State Consumer Disputes Redressal Commission
Smt. Dhayan Chandi vs Niac Ltd. & Anr. on 29 June, 2009
H H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, SHIMLA. --- FIRST APPEAL NO.69/2009. RESERVED ON 17.6.2009 DATE OF DECISION: 29.6.2009. Smt. Dhayan Chandi W/o Sh. Bal Krishan, R/O VPO Mandal, Tehsil Jubbal, Distt. Shimla, H.P. Appellant. Versus 1. New India Assurance Company Limited through its Divisional Manager, Block-7, 3rd Floor, SDA Complex, Shimla-9, H.P. 2. M/s Mahindra and Mahindra Financial Services Limited through its Branch Manager, Kachi Ghati, Tara Devi, Shimla-171010. Respondents. Honble Mr. Justice Arun Kumar Goel (Retd.), President. Honble Mr. Chander Shekhar Sharma, Member. Whether approved for reporting? Yes. For the Appellant: Ms Shilpa Sood, Advocate. For the Respondents: Mr. Ratish Sharma , Advocate. For respondent No.1. Mr. Prince Chauhan, Advocate, Vice Mr. Rahul Mahajan, Advocate, For respondent No.2 O R D E R
Justice Arun Kumar Goel (Retd.), President.
1. This appeal is directed against the order passed by District Forum, Shimla, in Complaint No.120/2005 dated 6.1.2009. By means of impugned order, complaint filed by the appellant has been dismissed.
2. Facts on which learned Counsel for the parties were not at variance at the time of hearing, need to be briefly noted. Appellant is the owner of Mahindra Max vehicle bearing Registration No.HP-01A-3374. It was insured under a valid policy of insurance with respondent No.1 in the sum of Rs.3,82,850/-.
As per policy of insurance, Annexure R.1, it is shown to be under Hypothecation/Financier/Lessor Name M&M Financial Services Ltd., however its branch is not given. Period of insurance was from 5.12.2003 to 4.12.2004.
3. On 6.6.2004, appellant engaged one Shri Tejinder Singh Sodhi son of Shri Ajar Singh Sodhi as driver. He had taken the vehicle in question on 7.6.2004 from Rohru to Shimla for leaving some passengers but did not return thereafter and had dishonestly taken away the same. This matter was reported at Police Station, Jubbal and FIR No.51/04 was registered on 25.7.2004 vide Annexure C.2. Police after thorough investigation, submitted untraced report, copy whereof is Annexure C.3, attached with the complaint. Both these documents are referred to in paragraph 7 of the complaint by the appellant. Its reply is that those are of matter of record. While admitting that some documents were furnished after repeated reminders, but according to respondent No.1, driving licence of the driver was not submitted and the claim was not thus payable.
While replying to paragraph 7 of the complaint it was also submitted that no interest is payable as there was no delay on the part of OP No.1. It pleaded in the reply that it is the appellant who is responsible for delay if any. Before filing the complaint, legal notices were got issued by the appellant to respondent No.1. These were replied too. Finally on 24.5.2005 vide Annexure R.6, the file was closed as No Claim due to inaction on the part of the appellant.
This resulted in filing of the complaint.
4. When put to notice, by way of preliminary objections, respondent No.1 pleaded that there was breach of terms and conditions of the Insurance policy, the driving licence was invalid. On merits, it was pleaded that this is a case of criminal breach of trust which is not covered under the terms of the policy because vehicle had been dishonestly removed by the employee, the driver engaged by the appellant. Policy, Annexure R-1, only covered cases of theft. Therefore respondent No.1 was well within its right to have closed the file as No Claim, and conveyed this decision to the appellant vide Annexure R.6.
5. District forum below came to the conclusion that since this is a case of criminal breach of trust having been committed by the employee of the appellant, and its risk was not covered by the Insurance policy, therefore, respondent No.1 was not liable to indemnify the complainant. Hence this appeal.
6. Mrs. Shilpa Sood, learned Counsel for the appellant submitted that the controversy regarding the liability of the Insurance Company was set at rest by the National Commission as far back as in the year 1991 where the driver had taken away the vehicle and neither the vehicle nor the driver could be traced. Thus, according to her, respondent No.1 was on facts as well as in law looking to the element of criminality in removal of the vehicle, liable to indemnify her client.
7. This plea was seriously contested and resisted by Mr. Ratish Sharma, learned Counsel for respondent No.1. According to him, impugned order suffers from no infirmity which may call for interference in this appeal.
Further according to Mr. Sharma appellant failed to produce the driving licence of the driver engaged by her, final report of police investigation, as well as the untraced report given by the police. He further submitted that his client had called the appellant to inform Regional Transport Officer of theft and then produce before respondent No.1 proof to that effect.
Numerous letters were written to her in this behalf by his client but without any consequence. This resulted in issuance of Annexure R.6 by treating it as No Claim. He even went to the extent of arguing that the complaint was pre-mature and thus according to him, this appeal deserves to be dismissed on all these grounds.
8. We shall first deal with the submission of Mr. Sharma, learned Counsel for opposite party No.1 that driving licence, final report of investigation as well as untraced report was not produced by the appellant despite numerous reminders sent to her by his client.
Suffice it to say in this behalf that Annexure R.2 is the copy of FIR which is specifically referred to in para-7 of the complaint. It has been simply stated in this behalf that it is a matter of record. Annexure C.3 is the untraced report. Its existence has also not been disputed. After institution of the complaint, respondent No.1 was very well aware that the final report has been given by the police as untraced. In this behalf emphasis laid by Shri Ratish Sharma on the Investigators report, Annexure R.4 needs to be mentioned.
It is dated 16.10.2004. This complaint was presented on behalf of the appellant before the District Forum below on 31.5.2005. In all fairness, respondent No.1 should have referred the matter again to the Investigator Shri Kamal Narian, HPS (Retd.) for verification. Why it was not done, Mr. Sharma had no answer. In these circumstances, so far final investigation report as well as untraced report having not been provided by the appellant to the respondent No.1 is a plea cooked up by respondent-Insurance company to deny the genuine claim of the appellant without any rhyme or reason. So far non production of driving licence is concerned, it may be appropriate to observe that the driver as well as the vehicle both were not traceable, as such, respondent No.1 was wanting her to do something that was impossible. As such this plea urged by Shri Sharma is hereby rejected.
9. After more than 4 years we do not think it appropriate to direct the appellant to resubmit her claim since the file was closed by respondent No.1 as No Claim. This in our opinion would be too harsh a direction to her. Reason for taking this view is that there is enough material to finally adjudicate the complaint, as such plea of Mr. Sharma that the complaint was premature, has no substance and is thus rejected.
10. Now we shall deal with the submission of Mr. Sharma that in case of loss only risk of theft was covered and not of breach of trust. Therefore, according to him, impugned order does not call for interference. In this behalf he placed reliance on a decision of the National Commission in the case of United India Insurance Company Ltd. Versus Maya, II (2008)CPJ 182 (NC) and this Commission in Surinder Singh Chauhan Versus United India Insurance Company Ltd., I (2003) CPJ 163. When a reference is made to the decision of the National Commission, it is on its own facts. In this case vehicle was stolen and claim was repudiated. Validity of driving licence was disputed by the Insurance Company. Besides this, vehicle was left unattended with ignition keys lying on dashboard.
Report of the Surveyor was ignored.
There was variance between the statements of complainant and associated interested persons which cast reasonable doubts on their overall bonafides. It was in this background that the revision was allowed and complaint was dismissed. So far decision of this Commission, (supra) is concerned, in the face of earlier and subsequent decisions of the National Commission, according to us, it does not hold good.
11. So far the risk covered is concerned, according to us it is based on criminality. Element of criminality is not disputed in this case on behalf of respondent No.1.
This matter had been attending attention of the National Commission. In the case of S. Bhagat Singh Versus The Oriental Insurance Co. Ltd., II (1991) CPJ 700, wherein whereabouts of taxi and driver were not known, police report was lodged and it could not trace both and untraced report was issued, identical plea of theft having not taken place was raised, the same was negatived.
12. To similar effect is again the decision of the National Commission in the case of The Oriental Insurance Co. Ltd. & Anr. Versus Rohit Kumar Gupta & Ors., I (1994) CPJ 196 (NC), wherein complainant had insured his car including risk of theft with the Insurance Company and driver disappeared with the car. Claim was repudiated by the Insurance Company. It was held to be a case of theft. First Appeal of the Insurance Company was dismissed.
13 In the case of Venkateshwara Borewells Versus Oriental Insurance Co. Ltd., III (2002) CPJ 308 (NC), insured drilling rig with compressor mounted on truck was stolen by the cleaner.
Repudiation on the ground of criminal breach of trust by employee was set out as a defence while contesting the claim of the insured. Theft being not there was held to be no ground to refuse relief and Insurance Company was held liable while allowing the claim of the petitioner by the National Commission. This Commission, as far back as in the year 1996 in the case of Oriental Insurance Company Ltd. Versus Shri Prem Lal, III (1996) CPJ 563 had also taken similar view while dismissing the appeal of the Insurance Company.
14. Again in a recent decision, the National Commission in the case of Oriental Insurance Co. Ltd . Versus Om Prakash Gupta & Anr, I (2009) CPJ 183 (NC), while dealing with a case registered by the police under Section 379, IPC, negatived the plea of the Insurance Company based on the fact that the case of criminal breach of trust was not covered by the terms of the policy. And rejected the defence of the Insurance Company.
15. We specifically called upon Mr. Ratish Sharma, learned Counsel for the respondent No.1 to explain, as to whether the provisions of Insurance Regulatory and Development Authority (Protection of Policy Holders Interests) Regulations, 2002, were complied with or not, and if so by whom and in what manner. His answer was that his client had specifically pleaded in its reply to the complaint, that the vehicle was got insured by the appellant after fully understanding the terms and conditions of the policy of insurance. In this behalf he referred to the affidavit filed in support of the reply. We again confronted Mr. Sharma as to whether the person who has sworn the affidavit in support of the reply was the one who had undertaken insurance in this case, he had no answer. It hardly needs to be clarified in this behalf that it is for the respondent No.1 to have placed material on record that the Regulations of 2002, (supra) were complied with. These have been framed under the provisions of Insurance Act, 1938 as well as the Insurance Regulatory and Development Authority Act, 1999. It is not the case of respondent No.1 that it is not bound by these Regulations.
16. In the light of the above discussion, we are of the view that the District Forum below committed grave error while dismissing the complaint after placing reliance on the decisions of this Commission in the case of Surinder Singh Chauhan Versus United India Insurance Company Ltd.,(supra) without bothering for the decisions of the National Commission, as such the same is liable to be set aside. Ordered accordingly.
17. Now comes the question as to what relief the appellant is entitled to. Vehicle was removed by the driver after expiry of 6 months. It was not disputed on behalf of the parties that for first 6 months, no depreciation is to be allowed and for the next 6 months, it has to be 5% of the sum insured. That being the position, we are of the view that the appellant is entitled to be indemnified by respondent No.1 in the sum of Rs.3,63,707.50P, (Rs.3,82,850/- the sum insured () Rs.19,142.50 being its 5%), or say Rs.3,63,707/-. In addition to this, we are of the view that she is also entitled to interest on this amount at the rate of 12% per annum after allowing reasonable time to respondent No.1 for settlement of her claim. FIR was lodged on 25.7.2004 at Police Station, Jubbal. Therefore, after allowing 5 months time to respondent No.1 for settlement of the claim, it is held that interest on the aforesaid sum of Rs.3,63,707/- will be payable on and with effect from 1.1.2005 till the date of payment/deposit whichever is earlier. Respondent No.1 is further held liable for payment of compensation also to the appellant which we quantify at Rs.25,000/- besides punitive costs in the like amount i.e. Rs.25,000/- and cost of this appeal as well as of the complaint quantified at Rs.10,000/-.
Since this is a case of a vehicle having been taken away by the driver alongwith all its documents, namely, Registration Certificate, Insurance Certificate etc., as such it is ordered that the appellant shall execute letter of subrogation in favour of respondent-Insurance Company and will further execute such other or further document(s) as may be required by the Insurance Company including power of attorney, so that in the event of its being traced by the Police, the Insurance Company is able to deal with it as its absolute owner having indemnified the appellant. In case the Insurance Company wants the vehicle to be transferred in its name, needful will be done by the appellant at the cost and expense of respondent No.1.
Appeal is disposed of in these terms while allowing Complaint No.120/2005 filed by the appellant before District Forum, Shimla.
Learned Counsel for the parties have undertaken to collect authenticated copy of this order from the Court Secretary free of cost as per Rules.
Shimla, June 29, 2009.
( Justice Arun Kumar Goel ) (Retd.) President ( Chander Shekhar Sharma ) /BS/ Member