National Consumer Disputes Redressal
United India Insurnce Co. Ltd. vs Raythara Shakari Bank Ltd. on 27 June, 2018
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 474 OF 2008 (Against the Order dated 25/07/2008 in Complaint No. 91/2007 of the State Commission Karnataka) 1. UNITED INDIA INSURNCE CO. LTD. Having its Head Office No. 24, Whites Road Chennai - 14 Tamil Nadu 2. UNITED INDIA INSURANCE CO. LTD. Through Manager, Delhi Regional Office I New Delhi Delhi ...........Appellant(s) Versus 1. RAYTHARA SHAKARI BANK LTD. Hiriadka, Post Hiriadka, Udupi Taluk Udupi Karnataka ...........Respondent(s)
BEFORE: HON'BLE MR. PREM NARAIN,PRESIDING MEMBER
For the Appellant : Mr. Vishnu Mehra , Advocate For the Respondent : Mr. Parikshit P. Angadi, Porxy counsel
For Mr. V.N. Raghupathy, Advocate
Dated : 27 Jun 2018 ORDER
This first appeal has been filed by the appellant United India Insurance Co. Ltd. against the order dated 25.07.2008 of the State Consumer Disputes Redressal Commission, Karnataka (in short 'the State Commission') passed in Complaint No.91/2007.
2. Brief facts as recorded by the State Commission are that this is the second round of litigation between the parties. The respondent/complainant in the first instance had filed the complaint No.44/04 before the State Commission seeking for payment of compensation of Rs.36,65,012/- on the ground that certain jewels deposited by the customers as security for the loan were lost due to the burglary and theft committed in the bank. In the said complaint it was brought to the notice of the State Commission that the police had registered a case against one Bhimbahadoor Singh@ Bhim Adikari who was an employee of the complainant bank under Section 457,380,381,411,201 r/w 149 of IPC and the case was pending when the complaint was considered on merits. As per the terms of the policy, if the theft is by an employee of the bank there is no liability on the part of the Insurance Company to compensate the loss suffered by the insured due to the burglary or theft. In view of this particular condition, as the criminal case against Bhim Bahadur Singh was pending consideration before the criminal court, the complaint was disposed of observing as follows:-
"The claim of the complaint depends upon the facts whether any employee of the bank was involved in the theft case or not. In the criminal case if any employee of the bank is held to be involved in the theft, then necessarily the Insurance Company is not liable to pay compensation in view of the Exclusion clause referred to above. In the alternative, if the said Bhim Bahadur Singh is held to be not guilty of the offence and he is acquitted, then necessarily the theft must be by person/s other than the employees of the bank and in such event the Insurance Company is liable to pay compensation."
3. With this observation the said complaint was disposed of reserving liberty to the complainant to file a fresh complaint in the event the criminal court comes to the conclusion that no employee of the bank is involved in the theft. Complainant has produced the copy of the order passed by JMFC, Udupi in CC No.4068/01 and 1669/02. In the said case Bhimbahadoor who was working as a watchman in the complainant bank is accused no.1. The Criminal Court considering the evidence adduced before it and passed the following order:
"Acting u/s 248(1) of Cr.P.C. accused Nos.1,2 and 6 are hereby acquitted for the offence punishable u/s 457,380,381,411,201 of IPC."
4. In view of the said acquittal order the complainant filed CC No.91 of 2007 before the State Commission.
5. The complaint was resisted by the opposite party on the ground that since the police have registered a case against Bhimbahadoor, who was an employee of the complainant bank on the ground that he was involved in the theft case and therefore, there was no liability of the Insurance Company to indemnify the loss suffered by the complainant.
6. The State Commission vide its order dated 25.07.2008 allowed the complaint and directed the opposite party/Insurance Company to pay Rs.21,59,188/- to the complainant along with interest @13% p.a. from the date of repudiation i.e. from 23.06.2003 till realization.
7. Hence the present appeal.
8. Heard the learned counsel for both the parties and perused the record. Learned counsel for the appellant stated that in deciding the present complaint, the State Commission has treated this complaint as extension of earlier complaint No.44/04. It was further contended that the decision of the State Commission is based on a decision of criminal court acquitting the accused Bhimbahadoor in the criminal case. A decision of the criminal court cannot be binding on civil court/consumer forum. The State Commission should have decided this case independently on the basis of the evidence and pleadings available on record. To support his contention, the learned counsel referred to the decision of the Hon'ble Supreme Court in Vishnu Dutt Sharma Vs. Daya Supria (SMT), (2009) 13 SCC 729 wherein following has been observed:-
"26. It is, however, significant to notice a decision of this Court in M/s Karam Chand Ganga Prasad & Anr. etc. vs. Union of India & Ors. [(1970) 3 SCC 694], wherein it was categorically held that the decisions of the civil court will be binding on the criminal courts but the converse is not true, was overruled therein, stating: K.G. Premshanker case, SCC .98,para 33):
"33. Hence, the observation made by this Court in V.M. Shah case that the finding recorded by the criminal court stands superseded by the finding recorded by the civil court is not correct enunciation of law. Further, the general observations made in Karam Chand case are in context of the facts of the case stated above. The Court was not required to consider the earlier decision of the Constitution Bench in M.S. Sheriff case as well as Sections 40 to 43 of the Evidence Act."
28. If judgment of a civil court is not binding on a criminal court, it is incomprehensible that a judgment of a criminal court will be binding on a civil court. xxxxxxxxxxx "
9. Learned counsel for the appellant further argued that the State commission has erred in allowing the complaint without appreciating that (1) it was the admitted case of the Bank Manager before the Criminal Court that Bhimbahadoor was an employee of the Bank and was involved in the theft and hence the appellant rightly repudiated the claim having regard to the terms and conditions of the policy as no more proof was required as to the cause of loss ; (2) that the accused was acquitted only on the ground that the Bank Manager was not examined; and (3) the prosecution has failed to examine the material witnesses. Thus, it is clear that in order to get the insurance claim from the appellant, the bank has not examined the Manager and other witnesses. Thus, acquittal is not on the basis of the relevant evidence but for want of proper evidence. The State Commission erred in allowing the complaint without appreciating that the complainant cannot take advantage of their deliberate wrong in not prosecuting the criminal case with due diligence by not examining the Bank Manager and not examining the material witnesses leading to the acquittal of Bhimbahadoor. The learned counsel further argued without admitting any liability that the State Commission gravely erred in directing the appellant to pay Rs.21,59,188/- in excess of the assessment of loss of Rs.16,22,140/- by the surveyor. Thus, in the event this Commission is of the view that the appellant is liable under the policy, the liability ought to be limited to Rs.16,22,140/- and to this extent the impugned order ought to be modified.
10. Learned counsel for the appellant also raised the question of admissibility of the claim under the policy and it has been stated that the loss due to 'burglary' is only covered and ordinary theft is not covered. The State Commission has not examined whether the incident is covered under the burglary i.e. theft with use of force. The use of force is very important ingredient and the same has to be proved before reaching to the conclusion that the claim under the burglary is admissible. The State Commission has erred in allowing the complaint even though the allegation of burglary as defined in the policy has not been proved. In the present case, there was no use of force or violence and as such the claim was rightly repudiated.
11. On the other hand learned counsel for the respondent/complainant stated that the terms and conditions of the policy are very clear and now that Bhimbahadoor has been fully acquitted by the court, it cannot be presumed that he was involved in the incident. Accordingly, the exclusion clause does not become applicable in the matter. As per the order passed in the consumer complaint No.44/04, the matter was to be finalized/ settled on the basis whether any employee of the complainant bank was involved in the burglary/theft or not. That order had attained finality and that order now cannot be revisited. Hence according to that order, when no employee of the complainant bank has been found to have been involved in the incident, the claim automatically becomes payable, therefore, the State Commission has rightly decided the complaint and the appeal filed by the Insurance Company deserves to be dismissed.
12. I have carefully considered the arguments advanced by both the learned counsel and have examined the material on record. It is true that by order dated 02.06.2006 passed in CC/44/04 the State Commission had disposed of the complaint by observing that if an employee is found involved in the incident of theft/burglary, the Insurance claim shall not become payable and if the employee is not found involved, the insurance claim will be paid and the liberty was granted to the complainant to file fresh complaint if needed. As this order seems to have become final, its operation now cannot be questioned and it seems that because of that reason, the State Commission has not considered any other aspect for allowing the insurance claim of the complainant and has based its decision in CC No.91/2007 on the basis that the employee of the complainant Bhimbhadoor has been acquitted by competent court in the theft case and therefore, involvement of an employee of the complainant cannot be taken into consideration. Though the judgment of Hon'ble Supreme Court in Vishnu Dutt Sharma Vs. Daya Supria (SMT) (supra) referred to by the learned counsel for the appellant lays down that decision of the criminal court cannot be binding on civil court, it is important to note the following observation of the Apex court in the same judgment:-
"28. xxxxxxxxx We have noticed hereinbefore that Section 43 of the Evidence Act categorically states that judgments, orders or decrees, other than those mentioned in sections 40, 41 and 42 are irrelevant, unless the existence of such judgment, order or decree, is a fact in issue, or is relevant in some other provisions of the Act, no other provisions of the Evidence Act or for that matter any other statute had been brought to our notice."
13. It is to be considered whether the order of the criminal court is a fact in issue or not. In the present case, the order of acquittal is definitely a fact in issue as the decision in the present complaint was dependent on the decision of the criminal court because the order passed in the first complaint had become final. If an accused is acquitted by the competent court and no appeal is filed against that order acquittal order becomes final and in this situation, the accused cannot be considered as involved in the crime. The competent court has acquitted Bhimbahadoor. This simply means that his involvement in the incident now cannot be presumed. Criminal court judgment in the present case is only confirming a fact, which is to be taken into consideration in the consumer case, which is of the civil nature. I do not see any situation that even after the acquittal having become final by the competent criminal court, the same person (accused) can be considered as involved in the same crime. In this way, I do not see any illegality in the order dated 25.07.2008 of the State Commission so far as it relates to the non- applicability of the exclusion clause in the present case.
14. Coming to the question of claim amount, the State Commission has allowed an amount of Rs.21,59,188/-, whereas the policy was only for Rs.18,00,000/-. Thus, in no way, the State Commission should have allowed more amount than Rs.18,00,000/- as insurance claim. Moreover, the surveyor has assessed the net loss as Rs.16,22,140/- in the matter. The State Commission has not discussed the report of the surveyor in its whole order. The surveyors are appointed under the Insurance Act, 1938 and their report cannot be brushed aside without any cogent reasons. It is very surprising that the State Commission has not dealt with the report of the surveyor and has not considered the same for deciding the insurance claim. As no reasons have been given by either the State Commission or the complainant, there is no alternative but to accept the loss assessed by the surveyor and the liability of the Insurance Company would be limited to the amount assessed by the surveyor.
15. Based on the above discussion, the appeal is partly allowed and the order of the State Commission is modified to the extent that the appellant Insurance Company shall be liable to pay Rs.16,22,140/- only to the respondent/complainant instead of Rs.21,59,188/- as ordered by the State Commission. The appellant shall pay interest @7% p.a. on this amount from the date of order of the State Commission till actual payment. This order be complied by the appellant within 45 days from receipt of the copy of the order. Parties to bear their own costs.
...................... PREM NARAIN PRESIDING MEMBER