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Judgment
Dr.Inder Jit Singh, Member
The present Consumer Complaint (CC) has been filed by the Complainant against Opposite Parties (OPs) as detailed above, inter alia praying for directions to the OPs to:-
i. Pay balance of the principal claim amount under the Policy with interest & 18% p.a.
ii. pay legal cost and compensation for damages for mental torture.
Notice was issued to the OPs on 13.07.2017. Parties filed Written Statement/Reply, Rejoinder, Evidence by way of an Affidavit and Written Arguments/Synopsis etc.
It is averred/stated by the complainant that: -
i. The complainant entered into a Service Provider Agreement (SPA) dated 07.10.2008, which was later changed to a Hire Purchase Agreement (HPA) dated 01.05.2009 for providing Furniture, Fittings and Fixtures (FFF) on hire/lease to Kingfisher Airlines Ltd. (KFA) at its warehouse in Bangalore. To purchase FFF from a third party, Complainant took a term loan of a sum of Rs.5,00,00,000/- from Union Bank of India (Bank) in order to further provide them on lease to KFA per HPA.
ii. On 09.07.2020, Bank, on behalf of the Complainant, availed a Standard Fire and Special Peril Policy (Policy) from OP-1 for protection against any loss to FFF. The policy was renewed every year and was last renewed on 14.08.2012 for a term of one year. For payment of premium, the Bank used to deduct the concerned amount from the loan account of the complainant.
iii. KFA defaulted on payment under the HPA. Complainant initially filed a civil suit against KFA, however, during the pendency of the civil suit, complainant and KFA entered into a settlement Agreement 20.09.2010 wherein apart from agreeing to the terms related to payment by KFA to complainant, the parties also terminated the HPA.
iv. On 12.04.2013, a fire broke out at the KFA warehouse at Bangalore. A claim was lodged with OP-1 who appointed a licensed Surveyor i.e. OP-2 to survey and assess the loss. During the survey, it came to the knowledge of the complainant as well as opposite parties (OPs) that KFA had also obtained the Business Suraksha Classik Insurance Policy (HDFC Policy) from HDFC Ergo General Insurance Co. Ltd. (HDFC Ergo) for protection of various warehouses, including the Bangalore Warehouse.
v. As per Final Survey Report dated 01.07.2013 of OP-2, the total assessed loss was Rs.2,13,27,795/- exclusive of the complainant’s claim with reference to internal and external painting of the warehouse being rejected. OP-2, further apportioned the loss to both the insurance companies i.e. OP-1 and HDFC Ergo applying Clause 11 of the Policy and further recommended a deduction to the tune of 15% of total assessed loss towards Salvage. The complainant objected to application of Clause 11 and rejection of claim w.r.t. internal and external painting of the warehouse.
vi. Claimant invited bids for Salvage. The highest bid received was Rs.66,00,000/- for a total quantity 300 MT material while the actual quantity of damaged product was 100 MT.
vii. Based on the highest bid for Salvage, the OP-1 revised the claim amount to Rs.79,44,358/-. The complainant citing financial difficulties accepted the offer under protest and requested the OP-1 to reassess the claim amount. A Settlement Intimation Voucher dated 28.08.2014 was also signed at the time of payment of Rs.78,06,062/-.
viii. The complainant made repeated requests and numerous correspondences to the OP No.1 including the legal notice dated 28.05.2015 to make remaining payment of the claim as well as the interest on delayed payment, however, the OP-1 failed to make such payment till date.
The OP-1 in their written statement/reply stated that: -
i. The complainant is engaged in large scale commercial activities and the insurance is obtained for commercial purpose, therefore, the complainant is not a consumer. The claim relates to the damage by fire to ‘slotted angle racks’ supplied by the complainant to M/s Kingfisher Airlines. Both, the complainant as also the Kingfisher, had insurance in their own respective names from two different insurance companies. After the fire both, the complainant as also Kingfisher, have claimed the ownership interest upon the said slotted angle racks and have laid claims under their respective insurance policies. There has been no decision of either this Commission or of any other competent Court of Law determining the nature and extent of the interest of the complainant and of the Kingfisher in the damaged racks. The rights, interests, obligations and liabilities of these two parties under their respective insurance policies have not been decided by any Court of Law as yet.
ii. This is a serious dispute as to questions of law and facts in this case. The complainant has not to make M/s Kingfisher a party to this action. Kingfisher is absolutely a necessary party and needs to be heard before this Commission. By not making Kingfisher as one of the parties, the complaint is bad for non-joinder of necessary party and hence merits to be dismissed.
iii. The complainant has made the Surveyor as OP-2. The surveyors are independent professionals licensed by the government to carry out survey and assessment job for a fee charged for their services. They are under no contract with the complainant. The complainant is not a consumer of the services of the said surveyors. The surveyor’s report has already been placed on record. The complaint is bad for mis-joinder of the parties and hence to be dismissed.
iv. The total amount of loss assed by the surveyors is Rs.1,47,17,795/-. Since both the parties, the complainant as also Kingfisher are claiming ownership interest on the damaged property, there can be in no circumstances a claim for Rs.1,47,17,795/- under each policy obtained by two parties. Till the time the rights, interests, titles and obligations of the parties on the damaged property are finally determined and the nature of the insurance decided by the Court of Law, the insurers have no option except to treat these parties as Tenants-in-Common over the damaged property since the claim cannot be paid twice for the same amount of damage and in such circumstances the total amount of loss had been apportioned between the two policies and this OP has already paid its share of loss amounting to Rs.78,06,062/-.
v. The policy specifically, under its condition 6(1)(a) clearly states that the complainant must submit a claim without including profit of any kind. No insured under a policy therefore can derive any amount of profit whatsoever in the event of loss.
vi. It appears that M/s Kingfisher who were insured under a policy by M/s HDFC Ergo General Insurance Co. Ltd. have lodged upon the said insurers the claim for the amount assessed and apportioned in their favour by the surveyors appointed by the said insurers. It is very likely that the said insurers M/s HDFC Ergo have already paid their part of the claim to the Kingfisher. The insurance obtained by Kingfisher from M/s HDFC Ergo was in compliance with the terms of the Service Provider Agreement (SPA) and subsequently the Hire Purchase Agreement (HPA) entered into by the complainant with Kingfisher. The said insurance was with the knowledge, consent and direction of the complainant and apparently, for their benefit.
vii. In case the Commission comes to find that entire assessed loss falls to be considered under this OP’s policy in that event under-insurance provision contained in Condition No. 10 of the policy will be attracted and the assessed amount of loss will get reduced proportionately as the sum insured in Rs.7,32,00,000/- while the value at risk was Rs.8,07,99,527/- and also be necessary for the Commission to decide upon the nature of insurance of Kingfisher’s policy, which was validly taken, and the implications flowing from it. For this purpose also, it is considered necessary to make Kingfisher also a party and consider their pleadings and submissions.
Heard counsels of both sides.
Complainant argued that the principle of Double Insurance is applicable when the same insured avails two or more insurance policies on the same property/interest. In the present case, since there are no two or more insurance policies by the Complainant on the same property/ interest, the present case is not a case of double insurance. the Complainant availed only one insurance policy i.e. the Policy from O.P. No. 1 to get protection from unforeseen loss or damage to FFF and other contents provided by the Complainant to KFA at his warehouse in Bangalore in the capacity of owner of such FFF and other contents. The other insurance i.e. HDFC Policy has been obtained by KFA from HDFC Ergo and secondly it is for protection from any loss or damage to its various warehouses including Bangalore warehouse. Thus, neither the insured nor the insured interest are same to the Policy availed by Complainant. It is a settled principle of insurance law that insurable interest must exist at both times i.e. at the time of taking the insurance policy and also at the time of loss. With the termination of HPA in 2010, KFA had no insurable interest in FFF both at the time of availing insurance services in 2012 as well as at the time of making of claim in 2013.
I tend to agree with the contentions of OP-1 that considering that both the complainant and King Fisher have claimed ownership interest on the damaged/insured items and have laid claims under their respective insurance policies, and the case involves a serious dispute and complicated facts and questions of law, which cannot be decided without hearing M/s King Fisher and without even knowing the details/status of insurance claims made by M/s King Fisher under the insurance policy taken by them from M/s HDFC Ergo General Insurance Co. Ltd., in a summary proceedings under Consumer Protection Act. King Fisher is a necessary party, hence the complaint is bad for non-joinder of a necessary party. The rights, interests, titles of the parties on the damaged/insured property needs to be determined by a competent Civil Court.
For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, the Consumer Complaint is dismissed, without any observation on merits/respective claims and contentions of the parties, and with liberty to the aggrieved parties to approach the competent Civil Court for adjudication of their rights and relief prayed for.
The pending IAs, in any of the Consumer Complaint, if any, also stand disposed off.