National Consumer Disputes Redressal
Jagrut Nagrik & Anr. vs Oriental Insurance Company Limited on 9 February, 2018
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3451 OF 2017 (Against the Order dated 10/08/2017 in Appeal No. 505/2015 of the State Commission Gujarat) 1. JAGRUT NAGRIK & ANR. THROUGH THEIR MANAGING TRUSTEE P.V. MOORJANI, OPP. LBS VIDYALAYA NEAR PRERNA SCHOOL SANGAM KARELIBAUG, VADODARA GUJARAT 2. B.N. SETHI (RTD) I.A.F R/O. 602, ANAND HOUSE IV, EME TEMPLE ROAD, FATEHGUNJ VADODARA-390002 GUJARAT ...........Petitioner(s) Versus 1. ORIENTAL INSURANCE COMPANY LIMITED HAVING ITS OFFICE AT MOTOR OWN DAMAGE CLAIMS SERVICE CENTRE, 3RD FLOOR, VANIJYA BHAVAN, RACE COURSE VADODARA GUJARAT ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Petitioner : Mr. P.V. Moorjani, A.R. For the Respondent : Mr. Kishore Rawat, Advocate
Dated : 09 Feb 2018 ORDER
JUSTICE V.K.JAIN, (ORAL)
Petitioner No.2, namely, Mr. B.N. Sethi owned a truck bearing No.GJ-6-TT-6564 which he had got insured with the Insurance Company for the period 5.12.2009 to 4.12.2010. During subsistence of the insurance policy, the driver of Mr. B.N. Sethi took the vehicle to GIDC, Halol for transporting goods. He, however, did not return with the vehicle. The incident was report to the police on 25.1.2010 but the complainant was asked to search for the vehicle and, therefore, the FIR came to be registered only on 28.1.2010. The claim lodged with the insurer, however, was rejected vide letter dated 28.5.2010 which to the extent it is relevant reads as under:-
"We have considered the papers sent by you and the facts and circumstances of the case and in our view the present one is not a theft simpliciter, as per The FIR lodged by you. The driver ran away with The truck which was insured with us. According to our policy condition when a commercial vehicle is stolen by the driver or cleaner of The insured, it does not fall under The definition of " Theft" but it is a case of criminal breach of trust.
FIR filed with Karelibag police station vide CR No I-15/2010 under section 406 & 420 of IPC. Further police authority filed Summary "A" at Court 13, Vadodara which is being approved by honourable judicial authority. Section 406 of Indian Penal code is suggesting provisions for punishment for criminal breach of trust, Section 420 of Indian Penal code is cheating and Dishonestly inducing delivery of property, and section 114 of Indian Penal Code Abettor present when offense is committed.
Further as per the policy condition claim for theft of vehicle not payable if theft not reported to company within 48 hours of its occurrence. The vehicle was stolen on 22.1.2010, you have reported to us on 1.2.2010.
In the circumstances, in our view claim is not considered as a Theft of the vehicle/insured peril as per the terms and condition of the policy. Competent authority repudiate your claim which please note."
2. It appears that a representation was thereafter made by Mr. Sethi. In response to the said representation, the insurer, vide letter dated 2.7.2010, took the following stand with respect to his claim:-
"We are in 1eceipt of your letter Dt. 21.06.10. We have gone through the letter & would like to comment as under:
The insurance policy covers Theft of a vehicle. As per FIR ledged with the police, your driver has gone away with your vehicle & also the FIR has been registered under sec 406 & 420. This sec deals with Breach of Trust & and cheating and dishonesty. The insurance company does not cover Breach of trust, cheating or dishonesty."
3. Being aggrieved from the rejection of the claim, the complainant - Mr. B.N. Sethi approached the concerned District Forum along with an organisation, namely, Jagrut Nagrik. The complaint was resisted by the insurer primarily on the ground that this was not a case of theft and, therefore, the loss was not covered under the insurance policy.
4. The District Forum having dismissed the complaint. The petitioners approached the concerned State Commission by way of an appeal. The said appeal also having been dismissed, they are before this Commission by way of this revision petition.
5. As far as the delay in reporting the theft to the insurer is concerned, though this was one of the grounds for rejection of the claim, no such plea was taken in the written statement filed by the insurer before the District Forum. This was also not the stand taken in the letter dated 2.7.2010. As a result, the complainants did not get an opportunity to explain the delay in reporting the theft to the insurer. In my view, considering that the aforesaid plea was not taken either in the letter dated 2.7.2010 which followed the previous letter dated 28.5.2010 nor in the written version filed by the insurer before the District Forum, the said plea should not have been considered and the complaint should not have been rejected on that ground.
6. As far as the second plea taken by the insurer is concerned, it has repeatedly been held by this Commission, that such a case would constitute theft in terms of the definition given in Section 378 of the Indian Penal Code though it may also constitute a criminal breach of trust. Reliance in this regard is placed upon the decision of this Commission in Revision Petition No.2601 of 2017 - Oriental Insurance Co. Ltd. Vs. Dhanraj Surana, decided on 31.10.2017.
8. The decision of this Commission in Dhanraj Surana (supra), to the extent it is relevant reads as under:-
"4. The only question which arises for consideration in this case is as to whether this was a case of theft of the vehicle or not. If it was a case of theft, the claim in terms of the insurance policy was payable to the complainant. An identical issue came up for consideration of this Commission in The Oriental Insurance Company Ltd. Vs. Ms. Paramjit Kaur, Revision Petition No.2159 of 2015, decided on 15.12.2015 and the following view was taken :-
"Admittedly, the vehicle was insured inter-alia against loss on account of (i) burglary, housebreaking or theft, (ii) by malicious act. Therefore, the question which arises for consideration is as to whether the loss of truck in the fact and circumstances of the case, can be construed to be covered by theft or by malicious act or not? An identical issue came for consideration before this Commission in S. Bhagat Singh vs. The Oriental Insurance Co. Ltd., R.P. No.7 of 1991 decided by Bench of four Members on 03.10.1991. In the above referred case, the taxi owned by the complainant which used to be driven by the driver employed by him left with some passengers in it, but thereafter the whereabouts of the taxi and the driver could not be known. Intimation having been given to the insurance company, the matter was investigated by the insurer. No claim however was being paid. Being aggrieved, the complainant approached the concerned District Forum by way of a complaint. The complaint was resisted on the ground that it was a case of criminal misappropriation or breach of trust and not a case of theft. Rejecting the contention of the insurance company, this Commission inter-alia held as under:-
"After considering the arguments of the learned counsel for the parties we have come to the conclusion that the present case is one of theft. Criminal breach of trust is defined in sec.405 of the Indian penal code. There is nothing on the record to show that the driver had any dishonest intention to misappropriate or convert to his own use the taxi-car when he left Taxi stand Kamla Nagar Market on the night in question with passengers in it. It is possible that the driver might have been murdered or relieved of the taxi by the passengers. It was for the respondent company to allege and prove that the case falls under sec.405, Indian Penal Code. There is the bare allegation of the respondent company that the case is of criminal misappropriation or breach of trust. The case had been investigated by an officer of the respondent company. It has not been stated by the company that said investigation revealed facts contrary to the facts alleged by the complainant.
Even if it is assumed that the driver dishonestly took away the taxi-car, even then the case would fall under sec.378, Indian Penal Code wherein 'theft' has been defined. The present case is fully covered by illustration (d) appended to that section. The said illustration reads as follows:
d) A, being Z's servant, and entrusted by Z with the care of Z's plate, dishonestly runs away with the plate, without Z's consent. A has committed theft. In the present case the driver was entrusted with the taxi-car. He did not take it back to Dehradun but has gone away somewhere either with the passengers or after they had alighted from it on way to Dehradun. As noticed earlier, the taxi-car was to ply only between Dehradun and Delhi. Thus the driver in the present case will be deemed to have committed theft of the tax-car."
"7. This question again came up for consideration of this Commission in United India Insurance Co. Ltd. vs. Ravi Kant Gopalka, R.P. No.1958 of 2004 decided on 13.09.2007 by a Bench of three Members. In the above referred case, the insured vehicle was taken away by the driver for servicing but the driver neither turned up nor did he bring back the vehicle. An FIR against the driver for committing theft of the vehicle was lodged and the insurance company was also informed. No claim having been paid, a complaint was filed. The State Commission ruled in favour of the complainant. Being aggrieved the insurance company approached this Commission and contended that since the police had registered a case under Section 406 of the Indian Penal Code (I.P.C.), the act of taking away of the vehicle by the driver would not amount to theft. Rejecting the contention and holding the order of the State Commission, this Commission held as under:-
"In our view, this submission is without any justification because of the definition of theft under Section 378 of the I.P.C. Illustration (d) to Section 378 specifically provides that-
A, being Z's servant, and entrusted by Z with the care of Z's plate, dishonestly runs away with the plate, without Z's consent. A has committed theft.
In any case, this would be a malicious act and the policy covers such peril. Further, the exclusion clauses also nowhere provide that an offence under Section 406 of I.P.C. is excluded.
Further, in our view, this loss of the car could also be construed to be covered by the general category of malicious acts, a set of grounds used in the policy. It is a malicious act of a person who was an employee of the insured at the relevant time."
8. The learned counsel for the petitioner has referred to the decision of the Hon'ble Supreme Court in National Insurance Co. Ltd. Vs. Ishar Das Madan Lal, (2007) 4 Supreme Court Cases 105. In the case before the Hon'ble Supreme court, the respondent, which was a Jeweller had lodged a claim alleging theft of jewellery by a customer to whom the jewellery was temporarily handed over by the complainant. The question before the Hon'ble Court was as to whether the handed over the jewellery to a customer amount to entrustment. Ruling in favour of the complainant and against the insurance company, the Hon'ble Supreme Court inter-alia held as under:-
"12. The word 'entrust' would imply giving responsibility to a person upon whom the owner has confidence. It envisages establishment of a relationship. When a customer enters into a jewellery shop, as of necessity, the owner or his agent must allow him to inspect the merchandise, the customer intends to purchase. For the said purpose possession in the legal sense is not handed over. The owner or his agent does not loose complete control thereover.
14. Mr. Vishnu Mehra, the learned counsel appearing for the appellant has relied upon the meaning of the word 'entrust' as contained in Black's Law Dictionary, 8th Edn. and Webster's Universal Dictionary.
15. In Black's Law Dictionary, the word 'entrust' has been defined as under :
"To give (a person) the responsibility for something after establishing a confidential relationship."
16. In Webster's Universal Dictionary meaning of the word 'entrust' reads as under :
"To confer as a responsibility, duty etc. to place, something in another's care."
17. Apart from the fact that the said meaning of the term "entrustment" goes against the submission Mr. Mehra, we may notice that in Black's Law Dictionary the word "entrusting" in commercial law has been described as:
"The transfer of possession of goods to a merchant who deals in goods of that type and who may in turn transfer the goods and all rights to them to a purchaser in the ordinary course of business." Transfer of possession of goods, therefore, is a sine qua non for entrustment. The person must be handed over the possession of the property. Illustration (d) appended to Section 378 IPC envisages a situation of this nature. It by no stretch of imagination would have contemplated a situation where an unknown customer would have committed theft."
9. In the case relied by the learned counsel for the petitioner, the Hon'ble Supreme Court was not concerned with the question as to whether a case of the driver of a vehicle found missing along with vehicle would constitute theft or criminal breach of trust. On the other hand, the above referred decisions of this Commission directly cover a case where the driver takes a vehicle and then does not return. Moreover, this Commission has also taken the view that such a case will also amount to a malicious act and therefore the loss would be covered under the insurance policy taken by the owner of the vehicle. Since I am bound by the previous decisions of this Commission rendered by a Larger Bench, it is not open to me to take a contrary view unless the aforesaid decisions are shown to be per incuriam. The petitioner however has failed to show that the aforesaid decisions rendered by the Larger Bench of this Commission are per incuriam."
5. For the reasons stated hereinabove, I hold that this was a case of theft of the vehicle, though it may also possibly constitute a case of an offence punishable under Section 406 of IPC. Once it is held that it was a case of theft, there was no escape from the conclusion that the petitioner was liable to reimburse the complainant for the loss suffered by him."
9. For the reasons stated hereinabove, the impugned orders cannot be sustained and the same are accordingly set aside. The respondent is directed to assess the claim on merit in accordance with law and settle the same within three months from today. The revision petition stands disposed of accordingly. No order as to costs.
......................J V.K. JAIN PRESIDING MEMBER