IN THE DISTRICT CONSUMERS’ DISPUTES REDRESSAL FORUM AT MYSORE<br /> <br /> PRESENT: 1. Shri.D.Krishnappa<br /> B.A., L.L.B - President <br /> <br /> <br /> 2. Smt.Y.V.Uma Shenoi<br /> M.Sc., B.Ed., - Member<br /> <br /> 3. Shri. Shivakumar.J.<br /> B.A., L.L.B., - Member<br /> <br /> CC 346/08 DATED 13.01.2009<br /> <br /> ORDER<br /> <br /> Complainant H.J.Puttaramegowda, S/o Javaregowda, C/o Annegowda, No.95, 3rd Cross, 3rd Main, Gokulam North, Mysore.<br /> (By Sri.V.M.Prasad, Advocate)<br /> <br /> Vs. <br /> Opposite Parties 1. The Branch Manager, United India Insurance Company Limited, Head Post Office Road, Hunsur Club Complex, Hunsur.<br /> 2. The Auction Superintendent, Office of the Auction Superintendent, Tobacco Board, Government of India, A.P.P.No.1, H.D.Kote, Mysore District.<br /> (By Sri.J.S.K., Advocate for O.P.1 and <br /> Sri B.P.K. Advocate for O.P.2)<br /> <br /> Nature of complaint : Deficiency in service<br /> Date of filing of complaint : 06.11.2008<br /> Date of appearance of O.P. : 01.12.2008<br /> Date of order : 13.01.2009<br /> Duration of Proceeding : 1 MONTH 13 DAYS<br /> <br /> <br /> <br /> PRESIDENT <br /> <br /> <br /> <br /> MEMBER<br /> <br /> <br /> MEMBER<br /> Sri.D.Krishnappa,<br /> President<br /> <br /> 1. The grievance of the complainant in brief against the opposite parties is, that he is a license holder from Tobacco Board, had built a barren on his land. He had built barren measuring 16’ x 16’ had kept 450 kgs. Tobacco leaves for processing. On 21.08.2008 the barren caught fire, as the result entire tobacco leaves are burnt including the infrastructure in the barren causing damage to the barren resulting in total loss of Rs.1,06,950/-. That he had insured the barren and tobacco leaves for total sum of Rs.1,15,000/- with the first opposite party. When he made a claim with the first opposite party, they by assessing loss on their own unscientifically have assessed the loss at Rs.38,000/-, which is not proper and stated that cost of production of tobacco during the year 2007-08 as published by the Central Tobacco Research Institute, Hunsur was Rs.47/-though the cost of production in real market was Rs.68/- per kg. The rate of tobacco during that year was Rs.130/- per kg. and therefore claimed Rs.58,500/- towards loss of tobacco, Rs.65,000/- towards damages to the barren and Rs.5,000/- towards other expenditure and thereby has prayed for a direction to the opposite parties to pay the said amount deducting Rs.25,000/-, which has already been paid by the first opposite party to him, which is in adequate. <br /> 2. The first and second opposite parties have appeared through their advocates and filed their version. The first opposite party in the version admitted to had issued a policy insuring the tobacco barren for Rs.90,000/- and tobacco leaves in process for Rs.25,000/-and further admitting the bank has collected the premium of Rs.129/- from the complainant and they have issued a policy in good faith, which was valid as on the date of the fire accident. It is further stated that they have undertaken, under the policy conditions that they will pay the insured the value of the property at the time of the happening of the destruction or the amount of loss. That Cauvery Kalpatharu Grameena Bank, Bilikere had intimated them about the fire incident, then they had engaged service of a licensed surveyor to assess the loss, the said surveyor after spot inspection assessed the loss of barren at Rs.17,825/- and loss of tobacco at Rs.18,000/- and arrived to the figure at Rs.35,325/-in all and after deducting policy excess of Rs.10,000/-, the surveyor recommended for payment of Rs.25,325/- and they have paid Rs.25,000/- to the Cauvery Kalpatharu Grameena Bank who has credited the same to the account of the complainant and that Bank has also issued a discharge letter accepting Rs.25,000/- towards full satisfaction of the claim discharging their further liability. Therefore, the claim of the complainant is not sustainable and that the claim made by the complainant is without any basis. This opposite party further disputing the cost of cultivation and the cost of tobacco leaves as on the relevant date have submitted that no deficiency is caused by them as the Bank has issued a valid discharge against their liability and if at all the complainant is aggrieved he can only go against the bank and thereby prayed for dismissal of the complaint.<br /> 3. The second opposite party has filed version denying his knowledge about the insurance coverage and actual loss that the complainant has suffered, has only admitted that the complainant is a tobacco grower further denying his knowledge about other allegations and contended that he is not a necessary party and therefore to dismiss the complaint against him.<br /> 4. In the course of enquiry into the grievance of the complaint, the complainant and the Assistant Divisional Manager of first and second opposite parties have filed their affidavit evidence reiterating what they have stated in their respective complaint and versions. The complainant has produced a copy of the letter issued by the tobacco board stating that this complainant is a registered tobacco grower, a certificate of the village accountant to show that there has been a fire incident, copies of letters that first opposite party addressed to him and to Cauvery Kalpatharu Grameen Bank besides producing an estimate made by him estimating the total loss, bale tickets issued by the tobacco board showing the tobacco rate per kg. as on 10.08.2008 with photos evidencing the damage caused to the tobacco leaves and the barren. The first opposite party has produced a letter issued by the Cauvery Kalpatharu Grameena Bank discharging the liability of the first opposite party after accepting Rs.25,000/- towards full satisfaction of the claim and copy of the statement of declaration of tobacco barrens with copy of the report of the surveyor and terms and conditions of the insurance. Heard the counsel for both the parties and perused the records.<br /> 5. On the above contentions, following points for determination arise.<br /> 1. Whether the first opposite party proves that discharge memo issued by Cauvery Kalpatharu Grameena bank after accepting Rs.25,000/- towards the full satisfaction of the claim discharges their further liability and therefore that binds the complainant and the complainant is therefore estopped from claiming further damages?<br /> 2. Whether the complainant proves that the first opposite party has caused deficiency in its service in not honouring his claim for damages as per the entitlement?<br /> 3. To what relief the complainant is entitled to?<br /> 6. Our findings are as under:-<br /> Point no.1 : In the negative.<br /> Point no.2 : In the affirmative.<br /> Point no.3 : See the final order.<br /> <br /> REASONS<br /> <br /> 7. Points no. 1 and 2:- The counsel appearing for the complainant argued that the complainant had insured the barren and also the tobacco leaves stocked in the barren for processing for total sum of Rs.1,15,000/- and that insurance was valid as on 21.08.2008 on the date of the fire incident and therefore the first opposite party is liable to pay damages of Rs.1,06,950/-, but has failed to honour his claim with a contention that they have paid Rs.25,000/- to Cauvery Kalpatharau Grameena Bank and obtained discharge certificate, which he submitted is illegal and prayed for the relief as prayed for. Whereas the counsel representing the first opposite party argued, admitting the insurance policy issued, insuring the barren and tobacco leaves for a total sum of Rs.1,15,000/-, further without disputing the fire incident stated that it was Cauvery Kalpatharau Grameena Bank which had paid the premium insured the barren and tobacco leaves stock, therefore is the insured party and the first opposite party has paid Rs.25,000/- as assessed by the valuer and the bank has issued discharge letter discharging the liability of the first opposite party after accepting Rs.25,000/- towards full satisfaction of the claim and thus submitted that the complaint is not maintainable and to dismiss the same.<br /> 8. The submission of the counsel for the first opposite party found to be contrary to what they have stated in their version, affidavit and in the conditions of the policy. In the first part of the conditions of the policy, the relevant sentence is as under:-<br /> “The company shall pay to the insured the value of the property at any time of the happening of its destruction or the amount of such damage or at its option re-instate or replace such property or any part there of” <br /> <br /> Besides this, the first opposite party in para 2 of his version has categorically stated that the bank has collected premium of Rs.129/- from the complainant. In para 3 of the version has stated that it has specifically undertaken under the policy condition that they shall pay the insured the value of the property at the time of the happening of the destruction or the amount of such damage, rest is omitted. The first opposite party in the affidavit evidence has also sworn to the same sentence and terminologies. Therefore, it is evident from these documents and the pleadings, that first opposite party is liable to pay the insurance amount to the insured. Therefore let us find out who is the insured in the case on hand. As admitted by the opposite party, the tobacco board is not in the picture in this case. The complainant admittedly had taken 2 loans from Cauvery Kalpatharau Grameena Bank for growing tobacco and for repair of barren, the bank which advanced the loan appears to have prevailed upon the complainant to insure the barren and the tobacco leaves to secure the loan advanced for the purpose of repayment. The Bank it is seen has collected the premium amount from the complainant and paid that amount to the first opposite party. This fact is admitted by the first opposite party in his version and the affidavit evidence stating the Bank has collected the premium of Rs.129/- from the complainant. Therefore, it is not the bank who has paid the premium from its cash and got the insurance in its name. Even, the statement of the declaration of tobacco barrens produced by the first opposite party show it is this complainant who has insured the barren for Rs.90,000/- and the tobacco leaves for Rs.25,000/- and undoubtedly insurance policy is issued in the name of the complainant to his advantage may be to secure the property as security for repayment of the loan advanced by the Bank. Therefore, under no stretch of imagination, it could be said that the bank is the insured, which had paid the premium and is entitled for insurance amount. Hence, the complainant is the insured.<br /> 9. Coming to the assessment of damages of the barren and tobacco is concerned, the complainant has assessed total damages for damaged barren and tobacco as Rs.1,06,950/- out of which he has assessed loss of tobacco leaves at Rs.45,000/- for 450/- kgs and Rs.5,000/- towards miscellaneous expenditure and the balance towards damages to the barren. Whereas the surveyor appointed by the first opposite party has given his report admitting the damage caused to the barren and burning of tobacco leaves, but arrived at a total loss of Rs.35,325/- out of which he has deducted Rs.10,000/- towards policy excess and shown Rs.25,325/- as net amount payable to the insured. The first opposite party out of Rs.25,325/- has only paid Rs.25,000/- to the Cauvery Kalpatharau Grameena Bank. On perusal of the assessment arrived by the complainant as well as surveyor it is found that both of them are not scientific and specific in their assessment. The complainant has valued the accessories found in the barren on very higher side. For example he has valued 20 tyre poles as Rs.6,000/-, then 600 small sticks at Rs,6,000/- and repair of a cracked wall at Rs.20,000/-, labour charges Rs.5,000/- and after valuing all the accessories as again added Rs.5,000/- as miscellaneous expenditure. As against this, the surveyor of the first opposite party has valued tyre poles number 20 at Rs.3,500/-, then small sticks 600 in number at Rs.1,800/-, labour charges as Rs.2,500/- and Rs.1,000/- towards cracked wall repair, which in our view found to be at lower side considering the escalated cost of every material in the market in recent days. Therefore, as against this speculated assessment of damage to the barren arrived by the complainant and the surveyor, this Forum has to strike a balance fixing a moderate amount towards the damages to the barren. Coming to the loss of tobacco is concerned there is no dispute between the parties that the complainant had kept 450 kgs. of tobacco leaves in the barren for processing. With this, quantum of tobacco leaves, the report of the surveyor disclose that he has valued the tobacco leaves at Rs.40 per kg and arrived the total loss as Rs.18,000/- whereas the complainant has produced bale tickets, which are nothing but bills disclosing the market rate of tobacco leaves prevailing as on 10.08.2008. The first opposite party has not disputed the genuineness of this bill of tobacco board. These bills reveal that the market rate of tobacco as on that date was Rs.124/- per kg. and the complainant has also produced a certificate issued by the Head of the Central Tobacco Research Institute, Research Station, Hunsur stating that cost of cultivation for tobacco per kg for the year 2007-08 was Rs,47/-. The opposite party has also not disputed the correctness of the cost of cultivation as stated in the certificate. The learned counsel appearing for the first opposite party argued that the complainant is entitled for cost of tobacco Rs.124/- per kg as the tobacco sold through the board was a processed produced and the tobacco leaves, which are burnt were yet to be processed where in the complainant was required to spend some money on it and that has to be considered while arriving the cost of tobacco. We find some force in the contention of the counsel for the first opposite party as the burnt tobacco had not been fully processed was required to be processed by incurring little more expenditure, but it is fact that it was under process. Therefore, taking into consideration, the undisputed fact regarding cost of tobacco as on the particular season and cost of cultivation, if cost of cultivation is deduction out of Rs.124/-, Rs.77 is net payable to the complainant. It is multiplied with 450 kgs., the net yield would be Rs.34,650/- that the total loss of tobacco that the complainant has suffered. But, admittedly, the complainant had insured the stock in the barren for Rs.25,000/-, as such he is not entitled for more than Rs.25,000/-. However, the complainant in our view is entitled for Rs.25,000/- towards loss of tobacco. The surveyor of the first opposite party has assessed damages to barren at Rs.17,825/-, whereas the estimation of the complainant comes to Rs.56,950/- towards damages caused to the barren. Admittedly, there is small crack of some length caused to the barren due to this fire incident. For repairing it, the complainant has estimated at Rs.20,000/-, which is exorbitant, which can be repaired without much expenditure. Therefore, taking into consideration of all these, we assessed total damages for barren at Rs.35,000/-, for which the complainant is entitled.<br /> 10. As already referred to above, the counsel for the first opposite party argued as if the Cauvery Kalpatharu Grameena Bank was the insured, it had submitted a claim application and Rs.25,000/- has been paid to them who has issued dischargel certificate discharging them further liability. We have already held that the bank cannot be under any circumstances, construed as an insured. Bank’s interest is only to secure the property for repayment of the loan and recovery of the loan. It has not taken the policy in its name by paying the premium, it is the complainant who has paid the premium and taken policy in his name. Therefore, the bank is not competent to issue any discharge certificate discharging from further liability of first opposite party and receive Rs.25,000/- towards full satisfaction of the insurance claim, which arguments of the counsel for the first opposite party do not stand to the reasons. Thus, we do not endorse the arguments of the counsel for the first opposite party that the complainant is estopped from making further claim. <br /> 11. However, the complainant has not disputed that he was due certain amount to the lender bank and that amount is yet to be cleared. Therefore, a sum of Rs.25,000/- paid by the first opposite party to the Cauvery Kalpatharu Grameena Bank towards partial discharge of loan advanced to the complainant, has to be accepted. The learned counsel appearing for the first opposite party by referring to the conditions of the policy submitted that there is an agreed bank clause under which the insurance amount become payable to the bank and it is entitled to issue discharge certificate discharging the bank from its further liability to reimburse the loss. We do not for a second understand the logic in the said submission of the counsel. There appears to be no sanctity for this terms between the bank and the first opposite party, because there is no privity of contract between the first opposite party and the bank, there could not have been any agreement or understanding between these two, so far as the quantum of insurance amount payable to reimburse the loss and regarding issue of dischargal certificate. The first opposite party and the bank could not have behind the back of the complainant claim to have entered into any such understanding or agreement. As such, it do not have any legal sanction to that alleged terms referred to by the counsel and his arguments that the bank is empowered to discharge the liability of the insurance company after accepting a partial amount towards the loss suffered by the insured, in our view is not binding on the complainant. Therefore, the complainant is not estopped from making a claim, which is otherwise legal and sustainable. However, the first opposite party having had already paid Rs.25,000/- to the Bank towards the discharge of loan advanced to the complainant shall to be deduct out of the total insurance amount payable to the complainant. The total insurance amount payable by the first opposite party is Rs.35,000/- towards damages of the barren and Rs.25,000/- towards loss of tobacco stocks, which comes to Rs.60,000/- out of which the first opposite party since has already paid Rs.25,000/- the balance Rs.35,000/- is to be paid to the complainant. Out of which if policy excess of Rs.10,000/- is deducted the net amount payable by first opposite party is Rs.25,000/-, with this we answer the above points accordingly and pass the following order:- <br /> ORDER<br /> <br /> 1. The Complaint is allowed.<br /> 2. The first opposite party is directed to pay Rs.25,000/- to the complainant within 60 days from the date of receipt of this order, failing which it shall pay interest at Rs.9% p.a. from the date of this order till the date of payment.<br /> 3. The first opposite party shall also pay cost of Rs.1,000/- to the complainant.<br /> 4. The complaint against the second opposite party is dismissed.<br /> 5. Give a copy of this order to each party according to Rules.<br /> <br /> (Dictated to the Stenographer, transcribed by her, transcript revised by us and then pronounced in the open Forum on this the day 13th January 2009)<br /> <br /> <br /> <br /> (D.Krishnappa) <br /> President <br /> <br /> <br /> <br /> (Y.V.Uma Shenoi)<br /> Member<br /> <br /> <br /> <br /> (Shivakumar.J.)<br /> Member<br /> <br />