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ANDHRA PRADESH STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, HYDERABAD
Honble Mr. Justice A. Venkatarami Reddy, President &
Mrs. J. Ananda Lakshmi, Member
LAKSHMI TRADING COMPANY—Complainant
versus
DIVISIONAL MANAGER, NEW INDIA ASSURANCE
CO. LTD. & ORS.—Opposite Parties
C.D. No. 10 of 1990 — Decided on 8.8.1996
Counsel for the Parties:
For the Complainant:Mr. V. Gourisankar Rao, Advocate.
For the Opposite Parties:Mr. Komireddy Ramulu, Advocate.
An insurance company cannot repudiate its liability under a policy on arbitrary and unfounded grounds. Such repudiation amounts to deficiency of service and the insured is entitled to compensation.
Headnote:
INSURANCE - SHOPKEEPERS INSURANCE POLICY - COVERAGE - RETAIL WINE SHOP - ARSON AND LOOTING - LIABILITY OF INSURANCE COMPANY - DEFICIENCY OF SERVICE - COMPENSATION.
Fact of the Case:
The complainant, Lakshmi Trading Company, filed a complaint against the Divisional Manager, Regional Manager, and Head Office of New India Assurance Company Ltd., claiming compensation for the loss suffered due to arson and looting of their retail wine shop in Vijayawada. The complainant had taken a shopkeepers insurance policy from the opposite party covering the period from 20.9.88 to 19.9.89 for a sum of Rs. 4 lakhs. The insurance company repudiated the claim on the ground that the policy did not cover the retail wine shop of the complainant at Bandar Road.
Finding of the Court:
The court found that the complainant had shifted his retail business to the premises bearing D. No. 27-37-47/4 Attarattaiah Street in 1985, which was the subject matter of arson and looting. The court also found that the insurance policy taken by the State Bank of Hyderabad on behalf of the complainant was in regard to the premises bearing D. No. 27-37-47/4 Attarattaiah Street, Governorpet, Vijayawada, and that the Surveyor assessed the loss in the same premises. The court held that the repudiation of liability by the insurance company was arbitrary, not bonafide, and amounted to deficiency of service.
Issues: 1. Whether the shopkeepers insurance policy taken by the State Bank of Hyderabad on behalf of the complainant covers the retail shop premises? 2. Whether the complainant is carrying on retail shop business in premises bearing D. No. 27-37-43/4 Attarattaiah street?
Ratio Decidendi: The court held that the insurance policy taken by the State Bank of Hyderabad on behalf of the complainant covers the retail shop premises bearing D. No. 27-37-47/4 Attarattaiah Street, Governorpet, Vijayawada, and that the complainant is carrying on retail shop business in the said premises. The court relied on the following evidence: * The shopkeepers insurance policy issued by the opposite party mentions that the stocks of all types of brandy, liquors whilst stored and or kept in Class 'A' construction building situated at Attarattaiash Street, Governorpet, Vijayawada-2 occupied as shop only was covered by the policy. * The State Bank of Hyderabad paid a sum of Rs. 1,178/- towards insurance premium on 20.9.88 for insurance of M/s. Lakshmi Trading Company which is carrying on business in the premises bearing D. No. 27-37-47/4, Attarattaiah Street. * The Surveyor assessed the loss in the premises with regard to which the claim is made by the complainant.
Final Decision: The court allowed the complaint in part and directed the opposite parties to pay to the complainant a sum of Rs. 1,11,000/- with interest @ 18% p.a. from 15.4.89 till the date of payment. The complainant was also entitled for payment of Rs. 1,000/- by way of costs.
Mr. Justice A. Venkatarami Reddy, President — This complaint CD 10/90 was filed by Lakshmi Trading Company against, (1) Divisional Manager, (2) Regional Manager, and (3) Head Office of New India Assurance Company Ltd., claiming a sum of Rs. 1,99,712.71ps. being the loss suffered by the complainant in the arson and looting that took place on 26.12.88 at Vijayawada.
2. The case of the complainant is that he is a dealer in Indian liquors and beers carrying on retail business in the premises bearing D. No. 27737-47/4 situated at Arrarattaiah Street and Bandar Road, Governorpet, Vijayawada-2 after obtaining necessary licences from the Excise Department and also the certificates of Registration from Sales Tax Department. The complainant through its Banker State Bank of Hyderabad paid the necessary premium of Rs. 1,178/- and took a shopkeepers insurance policy from the opposite party No. 1 covering the period from 20 9.88 to 19.9.89 for a sum of Rs. 4 lakhs. During the subsistence of the policy on 26.12.88 consequent on the murder of Local M.L.A. Vangaveeti Mohan Rangao Road, the shop of the complainant alongwith so many shops were subjected to arson and looting. The complainant gave F.I.R. to the police and the premises was also inspected by the revenue officials who estimated the loss suffered by the complainant. After informing the opposite parties about the incident on 14.1.89, submitted his claim to the Divisional Officer of the opposite parties at Vijayawada. By letter dated 21.4.89 the complainant was informed by the Divisional Manager that the shop-keepers comprehensive policy covers the premises situated at Attarattaiah Street, Governorpet, Vijayawada and no policy was issued covering the retail wine shop of Bandar Road, Governorpet, Vijayawada and hence they repudiated their liability and closed the file as no claim.
3. The representations made by the complainant for re-considering the matter did not bear any fruit. After some correspondence and issuance of Lawyer notice to the opposite parties, this complaint was filed. According to the complainant, that what was insured is the shop premises bearing D. No. 27-37-47/4, Attarattaiah Street and the other premises in the same street was merely a godown which was not insured. According to the complainant in the year 1984 the State Government has divided the complainant's licence into two types i.e. whole- sale and retail and after taking the shop permises bearing D. No. 27-37-47/4 which was a corner shop opening to Attarattaiah Street as well as Bandar road with the permission of the Excise Department, he shifted his shop premises to D. No. 27-37-47/4 after obtaining the necessary lease in the year 1985. According to the complainant he informed the same to the Insurance Company on 7.5.85. The certificate of registration issued by the Commercial Tax Department also shows that he is having a retail shop at 27-37-47/4 and in fact it is only the shop premises that was covered by the insurance policy and the opposite parties deputed their Surveyor with regard to this premises only. As the premises bearing D. No. 27-37-47/4 which faces and opens on two roads i.e. Attarattaiah and Bandar Road there is some amount of confusion and the complainant after the incident closed the access from Attarattaiah Street and transacting the business through door that opens to Bandar Road. It is also submitted that the State Bank of Hyderabad addressed letters dated 17.3.89 and 4.5.89 to the opposite parties requesting to settle the claim of the complainant. But the opposite parties did not settle the claim although a Surveyor was appointed and submitted his report assessing the net loss at Rs. 1,11,000/-.
4. In the counter filed, the opposite parties generally denied all the allegations made in the complaint including the incident and the loss said to have been suffered by the complainant. It admitted the payment of premium and issuance of shop-keepers policy to the complainant. But pleaded that t
