Arun Kumar Agarwal,

Proprietor,

Balaji Trading Company,

R/o D.No.23-6-127, Patnam Bazar,

Guntur. … Complainant


1. Sri Ramanjaneya Cold Storage Pvt.Ltd.,

N.H.-5, Lalpuram,

Ankireddypalem Post,

Guntur-522 005

2. The Branch Manager,

New India Assurance Company Ltd.,

Branch Office, Station Road,

Guntur-522 001. … Opposite parties


O R D E R

Per Sri T. Anjaneyulu, President:- This complaint is filed U/S 12 of the Consumer Protection Act, 1986 for a sum of Rs.3,77,000/- being the differential value of 1088 bags of red mixed chillies stored in OP1 cold storage which stock was gutted away in a fire accident and compensation of Rs.5,000/- apart from costs from both the opposite parties.

The case of the complaint is that he has stored 1088 red mixed variety of mirch bags in the cold storage of OP1 vide bond number 864, 877 and 878 and vide receipt numbers 13/11, 15/11 and 44/11 in different dates during the period April and May, 2000. The said stock was insured with the 2nd opposite party which had issued 5 policies in all fixing the value of Rs.500/- for each bag in case of any risk. On 27-1-01 a fire accident was occurred at the cold storage of OP1 and entire stock was gutted including the stock of the complainant. The fire accident was informed to the insurance company pertaining to the compensation as per the policy issued. As per the directions of the insurance company the stock details like weight and quality etc., were furnished. But the opposite parties postponed in settling the claim on one or other pretext till July, 2005. At last the opposite parties have offered Rs.1,75,000/- instead of Rs.5,42,000/- for the total stock. The said amount was received by the complainant. The present complaint is filed for the difference of the value of the stored baggage. Hence, the complaint.

OP1 filed its version admitting the contents of the complaint as true and correct. The AP Legislature House Committee and the District Collector conducted meetings with the insurance company and also directed it to pay compensation. The insurance company only delayed the payment. Therefore, there is no deficiency of service on the part of the Management of the Cold storage. The insurance company is alone responsible for making payment.

The 2nd opposite party filed its version through the affidavit of Divisional Manager. He has denied the contents of the complaint as not true and correct. Further, it is submitted that the policy of insurance was issued in favour of 1st opposite party but not in favour of complainant. There is no contractual relationship in between the complainant and the insurance company. There is no deficiency of service on the part of the insurance company at any point of time. The complaint is not maintainable before this Forum.

It is further submitted that with regard to the fire accident they have conducted survey through C.P. Mehta and company, Mumbai. Their officials have inspected the premises and submitted a detailed report. As per the surveyors report, the insurance company has settled Rs.1,75,000/- towards full and final settlement of the total claim. The complainant itself received the same without any protest. Therefore, it is prayed to dismiss the same.

The complainant has filed his affidavit apart from marking documents vide Exs.A-1 to A-7. OP1 has also filed his affidavit. There is already an affidavit of Divisional Manager on behalf of OP2. Exs.B-1 to B-5 are marked on behalf of OP2.

Now the points for consideration are that,

1. Whether this complaint is not maintainable on the ground of preliminary objections raised by the OP2 ?

2. Whether the complainant is entitled for the differential value of the stock of Rs.3,77,000/- apart from compensation

as claimed?

3. To what relief?

POINT No.1:- The learned counsel for the OP2 has mainly contended that there is no contractual relationship in between the complainant and the insurance company except in between OP1 and OP2. As this dispute raises the several questions of fact and issues on law an elaborate enquiry is required as such, the Forum is not competent to decide the same and even it is assumed that this Forum has jurisdiction, the gutted stock was stored purely for commercial purpose as such, the complaint is not maintainable. In respect of his contentions, he relied upon the following decisions,

1. 2003 CPJ 187 (NC) in Tirupati Balaji Cold Storage & Ice factory vs. New India Assurance Co. Limited & Another, wherein it was observed that on the fact of denial of policy that complex of questions of facts of law involved as such complaint cannot be adjudicable in summary jurisdiction.

2. 2003 (1) ALT (NC) (CPA) M/s Sidheswar Iron & Steel (P) Limited., vs. Kirloskar Electric Co. Limited and another, in this case the opposite party failed to deliver the machine in time inspite of receipt of advance payment from the complainant. Therefore, claim is made for compensation due to loss occurred on account of breach of contract as supply of goods purely for resale, it is held that there is no deficiency of service involved since transaction is commercial in nature and the complainant was not consumer.

3. III (2003) CPJ 690 Saroj Agarwal vs. BAtliboi and Co. Limited & Ors. in this case the similar proposition is held as in the 2nd cited case stating that commercial transaction is involved as such consumer Forum has no jurisdiction.


The aforesaid contentions got to be appreciated in the back drop of a fire accident that took place on 27-1-01 in the premises of OP1, wherein thousands of farmers were affected on the storage of their agricultural produce namely chillies. As the stock was insured with OP2, there were delegations and Joint Committee Meetings by the Legislature House Committee and at District Level Committee. There were number of cases filed before this Forum, the Forum has decided directing the insurance company to reimburse on the basis of model price arrived at in the report of Agricultural Market Committee, Guntur @ Rs.22/- per kg for red chillies, Rs.6/- per kg for white chillies. The State Commission also confirmed the same while modifying the rate of interest. Aggrieved by the same, the insurance company has preferred the revision petitions before the National Commission. By order dated 22-8-06, the insurance company was directed to deposit the loss assessed by the surveyor with interest @7.5%. The National Commission also directed to settle other matters also who suffered loss in the fire accident that took place in the year 2001 without further bargaining and whose matters are not still dealt with, it also directed to take into consideration the weight of the chilli bag at 33 kgs. The rate of red chillies is considered to be at Rs.20/- and white chillies at Rs.6/- per kg. The insurance company has also accepted the suggestion made by the National Commission by its letter dated 13-11-06.

The OP2 has filed copy of surveyors report in respect of insurance particulars. The insured name as M/s Balaji Trading Company (complainant) is also noted therein and about the four policies obtained for the value of Rs.5,42,000/-. It is also noted that the farmers and the traders were storing their chillies in the OP1 storage. The surveyor C.P. Mehta & Co., have also noted storage bond Nos.863, 864, 866, 867, 874,875,876,877 & 878 which contain total bags 1088 white chillies. After deducting salvage it arrived at loss of Rs.1,77,506/-. Accordingly, the said amount was paid against an undertaking of the complainant herein that it is towards full satisfaction and the discharge of claim vide Exs.B-2 to B-5 vouchers.

The above background of the case is referred to appreciate the contention raised by OP2 about ouster of jurisdiction of this Forum. Their own surveyors report very much shown the name of the complainant as insured and assessment of the total loss and it was also paid. Now OP2 cannot say that there is no relationship between the insurance company and the complainant. The surveyor report itself has direct bearing on this point apart from order of the National Commission. The National Commission have evolved an amicable solution between the parties to the proceedings in respect of weight, quality and rate of chillies that were gutted in the accident in respect of the parties before the Forum and also others who have not filed their complaints by that time. Therefore, the matter does not require to be adjudicated by Civil Court. The transaction is no way commercial one in view of the aforesaid background of the case. Therefore, the decisions relied upon by the counsel for OP2 are no way applicable. The point is answered against the OP2.

POINT No.2:- Now the main question that remains for consideration is that whether the complainant is entitled to claim differential value of the commodity that has been destroyed in the fire accident as per the policies issued by OP2. The total policy amount as per the policies vide Ex.A-2 for 1088 bags is at Rs.5,14,815/-. There is no dispute about the number of storage of bags as per the certificate given by OP1 vide Ex.A-3 to a tune of 1088 bags. The complainant has addressed two letters dated 3-9-03, 23-10-03 to M/s C.P. Mehta & Co., who were the surveyors appointed by OP2. While mentioning all the details about the storage of bags and its rate etc., they have clearly mentioned in Ex.A-5 letter dated 23-10-03 that they will not agree with the assessment of loss of Rs.1,85,000/- as informed by surveyor on phone which is an arbitrary and without any sound reason. However, by letter dated 13-07-05, Ex.A-6 the insurance company informed the complainant that the competent authority has given his consent for settling all claims under the policies obtained by the complainant for the said stock for Rs.1,75,000/- arising out of fire accident towards full and final settlement and the vouchers are enclosed and requested the complainant to return the same duly discharged in all respects.

The learned counsel for the OP2 relied upon a decision reported in 1998 ALD 245 wherein it is held that the damages assessed by the surveyor cannot be interfered when it is found not to be arbitrary or erroneous or without any reasonable basis. But the contention of the learned counsel for the complainant that as per their letter dated vide Ex.A-5 dated 23-10-03 they have already mentioned that it is an arbitrary and without sound reason as such they do not accept the said assessment for Rs.1,85,000/-.

The learned counsel for the complainant also rely upon,

II (2001) CPJ 158 in a case between the New India Assurance Company Limited vs. Sanjay Bahuguna.

In the above case a policy was obtained covering accidental risk to the vehicle it appears that it met with an accident the vehicle was insured for Rs.1,40,000/-. The insurance company has obtained a consent letter from the insured to a tune of Rs.1,00,000/- to minimize the claim. Subsequently, it repudiated the claim on the ground that the driver had no valid driving license. But it was proved that the driver had a valid driving license. Thereafter, the insurance company wanted to pay Rs.1,00,000/- as per the consent letter. The State Commission be rushed a side that consent letter and ordered to pay total damage suffered as per the policy.

Irrespective of the aforesaid decision and receipt of payment, in the circumstances, narrated above, there is guideline from the National Commission which is made applicable to all the cases who have stored commodity and destroyed in a fire accident. The guidelines were fixed in respect of weight, quality and rate to be adopted by the insurance company in settling the claims. The complainant has filed the present complaint in the wake of order given by the National Commission. Therefore, we are of the considered view that the same thing is to be adopted by the insurance company.

In the light of aforesaid discussion, we observe that the complainant is entitled to claim the differential value of the commodity as per the norms fixed by the National Commission in its order dated 20-12-06 and subsequently in its final order. The insurance company is liable to pay the said value arrived as per the norms fixed by the National Commission. However, we decline to pass an order with regard to compensation claimed as the complainant was already in receipt of part of the amount. However, we order costs of litigation at Rs.1,000/-.

In the result, the complaint is allowed in part in terms as indicated below:-

1. The complainant is entitled for the differential value of the commodity i.e., mixed white chilli bags at the norms fixed by the National Commission and the insurance company is liable to pay the same including interest amount.

2. The complainant is not entitled to claim the difference as per the sum assured in the policies.

3. The opposite party is further directed to pay Rs.1,000/- (Rupees one thousand only) towards costs of litigation.

4. The amounts ordered above shall be paid within a period of six weeks from the date of receipt of the copy of this order, failing which they shall carry interest @9% p.a., till the date of realization.