page (51) of the compilation. The Complainant, vide his letter dtd.22/4/2006, which is at page (53) of the compilation, replied both these letters and stated that necessary photographs of the site were taken and he referred to the record of the Opposite Party No.4 – Bank; to show that there was stock of sand on the day of the incident. Thus, the Complainant referred to the stock statement duly acknowledged by the Opposite Party No.4 – Bank. Alongwith this letter also some documents were submitted, which were already submitted with list dtd.7/10/2005. Copy of the letter received by the Opposite Party No.3 – Surveyor; on 7/10/2005, which was sent by the Complainant on 5/10/2005, is at page (55) of the compilation and it shows that the stock statement duly signed and discharged by the Bank of Maharashtra – the Opposite Party No.4; was submitted to the Opposite Party No.3 – Surveyor. It appears that again vide a letter dtd.12/7/2006, a copy of which is produced on the record at page (59) of the compilation, the Complainant submitted stock statement duly signed & discharged by the Opposite Party No.4 – Bank; to the Opposite Party No.3 – Surveyor & Loss Assessor. By this letter, certain other documents were also submitted. At page (62) of the compilation, there is a copy of the repudiation letter dtd.22/11/2006 and clause No.(02) of the letter shows that the Opposite Parties No.1 & 2 repudiated the Complainant’s claim on the ground, amongst other, that the insured location was an open land in vast area without demarcation and there was no criteria or evidence to prove that the insured used to excavate or keep or store sand at the said place. We have already referred to the copy of the Memorandum of Understanding as well as copy of the insurance policy. On the basis of that information, insurance policy was issued and premium was collected, but suddenly it dawned upon the Opposite Parties No.1 & 2 that the place was open and not demarcated. Having regard to the nature of the insurance policy and the purpose or object for which it was drawn, the reasons in the repudiation letter are lame. At page (66) of the compilation, there is a copy of the stock statement on the letterhead of Bank of Maharashtra – the Opposite Party No.4; which shows that on 25/7/2005, the stock of sand was worth Rs.9,66,900/-. This shows that on the day of incident, the stock of the sand around Rs.9,00,000/- was there. [15] The Opposite Party No.3 – Surveyor; had nowhere mentioned in his survey report that there was no possibility of loss due to flood. It is common knowledge that on 25th & 26th of July, 2005; there were heavy & unprecedented rains at Mumbai and there was water-logging and floods as a result of heavy rains, and therefore, sand being washed away, stocked in the river bed could be natural effect of the flood. There is nothing unusual of the same. [16] Apart from that the Opposite Parties No.1 to 3 did not appear before the Forum, as also, did not file their written version, as called for by this Forum. ‘Roznama’ of the proceeding reveals that the Opposite Parties No.1 to 3 were duly served with notices issued by this Forum under RPAD. ‘Roznama’ dtd.14/6/2007 shows that one advocate had appeared before this Forum on behalf of the Opposite Parties No.1 & 2 and sought an adjournment to file written version. Matter was adjourned to 4/7/2007. However, on 4/7/2007, the Opposite Parties No.1 to 3 were absent and ‘No written version’ order came to be passed. Thereafter, the Opposite Parties No.1 to 3 never appeared in the proceeding and the complaint was heard ex-parte. Thus, the Opposite Parties No.1 to 3 having duly served failed to appear before this Forum and contest the complaint by filing written version. In absence of any denial on the part of the Opposite Parties No.1 to 3, it will have to be presumed that they admit all the material allegations in the complaint. [17] So far as the Opposite Party No.4 – Bank; is concerned, the allegations are that the Opposite Party No.4- Bank; did not supply information and documents promptly, as required by the Complainant. There is no material on the record to show that there was a delay on the part of the Opposite Party No.4 – Bank; in furnishing required information/documents to the Complainant or the Opposite Party No.3 – Surveyor. Role of the Opposite Party No.4 – Bank; was limited in the sense that the Opposite Party No.4 – Bank; is the banker of the Complainant having two bank accounts and had advanced loan to the Complainant. On the basis of material on the record we have not come across any instance of deficiency in service on the part of the Opposite Party No.4 – Bank. [18] Coming to the question of award of claim & compensation to the Complainant, we find that in paragraph No.(21) of the complaint, the Complainant has claimed sum of Rs.8,50,000/- towards the insurance claim. Thus, according to the Complainant, loss sustained by him on account of washing away of the stock of sand was to the tune of Rs.8,50,000/-. In addition to that the Complainant has claimed compensation towards mental agony, loss of time, loss of business etc. We are inclined to allow the claim of basic principal amount of Rs.8,50,000/- together with interest thereon @ 9% p.a., as from the date of repudiation i.e. 22/11/2006 till the date of realization of entire amount by the Complainant. In view of this, we are not inclined to allow the claim of the Complainant as regards damages. Even otherwise to satisfy the claim of such nature, the insurance company is supposed to conduct investigation through its surveyor and satisfy itself about the claim and in that regard the insurance company is often required to collect various documents. That results into delay. It would not be appropriate to penalize the insurance company by directing the insurance company to pay compensation towards mental agony, loss of reputation and loss of business of the Complainant. From this stand point also, we are not inclined to award separate compensation to the Complainant. In the result, we proceed to pass the following order:- ORDER The complaint is partly allowed. The Opposite Parties No.1 & 2 are jointly & severally directed to pay to the Complainant, a sum of Rs.8,50,000/- towards insurance claim together with interest thereon @ 9% p.a., as from 22/Nov/2006 till realization of entire amount by the Complainant. The Opposite Parties No.1 & 2 are also further directed to pay to the Complainant, a sum of Rs.5,000/- towards costs of the proceeding. The Opposite Parties No.1 & 2 shall comply with the foregoing order within a period of four weeks from the date of receipt of this order. The complaint, as against the Opposite Parties No.3 & 4, stands dismissed. Rest of the claims of the Complainant stands rejected. Inform the parties 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 | |
