National Consumer Disputes Redressal
Oriental Insurance Co. Ltd. vs M/S. Shraddha Traders on 10 April, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2033 OF 2010 (Against the Order dated 21/01/2010 in Appeal No. 654/2006 of the State Commission Gujarat) 1. ORIENTAL INSURANCE CO. LTD. Through its Branch Manager, Swami Narayan Vanijya Sankoti, 1st Floor, Hospital Road Bhuj-Kutch Gujarat ...........Petitioner(s) Versus 1. M/S. SHRADDHA TRADERS Proprietor: Dhirajlal Vaghjibhai Thakkar, Market Yards, Bhuj-Kutch (Gujarat) ...........Respondent(s)
BEFORE: HON'BLE MR. ANUP K THAKUR,PRESIDING MEMBER HON'BLE MR. C. VISWANATH,MEMBER For the Petitioner : Mr. Mohan Babu Agarwal, Advocate With Ms. Celeste Aggarwal, Advocate For the Respondent : Mr. Akhil Hasiza, Advocate With Mr. Yash Mishra, Advocate Ms. Nidhi Saswal, Advocate Dated : 10 Apr 2019 ORDER C.VISWANATH The present Revision Petition is filed by the Petitioner under Section 21(b) of the Consumer Protection Act, 1986 against the Order passed by the State Consumer Disputes Redressal Commission, Gujarat (hereinafter referred to as the "State Commission") in Appeal No. 654/2006 dated 21.01.2010.
In the Complaint Case, it was stated that the Respondent/Complainant was a Sole Proprietor Registered firm doing business at Bhid Bazar in Bhuj in the name of M/s Shraddha Traders as General Merchant and Commission Agent. The Respondent took an insurance policy from the Petitioner/Opposite Party which covered risk of Public Liability, fire and allied perils, burglary, house breaking etc. On 26.01.2001 disastrous earthquake occurred in Kutch-Bhuj in Gujarat, which caused severe damages to properties and lives. All Govt. and Semi-Govt. organizations, Schools, Colleges were closed. It was further stated that on the day of incident, packs of edible oil worth Rs.4,68,881/- were stolen. The Respondent lodged a complaint regarding the theft with the city Police Station, Bhuj, which registered a case under section 379, 380,114 of I.P.C. It was noted that in spite of investigation, no stolen goods were recovered. The Respondent claimed a compensation of Rs.4,68,881/- as per shopkeeper's policy. The Respondent was maintaining books of account regularly. He did not violate any terms or condition of policy, rather submitted all the relevant papers to the Head Office of the Insurance Company. Despite lapse of several months, the insurance company had not paid damages to the Respondent under the Shopkeeper's Insurance Policy. This was considered as a deficiency in service and an unfair trade practice. The Complaint was, thus, filed by the Respondent alleging deficiency in service on the part of the Petitioner.
The Complaint was contested by the Petitioner in the District Forum, contending that the Respondent suppressed true and material facts that the insurance company had given reasons for rejection of claim, vide letter dated 26.03.2002. As per General Exclusion No.12 of sections 1-B of the Shopkeeper's Policy under All India Fire Policy, the Respondent was not entitled to get the claim. The scheme of Provisional All India Fire Tariff of General Insurance Company was similar throughout India in all subsidiary Companies. The said condition was lawful and entire evidence was required to be produced. The issue of interpretation of Policy lies only with the civil court. The Respondent withdrew the Complaint filed before the State Commission and he was permitted to do so and nothing was brought on record regarding the same. The Complaint was suffering from the principle of Res-judicator and Waiver-Estoppels. The Complaint was, therefore, liable to be dismissed. The Respondent suppressed the material fact before the Forum that in his case, examination was done by the Surveyor and held that the case of the Respondent did not fall in the ambit of the Policy and his claim was rejected accordingly. Thus, it cannot be said to be a case of deficiency in service. It was further reiterated that no theft had occurred by forcible entry into the shop of the Respondent. Theft does not fall under the definition of burglary or house breaking and therefore the Respondent was not entitled to get the claim. Form the facts and circumstances of the instant case, it was clear that due to earthquake the house was left open and goods were stolen and these type of damages were not covered in the policy. Hence, the Petitioner prayed to dismiss the Complaint with cost.
District Forum, vide order 30.05.2006, allowed the Complaint on the ground that the appointment of Surveyor was made for assessment of damages, and the Insurance Company should have decided on the admissibility of the claim under the Policy. The Surveyor had not mentioned in his report the time of his visit. Moreover, he had not assessed the stock on 26.01.2001 alongwith the Complainant. He did not obtain any evidence. In insurance and compensation cases Volume 2001 (2) in statute on Page No. 7 in Chapter V Duties had been given.It was the duty of the surveyor to assess the damages at the earliest and not beyond 30 days. He should have submitted his report to the Insurance Company. The cases of earthquake are outside the guidelines of Gypsa. In this case, Surveyor instead of assessing the damages, mentioned that the damages were not covered under the Policy and after showing no claim, closed the file and informed the insurance company by a letter. The Surveyor had not performed his duty, which was clearly a deficiency in service. The District Forum allowed the Complaint and ordered the Respondent to pay a sum of Rs.4,68,881/- to Complainant alongwith interest @9% w.e.f. 16.04.2003.A sum of Rs.3,000/- was also awarded for mental agony and a sum of Rs.2,000/- was awarded for expenses to the Complainant by Respondent.
Aggrieved of the order passed by the District Forum, the Petitioner filed an Appeal against the order of District Forum. The State Commission, vide order dated 21.01.2010, dismissed the Appeal of the Petitioner on the ground that there was no evidence that the Insurance Company had given the policy conditions to the insured.As per the established principle of law, when the policy conditions were not given to the insured, the policy conditions are not binding on the insured. Further, the Insurance Company had not disputed the theft of oil tins worth Rs.4,68,881/- of the Respondent. The Surveyor also had not mentioned about the loss in his report. It was, therefore, held that the claim of the Respondent was genuine and the Petitioner by not paying the claim of the Respondent was deficient in service and dismissed the Appeal.
The Petitioner filed the present Revision Petition before this Commission against the order of the State Commission.
Heard the Learned Counsel for the Petitioner as well as the Respondent. They reiterated their respective contentions as stated above. We have also carefully gone through the evidence placed on record.
The Petitioner has relied on the following judgements:
In United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal (2004) 8 Supreme Court Cases 644, the Hon'ble Supreme Court held that theft should have been preceded with force or violence as per the terms of the insurance policy. In order to substantiate a claim an insurer had to establish that theft or burglary preceded by force or violence and if not, then the insurance company will be well within their right to repudiate the claim of the insurer.
In Industrial Promotion and Investment Corporation of Orrisa Limited Versus New India Assurance Company Limited and Another (2016) 15 Supreme Court Cases 315, Supreme Court held that forcible entry is required for a claim to be allowed under the policy for burglary/house breaking.
The Respondent, relied on the following judgements:
In M/s Usha International Limited Versus United India Insurance Co. Ltd. ILR(2005) II Delhi 419, under Para 14, it was discussed that the words employed in the Policy must be given their ordinary meaning unless it is shown that the terms were carefully negotiated. The Hon'ble High Court had held that "force" should not be perceived as an essential element in Burglary, at least for the purposes of insurance policy in hand.
In Modern Insulators Ltd. Versus Oriental Insurance Co. Ltd. (2000) 3 SCC 734, it was held that the Petitioner cannot resort to exclusion clause and the same must be informed by the insurance company and agent as the agreements of insurance are done in good faith. Further, as per the order dated 21.01.2010 of the Hon'ble State Commission, Gujarat, the said Commission had rightly observed that when the policy was not given to the insured, then the policy conditions were not binding on the insured.
In B.V Nagaraju Vs. Oriental Insurance Co. Ltd. (1996) 4 SCC 647, it was held that the exclusion clause of the insurance policy must be read down so as to serve the main purpose of the policy and it is an evident act that the main purpose of the policy is to indemnify the damage caused to the insured.
In Momna Gauri Vs. Scooter India Ltd. through its Regional Manager and Others (2014) 13 Supreme Court Cases 307, it was opined that the revisional powers of the National Commission are derived from Section 21(b) of the Act, under which the said power can be exercised only if there was some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set-aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which the revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21(b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two fora.
We have heard both the Parties and carefully perused the order of both the Fora below and the record made available.
Complainant had taken a Shop Keepers Insurance Policy of the Opposite Party Insurance Company covering the risk of public liability, fire and allied perils, burglary and house breaking etc. and the Complainant was entitled to get loss against the perils as mentioned in the Policy. Complainant was in the wholesale business of dealing with edible oil in Bhid Chowk at Bhuj. After the earthquake, several tins of edible oil valued Rs.4,68,881/- were stolen from the shop of Complainant and a complaint to this effect was lodged by the Complainant in City Police Station.A Complaint was registered as per Offence Register No. 28/2001 under sections 379, 380, 114 of Indian Penal Code and F.I.R. was issued and the said goods had not been recovered till date.Complainant was regularly maintaining the books of accounts of his firm and purchase-sales, profit-loss account and Balance Sheet are ready. He had not violated any terms and conditions of the policy and had submitted all papers in the office of the insurance company. Though a period of about 27 months had passed, Insurance Company did not make payment of the loss suffered under Shop keeper's Policy The Complainant, filed a complaint against the Petitioner before the District Forum and demanded to pass an order for Rs.4,68,881/- with 18% interest, alongwith Rs.10,000/- towards mental torture for the lapse in service shown by not settling his claim by for a period of more than 27 months together with Rs.2,000/- being the costs of the Complaint. Complainant had taken a Shop Keepers Insurance Policy from the Petitioner Insurance Company for the period from 16.1.2001 to 15.01.2001.Further, there was no evidence that the Insurance Company had given the Policy conditions to the insured.Insurance Company had also not taken a dispute about the theft of oil tins of Rs.4,68,881/- of the Complainant.
The terms and conditions, including the exclusion clause were not communicated to the Respondent by the Petitioner. As per the established principle of law, when the policy conditions were not given to the insured, they are not binding on the insured. Both the Fora below, have also given justified orders supported with reasons in favour of the Respondent.Insurance is taken on the belief that claim will be honored in case of theft.It is the duty of the Insurance Company or the agent to properly explain the exclusion clause.
In a judgment reported in III (2000) CPJ (Supreme Court) page no. 1 in case of M/s. Modern Insulators vs. The Oriental Insurance Co. Ltd., the Hon'ble Supreme Court held that the Insurance Company or its agent should give guidance to the insured person about EXCLUSION CLAUSE.
In judgment reported in 2004 S.C.C.L.com. 070 delivered by the Supreme Court in case of United India Insurance Company Ltd. vs. M/s. Harakhchand Rai Chandanlal, the Hon'ble Supreme Court held that "The definition of the word Burglary should be given meaning which is closer to the realities of life. The common man understands that he has taken out the Policy against theft. The insurance companies will amend their policy so as to make them more meaningful to the public at large. It should have the meaning which a common man can easily understand rather than become more technical so as to defeat the cause of the public at large. In the said judgment, Supreme Court held that as per the definition of the burglary policy, if there was no forcible entry, then insurance company will not be responsible to pay the insurance claim. When the insured person is not provided any terms and conditions of the policy and not given any guidance to this effect, under that circumstances, if the insurance company repudiate the insurance claim taking base of this definition, then it would be considered as lapse in service. In view of all these facts and taking into account the judgments quoted, the Complainant becomes entitled to get the insurance claim under Shop Keepers Insurance Policy.
In view of the above, the present Revision Petition is dismissed and orders passed by both District Forum as well as State Commission are confirmed.
...................... ANUP K THAKUR PRESIDING MEMBER ...................... C. VISWANATH MEMBER