The herein titled complainant-firm M/s Nitin Traders has been commencing the marketing/trading business in electronic goods through its proprietor Smt. Anita Sharma at her Tibri Chowk Shop (for earning her family-livelihood through self-employment) and has filed the instant complaint against the titled opposite parties (the OP1/OP2 Bank and the OP3/OP4 Insurers) on account of 'repudiation' of her Insurance-Claim seeking relief(s) of reimbursement /compensation for the substantial loss/damage to the tune of Rs.25 Lac caused to the firm's comprehensively insured stocks of electronic goods due to the sudden Roof Collapse of the Firm's Store/Go-down at Village: Gurdas Nangal storing therein the substantial stocks of goods. The Shop and the Go-down along with the Stocks of Goods were all comprehensively insured for an amount of Rs.2,60,58,000/- against all the usual risks with the OP3/OP4 insurers through the OP1/OP2 Bank from whom the complainant-firm had availed of substantial credit facilities and who also arranged the comprehensive insurance cover in compliance to one of the terms of the related Sanction.
2. The complainant further states that she had been having her firm's cash-credit loan A/c with the OP1 Bank since long and the Branch had been arranging the requisite comprehensive insurance covering the Shop, Go-down and Stocks-in-trade to the debit of the firm's cash-credit a/c with them, in compliance to the terms of the related Sanction(s). The complainant has pertinently pleaded here that the firm's Go-down was previously situated at Village: Purana Shalla and was later shifted to the newly purchased premises along with the stocks-in-trade at Village: Gurdas Nangal in the year 2020 and the related information was duly advised, in writing, to the OP1 Bank on 10.05.2020, for necessary action/furtherance in the matter. However, on the night of 11.06.2021 the Go-down's Roof gave-in/collapsed damaging the stocks causing a substantial loss of Rs.24,96,870/- to the firm. The incident was duly reported/intimated to the OP3 insurers as well as to the OP1 Bank. The OP3's surveyor visited the site after a week and took photographs and also collected all the related information/papers and left assuring an expeditious resolve. The OP3 insurers were approached on regular basis and finally on 20.01.2022 they advised the complainant of rejection of her Stocks-damage claim and thus prompted the present complaint seeking directives to the OP insurers/ bank to settle the claim at its full amount of the incurred loss @ Rs.24,96,870/- with interest @ 18% PA from the date of loss till realization besides a sum of Rs.2.0 Lac as compensation and Rs.10,000/- as cost of litigation, in the interest of justice. The complainant in order to achieve a successful prosecution of her present complaint has also filed her affidavit (Ex.CW1/A) deposing the contents/pleadings as put forth in the complaint and also the authenticity of the herein produced listed documents (Ex.C1 to Ex. C11), in evidence. Ex.C1– Copy of the Firm's Registration Certificate; Ex.C2– Copy of the Title Deed dated 14.05.2020 evidencing the purchase of Go-down at village Gurdas Nanagal; Ex.C3 – Copy of the Insurance Policy dated 26.02.2021 for the revised/enhance Sum Insured @ Rs.2,60,58,000/- and Premium @ Rs.10,473/-, covering the stocks-in-trade and the mortgaged properties; Ex.C4 – Copy of the complainant-firm letter dated 10.05.2020 addressed to the OP1 Bank (duly acknowledged by the OP1 Bank on 11.05.2020) intimating of shifting of the substantial stocks-in-trade to the New Go-down at Village: Gurdas Nangal from Village: Purana Shalla for entry in the Banks' as well as that of Insurers' Record; Ex.C5 – Copy of the Stocks as per the Firm's Stock Register; Ex.C6 - Copy of the Stocks as per the Firm's Stock Register; Ex.C7– Copy of the Claim Form as filed on 05.07.2021; Ex.C8- Copy of the e-mail conversation the OP1 Surveyor and the Complainant; Ex.C9– Copy of the e-mail conversation the Complainant and the OP1 Surveyor; Ex.C10– Copy of the fresh Insurance Policy (10.11.2021) for Sum Insured Rs.63 Lac covering the Sheds/Buildings with PNF located at village: Gurdas Nangal; Ex.C11 – Copy of the Aadhar Card of Smt. Anita Sharma complainant. Replication(s)– To written statement(s) by both the OP1/2 and the OP3/4.
3. The titled OP Bank (OP1 & OP2), in response to the commission’s notice/summons appeared through counsel and filed the joint written statement stating therein preliminary as well as the other (on merits) objections as: The complaint has been filed in absence of 'cause of action' arisen to the complainant against the replying party and the same being sans merit needs be dismissed. The complainant was sanctioned Rs.15.00 Lac against the stocks-in-trade and mortgage of 12 Marla of property at Village: Chhawla (Gurdaspur); and as the stocks-in-trade were also to be insured these were got covered from the OP3/OP4 who are separate legal entity and thus themselves liable for any deficiency in service on their part. The OP Bank has also quoted/cited a number of senior court rulings/orders/judgments for perusal/guidance/consideration during the present proceedings. On merits, the OP Bank(s) have addressed contents of para 1 to para 4 as matter of record and have denied para 5 (collapse of Go-down roof and loss/damage to stored stocks) for want of knowledge; and para 6 (loss/damage to the stored stocks and its intimation to the OP Bank) has been denied as incorrect. Further, the contents of paras 7, 8 and 9 have been brushed-aside being relevant/related to the OP insurers only. And, lastly denying the para 10 as incorrect and claiming as no deficiency in service on their part and leaving rest of the paras as legal have sought dismissal of the present complaint with costs.
4. The OP Bank have filed the duly sworn-in Affidavit (Ex.OP1,2/A) of Sh.Saurav Saini the Authorized Representative along with the other herein listed documents, in evidence, to secure their prosecution of defense, Ex.OP1,2/1–Copy of Sanction 23.02.2021 with an Aggregate Amount Rs.215 Lac with insurance sub-cl. 10 & 11 U/Cl. 13 Specific Conditions (Declaration/Undertaking); Ex.OP1,2/2-Copy of Sanction 27.11.2020 with an Aggregate Amount Rs.480 Lac with a sub-limit Rs.150 Lac against stocks-in-trade along with insurance clauses, as above; Ex.OP1,2/3-Copy of Renewed Sanction 14.06.2021 Rs.215 Lac; Ex.OP1,2/4–Copy of Application Form 16.08.2014 Rs.15 Lac Ex.OP1,2/5–Copy of Master Facility Agreement (MFA) 27.08.2014 Rs.15 Lac Ex.OP1,2/6 – Copy of Initialed Sanction 07.08.2014 Rs.15 Lac (Insurance Charges); Written Arguments filed on 26.10.2022 (along with Senior Court Judgments).
5. Similarly, the titled OP Insurers (the OP3 & the OP4), in response to the commissions notice/summons appeared through counsel and filed the joint written statement stating therein preliminary as well as others (on merits) objections as: The complainant firm has been engaged in commercial purposed marketing/trading business and thus do not fall under the statutory definition of 'consumer'. The loss has occurred at the Go-down Site at Village: Gurdas Nangal which has not been the Risk Location as per the related policy. The complainant has failed to justify her claim at a site not covered in Policy Risk Location; and as such there's no deficiency in service and the related claim has been rightly repudiated. The OP insurers have also quoted/referred to/cited some of the senior court judgments/rulings/orders for our respectful perusal and guidance during the complaint proceedings. On merits, the OP insurers have pleaded ouster of the complaint on issue of 'commercial- purpose' in response to paras 1 & 2 of the complaint and have addressed para 3, as matter of record. In reply to para 4 the OP insurers have denied having received any intimation of shift of Go-down to Village: Gurdas Nangal from any quarters including from the OP Bank. The paras 5, 6 and 7 are again addressed as matter of records. The para 8 has been replied as that upon receipt of the claim, Surveyor was deputed and he intimated that the loss has occurred at the site other than the Policy Risk Location and thus the same was rejected.
6. Further, para 9 is denied being wrong and incorrect as the parties to a contract are bound by its terms and conditions and so the complainant is not entitled to compensation. Similarly, para 10 has been denied being wrong and incorrect as there's no deficiency in service on their part. In response to para 11 the commission's jurisdiction is not disputed but maintainability of the complaint stands challenged. Closing up, the OP insurers have denied the contents of para 12 for want of knowledge and the complaint has been prayed to be dismissed with costs. Lastly, the OP3/4 insurers in support of their version and pleadings in defense have produced the following documents in evidence: Ex.OPW3,4/1- Self declaration by the Manager (Legal) Manoj Prajapati; Ex.OP3,4/2 - Power of Attorney favoring the Manager Legal (claims); Ex.OP3,4/3- Policy 2949203258189101000 (22.01.2021) S.I. Rs.84.35 Lac covering Stocks at Shop at Tibri Road & Go-down at Mehar Chand Road; Ex.OP3,4/4- Policy Wording; Ex.OP3,4/5– Copy Surveyor Report 27.01.2022 Net-Loss @ Rs.8,36,921/-; Ex.OP3,4/6– Self Deposition by Sukrat Bhardwaj Branch Head; Ex.OP3,4/7– Copy E-Mail 21.06.2021 by the OP Insurers to the complainant; Ex.OP3,4/8 - Copy E-Mail 28.02.2022 by OP3/4 Claims to the complainant; Written Arguments – by the OP3,4 insurers (quoting senior court judgments).
7. We have examined the available documents/evidence on the records so as to statutorily interpret the meaning and purpose of each document and also the scope of adverse inference on account of some documents ignored to be produced by the contesting litigants against the back-drop of the arguments as put forth by the learned counsels for their respective litigants.
8. We find that the present dispute has arisen primarily on account of the impugned ‘repudiation’ of insurance-claim pertaining to the loss/damage caused/occurred to the comprehensively insured stocks of electronic goods due to storm causing collapse of the Go-down Roof under which were stored substantial stocks of the complainant firm.
9. As per the OP insurers the said Godown did not fall under the Policy Risk Location and the Policy cover was not available to the stocks lying/stored over there and as such the related loss-claim has been rightly rejected/repudiated. The OP Bank has pleaded that the OP insurers are separate legal entity from them and the contract of insurance has been between the complainant and the OP insurers and as such it's they who shall be liable for deficiency in service, If any. However, we observe the facts of the case depict a somewhat different situation and we endeavor to analyze and comment upon the objections/pleas of both the opposite parties taking these turn-wise but somehow in a sequence.
10. First the OP Bank: As per the OP Bank, it's earliest first Sanction (Ex.OP1/6) as produced here has been on 07.08.2014 for Rs.15 Lac and did have the 'insurance' clause at No. 8 (7) the Insurance Charges: As per Policy/Quote for Primary Security of Stocks-in-trade and also for Collateral Security of Equitable Mortgage of Commercial Property/ies. Similarly, the later sanctions/renewals Ex.OP1/2 (27.11.2020) for Rs.480 Lac; Ex.OP1/1 (23.02.2021) for Rs.215 Lac and Renewal Ex.OP1/3 (14.06.2021) for Rs.215 Lac; all mandatorily provide for 'insurance' of Bank's Financed Assets/Securities and were invariably comprised of the insurance-clause(s) i.e., the borrower(s) were directed to arrange insurance-cover with the Bank's Clause duly incorporated upon (i.e., Banks as Financier) the related policy(s) or otherwise the financing Banks do arrange suitable 'insurance(s)' by debiting premium to the borrowers' account(s) and a copy of the related insurance policies are kept along with the other loan documents. Moreover, its' been the duty of the financing banks to get the monthly stock-statements to determine drawing-power and also to examine/inspect the stocks regularly at irregular intervals of time and in the process/during the exercise they naturally/autobiographically get to know of the premises where the financed-stocks are stored and/or whether the premises fall under the Policy Risk Location or not and also to get done the necessary corrections, if any.
11. The complainant had advised the OP Bank of the shifting of the Stock Go-down from (Ex.C4) Village: Puaran Shalla to Village: Gurdas Nangal, in writing, on 10.05.2020 (as duly acknowledged by the OP Bank on 11.05.2020) with request to advise the OP insurers also. We observe that the OP Bank has sanctioned all the 3 nos of sanctions after 10.05.2020 Ex.OP1/2 (27.11.2020) for Rs 480 Lac; Ex.OP1/1 (23.02.2021) for Rs.215 Lac and Renewal Ex.OP1/3 (14.06.2021) for Rs.215 Lac; and they were duty-bound to examine/inspect the stocks physically and also the effective validity of the related insurance covers especially as to the changed/shifted Policy Risk Location etc. But that was not to be as the OP Bank has been stark negligent and have totally failed in providing the duty bound service to the herein complainant causing her harassment, mental agony and financial loss.
12. Now, the OP Insurers: We observe that the OP insurers have providing insurance cover to the complainant firm's owned OP Bank financed stocks and other fixed assets i.e. the equitably mortgaged properties since the year 2014 (as per the produced records) and they have been duty-bound to examine/inspect the insured assets of stocks and property and also the stores/go-downs etc being the service-providers as well as the custodians of public money out of which eligible claims get settled. We observe that the Stocks Go-down was shifted from Puran Shalla to Gurdas Nangal on 10.05.2020 with due intimation to the OP Bank who made a fresh sanction (Ex.OP1/1) of Rs.215 Lac on 23.02.2021 and had also got the Stock Assets insured (Ex.OP3,4/3) from the OP insurers on 22.01.2021 for the Sum Insured of Rs.84.35 Lac and at that point of time one substantial volume of stocks were lying stored at the Gurdas Nangal Go-down that should have been known to the OP Bank as well as to the OP insurers had both of them not failed in their respective duties and had examined/inspected the financed/insured stocks but that was not to be as the OP Bank accepted the insurance-cover sans checking for its correctness of risk-location and the OP insurers had already drawn the cover sitting the office sans stock verification or the risk-location etc. Both the OP Bank as well as the OP insurers thus failed in their duties towards their respective employers as well as towards their consumers.
13. Somehow, we do neither concur with the underlying logic nor with the narrated explanation of both the opposite parties in support of the impugned repudiation on the pretext of different Policy Risk-location and are inclined to examine the validity and legality of the same in the back-drop of the preceding and also the succeeding acts and events in the light of the facts on records and current law on the consumer proposition’s subject matter, in issue. We observe that the impugned repudiation of the insurance-claim has been the result of the OP's resolve in their endeavor to somehow repudiate the same.
14. Finally, in the matter pertaining to the present complaint and in the light of the all above, we find and address the unjust and unfair 'repudiation' and 'negligence cum dereliction' in duty at both the OPs' end as ‘deficiency in service' and 'unfair-practices' at play and thus ORDER both the titled Opposite Parties to jointly, severally & co-extensively pay the full amount of the impugned-claim of Rs.24,96,800/- to the complainant, in terms of the related policy, with interest @ 6% PA from the date of complaint till paid, in full, besides to pay Rs.50,000/- in lump sum as cost and compensation within 45 days of receipt of the certified copy of these orders otherwise the award shall attract additional interest @ 3 % PA from the date of the orders till actually paid.
15. The complaint could not be decided within the stipulated period due to heavy pendency of Court Cases, vacancies in the office and due to pandemic of Covid-19.
16. Copy of the order be communicated to the parties free of charges. After compliance, file be consigned to record.
(Naveen Puri)
President.
ANNOUNCED: (R.S.Sukhija)
OCT. 26, 2022. Member.
YP.
