State Consumer Disputes Redressal Commission
National Insurance Co. Ltd. vs K.K. Sharma on 15 November, 2006
IN THE STATE COMMISSION:DELHI (Constituted under Section 9 of The Consumer Protection Act, 1986) Date of Decision: 15-11-2006 F.A. No. 995/2006 (Arising out of Order dated 02-09-2006 passed by the District Consumer Forum-II, Qutab Institutional Area, New Delhi, in Complaint Case No. 512/2005) 1. National Insurance Co. Ltd. D.O. 17, 12-Community Centre, 2nd Floor, East of Kailash, New Delhi 110065 Also at: 2. National Insurance Co. Ltd. Through Regional Office-I, Jeevan Bharti Tower-2, Level-4, 124-Connaught Circus, New Delhi 110001. Both represented Through Appellant No.2 . . . Appellant Through Ms. Shanta Devi Raman, Advocate. Versus Shri K.K. Sharma, Flat No.100, Panchdeep Apartment, Vikaspuri, New Delhi. . . . Respondent CORAM: Justice J.D. Kapoor, President Ms. Rumnita Mittal, Member
1. Whether Reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice J.D. Kapoor (Oral)
1. Insurance claim of the respondent covering risk of theft of Nokia 7250 Mobile phone was repudiated by the appellant on the ground that theft was lacking the ingredient of actual or threatened force and, therefore, was not covered under the term of the policy. Feeling aggrieved, the respondent had filed the instant complaint before the District Forum.
2. Vide impugned order dated 02-09-2006 the District Forum allowed the complaint and directed the appellant to refund the cost of the hand set, i.e. Rs. 9800/- and pay Rs. 3000/- as compensation for the inconvenience and harassment and Rs. 2000/- as cost of litigation.
3. The appellant raised the plea that the insurance policy was a complimentary policy and, therefore, the respondent did not fall within the definition of consumer as defined by Sec. 2 (1)(d) of the Consumer Protection Act, 1986.
4. Assuming that the insurance policy was issued as compliment, still, in our view, the respondent was entitled for indemnification of the loss on account of theft of the mobile phone. The arrangement between service provider and consumer is of no significance. The crux of the matter was whether any insurance cover was issued or not. Once the certificate of insurance was issued in favour of the respondent, it was immaterial whether any payment was charged or not as the appellant on its own had chosen not to take the charges. Such a concession of the insurance companies amounts to hiring of service by a consumer against deemed payment.
5. The other defence advanced by the appellant is that the element of theft does not fulfil the terms and condition mentioned in the relevant clause 1B, which reads as under:
INSURANCE BENEFIT:
1B. Theft coverage for Nokia GSM handset for one year from the date of purchase subject to following exclusions:
c) Theft of handset from any property or premises unless such theft has occurred through forced and violent entry or exit.
(emphasis supplied)
d) Theft handset from any public/public conveyance except where the hand set is taken by actual or threatened force.
6. For the purpose of this clause we deem the DD entry as report of theft of handset as it is the common knowledge and common experience that whenever a person with such a complaint for lodging the report goes to the police, the police always records DD report instead of FIR in order to avoid the job of investigation. Had it been a simple case of having misplaced the handset, there was no need to go to the police station for lodging the report? Police comes into action when such a DD report is converted into a cognizable offence needing investigation. Thus in our view the DD report lodged with the police was in actuality a report of theft and nothing else.
7. Theft has been defined by section 378 of the Indian Penal Code punishable under section 379 as under: -
378.
Theft.- Whoever, intending to take dishonestly any moveable property out of the possession of any person without that persons consent, moves that property in order to such taking, is said to commit theft.
8. From the aforesaid definition following five factors are essential to constitute theft:-
(1)Dishonest intention to take property.(2)
The property must be moveable (3) It should be taken out of the possession of another person.(4)
It should be taken without the consent of that person.(5)
There must be some removal of the property in order to accomplish the taking of it.
9. In the instant case all the aforesaid five ingredients are present. Any theft if it is preceded through or followed by force or violence or forced and violent entry or exit loses the character of theft. Any theft with an ingredient of force or violent entry assumes the character of extortion or robbery, which have been defined by Section 383 and Section 390 of IPC as under:
Sec.383- Extortion- Whoever intentionally puts any person in fear of any injury to that person or to any other, and thereby dishonestly induces the person so put in fear to deliver to any person any property or valuable security, or anything signed or sealed which may be converted into a valuable security, commits extortion.
Sec.
390 Robbery In all robbery there is either theft or extortion.
Where theft is robbery Theft is robbery if, in order to the committing of the theft, or in committing the theft, or in carving away or attempting to carry away property obtained by the theft, the offender, for that end, voluntarily causes or attempts to cause to any person death or hurt wrongful restraint, or fear of instant death or of instant hurt, or of instant wrongful restraint.
10. As is apparent, ingredients of violence or force are relevant for the offence of extortion or robbery.
11. It is rule of prudence and rule of interpretation that any term of contract should not be given literal or pedantic meaning that may run counter to the main or pre-dominant object for which such term of contract was inducted. While interpreting such a term a lateral and liberal meaning should be assigned. Otherwise the very purpose and object of the term of the contract would not only lose its effect but would be rendered meaningless, nugatory and tautologous.
12. The bare reading of clause in question leaves no manner of doubt that the said clause pertained to only theft, the definition of which we have reproduced above. The meaning and pre-dominant object of this clause was to grant benefit to the consumer against the insurance policy covering the risk of theft and theft alone. Thus sub clause C of clause 1B containing the words unless such theft has occurred through force and violent entry or exit cannot take away the benefit of insurance to the consumer in case of theft of the insured article. Thus theft has to be taken as it is.
13. In our view such a clause having any pre condition or condition precedent to the word theft is illegal, arbitrary, unenforceable being not in consonance with the definition of theft provided by the law of the land i.e. India Penal Code as theft lacks ingredients of force or violence and to cap it all, being against the very object of the insurance benefit clause. There is unvarying unanimous judicial view that any term of contract which runs against the main object and defies the established and legal meaning of any term like theft, which is ordinarily called the predominant object of the term of contract is illegal, void and unenforceable under the law of contract.
14. As is apparent in the aforesaid clause element of theft was the essence of the contract and not the theft occurring through force or violence or forced entry or exit. Essence of contract was theft and theft simplicitor and, therefore, later part of the term viz unless such theft has occurred through forced and violent entry or exit was neither relevant nor necessary nor could have put an embargo on insurance benefit to the consumers against the policy covering risk of theft. Had it not been so the clause would not have been assigned the title Theft Coverage of Nokia Handset.
15. Counsel for the appellant has heavily placed reliance on the decision of Supreme Court rendered in United India Insurance Co. Ltd. Vs Harchand Rai Chandan Lal reported as 2005 ACJ 570. On the contrary, we find that the said ruling does not come to the aid of the appellant in the present appeal as while dealing with the distinction between burglary and housebreaking policy involving godown entry or exit from the premises by forcible and violent means; the Honble Supreme Court held as under:
Therefore, it is settled law that the terms of the contract has to be strictly read and natural meaning be given to it. No outside aid should be sought unless the meaning is ambiguous.
16. Even from the aforesaid criteria laid down by the Supreme Court, i.e. by providing natural meaning and without summoning outside aid, we find that the meaning of the word theft referred in the clause was the meaning provided by a relevant statute i.e. India Penal Code through Section 378 IPC and by defining it in any other form is to introduce an element of ambiguity.
Firstly, to say that natural meaning of word theft is what has been provided by the appellant is entirely illegal and natural. Secondly, to say that invoking the statutory definition of theft in context of penal offence as provided by Central Act i.e. Indian Penal Code is summoning outside help, is logic chopping. Statutory definition is a legal help, if at all any, and is the only definition to be provided to the word theft. Thirdly, introduction of any other requirement or definition of theft in the clause is introducing ambiguity. In addition to this, we find this clause running counter to the predominant meaning, purpose and object and also defining the word theft against the definition provided by the law of the land i.e. Indian Penal Code. Theft is a penal offence and is therefore punishable with sentence of fine or imprisonment or both and in respect of which FIR is lodged with the police and therefore has to be provided the meaning as given in the I.P.C.
17. In our view, later part of this clause is void and against the well established and not only universally understood by one and all and its natural meaning, the meaning of word Theft and against the statutory definition of theft provided by IPC, therefore, unenforceable in law so far as the words unless such theft has occurred through forced and violent entry or exit are concerned. This clause has to be, therefore, confined to the word theft. and clause C has projected as an exclusion clause by defining theft on their own. By resorting to such mechanism of providing altogether a different meaning and definition to the word theft without changing its character to extortion or robbery it runs against the main clause, the clause 1B, which prescribes only the theft coverage for handset for one year from the date of purchase.
18. Thus, from any aspect we may interpret the meaning and intention of this clause, we do not find escape from the irresistible conclusion that main object which was to be fulfilled through this clause was to grant insurance benefit to the consumer against the risk of theft and theft alone as per meaning and statutory definition provided by the relevant law of land i.e. IPC (Indian Penal Code).
19. If the insurance company starts defining the word theft, housebreaking and robbery as per their own concept and perception, then the relevant law of the land will be rendered meaningless as it is in the common parlance and as per meaning provided by the relevant law and the natural meaning as understood by the common man and man of average ken coupled with the predominant object, which is the determining criteria and nothing beyond that.
20. Having held the meaning and object of the clause 1B and the legal definition of the word theft provided by the IPC and holding the later part of sub clause C to the effect unless such theft occurred through forced and violent entry or exit as illegal, void, unenforceable and against the basic concept of contractual law and jurisprudence, we deem that appellant under the contract was liable to indemnify the loss against insurance risk of theft.
21. It is beyond our comprehension that insurance company of such a stature with such a legal back up and paraphernalia would not even have a rudimentary concept as to the meaning and definition of word theft, while referring or incorporating the word theft in the insurance benefit clause. It is, again, beyond our comprehension that these people did not know that theft if preceded or occurred by force or violence and through forced and violent entry or exit it does not remain theft and it assumes the character of robbery or extortion.
22. No theft takes place unless person committing the theft uses force. Any act of removing an article from the drawer of a table or from a place where entry of culprit is unauthorized necessarily involves the element of force.
23. What is forced entry or act? Dictionary meaning of word forced is over-strained, unnatural or compulsory. Thus element of force does not necessarily involve using force against a person causing injury. It also involves element or ingredient of unauthorized or unlawful entry into premises or vehicle or even committing theft from the persons body. Word forced entry can also take into its fold the unauthorized entry or unlawful act. Thus, when the clause 1(b) is read as a whole it excludes specific situation that have been enumerated like leaving the handset in open place like the roof, bonnet or boot of the vehicle.
24. Unauthorized entry into a premises for committing theft or removing an article by breaking open the lock or removing an article from the vehicle in unauthorised capacity is tantamount to forced entry as forced entry does not necessarily involve element of using force against a person or causing injury to him. Such an interpretation is valid interpretation when viewed in the light of predominant aim and object of the insurance policy that is covering of the risk against theft.
25. The pre-dominant object was for insurance cover against the theft and therefore the aforesaid terms and condition have to be interpreted in a manner which is beneficial to the interests of the consumer and in consonance with the aims and objects of the terms and condition of the contract. In such a case, at the most, the appellant can obtain indemnity bond in case the handset, in respect of which the report was lodged, is recovered by the police.
26. Even otherwise whenever insurance policy against theft is issued the consumer is generally told that the policy has been issued covering the risk of theft and when he is told about this fact he takes the definition of theft as understood by a common man and as defined by the statute of land. The detailed terms and condition running into pages without being duly signed by the parties concerned cannot have such an effect which is prejudicial to the consumer or to his disadvantage.
27. We have taken a view that wherever service provider issues insurance policy against cover note, the cover note should invariably contain exclusion clause and not in the long list of terms and conditions of contract which most of the times are in microprint and are not signed by the parties and therefore cannot form part of a written contract nor any endorsement is made at the end that all the above terms and conditions have been read over, explained to the consumer before obtaining his signature. These are such contracts which are for the benefit of consumers and not putting the consumer in such a jeopardy that when the occurrence takes place or the theft takes place his first attention is drawn to unsigned, unexplained terms and conditions contained in unreadable print.
28. In the result, appeal is dismissed being devoid of any merit.
Appellant shall make the payment as ordered vide impugned order within a month from the date of receipt of this order.
29. A copy of the order, as per statutory requirement, be forwarded to the appellant and the concerned District Forum and thereafter the file be consigned to record. FDR/Bank Guarantee, if any, be released.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member HK