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the Consumer Protection Act, 1986
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The Societies Registration Act, 1860

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State Consumer Disputes Redressal Commission
M/S. A.R. Trading Company vs The Oriental Insurance Co. Ltd. on 22 December, 2010
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G)

Complaint No.18/2009
Instituted on : 04/09/2009

M/s A.R. Trading Company,

Through : Abdul Rashid, S/o Shri Abdul Hafiz,
Link Road, Opp. C.M.D. College,
Bilaspur (C.G) ... Complainant

Vs.
1) The Oriental Insurance Company Limited.
Through : Divisional Manager, Korba,
Kosa Badi,
Korba, District Korba (C.G)

2) The Oriental Insurance Company Limited.

Through : Branch Manager,
Dr. Ambedkar Chowk, Manendragarh Road,
Post : Ambikapur, District Sarguja (C.G)

3) The Oriental Insurance Company Limited.

Through : Divisional Manager, Bilaspur,
Rama Trade Centre, Near Bus Stand,
District Bilaspur (C.G)

4) Conservator of Forest & General Manager,

Vanopaj Sangh, Jagdalpur Circle,
District Jagdalpur (C.G) ... Opposite Parties

PRESENT :

HON'BLE JUSTICE SHRI S.C. VYAS, PRESIDENT.

HON'BLE SHRI V.K. PATIL, MEMBER.

COUNSEL FOR THE PARTIE S :

Shri Pankaj Khedkar, for complainant.

Shri Abhishek Sinha, for O.P.Nos.1 to 3.
Shri Mukesh Sharma, for O.P.No.4.
// 2 //

ORDER

DATED : 22/12/2010 PER :- HON'BLE SHRI V.K.PATIL, MEMBER This complaint has been
filed under section 17 of the Consumer Protection Act, 1986, seeking compensation for alleged
deficiency in service against OPs for not indemnifying the loss caused to the insured goods,
under the terms of the insurance policy.

2. Facts of the case, as averred in the complaint, are that complainant is the Proprietor of M/s. A.
R. Trading Co. and his business is to purchase Tendu leaves from Government and to sell it to
reputed Bidi Companies. Complainant has averred that Tendu Leaves are used in production of
„Bidi‟ which are produced mainly in the forest of Madhya Pradesh and Chhattisgarh.
Complainant has also averred that every year in the month of May-June Tendu leaves are
brought by villagers and sold to the Government. After stocking the same in the prescribed
centers, O.P No.4 Forest Department had sold the same to the complainant. Complainant had
taken 2868.68 numbers of standard bags of Tendu leaves from O.P.No.4 at lot No.49 (b) Gadiras
which it had kept in the Jayaswal godown, in Village Kurundi, Jagdalpur. Complainant further
averred that he had got insured the aforesaid lot of Tendu leaves under plan „Standard Fire and
Special Peril Policy‟ from OP No.2 for which policy no. 2008/98 was issued having cover-note
no.126103 for the period from 18.05.2007 to // 3 // 17.05.2008. Complainant further averred that
having purchased Tendu leaves from the stocking centers it had got the same dried and after
filling in gunny bags, stored safely in godown, which was being looked after by employees of
O.P No. 4. Complainant further averred that in the month of December 2007 at the time of
selling tendu leaves, complainant was shocked to see that all the Tendu leaves stored in godown
became rotten and turned black due to moisture which was a natural calamity. Complainant has
further averred that Tendu leaves remained of no use so it submitted claim on 24.12.2007 with
O.P. No.2 seeking compensation for the loss. Complainant has averred that stocking of Tendu
leaves were properly stored in safe godown of web building where there was no possibility of
human error, but during July 2007 to October 2007 there were heavy rains in Jagdalpur area, and
due to moisture, Tendu leaves got affected in the godown thus got gradually rotten and became
black. Complainant averred that it had not contributed any fault in proper maintenance and
security of Tendu leaves. Complainant averred that the employees of OP Nos. 1 & 2 had issued
the policy and assured that if for any reason Tendu leaves got wasted or any loss caused to it due
to natural calamity, then the loss would be compensated by the Insurance Company.
Complainant purchased Tendu leaves from O.P. No.4 and according to their agreement, it was
binding upon the complainant to pay the cost of the gunny bags containing Tendu leaves in 4
installments, otherwise O.P.

// 4 // no.4 would initiate legal proceedings for recovery of the due amount and also of the
compensation amount receivable from Insurance Company instead of making payment to the
complainant. Complainant averred that since Tendu leaves were not damaged due to any of its
fault rather due to natural reason, so claim was to be paid by the Insurance Company.
Complainant further averred that it had complied necessary formalities with the insurance
company and when even after about 5 months claim was not settled, an advocate notice was sent
by Regd. post on 03.05.2008 but no response was received. Complainant has also averred that
despite seeking details from Insurance Company under right of information on 26.05.2008 the
claim was not settled. O.P. nos.1 to 3 without any proper reason repudiated the claim as per its
letter dated 13.05.2008, which amounted to deficiency in service. The complainant has further
averred that if O.P. Nos. 1 to 3 do not pay insurance claim, then he will have to make payment of
the entire amount to O.P. No.4 along with interest @ 0.04% per day in terms of agreement which
would be unbearable for it and resultantly would cause excessive financial and mental agony.
Complainant averred that despite submitting all the documents and making available individual
witnesses, the insurance company did not pay the claim which amounted to deficiency in service.
The complainant also averred that since employees of O.P. No.4 had also been looking after the
maintenance and security of the godown, so it was also partly liable.

// 5 // Complainant averred that OPs are jointly and severally liable to compensate the loss, thus
the complaint has been filed. Complainant prayed for seeking direction to O.P. Nos.1 to 3 the
insurance company to pay compensation of Rs.77,00,000/- and O.P. No.4 to waive interest
against its part deficiency. Besides compensation for loss due to delay in payment of claim
amount, Rs.1,00,000/- towards mental agony with cost of proceedings, has also been prayed for.
Complainant in support of its version filed affidavits dated 02.09.2009 and 08.04.2010 along
with 9 documents.

3. OP no.1 to 3 the Insurance Company in its common reply dated 29.12.2009, has raised
preliminary objections regarding maintainability of the complaint on two grounds: firstly, that
the complainant does not come in the category of „consumer‟ as defined under Section 2(1)(d)
of Consumer Protection Act, 1986 and secondly, that the complaint has been filed through Abdul
Rashid but the complainant company has not filed any document showing his designation in the
company and to show that he has authority to file the complaint and thus the said person Abdul
Rashid is not competent under Section 2(1)(b) and 2(1)(m) of Act to file the complaint. Further
in the written version regarding merits of the case it has been admitted by O.P.Nos.1 to 3 that it
had issued the insurance policy for period 18.05.2007 to 17.05.2007 under „Standard Fire and
Special Perils Policy‟, with certain terms & // 6 // conditions. Insurance company has averred
that the complainant has admittedly averred in the complaint that loss to insured tendu leaves
occurred due to natural moisture of weather and not due to rains. Insurance company also
averred that immediately on receipt of claim from the complainant; it had appointed a surveyor
Shri H.H. Chitalia to investigate into bonafides of the claim and to assess loss, who found that
cause of loss, was due to moisture of weather, which was not covered under the insurance policy.
Insurance company further averred that the claim was properly considered in terms of policy
conditions and was repudiated on 13.05.2008, intimation of which was duly given to the
complainant. Insurance company in support of its version submitted affidavit of its authorized
person Shjri K.C. Chacko the Divisional Manager, Korba and also affidavit dated 06.08.2010 of
surveyor Shri H.H. Chitalia in support of his survey report.

4. O.P. No.4, in its reply, while resisting the complaint has averred that there is no such
relationship between the complainant and OP no.4, under which any allegation of deficiency in
service could be made, so as to make out a consumer dispute. O.P. No.4 has averred that the
complainant was required to lift tendu leaves as per terms and conditions of purchase agreement
between them and as usual, its subordinates were posted to supervise tendu leaves in order to
safeguard against any loss to O.P. No.4. OP No.4 has further averred // 7 // that the complainant
is liable to pay penal interest @ 0.04% per day towards delay in payment of installments for any
reason what so ever, in terms of the agreement and it was accepted by the complainant that any
dispute in relation to imposition of interest would amount to settlement of account and not being
a consumer dispute. OP.no.4 has further averred that the complainant is not entitled for any relief
as claimed in Para 6 of the complaint about waiver of interest towards its alleged deficiency in
service against it and also for the amount as claimed in Para 12 of the complaint. OP No.4 has
averred that no deficiency in service on its part, as alleged by the complainant, was committed by
it, so as to make out a consumer dispute. Hence, the complaint is liable to be dismissed under
section 26 of the Consumer Protection Act which has been filed, to harass it. OP No.4 in support
of its version submitted affidavit dated 04.12.2009 of its authorized person Shri R.D. Taram
Deputy Managing Director.

5. We have perused the documents produced on record and arguments advanced by parties.

6. The issues to be considered in the complaint are; (A) (i) Whether complainant comes in the
category of „consumer‟ ?

(ii) Whether Abdul Rashid through whom the complaint has been filed is a competent person to
file the complaint?
// 8 // (B) Whether the insurance company is liable to compensate the loss incurred by the
complainant and if so, the quantum?
(C) Whether O.P. No 4 is liable to compensate the loss incurred by the complainant and if so, the
quantum?

7. So far as the issue (A) (i) is concerned, the Insurance Company has contended that the
complainant is a trader of tendu leaves so it does not come in the category of consumer in terms
of Section 2(1) (d) of Consumer Protection Act, 1986. It has been contended that the
complainant has not mentioned in the complaint that he is pursuing said business for the purpose
of self-employment, so under such situation, at the very outset, the complaint is liable to be
dismissed. We find that such contention is not sustainable. Section 2 (1) (d) of Consumer
Protection Act, 1986 provides as under;

"(d) "Consumer" means any person who-

(i) Buys any goods ......................; or
(ii) [hires or avails of] any services for a consideration which has been paid or promised or partly
paid and partly promised, or under any system of deferred payment and includes any beneficiary
of such services other than the person who 3[hires or avails of] the services for consideration
paid or promised, or partly paid and partly promised, or under any system of deferred payment,
when such services are availed of with the approval of the first mentioned person 4[but does not
include a person who avails of such services for any commercial purpose];
[Explanation.- For the purposes of this clause, "commercial purpose" does not include use by a
person of goods bought and used by him and services availed by him exclusively for the
purposes of // 9 // earning his livelihood by means of self- employment;]"

It is a settled law that insurance services are meant to compensate loss and not to earn money so
it does not come in the category of services hired for commercial purpose. In view of such
proposition we hold that the complainant has hired services of the insurance company for
compensation of loss as per terms & condition of insurance policy, so it is a „consumer‟ of
insurance company, in terms of section 2 (1) (d) of Consumer Protection Act, 1986.

In respect of Issue (A) (ii) Insurance company has contended that the complaint has been filed by
Abdul Rashid on behalf of M/s A.R. Trading Company but it has not produced any document
whereby his designation in the company or any authority in his favour can be established, so
Abdul Rashid is not the competent person under condition 2 (1) (b) and 2(1)(m) of the Consumer
Protection Act, 1986 to file complaint, as such the complaint is liable to be dismissed. Insurance
company averred that Abdul Rashid has not hired services of O.P. insurance company so the
insurance company can not be alleged to have committed deficiency in service.O.Ps. averred that
until services are not hired from the Insurance Company by any person, he can not come within
the category of consumer in terms of Consumer Protection Act, 1986. We find that such
contention is also not // 10 // sustainable. Section (2) (1) (b) and 2 (1) (m) of Consumer
Protection Act, 1986 provides as under;

"2(1) (b) "complainant" means-

(i) a consumer; or
(ii) any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956) or
under any other law for the time being in force; or
(iii) the Central Government of any State Government; or
(iv) one or more consumers, where there are numerous consumers having the same interest;
(v) in case of death of a consumer, his legal heir or representative; who or which makes a
complaint.
"Section 2(1)(m) "person" includes,-
(i) a firm whether registered or not;
(ii) a Hindu undivided family;
(iii) a Co-operative society;
(iv) every other association of persons whether registered under the Societies Registration Act,
1860 (21 of 1860) or not."
We find that Abdul Rashid by way of his affidavit dated 08.04.2010 has stated that he is the
proprietor of M/s A.R. Trading Company, the complainant and as per provisions of Section 2(1)
(m) and 2(1)(b) of Consumer Protection Act,1986 a proprietary firm is a "person" to be a
„consumer‟. Insurance company has not filed any evidence contrary to the statement on oath of
Abdul Rashid, the proprietor of the complainant. We, therefore, hold that Abdul Rashid is
competent to file the complaint on behalf of the complainant.

8. Issue (B): Insurance Company further contended that cover-note no. 126103 was issued
through OP.No.2 in favour of MD CG STATE // 11 // MKP T&D CO.OP.FED. LTD. A/C
A.R.TRADING CO. BILASPUR under terms & condition of Standard Fire and Special Perils
Policy, whereby the risk of fire, lighting, storm, cyclone, tempest, hurricane, tornado, flood and
inundation, were covered but as per GENERAL EXCLUSION CLAUSE No.4 of the insurance
policy, loss, destruction or damage caused to the insured property by pollution or contamination
if loss to the insured property is due to natural rains or moisture, then it was not covered. O.P.
Insurance Company stated that it had considered the claim of the complainant after proper
investigation and having found, it as not payable, repudiated it on 13.05.2008 and the same was
intimated to the complainant by regd. post, so there was no deficiency in service by it. We find
that the questioned policy was issued on 18.05.2007 in the name of M.D. C.G. STATE MKP T
& D CO. OP. FED. LTD, A/C A.R. TRADING CO. BILASPUR having collected total amount
Rs.12,166/-- towards premium, covering risk of sum assured Rs.77,00,000/- and as per condition
no. VI of the "STANDARD FIRE AND SPECIAL PERILS POLICY format, risk towards
Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood, and Inundation were covered
and also as per GENERAL EXCLUSION Clause no.4- loss, destruction or damage caused to the
insured property by pollution or contamination excluding: (a) pollution or contamination which
itself result from a peril hereby insured against.; (b) Any peril hereby insured against which itself
result from pollution or contamination. As per affidavit dated // 12 // 06.08.2010, of Shri Hitesh
Chitalia, Surveyor, who had surveyed the spot to assess the loss of insured Tendu leaves, in para
2 stated that loss to the insured property of the complainant was due to moisture of weather and
not due to water of rains. The said surveyor in his report dated 15.03.2007 has mentioned the
facts and circumstances of loss to the questioned Tendu Leaves and also given his observations.
In the concluding para he stated that;
"In my opinion, it is a genuine occurrence of contamination of Tendu Leaves stored in two
godowns, as accepted by insured, but outside scope of policy conditions to make loss
compensate, hence I recommend, Insurer to repudiate the claim as not payable in my opinion."

From the aforesaid report of Surveyor and from the conditions of the insurance policy, it is
evident that when loss to the questioned Bidi leaves had resulted in itself due to moisture and
was not due to the covered risk of Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado,
Flood and inundation, then in terms of condition no.VI of policy, it was not covered. Therefore
we hold that loss to the insured tendu leaves was not covered by the questioned insurance policy
and as such the insurance company has not committed deficiency in service by repudiating the
claim of the claimant.

9. Learned counsel for the complainant cited case of United India Insurance Co. Ltd. Vs.
Dipendu Ghosh & anr. 2009 (2) CPR 417 (NC) decided by Hon‟ble National Commission, in
support of the contention // 13 // that the loss to Tendu leaves was due to moisture which had
resulted due to direct and proximate cause of inundation. In that case the loss was due to flood
water logging, but in the instant case the facts are different wherein cause of loss was due to
moisture to Tendu leaves and was not due to inundation, storm or any of the insured perils, so it
cannot be of any help to the complainant.

10. The next question to be considered is whether OP no.4 is liable to pay compensation for loss
to the questioned tendu leaves incurred by the complainant? Complainant has produced copy of
the agreement dated 11.04.2007 with O.P.no.4 which pertains to purchase of Tendu Leaves and
its repayment with related terms and condition. Complainant in its complaint alleged that since
tendu leaves purchased were under supervision and maintenance by the employees of O.P.No.4
in the godowns, so it was also partly liable for its loss. As per the agreement, the questioned
Tendu Leaves were agreed to be purchased by the complainant and its cost was payable in 4
instalments under certain terms and conditions. We find that the dispute relates to mutual
performance of contract by the parties. It is not a case that the complainant purchased tendu
leaves and there was defect complained therein. In the aforesaid agreement there is no condition
about the mode and pattern regarding maintenance of tendu leaves on basis of which OP No.4
can be held liable for loss, thus allegation of deficiency in // 14 // service against it can not
sustain, so as to entertain consumer dispute in terms of provisions of Consumer Protection Act
1986. Condition No.21 of the aforementioned agreement provides that any dispute related to the
agreement would be adjudicated by judicial Forums in Chhattisgarh State. The complainant
could not substantiate the dispute as consumer dispute as per Consumer Protection Act 1986 so it
can not be decided by a Consumer Fora.

11. Under the facts and circumstances of the case and also the foregoing discussion, we do not
find substance in the complaint, therefore it is dismissed. However the complainant will be at
liberty to seek remedy against O.P. No.4 from any appropriate forum, if so advised. No order as
to cost.

(Justice S.C. Vyas) (V.K. Patil)

President Member
/12/2010 /12/2010