BEFORE THE HON’BLE STATE CONSUMER DISPUTE REDRESSAL COMMISSION

COMPLAINT UNDER CONSUMER PROTECTION ACT, 1986 AND INSURANCE ACT,

1938

TONY (CLAIMANT NO.1) …PLAINTIFF

JACK (CLAIMANT NO. 2)

VERSUS

THE NEW SUN INSURANCE COMPANY …RESPONDENT

MEMORIAL ON THE BEHALF OF THE PLAINTIFF

 TABLE OF CONTENTS

Sr. No. Contents Pg. no.

1. Title 1

2. Table of Contents 2

3. List of Abbreviations 3

4. Index of Authorities 4

5. Table of Cases 5

6. Statement of Jurisdiction 6

7. Statement of Facts 7

8. Issues Framed 8

9. Summary of Issues 9

10. Arguments Advanced 10-17

11. Prayer 18

LIST OF ABBREVIATIONS

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S. NO: TERMS ABBREVIATIONS

1. Hon’ble Honorable

2. SC Supreme Court

3. HC High Court

4. B/W Between

5. U/S Under Section

6. CRI.A. CRIMINAL APPEAL

7. Vs / v. Versus

8. AIR All India Reporter

9. COPRA Consumer Protection Act, 1986

10. SCC Supreme Court Cases

11. SCR Supreme Court Reporter

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 INDEX OF AUTHORITIES

➢ BOOKS

 The law of Torts by Dhiraj lal and Ratan lal

 Modern law of Insurance in India by Dr. KVS Sarma

 Law of Consumer Protection by Avtar Singh

 Consumer Protection Act by O.P Tiwari

➢ Dictionaries

1. Black’s law dictionary, (11th Ed.1999)

2. Oxford English Dictionary OUP

3. P. Ramanatha Aiyar’s The Law Lexicon, The Encyclopedic Law, (2nd Ed, reprint 2009)

➢ WEBSITES

1. ManunPatra, http://www.manupatra.com

2. Indian Kanoon, ://www.indiankanoon.org

3. Law Finder, library edition

4. www.judis.nic.in

5. SCC Online, http://www.scconline.co.in.

6. Oxford Dictionary, http://www.oxforddictionaries.com.

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 TABLE OF CASES

1. Om Prakash v. Reliance General Insurance

2. Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC)

3. Charan Singh v. Healing Touch Hospital and Others

4. Auslin Vs. Drew, (1816) 6 Taunt 436

5. Harris v. Poland, (1941) 1 KB 462

6. State of A.P. vs. United India Insurance Company, (1998) 2 ALT 51 (D.B.)

7.New Delhi Assurance Co. Ltd. V/S Nanik Wadhumal Alimchandani, (2003) 5 Cld 1007

8. United India Insurance Co. Ltd. V/S M/S B.J. Duplex Boards Ltd, AIR (2013) P.& H.

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 STATEMENT OF JURISDICTION

THE HON’BLE STATE CONSUMER FORUM HAS THE JURISDICTION IN THIS

MATTER IN THE FOLLOWING SECTION OF THE CONSUMER PROTECTION ACT,
1986.
Section 17 in the Consumer Protection Act, 1986
17. Jurisdiction of the State Commission.—
(1) Subject to the other provisions of this Act, the State Commission shall have jurisdiction
—
(a) to entertain—
(i) complaints where the value of the goods or services and compensation, if any, claimed
2[exceeds rupees twenty lakhs but does not exceed rupees one crore]; and
(ii) appeals against the orders of any District Forum within the State; and
(b) to call for the records and pass appropriate orders in any consumer dispute which is
pending before or has been decided by any District Forum within the State, where it appears
to the State Commission that such District Forum has exercised a jurisdiction not vested in it
by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its
jurisdiction illegally or with material irregularity.
[(2) A complaint shall be instituted in a State Commission within the limits of whose
jurisdiction,—
(a) the opposite party or each of the opposite parties, where there are more than one, at the
time of the institution of the complaint, actually and voluntarily resides or carries on business
or has a branch office or personally works for gain; or
(b) any of the opposite parties, where there are more than one, at the time of the institution of
the complaint, actually and voluntarily resides, or carries on business or has a branch office
or personally works for gain, provided that in such case either the permission of the State
Commission is given or the opposite parties who do not reside or carry on business or have a
branch office or personally works for gain, as the case may be, acquiesce in such institution;
or
(c) the cause of action, wholly or in part, arises.]

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 SYNOPSIS OF FACTS
 That in 1999, Tony and Jack joined The New Sun Insurance Company as agents and
started working with them.
 That they got themselves and their houses insured.
 That in 2009, Tony went into a financial crunch and found a way to get out of it.
 That Tony along with Jack plotted to between the house of Tony, as to get insurance
from the company.
 That they conspired and to do so engaged in various activities like planning, getting
material like gas together.
 That on the night of 12th December, 2009, they together between the house of Tony
but unknowingly Jack had put the gas containers in his backyard which was next to
Tony’s house and those containers caught fire.
 That on seeing the fires in his premises Jack jumped towards the house and after a
while Tony joined him too.
 That Tony and Jack received numerous injuries while extinguishing the fire.

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 ISSUES FRAMED

1. WHETHER THE CLAIMANTS ARE ENTITLED TO CLAIM

COMPENSATION FROM THE NEW SUN INSURANCE COMPANY OR NOT?

2. WHETHER THE REPUDIATION OF CLAIM BY THE NEW SUN INSURANCE

COMPANY IS VALID OR NOT?

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 SUMMARY OF ISSUES

1. WHETHER THE CLAIMANTS ARE ENTITLED TO CLAIM COMPENSATON

FROM INSURANCE COMPANY OR NOT UNDER THE CONSUMER
PROTECTION ACT, 1986 AND INSURANCE ACT, 1938?

It is humbly submitted before this Hon’ble Tribunal that the claimants are entitled to claim
the compensation as they both got themselves and their houses insured from ‘The New Sun
Insurance’. Also it is humbly submitted that on the fateful night, it was still covered for the
risk by the insurance company.

2. WHETHER THE REPUDIATION OF CLAIM BY THE NEW SUN INSURANCE

COMPANY VALID OR NOT?

It is humbly submitted before this Hon’ble Tribunal that the claim is genuine and company has no valid
ground to repudiate the claim. Hence it is an unethical practice to repudiate the claim. Company being
in the dominant position has done all in its power to defend the claim.

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 ARGUMENTS ADVANCED

1. WHETHER THE CLAIMANTS ARE ENTITLED TO CLAIM COMPENSATION

FROM THE INSURANCE COMPANY OR NOT UNDER THE CONSUMER
PROTECTION ACT, 1986 AND INSURANCE ACT, 1938?

It is humbly submitted before the Hon’ble Tribunal that the claim is very much genuine as the
fire broke out in the house on that fateful night of 12 November 2009. The House was insured
by The New Sun Insurance for the same.

Complainant who was owner of residential house had got insured his house alongwith
household articles with the respondent-Insurance Company which is The New Sun Insurance.
Risk was covered on that fateful night. Record further shows that on 12.11.2009 the insured
building and household articles were completely reduced to ashes in a fire which broke out in
the said house, as such the present complaint was filed by the complainant to indemnify the
complainant to the tune of insurance amount alongwith 18% interest from the date of filing of
the complaint till realization and in addition to this some compensation is also claimed for
illegal withholding of the insured amount.

In Charan Singh v. Healing Touch Hospital and Others, wherein the Apex Court held that
calculation of damages depends on the facts and circumstances of each case. No hard and fast
rule can be laid down for universal application.

That while awarding compensation, a Consumer Forum has to take into account all relevant
factors and assess compensation on the basis of accepted legal principles, on moderation. It is
for the Consumer Forum to grant compensation to the extent it finds it reasonable, fair and
proper in the facts and circumstances of a given case according to the established judicial
standards where the claimant is able to establish his charge.

It is humbly pleaded that in the present case the house owned by Jack was completely
reduced to ashes due to the gas container which was put in the backyard of the said house.

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It was a matter of accident that the fire broke out on that fateful night as there was no
malafide intention for the same.
There is no evidence on record which even gives a single inference to the fact that this was a
deliberate act to claim the compensation.
As all the formalities required for the assessment of loss were done according to the rules of
the insurance company.
The insurance company has accepted this on record that demolition of building took place
due to the fire and now being on the dominant position it has repudiated the claim.

Om Prakash v. Reliance General Insurance (Supreme Court)

The Apex Court in the case has made a very essential observation that the Consumer
Protection Act, 1986 is a beneficial legislation, hence the same shall be interpreted liberally
and in the interest of public at large.

According to Section 2(1)(d) of Consumer Protection Act,1986

"Consumer" means any person who—

(i) buys any goods 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 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
purposes;

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 earning his livelihood by means of self-employment; hereinbefore mentioned.”

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According to 2(1)(O) of Consumer Protection Act,1986:

"Service" means service of any description which is made available to potential users and
includes, but not limited to, the provision of facilities in connection with banking, financing
insurance, transport, processing, supply of electrical or other energy, board or lodging or
both, housing construction, entertainment, amusement or the purveying of news or other
information, but does not include the rendering of any service free of charge or under a
contract of personal service.

According to these definitions both claimants are engulfed in the definition of Consumer as
they availed service for a consideration which is not of commercial purpose. Hence the
claimants are entitled to make claim under the Consumer Protection Act,1986.

PRINCIPLE OF INSURABLE INTEREST

The most significant principle as well as legal requirement of a valid contract of insurance, is
insurable interest. It means the assured must have an actual interest in the subject matter of
insurance. Any person may said to have an interest in the subject matter of insurance who
may be injured by the risks to which the subject matter is exposed.

Insurable interest is a basic requirement of any contract of insurance whether life, fire ,
marine etc. unless it can be and is , lawfully waived. As a general rule this means that the
party to the insurance contract who is insured or policy holder must have a particular
relationship with the subject matter of the insurance whether that be a life or property or a
liability to which he might be exposed . the absence of the required relationship will rendered
the contract illegal, void or simply enforceable depending on the type of insurance.

United India Insurance Co. Ltd. V/S M/S B.J. Duplex Boards Ltd, AIR (2013) P.& H.

It was held that all goods lying at the address of the plaintiff were covered irrespective of
covered area or open area. Thus, entire premises including open area of the plaintiff were

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covered by policy which was operative when the fire incident occurred. Claim of the plaintiff
for goods in construction area and open area is maintainable.

New Delhi Assurance Co. Ltd. V/S Nanik Wadhumal Alimchandani, (2003) 5 Cld 1007

In this case due to leakage of gas from the cylinder, fire broke out in the flat and the
insurance company was held liable to pay the compensation to the plaintiff.

Similarly in the present case, the situation is exactly same and thus the compensation should
be granted.

FIRE INSURANCE

A fire insurance is a contract to indemnify the insured for destruction of or damage to

property caused by fire. In fire insurance, insurance is not against fire but against the loss
caused by fire. the insurer undertakes to indemnify the insured against loss due to fire caused
to the insured property. Section 2(6A) of the Insurance Act 1938 defines " fire Insurance
Business as business of effecting, otherwise than incidentally to some other class of insurance
business, contracts of insurance against loss by or incidental to fire or other occurrence
customarily included among the risks insured against in fire insurance policies.

Property which is accidently or negligently thrown into fire within the grate and burnt is loss
by fire as it is property not intended to be ignited. In this connection the decision of House of
Lords is notable in Harris V. Poland, the insured concealed a quantity of currency notes and
jewellery in her grate by placing wood and coal over them in order to misguide burglars and
keep them out. After returning home, she inadvertently lighted the fire forgetting what she
had concealed. When she remembered it, the notes were burnt and the jewellery partly
damaged. The insurer refused to indemnify alleging that it was a fire in the grate where it
ought to be and had not gone beyond its bounds. But the Court held that the loss fell within
the policy as the fire had burnt something which was intended to be burnt if instead of
negligently but knowingly the notes and jewellery were thrown into fire by the insured, the
insurer would not be liable.

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Similarly in the present case, the gas cylinders were not kept knowingly so as to cause fire to
the house of jack and thus the insurance company is liable for the damages and injuries
thereby caused.

In Auslin v Drew (1816) 6 Taunt 436,

It was observed that even a fire caused by the negligence of the insured or by the negligence
or misconduct of his servant is within the policy.

In the present case too, the fire was caused by the negligent act of keeping the containers of
gas outside.

In State of A.P. vs. United India Insurance Company, the High Court held that the plain
dictionary meaning of the word Accident means “the occurrence of things by chance and an
event that is without apparent cause or is unexpected. It is the cardinal principle of
interpretation of statutes that the plain meaning of the words should be taken into
consideration. Thus, taken, there should not be any mediation of any human agency to bring
it into the ambit of the word “accident”.

Similarly in the present case, the fire that broke out into the house was unexpected and thus it
was an accident and thus falls into the category of having claiming the compensation for the
damages and bodily injuries caused thereby.

1.1 CLAIMANTS ARE ENTITLES TO CLAIM INSURANCE BOTH ON

THEMSELVES AND THEIR HOUSES.

Claimants got themselves and their houses insured from the New Sun Insurance Company as
they both were agents of this same company. Their houses got fired unknowingly and in
order to extinguish fire both jumped into fire and got numerous injuries. As their intentions

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were bona fide due to which they jumped into fire to extinguish fire. If they have had any
malicious intention then there had been no need to jump in fire for them and due to it they
received numerous injuries. So, they both acted under good faith and are thus entitled to
claim compensation from the insurance company.

1.2 AMOUNT OF COMPENSATION THEY ARE ENTITLED TO RECEIVE FROM

INSURANCE COMPANY.

As both Tony (claimant no.1) and Jack (claimant no.2) are entitled to receive compensation
from the New Sun Insurance Company. The quantum of claim for the claimants shall be
around Rs. 15 lakhs for the house of Jack and Rs. 5 lakhs each for the bodily injuries the
claimants got while extinguishing the fire.

2) WHETHER THE REPUDIATION OF CLAIM BY THE NEW SUN INSURANCE

COMPANY IS VALID OR NOT?

It is humbly submitted before the Hon’ble tribunal that the New Sun insurance company has
repudiated the claim over invalid reasons.

The Insurance Company being in a dominant position, often act in an unreasonable manner
and after having accepted the value of a particular insured goods disown that very figure on
one pretext or the other when they are called upon to pay compensation. This take it or leave
it attitude is clearly unwarranted not only as being bad in law but ethically indefensible1.

Reason stated by the company is that ‘they smelled conspiracy’.

They have made baseless and false allegation that both the complainants have conspired to
burn down the houses so as to claim the insurance amount.

1 Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC.

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It is humbly submitted that there is no evidence on record which even gives a slight inference
to the fact that burning down the houses was a deliberated act of the complainants.

It is respectfully pleaded that the New Sun insurance company has acted in an unreasonable
and unethical manner.
Moreover in the present case the complainant has got the building and household articles
insured with a view to get himself indemnified in case of mishap and not for being dragged
into litigation as is apparent from the evidence on record, as the genuine claim of the
complainant has been turned down by the respondent. It was completely illegal and
unjustified; as such this is a clear cut case of deficiency in service.

2.1) Ingredients of Criminal Conspiracy

According to Section 120 A of the Indian Penal Code, 1860:

When two or more persons agree to do, or cause to be done –

(1) an illegal act, or

(2) an act which is not illegal by illegal means, such an agreement is designated a criminal
conspiracy.

Provided that no agreement except an agreement to commit an offense shall amount to a

criminal conspiracy unless some act besides the agreement is done by one or more parties to
such agreement in pursuance of thereof.

The main thing on which criminality lies under this section is the “agreement”, which
requires at least two persons. Here ‘Agreement’ is not merely the stage of intention which is
not culpable, but is much more than that.

It is a plan or a design to bring in action. The plot is an act in itself. It is not necessary that all
the members of the conspiracy must be aware of each detail of the conspiracy, but it is
essential and required that there has to be a common design among them and every
conspirator from his end of the design must carry out into effect or execute the plan.
However, every conspirator will be aware of the major and important details of the
conspiracy if not the minutest details.

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The ingredients of Section 120A(Criminal Conspiracy), of Indian Penal Code are as follows :

1) There should be two or more persons.

2) There should be Agreement between them.
3) Agreement must be to to or cause to be done, an illegal act; or
4) The act may not be illegal but is done by illegal means.

In the instant matter criminal conspiracy can’t be proved on the facts of the case.

It is humbly submitted that in the present case, the accused never had the single intention to
burn the house, as evidence on the record clearly states the gas container in the backyard of
the house caught fire, which further led to the complete demolition of the building and many
serious bodily injuries to the claimants.

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 PRAYER

Wherefore in light of the issues raised, arguments advanced and authorities

cited, it is humbly and respectfully submitted that this Honourable Tribunal may
be pleased to:

1. Award the deserved claim to the claimants with the rate or interest for
harassment and illegally withholding the claim.

And pass any other order that this Honourable Court may deem fit in the
interests of justice, equity and good conscience.

Sd/-

Counsel for the Claimant

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