UNITED INDIA INSURANCE CO LTD vs Visakha Enterprises Prop. M.J. Pattnaik

ALL these revisions arise out of judgement dated 16.10.2007 in appeals filed against judgement of the District Forum. Accordingly, the revisions were heard together and are being disposed of by common order. These revision petitions have been filed by the petitioners against the order dated 16.10.2007 passed by the Orissa State Consumer Disputes Redressal Commission, Cuttack (in short, ''the State Commission'') in Appeal No. 799/2006 - United India Ins. Co. Ltd. Vs. Visakha Enterprises and Appeal No. 206/2007 - Visakha Enterprises Vs. United India Ins. Co. Ltd. by which, while dismissing appeal of the Insurance Company, appeal of complainant was partly allowed and while confirming order of District Forum allowing complaint, compensation was enhanced.

BRIEF facts of the case are that complainant Visakha Enterprises was dealing in acid, etc. for which loan from Central Bank of India under hypothecation was taken and business premises were insured with OP No. 1 - United India Insurance Co. for a period of one year from 25.7.2003 to 24.7.2004. On 25.10.2003, fire broke out in the insured premises as a result of which, complainant''s stock was burnt. Complainant lodged claim with the Insurance Company, but claim was not allowed. Alleging deficiency on the part of OPs, complainant filed complaint with District Forum. OPs resisted complaint and OP No. 1 submitted that shifting of godown by the complainant in the premises where fire took place was beyond the knowledge of OP and also denied value of stocks in the premises and prayed for dismissal of complaint. OP No. 2 submitted that as complaint did not disclose any cause of action against OP No. 2, complaint may be dismissed. After hearing both the parties, learned District Forum allowed complaint against OP No. 1 and directed OP No. 1 to pay Rs.9,50,000/ - and Rs.10,000/ - as compensation towards mental agony and Rs.5,000/ - towards cost of litigation and complaint was dismissed against OP No. 2. Both the parties filed appeal against impugned order and learned State Commission while dismissing appeal of Insurance Company, partly allowed appeal of complainant and enhanced compensation to Rs.12,51,000/ - from Rs.9,50,000/ - against which, these revision petitions have been filed. Respondent No. 2 did not appear even after service; hence, proceeded ex -parte.

LEARNED Counsel for the petitioner -Insurance Co. submitted that insured premises were changed by the complainant without any intimation to the Insurance Co. and the place where the fire took place was not covered under policy; even then, learned State Commission has committed error in dismissing appeal. It was further submitted that though insurance policy was only of Rs.10,00,000/ -; even then, learned State Commission committed error in allowing Rs.12,51,000/ -;hence, revision petition be allowed and impugned order be set aside. On the other hand, learned Counsel for Visakha Enterprises submitted that insured premises were changed under intimation to the Insurance Company and learned District Forum has not committed any error in allowing complaint. Learned Counsel for Visakha Enterprises admitted that as policy was for Rs.10,00,000/ -, State Commission should not have allowed Rs.12,51,000/ -, but submitted that learned District Forum and State Commission have committed error in not granting interest; hence, revision petition be allowed and interest be awarded.

LEARNED District Forum rightly observed that OP No. 2 Central Bank of India intimated to OP -Insurance Co. regarding shifting of godown by the petitioner vide letter dated 18.8.2003 and fire took place on 25.10.2003 and in such circumstances, matter of shifting of godown was within the knowledge of OP No. 1. Letter dated 14.1.2005 issued by United India Ins. Co. to complainant clearly reveals that endorsement regarding change of insured place has been made on the basis of letter of complainant dated 16.8.2003 addressed to Central Bank of India for shifting of godown due to lack of space. This admission makes it crystal clear that change of godown by the complainant before fire took place was within the knowledge of insurance company and arguments of learned Counsel for the Insurance Co. is devoid of force to the extent that fact of change of godown was not communicated by the complainant to Insurance Co. Learned Counsel for the Insurance Co. further submitted that in the complaint reason for change of godown has been shown as due to marriage of complainant''s son, whereas as per letter dated 14.1.2005, it was changed due to lack of space which is contradictory. This argument has no bearing on the dispute because we are not concerned with the reason for shifting of the godown, but we are concerned only to the extent that whether shifting of godown within the knowledge of Insurance Co. or not. Further, Insurance Co. has not placed on record letter of complainant dated 16.8.2003, which would have revealed reason for change of godown. Thus, it becomes clear that complainant shifted godown within the knowledge of Insurance Company and learned District Forum rightly allowed complaint.

AS far as amount of compensation is concerned, learned State Commission has based its finding on the basis of statement of stock in complainant''s godown, which was available with the Financer Bank as on 25.10.2003. As per stock statement, goods were worth Rs.12,50,493.88 in the godown and everything burnt due to fire, but as insurance policy was only for Rs.10,00,000/ -, State Commission should not have enhanced compensation to Rs.12,51,000/ - and compensation should have been awarded only to the extent of Rs.10,00,000/ - for which insurance policy was taken. To this extent, revision petition filed by the insurance company is to be allowed.

LEARNED Counsel for the complainant Visakha Enterprises submitted that interest has not been granted to the complainant. Perusal of complaint reveals that complainant claimed compensation along with bank interest. There is nothing on record to arrive at conclusion about rate of bank interest at the time of filing complaint. Learned Counsel for the complainant placed reliance on judgment of Hon''ble Apex Court in C.A. Nos. 6075 -76 of 1995 - The United India Insurance Co. Ltd. Vs. M.K.J. Corporation with M.K. J. Corporation Vs. The United India Insurance Co. Ltd. in which, interest @ 12% p.a. was allowed, as Insurance Co. was investing money in the securities specified by the Government of India @ 11.3% p.a. He also placed reliance on judgment of this Commission decided on 24.3.2008 Jamnadas Madhavji International Ltd. Vs. The New India Assurance Co. Ltd. and D. Himatlal and Co. in which 12% p.a. interest was allowed. In the case in hand, as Bank interest on the date of filing complaint has not been specified, we deem it proper to allow interest @ % p.a. normally granted by the Banks on FDRs. Learned Counsel for the Insurance Co. submitted that by order dated 16.4.2008 this Commission stayed operation of impugned order subject to depositing Rs.10,00,000/ - with the State Commission. Learned Counsel further submitted that Rs.10,00,000/ - has already been deposited with the State Commission. In such circumstances, we hold that complainant is entitled to interest @ 9% p.a. on Rs.10,00,000/ - from the date of filing till the amount was deposited by Insurance Company with the State Commission and complainant is further entitled to receive accrued interest, if any, on Rs.10,00,000/ - deposited with the State Commission. 9. Consequently, Revision Petition Nos. 1046 -1047 of 2008 filed by United India Insurance Co. Ltd. are partly allowed and impugned order dated 16.10.2007 passed by learned State Commission in Appeal No. 799/2006 and Appeal No. 206/2007 is modified and Insurance Co. is directed to pay Rs.10,00,000/ - instead of Rs.12,51,000/ - to complainant, Visakha Enterprises. Revision Petition No. 1948 of 2008 filed by complainant, Visakha Enterprises is also allowed and impugned order passed by learned State Commission is modified and it is held that complainant is entitled to receive Rs.10,00,000/ - along with 9% p.a. interest from the date of filing complaint till money deposited by Insurance Co. with the State Commission and further any interest accrued on Rs.10,00,000/ - deposited with the State Commission along with Rs.10,00,000/ - deposited with the State Commission. There shall be no order as to costs.