Per Mrs.Usha S. Thakare, Hon’ble Presiding Judicial Member
Shree Venkatesh Trade & Agencies Pvt. Ltd. has filed present consumer complaint under Section 17(1)(a) of Consumer Protection Act, 1986 by alleging deficiency in service on the part of the opponent and for adopting unfair trade practice by the opponent.
2. The complainant is a private limited company registered under the provisions of Companies Act, 1956. It is carrying on business of steel and iron through out the India. Opponent is the Government of India Undertaking and carries on general insurance business through out the India. The complainant states that claim arises for non-settlement of complainant’s claim under Fire Floater Policy bearing No.250600/11/04/3101560 issued by the opponent.
3. According to the complainant, since 1990 the complainant has been taking out various insurance policies with the opponent. The complainant had taken Fire Floater Insurance Policy bearing No.250600/11/04/3101560 for Rs.1 Crore from the opponent for the period between 01/10/2004 till 30/09/2005 initially to cover their stocks at various locations namely at (1) Plot No.1106, Road No.12, Village Kalamboli, Taluka Panvel, District Raigad and (2) Plot No.552, Village Kalamboli, Taluka Panvel, District Raigad. The policy is subject to agreed bank clause and also warranties and clauses attached to the policy. It is extended to cover risk on the stock of Iron, Steel Plates, Beams, Channels and other non-hazardous goods. The sum assured of the aforesaid policy is enhanced from Rs.1 Crore to Rs.2 Crores by Endorsement No.250600/11/04/31/30314 with effect from 11/11/2004. Somewhere around 24/12/2004, the complainant further obtained Endorsement to said insurance policy to cover their stock lying at (3) Plot No.552, MIDC, Taloja, Kalamboli, (4) Suhas Enterprises, A/84/1, MIDC, Taloja, Panvel, Raigad. (5) Plot No.445, MIDC, Taloja, Kalamboli (6) Shree Venkatesh Trade & Agencies Pvt. Ltd. Plot No.225, Sector-24, Faridabad, Harayana and (7) 33-A, Industrial Area N.I.T., Faridabad. The opponent after receiving premium had issued an Endorsement No.250600/11/04/31/30378 effective from 24/12/2004 on the said policy. Said policy in its warrantee under Form “W” specifically covers stocks lying in open adjacent place to the insured premises. As per the Forms attached to the said policy, it covers risks on the stocks of Iron, Steel Plates, Beams, Channels and other non-hazardous goods. The insurance effected by the complainant was on the complainant’s stock and non-hazardous goods lying at the aforesaid premises.
4. It is submitted by the complainant that to decongest the traffic from Mumbai, Government of Maharashtra and Mumbai Iron Merchants Association shifted Warehouses/Offices of Iron/Steel from Mumbai to Kalamboli, Navi Mumbai on a land specifically allotted for the purposes. Most of the Steel and Iron Merchants had acquired open Plots from Mumbai Iron Merchants Association. Plots allotted at Kalamboli are open and bound by the Compound Wall for storage of heavy Steel and Iron materials. The opponent was and is aware of the above allotment and use of the same by Steel and Iron Merchants. At the time of renewing the Fire Floater policy, officers of the Insurance Company visited and examined the open Plots. Officer of the Insurance Company had visited Plot No.445, MIDC, Taloja, Kalamboli, before issuing Endorsement No.250600/11/04/31/30378 to cover non-hazardous goods with effect from 24/12/2004. The stock of Iron and Steel Plates, Beams, Channels and other non-hazardous goods were covered to the extent of Rs.2 Crores under the policy. The complainant is filing monthly statement of the stock of various locations to State Bank of India as finance was availed from the State Bank of India.
5. On 26/07/2005 the entire city of Mumbai, Navi Mumbai including Kalamboli experienced heavy torrential rain. Navi Mumbai area including Kalamboli is badly affected by the rain water as there was flood in these areas. Due to such heavy rain and flood, the Rear Compound Wall of premises of open plot No.445, MIDC, Taloja, Kalamboli had been collapsed. Stock of Iron Fine/Powder packed in Bags had swept away in the strong current of the water. On the said Plot, on or before 26/07/2005, the complainant had stock of Rs.34,96,000/-. Due to continuous raining and flooding, the roads in the Navi Mumbai, Mumbai were paralyzed. It was impossible to continue with usual daily activity about a week from 26/07/2005. During the period, major stock was washed away and remaining quantity of stocks was badly damaged. In spite of aforesaid situation, the complainant by fax dated 01/08/2005 had informed to the opponent about the loss and requested to depute Licenced Surveyor for assessing the loss and to register its claim. In spite of receipt of fax, the opponent failed to appoint Surveyor to assess the loss suffered by the complainant. Therefore, once again by letter dated 05/09/2005 addressed to the Branch Manager, opponent was requested to appoint Surveyor and to assess the loss. By letter dated 05/09/2005 addressed to the Senior Divisional Manager of the opponent complainant has informed about heavy loss and explained the delay in informing the opponent about said loss.
6. In pursuance of the said letters, opponent has appointed Licenced Surveyor-M/s.Ashok Chopra & Company to survey and assess the loss. The Surveyor for the first time visited the aforesaid Plot No.445, MIDC, Taloja, Navi Mumbai on 26/09/2005. Surveyor by letter dated 28/09/2005 addressed to the complainant recorded that the aforesaid Plot No.445 was actually an open Plot with no building though with a compound wall all around and that part of rear compound wall was collapsed and Heavy Steel Pipes and Coupling Type Items were occupying part of the Plot. The Surveyor had observed that 50% of open Plot had considerable grass/vegetation and about 10% was water logged. According to the Surveyor, there was no storage in the 60% of the Plot area and only 40% of area was occupied by Bags of different sizes. Those Bags could not be properly checked out. Surveyor confirmed that on examination of goods, they found Black Powder, which had turned into a Solid Gelatinous Mass, but there was no sign of this Black Powder having spread around/outside the affected place. Finally, the Surveyor concluded that the policy only covers the material that was stored in Nonkutcha Godowns and not goods in the open to be considered under the policy.
7. It is alleged by the complainant that the Surveyor refused to submit copy of Survey Report to the complainant. Hence, notice was issued on 17/01/2006 addressed to the Insurance Regulatory Development Authority, Hyderabad (‘In short ‘IRDA’). The plain reading of policy terms and conditions clearly indicates that stock stored in the open plot at Taloja, Kalamboli is covered under the policy. The Surveyor has wrongly interpreted the terms of the policy. The opponent by letter dated 11/10/2005 informed the complainant that they were closing the claim file as according to the Surveyor there was no loss and the claimant had withdrawn claim by giving consent to the same. The complainant in response to the letter; issued a letter through Advocate on 01/12/2005. The complainant had denied that claim was withdrawn. The complainant thereafter persuaded the matter with the IRDA, Hyderabad. After repeated follow-up, opponent forwarded a copy of Surveyor Report to the Advocate of the complainant. On 12/10/2006 Advocate of the complainant received a letter from IRDA stating that claim was not payable as the goods were lying in the Open Yard. Repudiation of the claim is untenable in law and contrary to the Insurance Act and terms and conditions of the policy. The complainant is a consumer within the provisions of Consumer Protection Act, 1986. The complainant hired services of the opponent for consideration. There is deficiency in service in the quality, nature and manner of the opponent. Wrongful refusal of the claim by the opponent is without application of mind. As a result of deficiency in service and gross negligence in performance of the services by the opponent, the complainant has suffered heavy loss and therefore, the complainant has filed present complaint claiming compensation of Rs.30 Lakhs with interest @ 18% p.a. with effect from 26/10/2005 till realization. The complainant has also claimed amount of Rs.1 Lakh towards compensation for mental agony and harassment and amount of Rs.75,000/- towards costs.
8. Opponent has resisted the claim by filing written version and denied all adverse allegations. It is submitted that complaint has been filed by the complainant arising out of repudiation of claim by the opponent for damage to the stocks lying in the open Plot No.445, MIDC, Taloja, Panvel, due to flood of 2005. The allegations made in the complaint are false to the knowledge of the complainant. The complaint is not maintainable either on facts or in law. There is neither deficiency in service nor breach of contract committed by the opponent. The complainant has approached the opponent vide letter dated 29/09/2004 along with Proposal Form for fresh policy covering fire, burglary, flood risk to the extent of Rs.1 Crore in respect of their stocks lying in the Godown situated at (a) Plot No.1106, Road No.552, Village Kalamboli, Tal. Panvel, Dist. Raigad. Proposal Form submitted by the complainant discloses that (a) Stocks shown in open – Nil (b) Construction Details – i)Walls of Bricks (ii) Floor - R.C.C (iii) Roof - R.C.C. The opponent had issued Standard Floater Stock Insurance Policy. During the currency of policy period, the complainant vide letter dated 11/11/2004 requested the opponent stating therein that kindly cover the following address of our godowns -
(i) Bima Complex, 304, MIDC Taloja Road No.3, Kalamboli.
(ii) Suhas Enterprises, Plot No.A/84/1, MIDC Taloja, Panvel, Dist.Raigad.
(iii) Rishabh Diogha Steel & Allied Pvt. Ltd. Plot No.C-17/3, MIDC area, Taloja.
With further request by the complainant to enhance coverage value of policy from Rs.1 Crore to Rs.2 Crores, coverage was provided vide Endorsement No.250600/11/04/31/30314. Again during the pendency of the existing Floater Stock Policy, the complainant had requested the opponent vide letter dated 24/12/2004 for coverage of following addresses -
(i) Plot No.552, MIDC, Taloja, Kalamboli
(ii) Suhas Enterprises, Plot No.A/84/1, MIDC, Taloja, panvel, Dist. Raigad.
(iii) Plot No.445, MIDC, Taloja, Kalamboli
(iv) Shree Venkatesh Trades & Agencies Pvt. Ltd.,
Plot No.225, Sector-24, Faridabad, Haryana.
(v) 33-A, Industrial Area, NIT Faridabad 121001.
The above listed godowns have been covered vide Endorsement No.250600/11/04/31/30378.
9. It is submitted that the complainant vide letter dated 05/09/2005 has intimated to the opponent that – “Our claim on account of flooding at our godowns” and further intimated that - “damages done by rain water during heavy rain fall on 26/07/2005 requesting for appointment of Surveyor to assess the damage.” Receipt of letter dated 01/08/2005 is denied by the opponent. The complainant again requested the opponent to appoint Surveyor to assess the damages done by rain water by letter dated 12/09/2005. The complainant vide letter dated Nil received by the opponent on 15/09/2005 has explained the delay in intimating the loss caused to the materials. The opponent had appointed M/s.Ashok Chopra & Co. to inspect and assess the damaged stocks. Surveyor visited the site of the affected stocks on 26/09/2005 and wrote a letter dated 28/09/2005 to the complainant. It was communicated to the complainant that premises were actually open plots with no building thereon and as such there is no loss to be considered under the policy. The opponent has concurred with the findings of the Surveyor and communicated their decision to the complainant vide their letter dated 11/10/2005. Decision of repudiation of the opponent has been confirmed by the IRDA vide letter dated 12/10/2006 which was addressed to the Advocate of the complainant.
10. It is alleged that the complainant has suppressed the material fact and not entitled to get compensation. All the alleged stock was lying in open plot in the present case. The policy issued to the complainant does not cover the stocks which are lying in the open plot. Surveyor’s conclusion that the policy only covers the material that are stored in the Non-Kutcha Godowns and not goods in the open space to be considered under the policy is accepted by the opponent as well as by the IRDA. The allegation of the complainant that policy was issued to cover stocks in plot and not in godown is illegal and wrongful. The opponent has not admitted the claim because risk was not covered under the Fire Floater Policy issued to the complainant. Contract of insurance is absent as far as affected place of stock is concerned. As such opponent is not liable to indemnify and to pay the damages to the complainant and consumer complaint is liable to be dismissed with compensatory costs.
11. To substantiate the claim, the complainant has placed reliance on affidavit of evidence of Shri Rajender Prasad Jain. The complainant has placed reliance on copy of Fire Floater Policy bearing No.250600/11/04/3101560, copies of Endorsements, Statements of stocks for the month ending April, May, June and August 2005, Delivery Challan and Invoice of Balaji Trading Company and confirmation letter, Fax dated 01/08/2005 and letter correspondence. To give the counterblow, the opponent has filed affidavit of Senior Divisional Manager, namely, Mr.Prafull Dalal and also placed reliance on various documents. The complainant has filed rejoinder on 05/12/2008.
12. It is an admitted fact that the complainant had taken Standard Fire Floater Stocks Policy from the opponent. The complainant approached the opponent vide letter dated 29/09/2004 along with proposal form for fresh policy covering fire/burglary/flood risk to sum insured of Rs.1 Crore in respect of stocks lying in godown situated at Plot No.1106, Road No.552, Village Kalamboli, Tal. Panvel, Dist. Raigad. During currency of policy period, the complainant vide letter dated 11/11/2004 requested the opponent to cover the following godowns -
(i) Bima Complex, 304, MIDC Taloja Road No.3, Kalamboli.
(ii) Suhas Enterprises, Plot No.A/84/1, MIDC Taloja, Panvel, Dist.Raigad.
(iii) Rishabh Diogha Steel & Allied Pvt. Ltd. Plot No.C-17/3, MIDC area, Taloja.
On the request of complainant, coverage value of above policy was enhanced from Rs.1 Crore to Rs.2 Crores vide Endorsement No.250600/11/04/31/30314. Again during currency of existing Floater Stock Policy, the complainant has requested the opponent vide letter dated 24/12/2004 for coverage of godowns on following address :-
(i) Plot No.552, MIDC, Taloja, Kalamboli
(ii) Suhas Enterprises, Plot No.A/84/1, MIDC, Taloja, panvel, Dist. Raigad.
(iii) Plot No.445, MIDC, Taloja, Kalamboli
(iv) Shree Venkatesh Trades & Agencies Pvt. Ltd.,
Plot No.225, Sector-24, Faridabad, Haryana.
(v) 33-A, Industrial Area, NIT Faridabad 121001.
13. There is no challenge to the fact that on 26/07/2005 the entire city of Mumbai and Navi Mumbai including Kalamboli experienced heavy torrential rain. Said area was affected by rain water and there was heavy accumulation of water in the area of Mumbai, Navi Mumbai including Kalamboli. Due to heavy rain and flood, rear compound wall of premises of open plot No.445 at MIDC Taloja, Kalamboli was damaged. According to the complainant, stock of Iron Fine Powder worth Rs.34,96,000/- was there in the affected area which was damaged due to heavy rain. The complainant has filed insurance claim pertaining to this Iron Fine Powder with the opponent and said claim is rejected by the Insurance Company/opponent.
14. The incident took place on 26/07/2005. It is the stand of the complainant that information was given to the opponent/Insurance Company on 01/08/2005 about damage to the stocks lying in the insured premises. The complainant has filed copy of fax at Exhibit-F. Receipt of fax is denied by the opponent. Nothing is on record to hold that said fax was issued and it was received by the opponent. The complainant should have filed on record receipt to show that fax was issued and it was received by the addressee. On 05/09/2005 the complainant had issued one letter to the Branch Manager of National Insurance Company, Mumbai and expressed his displeasure due to non-appointment of Surveyor to assess the loss by the opponent. On 12/09/2005 again another letter was issued and request was made to appoint the Surveyor. One letter was again issued which was received by the Insurance Company on 15/09/2005. In this letter, the complainant had mentioned reasons for non-lodging of claim earlier with the opponent. It is submitted that due to flood, concerned person Mr.Ravi Vetal, who has his residence in Kalamboli had suffered severe damages to his house and belongings. He had to vacate the place and to shift to his native place at Surli, Karad. Due to heavy loss he left the place without informing the Company and resumed the duty only on 02/09/2005. All the activities in the Kalamboli were at standstill even after more than 10 days of the calamity. There was heavy water logging near godown at Plot No.445, MIDC, Taloja, Kalamboli and thus not at all approachable. No one was willing to go near their godown due to foul smell of dead animals. People were feared of spreading of disease. It can be gathered from this letter that due to several reasons, immediate intimation was not given to the opponent about the damage to the stocks stored at open plot No.455 at Kalamboli. There is delay in giving information of damage to the opponent/Insurance Company. However, Surveyor was appointed by the opponent and on the basis of report of the Surveyor, claim of the complainant under policy No.2506001/11/04/3101560 was rejected.
15. On 28/09/2005 Surveyor-M/s.Ashok Chopra & Co. informed to the complainant that the policy basically covers the materials that are stored in the Non-kuchha godown and not goods stored in the open. Further, considering this material has stood under heavy monsoon rain, it obviously did not get further affected by the flooding.
16. During the survey, Surveyor has observed that the premises was actual an open plot with no building thereon whatsoever, though with a compound wall all around. There was an opening/entrance from the road and part of the wall at the rear had collapsed. Some steel pipes and coupling type items were occupying part of the plot, some of these actually lying on the goods. About 50% of the plot had considerable grass/vegetation freely growing while around another 10% was water logged. There was no storage in around 60% of the plot. Some affected material was lying in the Bags of different sizes occupying the remaining 40% of the area. Another 20 Bags of different sizes with some on wooden pallets were actually outside the said Plot. Overall, in and around the said Plot, around 75-100 Bags of different sizes were only lying around in a haphazard manner, so they could not be properly checked.
17. The insurance claim of the complainant was repudiated by the opponent/Insurance Company mainly on the ground that the stock was not lying in a godown, but it was lying in an open Plot. The premises that is an open Plot is not covered under the contract of policy.
18. The Learned Counsel for the complainant fairly urged that terms of the policy usually governed the contract between the parties and they have to abide by definition given therein and all those expressions appearing in the policy have to be construed as it is and something cannot be added, subtracted or substituted. Parties cannot rely on the definition given in other enactments. In interpreting documents relating to a contract of insurance, the duty of the Court is to interpret the words in which the contract is expressed by the parties, because it is not for the Court to make a new contract, however, reasonable, if the parties have not made it themselves. To ascertain the nature of the contract, it is necessary to look at the proposal, letter of acceptance and cover note. Therefore, it is a settled law that the terms of the contract have to be strictly read and natural meaning be given to it. No outside aid should be sought unless the meaning is ambiguous.
19. Learned Counsel for the complainant tried to harp upon that open Plot surrounded by the walls can be termed as godown for storage of goods. It is insisted upon that the Plot with the compound wall is recognized as godown for storage.
20. In the case of Polymat India (P) Ltd. V/s. National Insurance Co. Ltd., (2005) 9 SCC 174, the Hon’ble Apex Court has held as under :-
“It is duty of the Court to interpret the document of contract as was understood between the parties, strictly, without altering the nature of the contract. A different interpretation cannot be given dehors the context.”
21. Now, we will ascertain the nature of contract between the parties on the basis of letter and proposal form submitted by the complainant to the opponent/Insurance Company. Letter dated 29/09/2004 submitted by the complainant clearly speaks that the godown should cover under the policy. Clause No.3 of the letter reads as under :-
3. Following godown should cover under the policy :
(a) Plot No.1106, Road No.12, Village Kalamboli, Tal. Panvel, Dist. Raigad.
(b) Plot No.552, Village Kalamboli, Tal. Panvel, Dist. Raigad.
22. It can be gathered from the proposal form that the godown is covered under the policy and not the open Plot. In the proposal form in Para 21(a) construction details are given. In the proposal form, description of walls, floor and roof is sought. It is made clear that the walls should be of bricks and floor and roof is of RCC. When there is a mention of roof, it means godown and not the open Plot. It is pertinent to note here that the stock stored in the open is struck down. It is clear that the open Plot was not covered under the godown.
23. On 24/12/2004 the complainant had written a letter to the Insurance Company in reference to policy No.250600/11/04/3101560. By said letter it is requested to add the address of godown to cover under the policy as -
(a) Plot No.552, MIDC Taloja, Kalamboli.
(c) Plot No.445, MIDC Taloja, Kalamboli.
It was requested on behalf of the complainant to add godown to cover under the policy and not open Plot. Again by letter dated 05/09/2005, the complainant with reference to policy No.250600/46/04/7500271 raised the claim on account of flooding at godown and not of open Plot. Letter dated 12/09/2005 with reference to policy No.250600/11/04/3101560 the complainant had raised claim on account of flooding at godown. Own letters of the complainant issued to the Insurance Company make it clear that the stocks lying in the godown were covered under the policy and not the stock lying in the open Plot. The Surveyor has rightly observed that the policy basically covered the material stored in Non-kachcha godown and not goods kept in the open. As such claim is rightly rejected and there is no deficiency in service on the part of the opponent/Insurance Company.
24. Apart from that the complainant failed to quantify the loss. In Floater Policy bearing No.250600/11/04/3100001560, the materials stored in the godown are covered. The description of risk covered is given as “Storage of Non-hazardous goods subject to warranty that goods of Category of I, II, III, Coir waste, Coir. Stock lying in the open Plot was never covered. Considering all these facts, repudiation of the claim cannot be said to be illegal and incorrect. There is no deficiency in service on the part of the opponent while rendering services. The complainant is not entitled for claiming compensation on the ground of deficiency in service from the opponent.
25. In view of above discussions, it is clear that complaint deserves to be dismissed and with this view, we pass the following order :-
-: ORDER :-
1. Complaint stands dismissed.
2. Parties to bear their own costs.
3. Copies of the order be furnished to the parties.
Pronounced
Dated 25th September 2014.
