K.R.UDAYABHANU, J. - (1.)The complainant who is the proprietrix of M/s.Krishna Enterprises conducting business in rubber and spices has sought for a compensation of Rs.16.75 lakhs towards loss sustained on account of the fire that took place in her godown and consequent losses. It is her case that the business turn over for the particular year 1996-97 was to the tune of 1.3 crores. She had availed cash credit loan and bill discounting facility from the third opposite party/bank. The third opposite party/bank had availed insurance cover for the stock in trade from the second opposite party/insurer and the premium paid is credited to the account of the complainant. The insurance cover was availed in the year 1994 for a sum of Rs.6 lakhs and for the year 1996-97 the sum insured was enhanced to Rs.10 lakh. On 7.7.97, a fire had broken out in the go-down at 5.30 am. The entire stock in trade worth over 10 lakhs stored in the go-down was totally destroyed. On the next day itself, the bank Manager and the Field Officer of the insurer visited the spot. The complainant submitted the calim on 7.8.96 for a sum of Rs.10 lakh. The surveyors of the insurer inspected the premises. The complainant had submitted all the required documents as requested by the surveyors. The surveyor had also signed the stock register at the time of his inspection. As the claim was not settled, the complainant addressed the insurer and the bank to get the claim settled at the earliest vide letter dated 27.10.97. Subsequently, the bank had informed that the opposite parties had assured that the claim will be settled in November 1997. The complainant in the absence of receiving the amounts towards the claim was unable to start her business. A suit notice was sent on 30.12.97. The complainant owed money for purchase of rubber sheets and the above persons attempted to take away all the materials including account books and other documents. Police was intimated and the case was registered. The complainant approached the High Court for police protections vide OP.4397/98 and police protection was granted. After a lapse of 8 months, the opposite parties/insurer deputed a fresh surveyor. The petitioner was unable to produce the relevant records as the shop could not be opened. The matter was intimated to the opposite parties. The petitioner was constrained to go on a sathyagraha in front of the bank premises on 19th and 20th of March, 1998 and in front of the Divisional Office of the Insurance Company from 1.4.98 to 8.4.98. The opposite parties/insurers vide letter dated 27.3.98 repudiated the claim on the ground that a portion of the godown was converted into a smoke room and was used for smoking rubber and that the same is in violation of the policy condition that the go-down is to be used exclusively for storage of materials. It is pointed out that in 1994 itself, the building has been assessed by the Engineer deputed by the bank and in the report submitted on 15.12.94 it is specifically mentioned about the construction of the smoke house and the same has been valued at Rs.1,52,711/-. It was the third opposite party/bank who submitted the proposal for the insurance coverage. The insurance authorities also had inspected the premises before insuring the stock in trade of the petitioner. The insurer as well as the bank was aware of the existence of the smoke house in the premises of the go-down. There was no alteration at all subsequent to availing the insurance coverage. The allegation of the insurer that the complainant had failed to co-operate with the surveyors is denied. It is alleged that the claim has been repudiated on account of the failure of the petitioner to satisfy the illegal gratification sought by some of the officers of the Insurance Company. The allegation that the sister concern of the complainant was existing only on paper is false. The third opposite party/bank vide letter dated 15.1.98 had informed the insurer that the bank authorities and the Insurance Officer by name Mr.Sudheendran had inspected the premises jointly prior to providing insurance coverage. It is also pointed out that the insurers had sought for non-standard settlement of the claim and for which the petitioners were not amenable as evident from the letter of the insurer dated 13.5.98. Another engineer of the bank had also inspected the premises before availing the policy on 29.4.97 wherein also the existence of the smoke house is specifically mentioned. The contention of the insurers that the godown could not have contained more than 7620 kgs. of rubber is totally false. The go-down can stock 32-40 tones of rubber at a time. It is contended that the petitioner has sustained a loss of RS.9,75,000/- as goods worth the said amount has been totally destroyed. The complainant could not revive the business on account of the failure on the part of the opposite parties to indemnify the complainant. The petitioner has assessed the loss on the above account at Rs.5 lakhs. A sum of Rs.2 lakh is claimed towards mental agony etc. Altogether the claim is for a sum of Rs.16.75 lakhs.
(2.)The opposite parties 1 and 2 the Insurance Divisional Office and the branch respectively represented by the respective Managers have filed a joint version denying the case of the complainant as to the turn over of the business and also as to the loss sustained. It is submitted that on coming to know of the incident immediately Prudential Surveyors Private Ltd; and M/s. Scouts, Kochi were entrusted for survey and to conduct investigation respectively. On the basis of the reports of the surveyor and the investigator, it was found that a portion of the go-down was converted into a smoke room and was used for smoking rubber. The fire originated from this room. The above action is a clear violation of the warranty and condition No.3 (a) of the policy. It is also pointed out that the claim was preferred for destruction of stock of rubber amounting to Rs.24,844.900 kgs. as per the stock register of the firm. Out of this 14500 kgs. were purchased on 4.7.97 from Krishna Agencies( a sister concern) and from 4 individual suppliers. The insured refused to co-operate the surveyor and the claim investigator in supplying accounts books of the sister concern. On enquiries, it was revealed that the sister concern existed only on paper and the transactions are on paper only. The enquiries made with individual suppliers showed that the insured has attempted to heavily inflate the stock. The stock allegedly destroyed cannot be stored in the space available. Only a smaller quantity than is being claimed was involved. The complainant has violated warranty G of the policy which specifies that no work or process of any kind except storage or removal of materials be carried on in the go-down. The processing of rubber by smoking was carried out in the go-down which is a violation of the policy condition. Further the complainant did not produce any documentary evidence in spite of repeated requests. It is denied that the existence of the smoke room was known to the opposite parties. The rest of the allegations are denied. The claim was repudiated and the warranty and policy conditions were violated.
(3.)The third opposite party/Dhanalashmi Bank has filed version stating that the complainant had availed cash credit loan and bill discounting facility from the bank. It is admitted that on 7.7.97, the complainant had informed the opposite parties regarding the fire accident. Opposite parties also visited the premises. The third opposite party had done everything necessary to settle the claim with the Insurance Company. It is denied that the third opposite party is not a necessary party in the present proceeding. The third opposite party was all along taking a constant and lenient view towards the complainant and pressing with the insurer for an early settlement of the claim. The policy was availed by the bank to safeguard the interest of the bank. The policy was issued by the Insurance Company after satisfying all the requirements such as visiting the spot and verifying the stocks. The Development Officer of the Insurance Company Mr.Sudheendran accompanied by the Branch Manager of the bank had inspected the property prior to insuring the same. The Insurance Company was aware of the existence of the smoke house and it is after visiting the spot and verifying the stocks that the policy has been issued.