ALKESH SAINI & ORS. vs SBI GENERAL INSURANCE COMPANY LIMITED & ORS.

Appellant/Complainant being aggrieved by order dated 2.12.2014 passed by H.P. State Consumer Disputes Redressal Commission, Shimla (for short, ''State Commission'') vide which his complaint was dismissed with cost of Rs.10,000/-, has filed present appeal.

Appellant''s case is, that he constructed house at site, bearing Khasra Nos. 805, 875 & 896 in Mauza Majeth, Tehsil & District Shimla, after getting plan approved from the Municipal Corporation, Shimla. Entire structure was four-and-a-half storeyed, out of which he owned two storeys plus attic. It was occupied by him for his residence.

It is alleged, that on 14.08.2012, appellant was contacted telephonically by an official of Respondent/Opposite Parties, for insurance of his aforesaid house. On 19.08.2012, appellant was again contacted by the respondents telephonically and was told that a local Surveyor had inspected his house and respondents were ready to insure the same. Upon that, appellant paid a premium of Rs.5,593/- online and his house was insured, vide policy effective from 21.08.2012 (15.55 hours). On 22nd August, 2012, at 7.30 am, due to landslide and heavy rain, the insured house was completely damaged. Intimation of the damage was given to the respondents. A Surveyor was deputed. Appellant was required to submit certain papers, which he submitted promptly. However, respondents repudiated the claim, vide letter dated 01.01.2013, on the ground that "claim fell outside the ambit of the policy, being prior to policy inception date". Appellant approached the Grievance Cell of the respondents, but the said Cell rejected his representation /complaint, vide communication dated 07.06.2013 on the ground that the building had already been damaged, when the insurance was sought. Appellant then approached Insurance Ombudsman, Chandigarh, by making a complaint. The Ombudsman also dismissed his complaint, vide order dated 05.03.2014. It is alleged by the appellant that his house was intact on the date of insurance. The damage took place on 22.08.2012, at 7.30 am and a report with the police as also Patwari was lodged after damage had taken place. Since, the house was insured for the sum of 40.00 lacs and that it having completely and totally damaged, therefore, he is entitled to the entire amount, for which it was insured.

Respondents contested the complaint and took the plea that none of their officials ever approached the appellant, for insurance of his house nor was the house ever inspected by any of their officials. As a matter of fact, Aruna Saini, sister of appellant (who is appellant in F.A. No. 48 of 2015), paid the premium online from a branch of State Bank of India, from a place in Jalandhar District of Punjab State, on 21.08.2012. On the basis of that payment of premium, policy document was issued, effective from 21.08.2012 (15.55 hours) on 23.08.2012. The proposal form for seeking insurance was submitted on 23.08.2012.

It is further alleged, that partial damage to the house of appellant had taken place on 19.08.2012 and this fact was concealed by the appellant at the time of seeking insurance. It is further stated that Surveyor-cum-Investigator deputed by respondents, collected record from various offices, including that of S.D.O. (Civil) and Police Station, which indicated that landslide had occurred on 19.08.2012, in which house of one Sangita Devi had been completely damaged and partial damage to the building in which insured''s residence was located, was also caused. Appellant had concealed this fact while filling in the proposal form, as in the said form he stated that the property was in a good state of repair and would be maintained so at all times. Thus, on account of suppression of material facts and mis-statement that the building was in good state of repair, the claim has been repudiated.

The State Commission vide its impugned order dismissed the complaint with cost of Rs.10,000/-.

Being aggrieved, appellant has filed the present appeal.

I have heard ld. counsel for the appellant and gone through the record.

It is submitted by ld. counsel that before issuing the insurance policy, respondents had conducted a pre inspection of the building. The offer made by the appellant was duly accepted by the respondents by issuing a valid policy. Thus, there was a valid contract between the parties. It is also stated that State Commission did not consider the evidence given by the appellant by tendering affidavits of his neighbors, that building was safe on 21/08/2012.

The State Commission in its impugned order observed; " 8 . Complainant has not disclosed the name of the official of the opposite parties, who allegedly contacted him on 14.08.2012, proposing for the insurance of his house nor has he disclosed the name of the official, who allegedly talked to him on 19.08.2012 and conveyed that a local Surveyor had inspected the building and the opposite parties were ready to insure the same. Also, the complainant has not adduced any evidence, showing that, in fact, any official of the opposite parties made any call on his telephone number. He has not even disclosed his own telephone number, on which the call was received. His self-serving affidavit with regard to this fact cannot be said to be sufficient evidence, particularly when the opposite parties have denied the plea that they approached the complainant to seek insurance of his house, or that his building had been inspected by their local Surveyor and found fit for insurance.

The proposal form was submitted on 22.08.2012 not by the complainant himself, but his sister, Aruna Saini. In the proposal form, which is dated 22.08.2012, it is stated that the property is in good state of repair. Insurance premium was also paid by said Aruna Saini, through online transaction, on 21.08.2012. This fact also negates the plea of the complainant that insurance was done after the inspection of his building, as conveyed, on telephone.

We find on record a police report, Annexure R-2. This report is entered in the Roznamcha, by a police official, namely ASI Shiv Kumar. The time of the report is 2.15 am and the date is 20th August, 2012. It is recorded in the report that a police party, headed by ASI Shiv Kumar, was present on the road, near the house of the complainant, as house of one Sangita Devi, had earlier collapsed due to sagging of hillside and thereafter the house of one Deep Ram had also collapsed. He reported that when Deep Ram''s house collapsed, he went to the spot and noticed that besides the house of Deep Ram, house of Alkesh Saini (the present complainant), which was four-and-a-half storeyed, was also in danger of collapse and that the house itself and its walls had developed cracks and, therefore, the inhabitants had been evacuated. There should be no reason to disbelieve this report, which is by an independent person, namely a police official, who was in no way interested in the opposite parties nor had he any axe to grind, against the complainant.

The aforesaid report apart, the Surveyor deputed by the opposite parties to investigate the claim of the complainant, procured copies of the statements made by certain persons to the S.D.O. (Civil), Shimla, seeking compensation for the loss sustained by them due to the landslide and the consequential damage to their houses. He recorded the statement of one Anil Kumar Ghai, copy of which is available at page-102 of the file. Anil Kumar Ghai, in his statement, stated that he had taken a flat from the complainant in the year 2009 and that on 19.08.2012, around 8.00 pm, the retaining wall on the left side of the building collapsed, due to which a window and a door of his flat were broken and that, therefore, he vacated the flat and took his family members to one of his relatives in Chakkar locality. He further stated that when around 10.00 pm, he visited his flat, he saw that an adjoining four-and-a-half storeyed building had completely collapsed. He further stated that by 7.30 am on 20th August, 2012, all the houses adjacent to his flat, had collapsed and he heard the sounds of cracking of his own flat and the breaking of tiles and, therefore, he removed his household goods from two of the rooms, but from the kitchen & one bed room, he could not remove his goods, because of the dangerous condition of the flat. He stated that on 21st August, 2012, also his flat had been collapsing and by 7.30 am on 22nd August, 2012, his flat got buried under the debris of the upper storeys of the building.

Another statement procured by the Surveyor from the office of S.D.O. (Civil), is of Aruna Saini, a sister of the complainant and as per her statement, her flat, which she had purchased from the complainant in the year 2005, had collapsed on 22nd August, 2012, in the morning.

Complainant also made a statement, copy of which is available at page-104, to the S.D.O. (Civil), and according to this statement, on 22nd August, 2012, due to heavy rain, the first floor of his building sagged, because of which the entire four-and-a-half storeyed building sank.

Also, the Surveyor obtained copies of reports prepared by the Patwari, which are available at pages 105 to 110, and as per report available at page-106, complainant''s house was completely damaged on 22.08.2012 at 7.30 am. One more report of the Patwari, copy of which is available at pages 145 & 146 of the record, was obtained by the Surveyor. The report records that on account of a landslide, which occurred on 19.08.2012, houses of seven persons, including that of the complainant had been damaged and loss sustained by the complainant was to the tune of 90.00 lacs.

The aforesaid documents clearly indicate that the house of the complainant, which he insured with the opposite parties, had been completely destroyed by 7.30 am on 22.08.2012. The proposal form, Annexure R-1, submitted by Aruna Saini, a sister of the complainant, on 22.08.2012, can be presumed to have been filled in and submitted after 10.00 am, because normally the offices open at 10.00 in the morning. That means, by 10.00 am, it was known that the house, in respect of which the proposal form had been filled in, had already collapsed. If that is so, the declaration made in the proposal form that the property was in good state of repair, was false to the knowledge of the complainant and his representative, who filled in and submitted the proposal form, Annexure R-1. Not only this, the evidence, as discussed herein-above, shows that the house of the complainant had developed cracks even before the payment of premium. ASI Shiv Kumar, in his report entered at 2.15 am on 20th August, 2012, Annexure R-2, noted that the building and walls of the house of the complainant had developed cracks and that the hillock and the land near the house had also developed cracks, because of which the house had been got vacated and the occupants shifted to the nearby house of Dev Raj.

Part-III of the proposal form, Annexure R-1, says that the opposite parties are entitled to avoid contract of insurance in case any information provided therein by the complainant is found to be false. Information with regard to the house indicated in the form, being false to the knowledge of the complainant, the opposite parties were, therefore, within their right to avoid the policy and repudiate the claim.

The evidence adduced by the complainant consists of his own affidavit and affidavit of some other persons, including one Dev Raj Sharma. Dev Raj Sharma, in his affidavit has stated that due to heavy rain on 19.08.2012, he heard rattling and cracking sounds erupting from the buildings of Sangita Thakur and Deep Ram and that by 22nd August, 2012, 7.30 am, Saini Niwas, i.e. the building of the complainant, had been completely damaged. The affidavit supports our aforesaid observation that by the time the proposal form was filled in, the house had already collapsed and, therefore, the declaration made in the proposal form was false to the knowledge of the complainant and his representative, Aruna Saini.

In view of the above stated position, complaint is dismissed with costs quantified at Rs.10,000/-."

The basic issue which arise from consideration is, as to whether respondents were justified in repudiating appellant''s insurance claim on account of suppression of material facts and mis-statement, that building was in good state of repair.

Appellant''s in its entire complaint has not mentioned the name of any official of respondent''s company, who told him about the policy features. Be that as it may, the copy of proposal Form (placed at page no.115-116 of the paper book) is dated 22.8.2012. This form was signed at Chandigarh by "Aruna Saini".

There is overwhelming evidence on record to show that when the proposal form in the present case was filled up, at that time the insured building had already collapsed and was totally damaged. Thus, appellant had obtained the insurance policy on suppression of material facts. In this regard, report of Deputy Commissioner, Shimla and statement of appellant''s tenant Anil Kumar are very material piece of evidence.

Deputy Commissioner, Shimla had conducted an inspection on 21.8.2012 and in his report it is stated; " INSPECTION REPORT

I visited Totu Area along with both the Additional District Magistrates, Sub Divisional Magistrate and Tehsildar Shimla (Rural) on 21 st August 2012 at about 6.00 p.m. in the evening. I have been persistently receiving telephone calls from the inhabitants of that locality and this visit was follow up visit on the rehabilitation and other rescue operations undertaken by the ADM (L&O). SMM (Rural) and Tehsildar, Shimla (Rural). After coming back to the office, I had requested the Assistant Commissioner, MC to attend a meeting alongwith the concerned officers of the Municipal Corporation. The Superintending Engineer, HPPWD had also been contacted and when the meeting was held in my chamber, he had preferred to visit the spot. The main thrust of this meeting apart from the immediate issue of rehabilitating the families is to try and find out the measures so as to salvage;

A building which is just adjacent to debris and this tilted building according to the local persons there could be salvaged in case upper two stories could be removed/demolished before these actually give way and the anticipated damage to the adjoining other building and the one down below could be minimized.

This suggestion is being forwarded to the authorities of the Municipal Corporation/Public Works Department for implantation/their opinion taking into record the amount of unstable debris/strata accumulated there and the resultant force which may sweep anything within its range. Municipal Corporation Shimla and Superintending Engineer HPPWD were requested to take action as is warranted in the circumstances. This building belongs to Shri Akhilesh Saini.

Without commenting on the exact cause of this huge land slide triggered by the inconsistent rains does appear to have a genesis in some of the unsecurable construction/removal operations being undertaken by one Mrs. Sangita. One huge vertical retaining wall is visible on the spot which measures more than 80 feet and the vertical excavation had made the strata totally vulnerable. XEN, MC Shimla in the meeting further disclosed that beyond the top of that hillock where the retaining wall had been attempted a water channel also had been made by her and some fissures have been noticed. This structure which unanimously resulted in this collapse needs to be scrutinized further as under; 1. The MC may look into the aspect of passing of map including the mandatory certification on the structure stability of the building.

The agitated victims had screamed about the JCB operation going on this loose soil for months together. The composition of the soil to a layman appears to be hardly suitable for construction activities. MC may revisit the whole area and take appropriate action. During our visit people had also brought to our notice the "fact" of Smt. Sangita having temporarily channelized the water on the hillock aside resultant in seepage and the resultant collapse.

It is understood that the culverts meant for proper drainage had either been blocked by the people or got blocked. The SE, PWD had also been asked to attend the meeting had visited the spot at exactly the same time and he assured the comments by tomorrow morning. While on the spot some of the families screamed about their rehabilitation. One can understand the reluctance of the families to relocate themselves to the places which the administration was offering for their temporary shelter. The local councilor had advocated them shelter in the building belonging to the Milk Federation. The issue of temporary shelters was left to SDM and Tehsildar who are camping on the site when we came back. The relief is also being given by the SDM within the prescribed parameters. The traffic diversion has already been ordered and it was resolved that MC may put on caution boards including one about the traffic.

Deputy Commissioner, Shimla"

Beside this, there is statement of appellant''s tenant which read as under; "Statement of Shri Anil Kumar Ghai son of Shri Amar Nath Ghai, Age 61 years, Retired employee, HP Milk Federation resident of Saini Niwas Tutu. Stated that I had taken this Flat from Aklesh Saini in 2009 in Shiv Nagar, Tutu. On 19.8.2012 at about 8 p.m. I was at my house alongwith my family. Due to heavy rain since morning, the Pucca Dange on the right side of house collapsed, from which the window and door of the room of my fast damaged. Stated that thereafter we have become nervous. I alongwith my family had gone to the house of my relatives in Chakur, thereafter on coming back at 10 PM in the night, on reaching Shiv Nagar, 3 storeyed of 4 ? storeyed house of the adjoining slab has fully collapsed. Therefore due to nervousness, went back to my relatives in Chakur. Stated that in the morning 7.30 a.m. of 20.8.2012, the entire building alongwith my flat had fallen and sounds were coming in my house/flat in the building. From which it was felt that the tiles of the house are breaking. Thereafter with the help of local people and children, the goods of my two front rooms and drawing room was taken out. Thereafter the glass tatted breaking in the house. My goods of kitchen and one bed room remained there, which could not be taken out due to collapse of house.

Stated that on 21.8.2012 the building of my flat was collapsing from the front. For the said reason we did not enter in the house. On 22.8.2012, at 7.30 a.m. in the morning, the entire floor of my flat came under the debris and the upper storeyed of the house fell on it.

Stated that due to having no proper arrangement of the exit of water with the Danga (support) behind the building of my flat, this incident has happened due to seepage of water in Danga (support ) and house. Statement heard and admitted correct.

Sd/-

Anil Kumar

12.9.2012"

In addition, it is an admitted case of the appellant that he had approached "Ombudsman" of the insurance company with regard to his claim. The order passed by Ombudsman, in this regard states; " ORDER (Under the Redressal of Public Grievances Rules 1998 and Arbitration & Conciliation Act, 1996) 1. On 08.09.2013, this complaint was filed by Shri Alkesh Sani about a Long Term Home Insurance Policy No.0000000000390353 issued by State Bank of India General Insurance Company to insure a residential flat no.805/2, Saini Niwas, Tutu, Shimla (Himachal Pradesh) from 21.08.2012 to 20.08.2015. Afterwards, on 22.08.2012, the insured flat was damaged due to landslide, and its claim was denied by the Company. Hence, feeling aggrieved, the complainant had approached this office for a settlement of the claim.

On 20.09.2013, the complaint was referred to Chief Regional Manager, Regional Office, Mumbai for para-wise comments and a self-contained note about the facts of the matter. The complainant was sent P-II and P-III forms for compliance, which reached this office on 25.09.2013.

Today, the parties were called for a hearing at Chandigarh. Shri Alkesh Sani was present and the Company was represented by Shri Mahendra Tripathi, Head Compliance (Legal).

During the course of hearing, Shri Alkesh Saini said that on 19.08.2012, he had applied for insurance of his house, but a policy was issued on 21.08.2012. He pointed out that entire building was quite intact while making a proposal on 19.08.2012. In fact, the entire damage occurred on 22.08.2012. Although, first floor of the house is still intact, upper two floors were demolished under the instructions of the District Administration. Surprisingly, despite a big loss to the insured flat, its claim was not paid by the Company. He pointed out that claim of an adjoining building of Shrimati Sangeeta Thakur, from where the landslide had started and affected his premises, was settled by the same Company.

The representative of the company explained that insurance was obtained on 21.08.2012, whereas landslide that affected the entire area including the building started on 19.08.2012 wherein a major portion collapsed on 22.08.2012. As regards a specific query in the proposal form about condition and maintenance of the proposed building, the insured had given a wrong confirmation. He observed that proposal for the insurance of the building was made after the onset of landslide. Moreover, there is enough evidence to establish the occurrence of mishap before hand. In this context, the policy was voidable on account of non-disclosure and suppression of material facts. So, a claim was rightly repudiated by the company.

After going through the written submissions and verbal pleadings, I am of a view that company''s decision to reject a claim on the ground of pre-existing loss and mis-representation of facts, is justified. Therefore, the complaint is dismissed. To be informed to both the parties. DATED: 5 th March, 2014 (MANIK SONAWANE) PLACE: CHANDIGARH INSURANCE OBUDSMAN CHANDIGARH"

The above documentary evidence lead to only one conclusion that the building for which appellant had obtained insurance policy through proposal form dated 22.8.2012, was already completely damaged on 19.8.2012.

Thus, it is manifestly clear from the record of this case that the appellant did not approach the State Commission with clean hands and has obtained the insurance policy by concealing the material facts and has obtained the same by fraudulent means. The insurance company, under these circumstances, rightly repudiated the claim of the appellant. It is well settled that when a litigant approaches any judicial fora with unclean hands and conceal the material facts then he is not entitled to the relief sought. Reference in this regard can usefully be made to the observations made by Hon''ble Suprme Court in Dalip Singh Vs. State of U.P (2010) 2 SCC 114, where it observed ; "1. For many centuries Indian Society cherished two basic values of life i.e. "satya" (truth) and "ahinsa" (non-violence). Mahavir, Gautam Buddha and Mahatma Gandhi guided the people to ingrain these values in their daily life. Truth constituted an integral part of the justice-delivery system which was in vague in the pre-Independence era and the people used to feel proud to tell truth in the courts irrespective of the consequences. However, post-independence period has seen drastic changes in our value system. The materialism has overshadowed the old ethos and the quest for personal gain has become so intense that those involved in litigation do not hesitate to take shelter of falsehood, misrepresentation and suppression of falsehood, misrepresentation and suppression of facts in the court proceedings.

In the last 40 years, a new creed of litigants has cropped up. Those who belong to this creed do not have any respect for truth. They shamelessly resort to falsehood and unethical means for achieving their goals. In order to meet the challenge posed by this new creed of litigants, the courts have, from time to time, evolved new rules and it is now well established that a litigant, who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final."

It is well settled that no leniency should be shown to such type of litigants who in order to cover up their own fault and negligence, goes on filing meritless petitions in different Fora. Time and again courts have held that if any litigant approaches the court of equity with unclean hands, suppress the material facts, make false averments in the petition and tries to mislead and hoodwink the judicial Forums, then his petition should be thrown away at the threshold.

Thus, after scanning through the entire material on record, I have no hesitation in holding that State Commission, rightly dismissed the appellant''s claim on the ground that the declaration made in the proposal form was false to the knowledge of the complainant and his representative Ms. Aruna Saini. Accordingly, the present appeal stand dismissed with punitive cost of Rs.20,000/- (Rupees Twenty Thousand only).

Appellant is directed to deposit the punitive cost by way of demand draft in the name ''Consumer Legal Aid Account'' of this Commission, within four weeks from today.

In case, appellant fails to deposit the punitive cost within the prescribed period, then he shall be liable to pay interest @ 9% p.a., till realization.

List for compliance on 27.3.2015.