National Consumer Disputes Redressal
Paresh Mohanlal Parmar vs The New India Assurance Co. Ltd., on 19 July, 2011
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 45 OF 2007 (From the order dated 21.12.2006 in Complaint No. 35/2005 of Gujarat State Consumer Disputes Redressal Commission) Paresh Mohanlal Parmar Proprietor, Smart Group, 520 / 521, Star Chambers Harihar Chowk, Rajkot 360001. Appellant Versus 1. The Divisional Manager, The New India Assurance Co. ltd., Bank of India Building, M.G. Road, Rajkot 360001. 2. The Regional Manager, New India Assurance Co. Ltd., 5th Floor, Popular House, Ashram Road, Ahmedabad 380009. 3. The Chairman Cum Managing Director, The New India Assurance Co. Ltd. Head Office, New India Assurance Co. Building, 87, M.G. Road, Fort, Mumbai 400001. Respondents BEFORE HONBLE MR. JUSTICE V.R. KINGAONKAR, PRESIDING MEMBER HONBLE MR. VINAY KUMAR, MEMBER For the Appellant Mr. S.K. Sharma, Advocate Mr. M.B. Parmar, Proprietor For the Respondents Mr. R.B. Shami, Advocate PRONOUNCED ON : 19 th JULY 2011 O R D E R MR. JUSTICE V.R. KINGAONKAR, PRESIDING MEMBER This is an appeal filed by original complainant, being aggrieved by judgment and order dated 21-12-2006 rendered by the State Consumer Disputes Redressal Commission, Ahmedabad (For short, State Commission) in complaint case no. 35/2005. The State Commission dismissed the complaint filed by the appellant mainly on the ground that the claim for compensation was not covered by the terms of the insurance policy. 2. Briefly stated, the appellants case is that he was dealing in business of mobile phones and was having shop no. 520-521 at Star chambers Harihar chowk, Rajkot. He used to store the goods in his godown no. 3/6 Anandpar, Nqavagam (Rajkot), which is situated in the outskirts of the town and is around 5 km. away from the shop premises. He had taken burglary insurance policy from the respondents bearing no. 211/46/03/00026. The shop premises and the godown were burgled in succession during the night between 11th and 12th January, 2004 and the stock of mobile phones was stolen away from both the premises. The lock was found removed and was found lying there on the street. The appellant lodged FIR with the concerned police station. The police registered offence and carried out certain investigation. The police arrested the culprit by name Mahesh alias Anil. He gave his confessional statement. He was charge sheeted in criminal case no. 1127/2005 for offence under Section 454, 457, 380, 411 and 114 of IP Code. 3. The appellant (complainant) reported the loss of the mobile phones from the business premises and the godown to the respondents on the same day i.e. 12-01-2004. The value of the stolen goods was Rs.21,52,969/-. The respondents appointed one Bharat Mehta as a surveyor. The surveyor visited the premises on 15-01-2004 and carried out the survey. The appellant gave the necessary information to the surveyor. Though the appellant repeatedly urged the respondents for due statement of his claim yet it was not done. The appellant served a legal notice on the respondents on 25-11-2004. The respondents sent him a blank plain form but the claim was not settled. The appellant approached the banks Ombudsman but it was of no avail to him. The respondents issued letter of repudiation dated 22-03-2005 to him. He was informed that the claim was repudiated because it was outside the ambit of conditions under the insurance contract. 4. The complainants case further is that he was not supplied with a copy of the policy conditions. He was not made aware of the conditions on the basis of which the claim was repudiated. The repudiation of the claim is, therefore, unlawful and unsustainable. The appellant, therefore, sought compensation of Rs.40 lakhs along with the expenses and cost of litigation. 5. By filing their written version vide exhibit 7, the respondents denied truth into the material allegations made by the appellants. The contention of the respondents was that the appellant had not taken due steps so as to take possession of the mobile handsets, which were seized by the police during course of the investigation so that the loss could be minimized. Further contention of the respondents was that in view of the complex issues involved in the matter, the State Commission should not entertain the complaint. The next contention of the respondents was that the burglary policy issued to the appellant provided that the loss could be compensated only when there was forcible and violent entry or house burglary but not in case of simple theft. The respondents further alleged that the appellant could not prove incident of burglary in his godown. The respondents submitted that the godown was opened by removing the lock, which was opened with original keys. According to the respondents, the culprits had not entered the godown by use of force and therefore the appellant could not claim any amount under the insurance policy in view of M/s Harchand Rai Chandanlal Vs. United India Insurance Co. Ltd.(JT) (8) (SC). The respondents denied that the terms of the insurance policy were not furnished to the appellant. 6. The parties filed certain documents on record. On consideration of the relevant documents and submissions of the parties, the State Commission held that repudiation of the claim by the respondents is legal and proper. The State Commission observed that though the fact of the theft has been established yet in absence of any use of force or violence while entering the premises of the godown, the case cannot be regarded as that of Burglary. The State Commission, therefore, held that the strict interpretation of the terms of insurance policy would exclude maintainability of the claim for compensation. Hence the complaint was dismissed. 7. We have heard learned counsel for the parties. We have perused the record of the State Commission. Before we embark upon discussion on the issue regarding breach of the terms of the Insurance Policy, it may be mentioned that the other contentions of the respondents were rejected by the State Commission. The appellant also had contended before the State Commission that he was not furnished with the terms and conditions of the insurance policy when the insurance policy was taken by him. The fact that the appellant took relevant insurance policy covering period between 5.06.2003 to 4.06.2004 is not in dispute. The case of the appellant was that the annexure containing terms of the insurance policy had not been attached alongwith the document of the policy furnished to him. Though the respondents denied such averment of the appellant in their written version yet the appellant reiterated the same stand in his rejoinder affidavit filed before the State Commission. The State Commission did not deal with this aspect of the matter. In our opinion, it was necessary for the respondents to prove that the terms and conditions of the Insurance Policy were furnished to the appellant when the policy document was issued in his favour. We have not come across any tangible material to infer that the relevant terms and conditions of the Insurance Policy were brought to the knowledge of the appellant. 8. We may now proceed on the assumption that the terms and conditions of the Insurance Policy were furnished to the appellant alongwith the document of insurance policy. The relevant conditions under the Insurance Policy are as follows:- Operative Clause: The company hereby agrees subject to terms, conditions and exclusions herein contained or enclosed or otherwise expressed hereonto indemnify the insured to the extent of instrinsic value of : (3-A) Any loss of or damage to property or any part thereof whilst contained in the premises described in the schedule hereto due to Burglary or House breaking (theft following upon an actual forcible and violent entry of and / or exit from the premises) and Hold-up. (3-B) Loss of money and / or other property abstracted from safe following the use of the key to the safe or any duplicate thereof belonging to the Insured, unless such key has obtained by assault or violence or any thereat. 9. Perusal of the above conditions go to show that the loss of property could be indemnified to the assured in case of burglary or house breaking and hold-up. The expression house breaking is qualified by further explanation in the sub clause 3(a) of the conditions as being a theft falling upon an actual forcible and violent entry of and or exit from the premises. So, where it is duly proved that the culprit had entered the premises by use of force and thereafter committed the theft then the condition 3(a) will have to be deemed as complied with. 10. The peculiar facts of the present case may be noticed. The appellant lodged the FIR with promptitude after he got knowledge of the theft in the godown. The police registered offence under sections 454, 457, 380, 411 and 114 of the I.P. Code on basis of the FIR. One Mahesh alias Anil alias Parmi Maulik was arrested by the Rural Police of Ahemdabad in connection with some other offence. He gave certain confessional statement to the Police which indicated that he had committed the theft of the mobile phones from the godown of the appellant. The Rajkot Police took transfer warrant and arrested the said culprit in pursuance to his confessional statement. Thereafter, at his instance eight (8) mobile phones were recovered from four different places. The culprit was charge-sheeted and prosecuted vide criminal case no. 1127 / 2005. Copy of the order of the Chief Judicial Magistrate, Rajkot goes to show that the said culprit was convicted for the offences under section 454, 457, 411 and 114 of the I.P. Code. The order rendered by the Chief Judicial Magistrate on 12.07.2006 goes to show that the case of absconding accused was pending and, therefore, the articles were not returned to the complainant. It is obvious that the complainant was unable to get beck the 8 mobile phones, which were recovered during course of the investigation though, he had attempted to do so. It is significant to note that the Chief Judicial Magistrate convicted the culprit by name Mahesh alias Anil alias Parmi Maulik on 12.07.06 and copy of that conviction order was before the State Commission prior to passing of the impugned order on 21.12.2006. Though, judgement of the Criminal Court may not be binding on the Civil Court yet when the issue is to be determined by quasi-judicial forum like the State Commission, judgement of the Criminal Court could not be ignored in toto while deciding the complaint. It appears that the State Commission did not consider the findings of the criminal court and the attending circumstances. 11. Here is a case in which the complainant filed a copy of FIR and Copies of investigation papers including the confessional statement of Mahesh alias Anil alias Parmi Maulik. The complainant came out with a case that key of the lock was got prepared by using duplicate keys and that the culprit opened the lock of the godown prior to the entry. The lock was found thrown on the street. These are significant circumstances. The throwing of the lock on the street, using of duplicate key to open that lock put on the door of the godown and thereafter making entry inside the godown are the circumstances which indicate happening of house breaking. These circumstances coupled with recitals of the confessional statement of Mahesh alias Anil alias Parmi Maulik and the nature of conviction rendered by the criminal court ought to have been considered by the State Commission in order to appreciate the total impact thereof. 12. The complainant could have no personal knowledge in respect of the manner in which the culprit had entered the godown. The confessional statement of the culprit by itself may not be relevant still, however, the fact that duplicate key was used by the culprit while opening the office premises and thereafter the keys of the lock of godown were taken away and the lock was opened are the relevant circumstances. Moreover, the nature of conviction rendered by the Criminal Court for offence under section 454 of I.P. Code is relevant to reach the conclusion that the offender(s) had committed lurking house trespass in the godown before he / they decamped with 324 mobile phones. There need not be direct evidence regarding use of force preceding the entry in the premises in each and every case. There may be inferential evidence in the given circumstances to reach conclusion that the entry preceded by use of force. 13. We have noticed from the impugned order that the State Commission dismissed the complaint mainly in view of United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal [(2004) 8 SCC 644]. We have carefully gone through the judgement of the Apex Court, which is relied upon by the State Commission in support of its decision. We are of the opinion that the fact situation in the present case stands on different footing from the fact situation which was noticed in case of United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal (supra). In that case, FIR was lodged at the Police station only under section 380 of the I.P. Code. The Apex Court, no doubt, held that if the element of force or violence is not present then the insurer cannot make claim against theft only from the Insurance Company. In the present case, when the lock of the godown was found on the street and that the culprit was convicted by Criminal Court under section 454 of the I.P. Code it may be gathered that element of force was present when the culprit entered the premises of the godown. It is not necessary that the force shall be used against the complainant or his employee prior to commission of the theft. It would be sufficient if force is used prior to entering the premises in question for the purpose of making entry therein. 14. In the peculiar facts and circumstances of the present case, we are of the opinion that the culprit had forced entry in the godown and his unchallenged conviction for offence under section 454 of the I.P. Code could not have been ignored by the State Commission. In case of United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal (supra), there was no conviction and the investigation did not end up with arrest of the culprit. That was found to be a simple case of theft from the premises. Needless to say, the State Commission should have distinguished the present case from the fact situation of the case relied upon by it. There cannot be duality of opinion that terms of the insurance policy must be strictly construed. The Apex court in General Assurance Society Vs. Chandmull Jain [AIR 1966 SC 1644], held that in interpreting document relying to a contract, the duty of the court is to interpret the word in which contract is expressed by the parties, because it is not for the Court to make a new contract, however, reasonable, if the parties have not made it themselves. Similar view is expressed in Modern Insulators Lvd. Vs. Oriental Insurance Co. Ltd. [(2000) 2 SCC 734]. 15. In Mono Industries Vs. New India Assurance Co. Ltd. [II (2008) CPJ 125 (NC)], it has been held that entry in the premises, if is found to have been effected by exercise of force, however, slight, it may be, would be sufficient to constitute forcible entry within the meaning of burglary policy. In that case, the culprit had entered the premises by removing roof-sheet and had exit by breaking lock. This Commission, therefore, held that forceful entry and exit have been proved. So, if an unauthorised entry is made even with a slight force, it will amount to an act of burglary, and will come within the ambit of such policy. 16. We may further take into account the delay caused by the respondents while repudiating the insurance claim of the appellant. We have gone through the letter correspondence between the parties. The appellant reported incident to the respondents without loss of time. The incident occurred in the night between 10th Jan. and 11th Jan. 2004. The intimation was given to the respondents on 12.01.2004. The surveyor was appointed to conduct the inspection and survey. It is an admitted fact that the surveyor conducted the inspection on 15.01.2004 and surveyed the relevant documents. The surveyor opined that the claim was truthful and the incident of burglary had happened as narrated by the complainant. The respondents repudiated the claim vide letter dated 22.03.2005, after more than one year. The disclaimer of the liability was on the following grounds:- 1) The godown was opened by keys which had apparently been taken from the insureds office itself. Therefore, no due diligence was observed by the insured as required by the policy condition no. 3 which states that the insured shall take all reasonable steps to safeguard the property insured against accident, loss or damage. 2) The keys were not obtained by force / threat as the godown was opened by the original keys. This clearly violates the exclusion under the policy, which states that any loss following use of the key or any duplicate thereof belonging to the insured or person is whose custody the insured property is, unless, such key or duplicate key has been obtained by threat or by violence. 3) The burglary policy provides cover against loss by burglary / House breaking, i.e., theft following and actual, forcible and violent entry of and / or exist from the premises had been observed. In this above incident, there was no forcible entry into the premises. 17. In our opinion, there was no tangible material available to attribute any negligence to the appellant (complainant). The keys were removed from the shop premises of the appellant during the course of night by using a duplicate key to open the lock of the shop. The respondent did not adduce any evidence to show that the keys of the godown were negligently made available to the culprit, by the appellant. As stated before, there was delay of more than one year in repudiation of the claim. Considering such a huge delay, it will have to be said that the respondents carved out the reasons stated in their repudiation letter dated 22.03.2005. In fact, even if the respondents had found that the incident of the theft was true one and the loss was caused to the complainant as a result of said incident, an attempt should have been made to settle the claim on non-standard settlement basis. Unfortunately, the respondents made no such attempt and were bent upon repudiation of the claim without considering the correctness thereof. In our opinion, the approach of the respondents was unfair and improper. The repudiation was afterthought and unjustified. 18. The Counsel for the respondent submitted that the issue need not be considered in as much as Revision Petition no. 1081 / 2008 arising out of identical fact situation, has been dismissed by this Commission. We have considered the judgement and order dated 17.02.2011, rendered in RP No. 1081 / 2008. We are of the opinion that the scope of the revision petition is rather limited and therefore, this Commission was not required to appreciate the evidence on record. This Commission was concerned only with the question of legality and propriety of the orders which were impugned in the revisional jurisdiction. However, while considering the present appeal, it is necessary to re-appreciate the evidence and to examine whether the dismissal of the complaint is proper. We find that the complaint has been dismissed by the State Commission without considering the nature of conviction rendered by the Criminal Court and also the attending circumstances and the relevant evidence tendered by the parties. In this view of the matter, we are inclined to allow the appeal. 19. In the result, the appeal is allowed. The impugned judgement and order is set aside. The complaint is partly allowed. The respondents shall pay amount of Rs.20 lakh to the appellant (complainant) alongwith interest @6% from the date of repudiation till the date of filing of complaint and @9% p.a. from the date of filing of complaint till the date of realization of the entire amount. The respondents shall pay cost of Rs.20,000/- to the appellant being the consolidated cost of the complaint and the appeal and shall bear their own costs. ..
(V.R. KINGAONKAR J.) PRESIDING MEMBER ..
(VINAY KUMAR) MEMBER RS/