UNITED INDIA INSURANCE CO LTD Vs. NARESH KUMAR

JUDGEMENT

(1.) THIS is an appeal against the Order dated 10th June, 1993 passed by the State Consumer Disputes Redressal Commission, Haryana (for short the State Commission) by which it accepted the complaint filed by the present respondent No. 1, Naresh Kumar and directed the present appellant who had been arrayed as opposite party No. 1 in the complaint to pay to the complainant the insured sum of Rs. 1,25,000/-with interest at the rate of 18% per annum from the date of the loss till the date of realisation. The respondent No. 2 herein is the State Bank of India, Industrial Area Branch, Panipat which had been arrayed as opposite party No. 2 in the complaint. The parties will be referred to as they were arrayed in the complaint.

(2.) THE complainant is a partner of the registered firm, M/s. Garg Textile of Panipat. In the course of the business the complainant had taken as cash credit loan from the State Bank of India. The Bank had a floating charge upon the raw materials of the concern upto the finishing stage. The terms of the loan made it obligatory upon the complainant to insure all the relevant stock and goods. Consequently, the Bank on behalf of the complainant took out an insurance policy for the sum of Rs. 1,25,000/- from the opposite party No. 1 United India Insurance Co. Ltd. (for short Insurance Company). The required premium of Rs. 2,436/- was tendered and accepted by the Insurance Company. According to the complainant the insurance covered the stocks of handloom products including yarn ,Durries and other goods of like nature pertaining to the insured trade, finished or unfinished whilst stored and lying in the insured's premises. On the night intervening 13th/14th June, 1992 a fire broke out in the factory premises of the complainant resulting in a total destruction of the material lying in the factory. The case of the complainant is that he suffered financial loss to the tune of Rs. 20 lakhs and the same was immediately notified to the insurer and a First Information Report was also lodged on 14th June, 1992 itself. A Surveyor was appointed by the insurer who visited the factory premises. However, after considerable delay, vide letter dated 4th November, 1992 the insurer repudiated the claim on the express ground that shoddy yarn stored in the premises of the complainant was not covered under the policy. Despite further protestations the insurer did not offer any redress. Consequently a complaint was filed on the 24th November, 1992 seeking the insured amount with interest and damages amounting to Rs. 1 lac.

(3.) OPPOSITE Party No. 2 i.e. the State Bank of India also filed a counter supporting the complainant. The stand taken by it was that the insurance policy fully covered the fire risk of all the stock and types of the products like yarn, fabric and other goods of like nature lying on the insured premises. It was admitted that stocks worth Rs. 138,375/- and odd were lying in the factory on 26th May, 1992 and therefore, it was pleaded that the insurer was liable to pay Rs. 1.25 lakhs alongwith interest.