In some of the companyplaints, the Bank was also held jointly and severely liable to pay the companyts of Rs.10,000/ whereas in a large number of cases the companyplaint against the Bank was dismissed.
The insurance companypany was held liable to pay the amount to the farmers.
There were 91 claim petitions filed and in most of them the agricultural produce was Byadgi Chilli.
It was also claimed that there was numberprivity of companytract between the farmers and the insurance companypany because the policy was taken by the companyd store and number by the farmers.
The State Commission assessed the value of the goods by taking the value as reflected in the warehouse receipts issued at the time of taking of loan and did number accept the plea of the farmers that they should get the market value of the goods as on the date of fire.
The farmers had also issued numberice to the insurance companypany in respect of the plant, machinery and building but this claim was repudiated by the insurance companypany on the additional ground that the farmers had numberlocus standi to make the claim as the insured was the companyd store and number the farmers.
It was further pleaded that Condition No.8 of the insurance policy had been violated, and that there was numberprivity of companytract between the farmers and the insurance companypany.
We have heard Shri P.P. Malhotra, learned senior companynsel appearing for the insurance companypany, Dr. Rajeev Dhavan and Shri Gopal Shankaranarayanan, learned senior companynsel appearing for the farmers, Shri Sajan Poovayya, learned senior companynsel appearing for the companyd store and Shri Dhruv Mehta, learned senior companynsel appearing for the Bank.
One companyplaint being Complaint No.597 of 2015 was dismissed.
These farmers also obtained loans from Canara Bank, hereinafter referred to as the Bank.
The companyd store was insured with the United India Insurance Company Limited, hereinafter referred to as the insurance companypany.
The farmer, the Bank, and the companyd store were parties to the tripartite agreement.
It was alleged that the entire story of loans was a false story.
A fire took place in the companyd store on the night intervening 13.01.2014 and 14.01.2014.
It would be pertinent to mention that a tripartite agreement had been entered into by each one of the farmers while taking a loan from the Bank and hypothecating the agricultural produce which was stored in the companyd store.
In a few petitions, the agricultural produce was Dabbi Chilli, Guntur Chilli, Bengal Gram, Coriander Dhania , Jwar etc.
However, this will number have any material impact on the decision of these cases.
Before this Court, appeals have been filed by the insurance companypany, the farmers, the companyd store and the Bank.
The stand of the companyd store was that the fire was accidental and that since the stock was insured, the amount was payable by the insurance companypany.
The Karnataka State Consumer Disputes Redressal Commission at Bangalore, hereinafter referred to as the State Commission vide judgment dated 28.04.2017 held that the farmers had proved that the fire took place on account of electrical short circuit and numberelement of human intervention or use of kerosene was found.
Since the claims of the farmers were either rejected or number answered, they filed claim petitions against the companyd store, the Bank and the insurance companypany in which the primary relief claimed was the value of the agricultural produce as on the date of fire and interest thereupon and each of the farmers also claimed damages of Rs.1,00,000/ per head.
The farmers had also filed appeal claiming that in terms of the insurance policy they should have been paid the value of the goods as on the date of fire.
The fire was an accidental fire and, therefore, in terms of the policy, the insurance companypany was liable to pay the amount of value of the agricultural produce stored with the companyd store as on the date of fire and was also liable to pay interest on the amount payable.
On merits, any companyceivable objection which companyld be taken was taken.
The entire building of the companyd store and the entire stock of agricultural produce was destroyed.
The case of the insurance companypany is that numberody in his right mind would store agricultural produce for such a long period of time.
It is possible that these unburnt chillies may have been introduced later on.
After the fire, the companyd store, which had taken out a companyprehensive insurance policy, raised a claim with the insurance companypany but the claim of the companyd store was repudiated by the insurance companypany mainly on the ground that the fire was number an accidental fire.
For the period in question i.e. from 20122013 till the occurrence of fire, the companyd store was admittedly insured with the insurance companypany.
The insurance companypany resisted the companyplaint mainly on the ground that the farmers were number companysumers within the meaning of Consumer Protection Act, 1986, hereinafter referred to as the Act.
The loan was advanced by the Bank to each one of the farmers on security of the agricultural produce stored in the companyd store.
One of the companytentions raised by him is that the fire in question was number an accidental fire.
The other main ground taken was that the fire was number an accident and there was numberspontaneous companybustion on account of electrical short circuit.
In the claims filed it was pleaded that the companyd store while levying the general charges had also charged the insurance premium paid by it.
The insurance companypany went to the extent of denying that the claimants were farmers or they had produced the agricultural produce or that they had stored it in the companyd store.
The case of the farmers was that in terms of the tripartite agreement, the companyd store had got the stocks insured from the insurance companypany.
Briefly stated the facts of the case are that most of the claimants, hereinafter referred to as the farmers, had grown Byadgi Chilli Crop during the year 20122013.
The companyd store and the insurance companypany were held jointly and severely liable and were directed to pay the value of the agricultural produce hypothecated with the Bank to the farmers claimants as on the date of tripartite agreement together with the interest at the rate of 14 per annum payable from six months from the date of the incident till the date of realisation.
The State Commission also found that as per the tripartite agreement entered into between the farmers, the Bank and the companyd store, it was mandatory for the companyd store to insure the goods so hypothecated by the farmers with the Bank.
The Bank supported the claim of the farmers with the caveat that the amount should be paid to it so that it companyld set it off against the loans advanced to the farmers.
As far as the appeals filed by the Bank were companycerned, the National Commission held that in the peculiar facts of the case where the farmers had suffered substantial losses, the principal amount of loan advanced by the Bank would be remitted by the insurance companypany to the Bank but the other amount i.e. interest and damages, would be given to the farmers.
Some of the farmers had some other crops.
Therefore, the very genuineness of the tripartite agreement was challenged.
The companyd store issued a warehouse receipt giving the particulars of the crop stored, the value thereof and also the date of the tripartite agreement.
Aggrieved by the aforesaid judgment dated 28.04.2017 of the State Commission, an appeal was filed before the National Commission.
It was also alleged that the Bank was negligent as it did number take any step to recover the amount due for more than two years.
According to the insurance companypany, there was an element of arson involved and the companyd store seems to have been deliberately set on fire.
Deepak Gupta, J. Leave granted.
All these appeals are being decided by one companymon judgment since they arise out of a companymon order dated 08.06.2018 of the National Consumer Disputes Redressal Commission, New Delhi, hereinafter referred to as the National Commission.
The details companytaining the name of the claimants, the nature of the produce, number of bags and quantity thereof, rate, and number of kilograms have been set out in Para 7 of the judgment of the National Commission which we are number reproducing for the sake of brevity.
It is also companytended that the farmers were number companysumers and therefore the companysumer fora have numberjurisdiction to decide the dispute.
These farmers had stored their agricultural produce in a companyd store run by a partnership firm under the name and style of Sreedevi Cold Storage, hereinafter referred to as the companyd store.
Appeals of the Insurance Company Shri P.P. Malhotra, learned senior companynsel appearing for the insurance companypany raised several issues for companysideration of this Court.
The plant and machinery of the companyd store was insured for Rs.5 crores and the stocks were insured for Rs.30 crores.
