SHAKTI PAPER vs National Insurance Co Ltd

THE complainant, who is a Small Scale Industry and is a Proprietorship Firm, has filed this case to direct the National Insurance Company, represented by opposite party Nos. 1 to 3 to settle the claim in respect to Fire Policy No. 153001/11-13/004/99 for insured sum of Rupees 10 lakh in his favour and to pay interest at Bank''s rate and to award exemplary cost against them for causing deficiency in service to him.

COMPLAINANT''s case in brief is that the State Bank of India, Rairangpur Branch, opposite party No. 4 sanctioned vide order dated 18. 3. 1996 cash credit working capital loan Rupees 15,00,000 in favour of the complainant to promote the Industrial unit. As per Clause 5 of the sanction order, the Stock and Store of Raw Material of complainant''s Small Scale Unit, which were hypothecated to the opposite party No. 4 Bank, were insured against fire accident with opposite party Nos. 1 to 3. At that time, the stocks of raw material and finished goods such as Exercise Books, Registers, etc. worth Rupees 10 lakh under Insurance Fire Policy No. 153001/11-13/004/99 were kept in the rented house of Swaroop Kumar Giri of Hatabazar, Mayurbhanj and the stocks of raw materials and finished goods worth Rupees 6. 50 lakh under Insurance Fire Policy No. 153001/11-13/005/99 were kept in nearby another rented house of Pritish Sahoo of same Hatabazar. Said two Fire Insurance Policies were entered into in the joint name of opposite party No. 4 Bank and the complainant as per the sanction order of the said Bank. Said Bank paid the premium amount on behalf of the complainant which was being debited in complainant''s account. The Insurance Company issued the Cover Note dated 11. 5. 1999 and the policies were valid upto 16. 4. 2000. The related insurance policies are being retained with the Bank. The stock having insured value of Rupees 10 lakh were shifted to the house of the complainant in the year 1997 from the rented house of Swaroop Kumar Giri. In the year 1999, the stock having insured value Rupees 6. 50 lakh were also shifted to complainant''s said house from the rented house of Pritish Sahoo. Shifting of stock and finished materials was intimated to the Bank Officials vide letter dated 20. 10. 1999. The Bank officials were regularly visiting the site and were inspecting the stock and finished materials every month and were preparing reports and have shown in their sign board that the stock and finished materials have been hypothecated to the Bank.

The further case of the complainant in brief is that when both the Fire Policies were valid, complainant''s premises caught with fire due to electric short circuit on 4. 4. 2000 and damaged the raw materials and finished goods. On 5. 4. 2000, complainant intimated about this to the Insurance Company and on receipt of the prescribed form from the Insurance Company, complainant lodged two separate Fire claims to a tune of Rupees 18,02,545 as per the prescribed proformas of the Insurance Company. Insurance Company, thereafter, deputed a Surveyor who assessed loss due to fire Rupees 19,15,235. 75 paise. But, though Insurance Company vide letter dated 30. 08. 2001 settled claim at rupees 2,14,613 in respect to Fire Policy No. 153001/11-13/005/99 as against insured sum of rupees 6. 50 lakh yet Insurance Company arbitrarily vide letter dated 21. 5. 2001 rejected claim in respect to other Fire Policy No. 153001/11-13/004/99 for insured sum of Rupees 10 lakh on the ground that shifting of stocks were not informed to the Insurance Company either by the complainant or by the Bank. As a matter of fact, after shifting of the stocks, the Bank officials were regularly visiting and were preparing monthly stock report. Cash credit facility from the Bank was availed against the hypothecation of the stocks. It was the duty of the Bank to intimate about shifting to the Insurance Company. The Surveyor deputed by the Insurance Company has also assessed the loss Rupees 19,15,235. 75 paise. In the circumstances, Insurance Company should not have repudiated the claim towards loss in respect to aforesaid policy whose insured value is Rupees 10 lakh while sanctioning loss in respect to the other policy worth Rupees 6. 50 lakh. In spite of repeated requests to opposite party Nos. 1 to 3 to sanction claim in respect to the repudiated one, as they turned down his request, complainant filed the present C. D. Case.

ON the other hand, the case of the opposite party Nos. 1 to 3 as per their joint written version in brief is that they have not caused deficiency in service. The claim in respect to Policy No. 153001/11-13/008/re/99 policy for Rupees 6. 50 lakh having been settled and loss voucher (Annexure-R/6) having been discharged unconditionally, they are not liable to pay any more amount in respect to Policy No. 153001/11-13/00007/re/ 1004/99 with sum assured Rupees 10 lakh. As a matter of fact, two separate policies were issued in favour of the complainant through opposite party Bank in respect to stocks in manufacturing unit-cum-godown hypothecated to said Bank. One Policy No. 153001/11-13/00008/re0004/99 (marked Annexure-R/2) as per proposal (Annexure-R/1) for sum assured rupees 6. 50 lakh kept in complainant''s premises and the other policy No. 153001/11-13/00007/re/0004/99 (marked Annexure-R/3) as per proposal (Annexure-R/1-A) for sum assured Rupees 10 lakh in respect to stocks kept in the premises of Mr. Pritish Sahoo. The policy period of both policies were from 17. 4. 1997 to 16. 4. 1998 which were renewed for further period from 17. 4. 1999 to 16. 4. 2000 as per Annexures A-2 and A-3 series. Stocks worth Rupees 6. 50 lakh were kept in the own premises of the complainant and stock worth Rupees 10,00,000 were kept in the rented house of Mr. Pritish Sahoo. They were never intimated either by the Bank or by the complainant about relocation. So the insurers (opposite party Nos. 1 to 3) have no knowledge about shifting of said stocks from the premises of Pritish Sahoo to the own premises of the complainant. They have never issued two claim forms to the complainant and complainant had made claim as per one claim form (Annexure-R/5 ). The loss is only in respect to aforesaid policy where sum insured is Rupees 6. 50 lakh. In these end of the view, they have no liability in respect to the other policy, the stocks insured being kept in the premises of Mr. Pritish Sahoo. The opposite party No. 4 Bank in a separate written version has denied any responsibility and liability in respect to the claim of the complainant as per the C. D. Case. Opposite party No. 4 Bank states that while sanctioning cash credit loan Rupees 15 lakh on 18. 3. 1996 in favour of the complainant, the stocks and stocks of finished goods which were kept only in two godowns were insured with the Insurance Company as per two policies referred to above by opposite party Nos. 1 to 3. The opposite party No. 4 Bank has no information about shifting of aforesaid insured articles worth rupees 10 lakh from the rented house of Pritish Sahoo to complainant''s own premises. No records in the Bank are there to show such shifting. Complainant has never intimated the Bank in respect to said shifting. Though the complainant-borrower was required to submit stock statements at monthly intervals yet he was not maintaining its regularity and Bank was procuring the same after much persuasion and even on personal contact. Moreover, whenever the Bank Officials were going to verify the stocks, most of the time, they found the godowns were locked. As the complainant was making various irregularities, the loan was called up and the unit was advised vide letter dated 25. 10. 1999 to insure the stock by himself as policy expires on 15. 4. 2000. Thus opposite party No. 4 Bank has committed no deficiency in service and the settlement of claim primarily being a dispute between the complainant and Insurance Company, the C. D. Case against him is not maintainable.

WE have heard the learned Counsels appearing from both sides. Perused the pleadings of the parties and the xerox copies of letters and documents filed before us. Admittedly, stocks and stocks of finished goods for sum assured Rupees 6. 50 lakh kept in the premises of the complainant were insured under Fire Policy No. 153011/11-13/00008/re 0004/99 in respect to which opposite party Nos. 1 to 3 have settled the claim at Rupees 2,14,585 for loss due to fire as per loss voucher R/6. Complainant does not raise objection to this. He has filed the C. D. Case alleging fault and negligence against the Insurance Company in not settling claim in respect to the stock and finished articles covered under the aforesaid Policy No. 153001/11-13/00007/re/0004/99. The Insurance Company, through opposite party Nos. 1 to 3 has categorically denied to have caused any fault or negligence in this respect on the ground that the stocks and finished goods as per this policy were not affected by fire being kept in the rented house of Mr. Pritish Sahoo and if at all there is shifting of these articles from the premises of Pritish Sahoo to complainant''s premises, they have not been intimated about the same. Opposite party No. 4 Bank also denies any knowledge in respect to this shifting. In these premises, the points arise for determination are as to: (i) whether the stock and stock of finished goods from the premises of Mr. Pritish Sahoo were actually shifted to the premises of the complainant by the time, the accident of fire at the premises of the complainant took place and the fact of shifting was intimated by complainant to the Bank, whereas the Bank was negligent in intimating this to the Insurance Company, and (ii) as to whether the Insurance Company is at fault and is negligent in not settling claim in respect to the stock and finished goods insured for a sum of Rupees 10 lakh as per the aforesaid Insurance Fire Policy. In respect to aforesaid first point, it may be stated here that the burden lies on the complainant to prove first of all that stocks and stocks of finished goods kept at the premises of Mr. Pritish Sahoo were shifted to his premises when the incident of fire took place. Then his other burden is to prove that in spite of his information regarding such shifting to opposite party No. 4 Bank, the Bank is negligent for not intimating Insurance Company in this respect. But, it seems complainant has failed to discharge both the burdens. He has not filed any evidence through affidavit even evidence of said Pritish Sahoo and any documents in support of his plea. Complainant has stated in the complaint petition that as per a letter dated 20. 10. 1999, he had intimated opposite party No. 4 Bank about such shifting, but Bank failed to do the needful with Insurance Company. He has filed the xerox copy of such a letter dated 20. 10. 1999 (Annexure-3 ). But complainant has not produced any materials to establish that it was either despatched to the Bank or received by the opposite party No. 4 Bank, more particularly when opposite party No. 4 Bank does not admit to have ever been intimated about shifting by the complainant. Therefore, a conclusion can safely be arrived at that, complainant has never intimated about shifting of the same from premises of Pritish Sahoo to his own premises. Therefore, opposite party No. 4 Bank cannot be blamed for suppression of this fact from Insurance Company.

IN respect to aforesaid second point, complainant has not intimated about such shifting to Insurance Company. In these end of the view since Insurance Company has not been intimated about shifting of stocks and stock of finished materials covered under said policy for sum assured Rupees 10,00,000, Insurance Company has no obligation to assess loss due to fire and to settle claim in respect to these stocks and stock of finished materials kept in complainant''s premises. Complainant has not produced xerox copies of two claim forms as has been stated in the complaint petition, whereas opposite party Nos. 1 to 3 speak about submission of one claim form and have also filed a xerox copy of the said claim form marked Annexure-R/5. Said claim form does not speak / indicate that the stocks kept in the premises of Pritish Sahoo were kept in complainant''s premises at the time when fire incident took place and claim has been made in respect to said stocks also. Thus nothing is there to show that aforesaid stocks and finished goods insured for Rupees 10 lakh as per separate Insurance Policy were very much available there and were damaged by fire on the fateful day. Complainant admits that the loss was surveyed by a Surveyor. Thus after necessary inquiry, the Insurance Company assessed the loss due to fire in respect to those articles insured for Rupees 6. 50 lakh and complainant has no objection to the amount settled by Insurance Company in this respect. In the circumstances, there being no materials at all that said articles covered for Rupees 10 lakh were very much available in the complainant''s premises after shifting and were damaged in fire, Insurance Company has committed no fault or negligence in not settling claim in that respect. The Insurance Company has not been intimated either by the complainant or by opposite party No. 4 Bank about said shifting. Therefore, in view of Condition No. 3 (a) of the Fire Policy ''c'' (Annexure-R/4), the Insurance Company has no responsibility in respect to said property affected by fire. In view of the materials as discussed above, the complainant is not entitled to any claim towards loss in relation to Fire Policy No. 153001/11-13/00007/re / 0004/99 for sum assured Rupees 10,00,000. Therefore, the Insurance Company represented by opposite party Nos. 1 to 3 have committed no deficiency in service to the complainant in respect to this policy. Complainant has not sought for any relief against opposite party No. 4 in this case. Hence, the C. D. Case is not maintainable.

IN the result, the C. D. Case is dismissed on contest without cost. Complaint dismissed.