National Consumer Disputes Redressal
New India Assurance Co. Ltd vs Shri Pankaj Kapoor on 4 March, 2013
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO.206 of 2007 (From the Order dated 15.01.2007 in Complaint Case No.C-121/98 of the State Consumer Disputes Redressal Commission, New Delhi) New India Assurance Co. Ltd. DRO-I, Level-V, Tower II, Jeevan Bharti, Connaught Circus, New Delhi .. Appellant Vs. 1. Shri Pankaj Kapoor, S/o Shri Chand Kapoor, R/0 92, Lodhi Road Complex, New Delhi 2. Branch Manager, Haryana Financial Corporation, H.No.449, Sector 14, Sonepat, Haryana 3. The Managing Director, Haryana Financial Corporation, Chandigarh ..Respondents BEFORE: - HONBLE MR. JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS. VINEETA RAI, MEMBER For the Appellant : Mr. R.B. Shami, Advocate For the Respondent No.1 : N E M O For the Respondent No.2 & 3 : Mr. S.B. Singh, Advocate PRONOUNCED ON: 04.03.2013 O R D E R
ASHOK BHAN, J., PRESIDENT Appellant which was Opposite Party Nos.1 & 2 before the State Commission has filed this Appeal against the judgment and order dated 15.01.07 passed by the State Consumer Disputes Redressal Commission, Delhi (in short, the State Commission) in Complaint No. C-121/1998 wherein the State Commission allowing the complaint has directed the Appellant to pay a sum of Rs.8,00,000/- to the Respondent/Complainant along with compensation of Rs.50,000/- for mental agony and harassment.
FACTS:-
Complainant/Respondent No.1 (hereinafter to be referred to as the Complainant) had set up a plastic factory. He was sanctioned and disbursed a loan of Rs.7,50,000/- by the Haryana Financial Corporation, Respondent No.2 & 3 herein (for short, the HFC). He executed a mortgage deed dated 10.02.95 in favour of the HFC which contained the various terms and conditions on which the loan was granted and the schedule of repayment. Complainant took a Burglary Insurance (Business Premises) policy for Rs.8,26,000/- from the Appellant Insurance Company for the period from 8.8.96 to 7.8.97.
Complainant failed to repay the installments and the loan amount. HFC took steps for recovery of the loan amount. In spite of several reminders sent for repayment of the loan, Complainant did not pay the same. HFC issued a recall notice dated 03.02.97. When no response came from the Complainant, another notice dated 19.3.97 was sent wherein it was mentioned that if the Complainant did not pay the loan amount, action would be initiated for recovery of the loan amount under Section 29 and 31 of the State Financial Corporation Act, 1951. Loan amount was not re-paid. HFC in exercise of its power u/s 29 and 31 of the State Financial Corporation Act, 1951, took the possession of the factory premises, machinery and plant on 8.4.97. HFC issued another notice dated 29.10.97 to the Complainant regarding sale of property and when no response was received, the factory premises, machinery and plant were sold and the proceeds of the sale were adjusted against loan amount.
Complainant filed a civil suit in the City Civil Court, Sonepat challenging the legality of the taking over of the insured property. A Court Commissioner was appointed by the Civil Court to prepare an inventory on 2.8.97 who reported that a part of the machinery was missing.
Complainant thereafter without filing the FIR or lodging a claim with the Appellant filed a complaint in the State Consumer Disputes Redressal Commission at New Delhi claiming an amount of Rs.8,00,000/- being the purported price of the stolen machinery along with interest @ 18% p.a., Rs.2,00,000/- towards financial loss and mental agony besides Rs.2000/- each towards travelling allowance and filing of complaint.
Appellant, on being served, entered appearance and took the plea that the complainant was guilty of concealing material facts; that it was neither a case of theft nor burglary as the Complainant had taken a loan from HFC and when he failed to pay even a single installment, HFC took possession of the factory for the purpose of recovery of the loan; that no FIR regarding the theft of part of the machinery was lodged with the police; that there was delay in intimating the Appellant about the theft in violation of the terms and conditions of the policy which deprived the Appellant of its legitimate right to enquire about the theft as well as to trace the stolen property; that there was no insurable interest left in the Complainant as by the time the alleged theft was committed, the property had already been taken over by the HFC.
HFC filed a separate written statement stating therein that since the Complainant had failed to repay the loan as per the agreement arrived at between the parties, it had taken possession of the factory premises along with machinery etc. in exercise of its power u/s 29 and 31 of the State Financial Corporation Act, 1951 by breaking the locks. It was denied that any theft had taken place.
State Commission, over-ruling the stand taken by the opposite parties, allowed the complaint and directed the Appellant to pay a sum of Rs.8,00,000/- to the Complainant along with compensation of Rs.50,000/-
Appellant, being aggrieved, has filed the present appeal.
Complainant, on notice being issued, was duly served. He appeared in person on 25.02.08, 10.10.11, 25.07.12 and 26.09.11. On 26.09.12, case was adjourned at the request of the Complainant to 6.12.12. Complainant did not appear and case was adjourned for today with a direction to the office to inform the Complainant about the adjourned date of hearing with a note that in case he does not appear on the next date of hearing, he shall be proceeded ex-parte and appeal be disposed of in his absence.
Complainant is not present and accordingly proceeded ex-parte.
Complainant had taken Burglary Insurance (Business Premises) Policy for Rs.8,26,000/- from the Appellant for the period from 8.8.86 to 7.8.97. For default in payment of the loan amount, HFC took possession of the factory premises, machinery and plant on 8.4.97. The Court Commissioner appointed by the Civil Court in the Civil Suit filed by the Complainant against the HFC, prepared an inventory on 2.8.97 reporting that certain machinery was missing. Complainant putting the value of the lost machinery filed the complaint in the year 1998 before the State Commission. We agree with the contention raised by the Ld. Counsel for the Appellant that after taking over the property by the HFC on 8.4.97, Complainant was left with no insurable interest in the property. On taking over the property u/s 29 and 31 of the State Financial Corporation Act, 1951, the property vested in the Corporation free from all encumbrances.
In exercise of its power u/s 29 and 31 of the said Act, HFC could sell the property and adjust the sale proceeds towards the loan amount. After taking over the property by the HFC, complainant was left with no insurable interest.
Complainant did not produce any evidence to show the value of the stolen property. State Commission on the basis of averments made in the complaint fixed the value of the stolen property at Rs.8,00,000/-. In the absence of any assessment made by the Surveyor or any other evidence, the value of the alleged stolen property could not be fixed at Rs.8,00,000/-.
This apart, HFC while taking over the possession of property had noticed that certain machineries had been removed and a part of it had been dis-mentled. HFC had kept a guard to ensure the safety of the property. The case of the HFC is that no theft had taken place. As the property was in the possession of the HFC, it was for the HFC to report whether any theft had taken place or not.
Complainant did not lodge any FIR with the police that the machinery had been stolen from the insured premises. In terms of the conditions of the policy, insured was required to inform the Insurance Company about the theft immediately to enable it to enquire about the theft as well as to trace the property.
Appellant was never informed about the theft. Appellant came to know about the theft only on filing of the complaint. Supreme Court in a recent judgment in Oriental Insurance Co. Ltd. Vs. Parvesh Chander Chadha Civil Appeal No.6739/2010 decided on 17.8.2010, has held that not informing the insurance company immediately after the theft deprives the insurance company of its legitimate right to investigate the matter and such a delay is fatal to the claim. Relevant observations of the Supreme Court are as under:-
Admittedly the respondent had not informed the appellant about the alleged theft of the insured vehicle till he sent letter dated 22.5.1995 to the Branch Manager. In the complaint filed by him, the respondent did not give any explanation for this unusual delay in informing the appellant about the incident which gave rise to cause for claiming compensation. Before the District Forum, the respondent did state that he had given copy of the first information report to Rajender Singh Pawar through whom he had insured the car and untraced report prepared by police on 19.9.1995 was given to the said Shri Rajender Singh Pawar, but his explanation was worthless because in terms of the policy, the respondent was required to inform the appellant about the theft of the insured vehicle. It is difficult, if not impossible, to fathom any reason why the respondent, who is said to have lodged First Information Report on 20.1.1995 about the theft of car did not inform the insurance company about the incident. In terms of the policy issued by the appellant, the respondent was duty bound to inform it about the theft of the vehicle immediately after the incident. On account of delayed intimation, the appellant was deprived of its legitimate right to get an inquiry conducted into the alleged theft of the vehicle and make an endeavour to recover the same. Unfortunately, all the consumer foras omitted to consider this grave lapse on the part of the respondent and directed the appellant to settle his claim on non-standard basis. In our view, the appellant cannot be saddled with the liability to pay compensation to the respondent despite the fact that he had not complied with the terms of the policy. (emphasis supplied) This apart, Complainant had taken the Burglary Insurance (Business Premises) Policy from the Appellant. Complainant has failed to prove that a burglary had taken place at the insured premises. Honble Supreme Court in the case of United India Insurance Co. Ltd. Vs. M/s Harchand Rai Chandan Lal reported as 2004 CTJ 1018 (SC) (CP) after discussing the difference between the Theft and Burglary, held as under:
The definition given in the policy is binding on both the parties. The policy is a contract between the parties and both parties are bound by the terms of contract. As per the definition of the word burglar, followed with violence make it clear that if any theft is committed it should necessarily precede with violence i.e. entry into the premises for committing theft should involve force or violence of threat to insurer or to his employees or to the members of his family.
Therefore, the element of force and violence is a condition precedent for burglary and housebreaking. The term burglary as defined in the English Dictionary means an illegal entry into the building with an intent to commit crime such as theft. But in absence of violence or force the insurer cannot claim indemnification against the insurance company. The terms of the policy have to be construed as it is and we cannot add or subtract something. Howsoever liberally we may construe the policy but we cannot take liberalism to the extent of substituting the words which are not intended. It is true that in common parlance the term burglary would mean theft but it has to be preceded with force or violence. It the element of force and violence is not present then the insurer cannot claim compensation against theft from the insurance company.
It is not the case of the Complainant that the theft of machinery has preceded with force or violence as per the terms of insurance policy. Under the circumstances, Appellant cannot be fastened with any liability to indemnify the complainant for the alleged theft.
For the reasons stated above, appeal is accepted, order of the State Commission is set aside and the complaint is ordered to be dismissed.
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(ASHOK BHAN J.) PRESIDENT . . . . . . . . . . . . . . . .
(VINEETA RAI) MEMBER Yd