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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI

                                          S.C. CASE NO. : CC/09/21

DATE OF FILING : 31.03.2009
DATE OF FINAL ORDER: 12.04.2010

COMPLAINANTS

M/s. ANKUR
Prop. Rizwan Hussain
Chaibasa Road Bye Lane
Doctor Danga
Holding No. 16, Dist. Purulia,
West Bengal.

OPPOSITE PARTIES

1. The Branch Manager
National Insurance Co. Ltd.
Purulia Branch
G.N.Mukherjee Road
Purulia-723 101.

2. The Regional Manager
National Insurance Co. Ltd.
Kolkata Regional Office No. – II
8, India Exchange Place
Kolkata-700 001.
PROFORMA OPPOSITE PARTY
3. Canara Bank
S.C.Sen Road
Opp. M.S.A. Ground
Purulia – 723 101.

BEFORE : MEMBER : MR. P.K.CHATTOPADHYAY
MEMBER : MR. S.COARI
MEMBER : MRS. S.MAJUMDER



FOR THE COMPLAINANT : Mr. Sujay Kr. Basu, Ld. Advocate

FOR THE O.P.S.: Ms. Tanushree Dasgupta, Ld. Advocate (OP-1&2)

Mr. Subhajit De, Ld. Advocate (OP-3)

O R D E R :

MR. P.K.CHATTOPADHYAY, LD. MEMBER
This complaint case filed by M/s. ANKUR, a proprietary firm having its office-cum-godown at Doctor Danga, Chaibasa Road Bye Lane, Holding No. 312, Purulia, related to a claim arising out of Standard Fire & Special Perils Policy subsequent to a devastating fire occurring on 28.12.06 and supposed denial of insurance claim therefor by the Op Nos. 1 & 2 namely M/s. National Insurance Co. Ltd., with Proforma OP namely Canara Bank, with whom given stock of goods of the complainant was hypothecated. Admittedly, the complainant was engaged in dealing with wholesale business of readymade garments and hosiery goods, purchases of which were made from various village markets (Huts) of Kolkata, Budge Budge, Salkia, etc. in cash and credit and the sales comprised of only wholesale to various vendors of Purulia, Jamshedpur and suburbs in cash and credit against bills and receipts. The complainant’s firm was located in a premise where the ground floor was stated to be utilized as sales counter and the first and the second floor were used as godown. The complainant was covered by Standard Fire & Special Perils Policy bearing numbers 150503/11/05/3100000474 & 475 for the period from 6.1.06 to 5.01.07 when insurance coverage included stock of readymade garments, sarees and hosiery goods. Subsequently the business premises was shifted from Holding No. 38(Old) to Doctor Danga, Holding No. 312(New) and the insurance policy was stated to be duly rectified and endorsed with change of address so effected. Since the stock of material was hypothecated to Canara Bank, Purulia, Canara Bank was also made Proforma Opposite Party, against whom, however, no relief was claimed. The incident of devastating fire took place at Purulia in the location of the complainant/insured at Holding No. 312 at Purulia on 28.12.06 at about 23.25 hours at night and as a result, the complainant suffered extensive damage and loss of nearly all the stock-in-trade, furniture, fixtures and electrical installations and also for the building. Immediately local police station and fire brigade were informed and fire was extinguished by two fire tenders, which took about 2½ hours. The entire incident of fire was reported and recorded with Purulia Town P.S. under G.D. No. 1210 dt. 29.12.06. The OP No. 1 namely the Branch Manager, National Insurance Co. Ltd., Purulia Branch, was intimated immediately about the incident and a surveyor was appointed forthwith who conducted preliminary survey and submitted his report with some documents. On 2.1.07 the complainant filed its claim of Rs. 60.00 lakhs for total loss of the materials in respect of both the policies and in due course filed other reports like certificate issued by Canara Bank, Purulia Branch, police report and relevant other documents including balance sheet as prepared and certified by chartered accountants with relevant stock statement, purchase register, invoice/bills, sales register, sales invoices, cash memos, cash book, etc. The Ops subsequently appointed another surveyor namely Apex Surveyors Pvt. Ltd., which firm conducted further survey with assistance and cooperation from the complainant in every way possible and submitted its final report to the OP No. 1 on 22.12.08 assessing the loss to the tune of Rs. 53,17,790/- after deducting the salvage amount of Rs. 1.00 lakh and factoring sound stock being saved after fire at Rs. 51,969/-, but the OP Nos. 1 & 2 did not pay the claim. The complainant then started pursuing the matter with the OP Nos. 1 & 2 trying to satisfy all its queries by providing records as were available and explanations as were feasible, but inspite of its best efforts, failed to receive the claim amount. Meanwhile, after serving due notice upon the complainant Canara Bank proceeded with action under SARFAESI Act 2002 and the complainant was unwittingly cornered on litigation at that end as well. After exhausting all its efforts and in failing to secure any amount on the claim preferred by it on the OP Nos. 1& 2/Insurance Co. and in not having any resolution on its claim of damages suffered due to fire, this complaint was lodged on the OP Nos. 1 & 2 praying for a decree for Rs. 60.00 lacs against the OP Nos. 1 & 2 on account of loss of damaged materials by fire and for Rs. 1.00 lakh as compensation for harassment, mental agony and serious loss in business due to inordinate delay in settlement of legitimate claim with interest at 12% from 28.12.06 over the claim amount of Rs. 60.00 lakhs and any other relief(s) that the complainant is entitled to, in law and in equity.

The OP Nos. 1 & 2 namely National Insurance Co. Ltd., entered appearance and contended inter alia that the Insurance Co. took exceptional, prompt and sincere action by appointing IRDA approved surveyor Mr. Pravakar Kumar Roy on 29.12.06 on the incident of 28.12.06 asking the surveyor to carry out preliminary physical inspection of fire affected loss and other aspects. The said surveyor visited the spot on 29.12.06 and submitted his report on 3.1.07 with specific comments that some garments on the ground floor remained still untouched from fire and that the complainant dealt in wholesale readymade garments having a single counter in the ground floor in the building jointly with M/s Saree Point and the complainant did not deliver record books and daily selling receipt books as some might have been burnt and that 13 specified quantified items of goods were found in good condition. It was submitted that the preliminary surveyor could not identify and quantify the nature and quantity of goods lost/destroyed due to such fire. Immediately thereafter on 4.1.07 the OP No. 1 engaged M/s. Apex Surveyors Pvt. Ltd., who visited the spot on 5.1.07 and wrote letter to the complainant requesting him to submit six specified documents/records. However, the complainant miserably failed to produce the stock registrar duly certified by auditor, chartered accountant, which position prevails till today. Stating that the final surveyor did not recommend the admissibility of the claim for payment in terms of Chapter-IV , Clause-13 of Insurance Surveyors and Loss Assessors (Licensing Professional requirements and code of conduct) Regulation 2000 it was submitted that day-to-day stock registrar was not maintained and the documents, records produced by the complainant to the surveyor were all unreliable and unauthentic and assessment of loss on the basis of such could be treated as void and quashed on merit of reasonableness, fairness and lawfulness. Pointing out that subsequently the Insurance Co. issued several letters to the insured asking for filing of various documents like stock registrar, return, etc. it was submitted that those having not been produced the dispute was not adjudicable in summary jurisdiction and should be referred to a Civil Court for proper adjudication and examination in order to ascertain the veracity of the claim as made out by the complainant. Denying that there was any element of deficiency of service on part of National Insurance Co. Ltd. at any stage and pointing out to its promptness in engaging successive surveyors immediately after the incident and in adhering to reports of such authorities the Ops submitted that the complaint was liable to be dismissed.

The OP No. 3, Canara Bank, entered appearance and filed written version when it stated that the OP/Bank sanctioned a credit facility to the complainant to the tune of Rs. 35.00 lakhs against the hypothecation of the stocks and mortgage of immovable property. Stating that account of the complainant became irregular and inspite of repeated reminders the same was not regularized, the OP/Bank issued a notice U/S 13(2) of the SARFAESI Act and thereafter the account was classified as N.P.A. on 1.3.2008. It was submitted by the OP No. 3/Bank that as per Bank’s record the stock at the time of incident of fire was for Rs. 60.00 lakhs and the same was claimed to have been burnt due to fire. It was also stated that the Insurance Co. did not release the payment for the loss due to fire and the Bank could not realize its dues from the complainant. The OP/Bank denied all the allegations against it and left the dispute at the end of this Commission for proper adjudication.

The matter was heard from respective sides with filing of evidence, questionnaires and replies thereto and subsequent WNAs.

DISCUSSION
A. Section 2(d)(i) and (ii) of the Consumer Protection Act, 1986, as amended, is as under -

“(d) “Consumer” means any person who –

(i) buys any goods for a consideration which has been paid or promised or party paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; 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 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 but does not include a person who avails of such services for any commercial purpose.”

Where in the explanation it is provided that “for the purpose 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 earning his livelihood by means of self employment”.

In the instant matter, admittedly the complainant is a proprietary firm engaged in dealing with wholesale business of readymade garments, sarees and hosiery goods, purchases of which were made from various huts/local marketing centres and resold wholesale to various vendors. From the averments and in evidence there is no pleading or proof whatsoever that the complainant conducted business on self-employment or for earning his livelihood.

B. In I (2005) CPJ 27 (NC) – Harsolia Motors Vs. National Insurance Co. Ltd., the Hon’ble National Commission inter alia decided as under -

“Consumer Protection Act, 1986 – Sections 2(1)(d), 2(1)(o) – Consumer – Service – Commercial purpose – Insurance policy taken by commercial units – whether excluded from purview of C.P.Act – Complainants availed service of insurance company for commercial purpose – Complaint dismissed by State Commission as not maintainable – Hence appeal – Hiring of services of Insurance company by complainants who are carrying on commercial activities cannot be held to be a commercial purpose – Policy is taken for reimbursement or indemnity for loss which may be suffered due to various perils – No question of trading or carrying on commerce in insurance policy – Contract of insurance generally belongs to general category of contract of indemnity – Services may be for any connected commercial activity, yet it would be within purview of Act – Commercial purpose means goods purchased or services hired should be used in activity directly intended to generate profit which is the main aim of commercial purpose – Where goods purchased or services hired in activity which is directly not intended to generate profit, it would not be commercial purpose – Person who takes insurance policy to cover envisaged risk not takes policy for commercial purpose – Policy is only for indemnification of actual loss, not intended to generate profit – Appeals allowed - Order of State Commission set aside – Matter remitted back for being decided on merit.”

This position underwent revisit in judgement in case of First Appeal No. 84 of 2008 – B.S.E.S. Rajdhani Power Ltd. Vs. M/s. Saraf Project Pvt. Ltd. decided on 7.8.09 and Meera Industries Vs. Modern Constructions reported in (2009) 2 CPJ 402 where consequent upon amendment of Consumer Protection Act, 1986 in 2003 it was held as under :-

“A person who avails of such services for any commercial purpose is excluded …………..” “……….Therefore, even the service availed for commercial purpose is excluded from the scope and ambit of consumer.”

In the facts and circumstances of the complaint case under adjudication we find that the foregoing judgement of the Hon’ble National Commission is aptly applicable and thus the complainant namely M/s. Ankur, cannot be regarded as a Consumer for the purposes of any adjudication under Consumer Protection Act, 1986, as amended.

C. In this regard our attention has been drawn to this Commission’s Case No. CC/56/2009 where in a Misc. Application under number MA-263/09 arising out of the complaint case, this Commission held inter alia, “……considered the law referred to by the OP/Appellant in the two judgements cited by him. The position in law appears to have been settled by the said two judgements that after the amendment of Section 2(d)(ii) of the Consumer Protection Act, the definition of consumer has undergone a change and in respect of any cause arising after 15.3.03 the complainant is not a consumer if the Service Provider’s service has been taken for a commercial purpose. In the present case on facts it is apparent that contract was taken by the complainant for construction and maintenance of the road. Therefore, coverage of the policy being in aid of maintenance of the road, the same is a commercial purpose. No case has been made out that the complainant enjoys the benefit of the explanation i.e. the contract was for self-employment and for earning livelihood. Therefore, the complainant here is not a consumer and the complaint is not maintainable.” Considering the facts and circumstances of the present case the same view may be taken for adjudication of the dispute.

D. In above view of fact and law the complaint is liable to be dismissed on contest without cost.

O R D E R
The complaint is dismissed on contest without cost. The subject matter of the complaint, however, has not been decided on merit and the complainant will be at liberty to bring any other proceeding on the subject matter before appropriate forum if it so chooses.



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