1.      This consumer complaint under Section 21 (a) (i) of the Consumer Protection Act, 1986 (in short, ‘the Act’) is filed alleging deficiency in service and seeking compensation with interest in respect of loss suffered on account of natural calamity under the insurance policy obtained by opposite party on behalf of the complainant.

2.     The facts of the case, in brief, are that the complainant is an agriculturist owing agricultural land who obtained a loan to establish a poultry farm followed by subsequent loans for extension of the farm and erection of the poultry feed mill.  The total loan amount was Rs.3,02,00,000/-.  The complainant states that as required by the bank, the insurance premium in respect of the loan was paid directly to the insurance company from the account of the complainant by the opposite party.  On account of heavy rain with wind on 06.05.2009, there was extensive damage to the complainant’s poultry farm which is certified by the local Revenue authorities and the Asstt. Veterinary Surgeon from the Veterinary Hospital Centre, Thathathiripuram. The complainant approached opposite party with an insurance claim of Rs.80,00,000/-.  After following up the matter on regular basis till 2014, he came to know from his Account Statement that the insurance premium had not been paid in time by opposite party and the same was paid only on 07.05.2009 i.e. on the date after the incident of the natural calamity. The complainant states that the insurance premium had earlier been paid on 04.12.2007 and the coverage period was till 03.12.2008.  The premium fell due on 04.12.2008 which was not done by the opposite party as a result of which he could not claim the loss from the insurance company.  On account of default on the part of the opposite party the claim was not settled and the operations of the poultry farm could not be conducted for want of capital. The bank also initiated action under the SARFAESI Act against the complainant which is stated to be arbitrary and unreasonable.

3.     The complainant submits that had the insurance claim for Rs.80,00,000/- been available to him, the poultry farm could have been renovated in two months and he would have been able to earn Rs.3 lakhs per month.  The complainant is before this Commission with the following prayer:

 a)     Direct the respondents to pay the compensation of Rs.3,02,00,000/- with interest at the rate of 12% per annum from 07.05.2009.

b)       Direct the respondent to pay the compensation of Rs.25,00,000/- for loss suffered by the complainant and

c)       Pass any other order/orders, direction/directions which this Hon’ble Court may deem just and proper in the facts and circumstances of the present case to meet the ends of justice.

4.     The complaint was resisted by way of written version by the opposite party.  The opposite party contends that the present complaint is an afterthought and has been filed to circumvent the liability of the claim under the SARFAESI Act initated by the opposite party.  The complaint is stated to be barred by limitation of more than six years and liable to be dismissed on the ground of limitation. As per Hypothecation Agreement while sanctioning of the credit facilities to the complainant, it was the first and foremost duty of the complainant to obtain the insurance policy, which they failed to adhere to.  The opposite party contends that the complaint is false, frivolous and misconceived. In so far as the fastening of liability qua providing insurance cover is concerned, the alleged payment of insurance premium by debiting the account of the complainant would not shift their obligation.  It is contended that the complainant was well aware of the fact that the insurance purchased by him was only invokable in case of “fire” or “earthquake” and the alleged damaged caused due to “cyclone” was never included in the insurance cover.  Complainant himself was negligent in not purchasing the insurance policy and, therefore, the complaint is liable to be dismissed.  As per opposite party, the complainant is also guilty of making fraudulent submissions and is liable to be prosecuted under law. 

5.     Parties led their evidences way of affidavit and filed their written statements, rejoinder and written synopsis.

6.     I have heard the learned counsel for both the parties and given thoughtful consideration to the material on record.

7.     Learned counsel for the complainant argued that the loan documents at the time of sanction of loan required the opposite party bank to deduct the premium from the loan account towards the payment of insurance premium.  However, the opposite party failed to renew the said policy on or before 06.12.2008 resulting in the policy getting lapsed.  No notice was given to the complainant to renew the policy.  Therefore, on account of the incident of wind and cyclone on 06.05.2009 the hypothecated material and stocks were destroyed without there being insurance cover on account of deficiency of the opposite party.  It was argued that on 31.03.2009 the complainant’s poultry farm was valued at the instance of the opposite party and assessed at Rs.1,89,00,000/- as per the valuation report produced as part of the evidence.  It is submitted that another agriculturist who had also availed a bank loan from Indian Overseas Bank, Namakkal had been compensated for the loss suffered on the same date.  Various revenue and veterinary officials had inspected the complainant’s poultry farm and issued certificates which had been produced as evidence.  The deduction of the insurance premium from time to time is also evidenced from the Statement of Accounts obtained from the opposite party and brought on record by the complainant.  Despite the error on the part of the opposite party, it had initiated proceedings with the Debt Recovery Tribunal, Madurai and initiated coercive steps to recover the loan amount.  Therefore, this complaint seeking compensation for deficiency in service of Rs.3,02,00,000/- with interest @ 12% p.a. and other losses of Rs.25,00,000/- had been filed by the complainant.         It was stated that although the opposite party vide its reply dated 26.08.2015 to the R.T.I. application filed by the complainant had denied the debiting of insurance premium, the insurance company with which the complainant’s poultry farm was insured by the opposite party had in its detailed reply had confirmed that the renewal notice had been handed over to the opposite party one week prior to the date of renewal. 

8.     The opposite party in his written version had denied that any incident involving wind and rain had occurred on 06.05.2009 and highlighted that compensation had been received from the insurance company in respect of another incident which occurred on 29.05.2009.  The complainant denies the claim of the opposite party that the payment of premium was to be paid by him (complainant) and that there was no obligation for the opposite party to take this responsibility.  Reliance has been placed on this Commission’s orders in (1) Rajagarh Sehore Kshtriya Gramin Bank Vs Ramgopal and Ors. [2006(III) CPJ 300 (NC)]; (2) Share Kalyan Ayurvedic Pharmacy, Gujarat Vs. Commercial Co-operative Bank Ltd. [2007(IV) CPJ 127 (NC)] in support of the assertion that in a similar situation of non-payment of premium by the bank/ opposite party certainly amounts to deficiency in service.

9.     The opposite party’s contention that the complainant is not a consumer under Section 2(d) (i) of the Act is denied by the complainant on the basis of the explanation to section 2(d) which clarifies that commercial purpose does not include a person who buys goods or services exclusively for the purpose of earning his livelihood by way of self-employment, under which the complainant falls.  In support of this contention reliance is placed on judgments of Hon’ble Supreme Court in (a) Standard Chartered Bank Ltd. Vs. Dr. B.N. Raman [2006(5) SCC 727] (b) Sunil Kohli Vs Purearth Infrastructures Ltd., Civil Appeal nos.9004-9005 of 2018 decided on 01.10.2019. As regards the applicability of limitation, the complainant contends that since his claim has not been settled despite a written communication dated 07.05.2009, there was a continuing cause of action and, therefore, the complaint filed on 04.09.2015 was within time.  In support, reliance has been placed on the judgments of the Hon’ble Supreme Court in (i) National Insurance Co. Ltd. Vs. Hindustan Safety Glass Works 2017 (5) SCC 776; (ii)         Mukhdeo Singh & Anr. Vs. Harakh Nrayan Singh & Ors. in AIR 1931 Patna 285 (291); and (iii) Zila Parishad (District Board) Vs. Smt. Shanti Devi & Anr. in AIR 1965 Allahabad 599.

10.   On behalf of the opposite party preliminary objections were taken that (i) the complaint was barred by limitation as it had been filed after six years from the date of the alleged cause of action; (ii) that the complainant was not a ‘consumer’ under the Act since the insurance policy had been obtained for commercial purpose as the complainant had been availing credit facilities since 2003 from the opposite party which were recalled on 22.04.2009 i.e. prior to the alleged incident of storm and cyclone on 06.05.2009; (iii) that under the Hypothecation Agreement between the parties, the onus to obtain the insurance policy rests upon the complainant, who had failed to adhere to such terms and conditions; (iv) that on 06.05.2009 another incident of fire which is a covered peril occured on 25.09.2009 which was settled by the insurance company for a sum of Rs.1,71,592/- on 31.03.2010; (v) the fastening of liability on the opposite party for not providing insurance cover on the opposite party is contested on the ground that the debiting of the account of the complainant does not shift the obligation of the complainant to the opposite party.; and (vi) that the insurance policy covered only the risk of fire or earthquake and did not include cyclone in the insurance cover.  Therefore, the complaint is stated to be false and frivolous and due to the negligence of the complainant, for which the opposite party should not be held responsible.

11.   The complainant has relied upon the judgment of the Hon’ble Supreme Court in Sunil Kohli & Anr. Vs. M/s Purearth Infrastructure Ltd. in Civil Appeal Nos. 9004-9005/2018, 2020 (12) SCC 305 which held, relying on Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583, and Cheema Engineering Services Vs. Rajan Singh (1997) 1 SCC 131, that the expression “commercial purpose” is a question of fact to be decided in the facts of each case.  If the buyer of goods uses them for himself i.e. for self-employment for earning his livelihood, it would not be treated as “commercial purpose” and he does not cease to be a ‘consumer’.  The burden is on the opposite party according to Cheema Engineering (supra) to prove whether the complainant is not self-employed i.e. earning his livelihood from the goods.  He also relies upon the judgment of the Hon’ble Supreme Court in Shrikant G. Mantri Vs Punjab National Bank in C.A. No. 11397 of 2016 dated 22.02.2022 wherein it was held on the basis of Laxmi Engineering (supra) that services availed exclusively for the purpose of earning his livelihood and by means of self-employment will also have to be construed in context with the purpose of the enactment of the Act.  No business to business relationship has been established by the opposite party for the services availed to be considered as a “commercial” purpose.  Therefore, the contention of the opposite party that the complainant was not a consumer under the ambit of Section 2 (d) (1) of the Act according to the complainant does not sustain.

12.   As regards the applicability of Section 24 A barring the complaint on the grounds of limitation, the complainant has relied upon the judgment of the Hon’ble Supreme Court in Samruddhi Cooperative Housing Society Ltd. Vs. Mumbai Mahalaxmi Construction Pvt. Ltd. in Civil Appeal No. 4000 of 2019 decided on 11.01.2022 which held that failure to obtain occupancy certificate is a continuing wrong and therefore the complaint cannot be said to be barred by limitation.  In the present case it is contended by the complainant that his complaint qua the opposite party’s failure to deposit the insurance premium within the prescribed time had led to the insurance company not honoring the claim for the loss and the proceedings before the D.R.T., as a consequence, constituted a continuing cause of action. It was also argued, vide Samruddhi Cooperative (supra), that the complaint cannot be rejected on the ground that it is a recovery proceedings and not a consumer dispute and, therefore, not maintainable.  Reliance is also placed on Canara Bank Vs. Leatheroid Plastics Pvt. Ltd. in Civil Appeal No. 4645 of 2019 decided on 20.05.2020 wherein the Hon’ble Supreme Court held that no insurance i.e. non-insuring of whole of the hypothecated assets of the borrower by the bank amounted to deficiency in service, when the bank was contractually bound to do so. 

13.   It is evident from the Agreement for Hypothecation between the parties dated 10.07.2006 vide ‘Clause X’ that the complainant was required to keep items of insurable nature covered for the risks and the delivery of such policies to the bank duly endorsed in favour of the bank.  It was also lawful for, but not obligatory, for the bank to ensure by debit to the borrower, insurance towards replacement of the security or satisfaction of the bank’s dues as may be decided by the bank.  Clause ‘X’ reads as under:

That the Borrower(s) shall at all times keep such items of security as are of insurable nature, insured against loss of damage by fire, theft, burglary, epidemic, floods and other risks as are customary for the business of the nature carried on by the borrower (s) or against the risks for which insurance cover is available / possible or as may be required by the Bank and shall deliver to the bank all such policies or the policy/ies duly endorsed in favour of the Bank it shall be also lawful for, but not obligatory upon, the bank to insure and keep insured by debit to the Borrower(s) account(s) the security as are of insurable nature.  The proceeds of such insurance shall, at the option of the Bank, either be applied towards replacement of the security or towards the satisfaction of the Bank’s dues here under or towards both as may be decided by the Bank.

14.   From the above it is apparent that the bank had obtained insurance cover for the period 07.12.2007 to 06.12.2008 and again from 07.05.2009 to 06.05.2010 under this provision of the agreement in lieu of the complainant who had failed to renew the contract of insurance.  The complainant’s case is that the period between 07.12.2008 to 06.05.2009 remained bereft of insurance cover for which the bank is liable. The opposite party has not brought on record any justification for having obtained the policies for the period prior and after the date of incident when the loss is stated to have occurred if it was the liability of the complainant alone.  The argument that insurance was the liability of the opposite party which failed to discharge it is, therefore, patently misplaced and cannot be sustained.

15.   As regards the risks covered under the policy, it is apparent from the record that ‘cyclone’ is not a covered peril in policy no. 453403/11/2008/244 dated 06.12.2007.  The relevant extract of the Policy reads as under:

Furniture, fixture & fittings – CAGES.                                24,62,000

Building – POULTRY SHEDS.                                            65,61,000

Stock – FEED                                                               25,00,000

Fire Basic Cover                               1,15,23,000             12,963.38

Place:      NAMAKKAL                                           For and on behalf of

Date: 06/12/2007                            The Oriental Insurance Company Limited

It is also evident that under the previous policies, i.e., policy no. 453403/11/2008/244 for the period 07122007 to 06.12.2008 and policy no. 454700/11/2010/51 for the period 07.05.2009 – 06.05.2010 the risk covered was for “Fire Basic Cover” and “Earthquake Cover”. The risk of a natural calamity such as a storm or cyclone was not included under the policy. It is thus clear that risks covered under it related to only fire and earthquake. The Complainant’s claim for the incident of a natural calamity involving heavy wind and cyclone, which is not covered under the policy has been repudiated by the opposite party on the basis of the policy conditions and, therefore, cannot be faulted. In several judgments of Hon’ble Supreme Court and this Commission it has been held that the terms of a contract of insurance cannot be re-written and only risks which are covered can be indemnified. Reliance is placed on the judgment of the Hon’ble Supreme Court in the case of Oriental Insurance vs Sony Cheriyan (1999) 6 SCC 451, wherein it was laid down that an insurance policy represents a contract between the insurers and insured, the terms of which have to be strictly construed to determine the extent of liability of the insurer and the insured cannot claim anything more than what is covered by the insurance policy. The contention of the complainant in this regard cannot be sustained for this reason.

16.   In view of the foregoing, the complaint seeking indemnification against loss on account of natural calamity involving heavy wind and cyclone is not found to be covered under the terms of the Insurance Policy under which the complainant has sought to be indemnified for the loss suffered by him.  Notwithstanding all other contentions of whether the policy was in force on the date of the incident and whether the opposite party bank is liable for negligence on this account, it is apparent from the record that the previous policies also did not recover the risk of damage or loss due to natural calamity involving heavy winds and cyclone.  The risk covered under the previous policy was admittedly taken by the opposite party/bank for the year 07.12.2007 to 06.12.2008 and covered the risks of “Fire and Earthquake”.  The policy taken by the complainant for the year 07.05.2009 to 06.05.2010 also covered only the risks of “Fire and Earthquake”.  From the above it is evident that even the complainant had not covered the risk of a natural calamity involving heavy winds and cyclone in respect of the poultry farm in question.  Therefore, the opposite party/bank cannot be faulted in not having including the risk of natural calamity of “cyclone” while renewing the said policy admittedly after the date of the incident.  In other words, the policy has to be construed as being limited only to the risks of “Fire and Earthquake”.  For this reason the claim of the complainant is liable to fail since it has been filed for loss arising from the risk of heavy rain and cyclone.

17.   For the foregoing reasons, the complaint is found to be without merits and accordingly dis-allowed, with no order as to costs. All IAs also stand disposed of.