NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Anup K. Thakur, Presiding Member
M/s. M.V. Enterprises – Complainant
versus
United India Insurance Co. Ltd. – Opp. Party
Consumer Case No.258 of 2012
Decided on 23.2.2021

IMPORTANT POINT
Policy coverage provisions should be interpreted broadly regarding tripartite agreement along with the terms of the policy and exclusion clause must be read narrowly.

Headnote:

Consumer Protection Act, 1986 – Section 21 and 2(1)(g) : [Consumer Protection Act, 2019 – Section 58 and 2(1)] – Standard Fire and Special Perils Policy – Deficiency in service – Claim for – Scope – Complainant enjoying cash credit facilities from the Bank – Bank took insurance policy on behalf of the complainant from the respondent – Fire took place in premises of the complainant – Rs. 94,91,411/- as assessed by surveyor paid into cash credit account – Complainant sough direction against Insurance company to pay Rs. 2,90,30,777/- with interest @ 18% p.a. – As per materials on record the complainant made baseless allegations of mal-intent and foul play by Insurance company and bank, without a shred of evidence – None of the facts so far shown any deficiency in response of the OP to the claim for insurance – Complainant has not been able to make its case against the insurance company – Opposite party found to have acted in terms of the policy – Deficiency in service ruled out – Insurance company held not at fault either in process of admitting and processing of claim or in settlement of claim.

Held: After hearing the learned and carefully appraising the record, the following observations are in order.

One, it is hard not to conclude that the complainant has been rather negligent and careless. Admittedly, there is no remedy for the follies of carelessness and the complainant has to bear the consequences. The complainant has made baseless allegations of mal-intent and foul play by the OP and the bank, without a shred of evidence. It has miserably failed to explain its own conduct as reflected in the fact that OP1-Bank was deleted from the memo of parties even as allegations continued to be maintained against OP1 even in the amended consumer complaint. Resultantly, the complaint was never very clear on who it held responsible for it’s loss not having been indemnified as it ought to have been. On the face of it, the complainant seemed happy enough to enjoy cash credit facilities, leaving it to the bank to take insurance on it’s behalf, a situation of having one’s cake and eating it too. When the loss occurred, the complainant could only claim what was in the insurance contract. It’s pleas of reasonableness and intent of insurance clearly had no place in what is a strict contract of insurance.

Two, during arguments as well as in its pleadings, complainant has understandably been seeking a favourable consideration of its insurance claim. However, this cannot alter the fact that the complainant’s request is quite a far cry from the accepted law of insurance viz. the policy with all it’s terms and conditions has to be read as it is. It is not permissible to construe meanings to words and expressions used in the policy. The complainant however would want that even as policy wordings did not mention semi-finished goods, stock in process, the same should be included on the argument that the same was obvious. It is precisely the case of the OP that there is no scope for any such “obviousness” and that the policy wordings have to be strictly read, understood and applied.

Three, on the face of record, it is difficult to see any deficiency in service of insurance by the OP. The dates are relevant. Fire occurred on 22.4.2011, intimation was received by the OP on 22.4.2011 but without any estimate of loss furnished by the complainant, leading therefore to the appointment by the OP of a preliminary surveyor; the appointment itself however was as prompt as could be; no deficiency in service here. Upon receipt of estimate of loss on 2.5.2011 of Rs.4 crore, final surveyor was appointed, again promptly on 5.5.2011. Survey took place from 9.5.2011 to 11.11.2011. None of the facts so far shows any deficiency in response of the OP to the claim for insurance. It is however seen from the record that all the documents sought were submitted to the surveyor by 15.11.2011, and the survey report was thereafter finally submitted on 27.1.2012. Again, no glaring deficiency or delay is noticed on the part of the OP.

Four, learned counsel for the OP has also pointed out that certain actions of the complainant remained unexplained. In particular, soon after filing of this consumer complaint, complainant made a request for amendment of the complaint. This request related to, essentially, para 8 of the consumer complaint. On 16.10.2012, an application for amendment, IA/1/2012, was allowed by the Commission. Vide this, para 8 of the complaint, line no.3 thereof was permitted to be amended by adding the following words after choice: “by acting as agent of the OP No.2 (insurance company)”. The argument advanced by the counsel for the OP is this: the original para 8 of the consumer complaint read as “That in order to secure its loan, Dena Bank, Nehru Place, New Delhi, who has been taking insurance on behalf of the complainant from the insurance company of its choice by acting as agent of the opposite party”; the amendment sought to add the word ‘implied’ before ‘agent’, so the complainant would be now saying that Dena Bank was acting not as an agent but ‘impliedly as an agent’; inexplicably, the amended complaint which was filed subsequently, para 8 thereof, read the same as before. In other words, the complainant was rather confused and unsure of how it was to deal with its financier, Dena Bank, agent or implied agent? It therefore focused entirely on the OP. However, undeniably, the fact of the matter was that the fault in the wording of the insurance policy lay squarely with Dena Bank. It was the bank that was extending credit facilities to the complainant against hypothecation of the complainant’s building, goods, stocks etc.; it was the bank that was insuring the hypothecated goods against any peril by obtaining a standard Fire and Special Perils Policy; it was the Bank that had wrongly filled up the proposal form which sought insurance for building; it was the Bank that had requested the OP to endorse the policy on the same lines as the previous policy with OIC. The OP had done precisely as requested. Indeed, OP could not have done otherwise. So, allegations of deficiency in service by the OP on the main ground that the OP had not appreciated the intent of the policy by not permitting claim against all manner of stocks rather than as mentioned in the policy cannot sustain.

Upon an overall consideration, I am of the considered view that the complainant has not been able to make out its case against the OP. Insurance contracts are contracts of utmost good faith and its provisions are read strictly as they are leaving little scope for any interpretation or any addition by way of other considerations. The complainant ought to have been aware of this. If it was not so aware then it only has itself to blame. The complainant arguably was a going concern and it was it’s business to have kept track of it’s insurance also. The citation relied upon viz. Canara Bank versus United India Insurance Co. & Ors (supra) does not really come to the rescue of the complainant: the facts of the case and the parties therein, notably farmers whose goods stored in the cold storage were affected, were quite different from the case in hand where the complainant is a company in business with cash credit facilities from bank. It has been fairly clearly established that the OP had merely endorsed the insurance policy at the instance of the Bank who had taken out the insurance policy against goods of the complainant hypothecated with it. At no stage had the complainant shown any interest in the contents of the policy, the wording thereof or any other aspect nor has the complainant claimed that it had done so. It is only when fire occurred and loss was caused that these issues came up. At this time, the complainant realized that the insurance policy in existence was not what it ought to have been and hence it, not able to blame the bank for reasons which seem obvious, filed this consumer complaint against the OP. The OP has been able to establish that by having acted, strictly in terms of the policy, it cannot be faulted with any deficiency in service. In the facts of this case, therefore, it has to be held that the OP did not commit any deficiency in service, either in process of admitting and processing of the claim or in settlement of the claim. In view of the discussion above, this consumer complaint, after consideration, is dismissed. There shall be no orders as to costs. Paras 16 to 18)

Result: Complaint dismissed.