National Consumer Disputes Redressal
M/S Krishna Auto Sales vs The New India Assurance Co. Ltd. And Anr. on 25 April, 2012
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 351 OF 2005 (From the order dated 13.07.2005 of the Haryana State Consumer Disputes Redressal Commission, Chandigarh in Complaint Case No. 55 of 2000) M/s Krishna Auto Sales Head Office-cum-Main Showroom Appellant 301/1, Lajpat Nagar New Railway Road, Gurgaon versus 1. The New India Assurance Co. Ltd. Registered and Head Office at New India Assurance Building 87, M. G. Road, Fort Mumbai Respondents 2. Branch Office 386-87, Jacobpura P.B. No. 10, Old Railway Road Gurgaon BEFORE: HONBLE MR. JUSTICE R. C. JAIN PRESIDING MEMBER HONBLE MR. ANUPAM DASGUPTA MEMBER For the Appellant Mr. Santosh Paul, Advocate and Ms. Meera Mathew, Advocate For the Respondent Mr. Kishore Rawat, Advocate Pronounced on 25th April 2012 O R D E R
ANUPAM DASGUPTA This appeal is directed against the order dated 13.07.2005 of the Haryana State Consumer Disputes Redressal Commission, Chandigarh (in short, the State Commission) in complaint case no. 55 of 2000. By this order, the State Commission came to the conclusion that the opposite party, i.e., the New India Assurance Co. Ltd. was justified in repudiating the insurance claim of the complainants firm and hence dismissed the complaint.
2. The facts of the case are mostly undisputed:
(i) The complainants firm had obtained an insurance policy relating to Money in Transit for the period 31.10.1997 to 31.10.1998 with the following terms:
Insurance coverage Insurance of money in transit from showroom at New Railway Road to Bank or from Bank to showroom or showroom at Mehrauli Road to Bank or vice versa or from New Railway Road showroom to residence or vice versa Maximum Distance 20 km Estimated annual limit of money-in-transit Rs.5,00,00,000/- (Rs.
Five crore) Single carrying limit Rs.5,00,000/-(Rs. Five lakh)
(ii) The letter of repudiation dated 03.08.1999 of the respondent/opposite party (OP) summarised the admitted facts leading to the insurance claim in the following words:
It is abundantly clear from the initial intimation dated 19.05.1998 given to the insurer by Manish Malik, partner that an amount of Rs.3,66,000/- had been forcibly snatched from him (Manish Malik) for which FIR no. 305 dated 18.05.1998 had been got recorded with police station, Gurgaon city. The FIR lodged with the police on the statement of Manish Malik was also to the effect that the amount was still lying on the consumer counter of the showroom when it was forcibly removed by some miscreants who had made back door entry into the showroom. The circumstances in which the money had been removed were also communicated to the M/s R. L. Aggarwal and sons, surveyors, New Delhi by Mr. Manish Malik partner of the firm in the same manner. The same version was given in the statement of occurrence by Sanjay Malik, partner, Rakesh Aggarwal, an eye witness to the occurrence had also given a similar account that the amount was still lying on the Consumer Counter in the showroom when the culprits had decamped with it by use of force. The very same story had been carried by three different newspapers of 20.05.1998.
(iii) This letter also clarified the reasons for repudiation in the following words:
With this background of the matter, it is clear that the money was in the custody of the insured within the showroom and was not in any case in transit so as to cover it under the Money Transit Policy taken by you. All the facts and circumstances thus unambiguously show that the money was still in your possession at the Consumer Counter in the showroom when the occurrence had taken place. On cumulative consideration of all these facts, your claim does not come within the terms of the Money Transit Insurance Policy as transit commence only on leaving ones own premises and therefore, the claim is hereby repudiated.
(iv) Thus, the only disputed point involved in the complaint as well as the appeal is whether the loss by theft of the sum of Rs.3,66,000/- in cash from inside the showroom of the complainant firm could be termed as loss of money in transit from the showroom.
3. We have heard Mr. Santosh Paul, learned counsel for the appellant/complainant and Mr. Kishore Rawat, learned counsel for the respondent/opposite parties and considered the evidence and documents placed on record.
4. Mr. Paul has argued that admittedly the money was in the process of being carried by Manish Malik, partner of the firm to his house/residence and in that process, the bag containing the cash had been removed from the cashiers cabin and temporarily placed at the customer counter inside the showroom from where it was stolen. According to Mr. Paul, transit of the money lost had thus already begun because the bag containing the cash had been handed over by the cashier to Manish Malik and the latter had set out to carry the bag to his residence. The words transit from the showroom could not be restricted to mean only transit beginning from outside the physical precincts of the showroom. In support of his contention, Mr. Paul has sought to rely heavily on the decision of the Punjab State Consumer Disputes Redressal Commission, Chandigarh in the case of United India Insurance Company Ltd. and Anr. v Issewal Co-operative Agricultural Service Society Ltd. [III (1996) CPJ 232].
5. On the other hand, Mr. Rawat has emphasised that the coverage clause of the policy ought to be read so as to give a straightforward meaning to various terms. According to him, the phrase money in transit from showroom will, in the customary sense of the words, mean that the transit of the money would have to begin from the showroom, i.e., transit of money once it had left the showroom premises. In this case, admittedly, the theft/burglary took place while the bag containing the cash was temporarily placed at the customer counter, which was very much within the showroom premises, unlike the case cited by the learned counsel for the appellant. The appellant in this case did not have any insurance policy covering the risk of theft, etc., of cash from inside the showroom premises. Therefore, repudiation of the insurance claim as not being covered within the terms of the policy was fully justified as has been rightly held by the State Commission.
6. In view of the contentions, we may now consider the facts of the case cited by Mr. Paul. The relevant order of the Punjab State Commission records the facts are as under:
The policy was valid upto
07.12.1990. The risk covered under the policy was against burglary, accident or misfortune, terrorist act and during transit from the complainants premises to the bank premises in the District for the moneys handled by the complainant. On 29.10.1990 when employees of the complainant were handling cash in order to take it to the bank, while in the premises of the complainant, some unknown persons entered the same and deprived them of the cash amount of Rs.46,250/- on gun point. A report was lodged with the police and claim was lodged with the Insurance Company. Legal notice was also served upon the Insurance Company to settle the claim. The complainant filed a suit for mandatory injunction, which was dismissed on 15.06.1993 on the ground that there were other more effective remedies available, it was thereafter that the present complaint was filed, claiming aforesaid amount with interest @ 18% per annum with effect from 29.10.1990.
[Emphasis supplied]
7. Discussing the terms of the insurance policy in question, the Punjab State Commission observed as under:
Learned counsel for the appellant has strongly argued that the incident was not covered under the terms and conditions of the policy. He has made reference to such terms as contained in the copy of the insurance policy Annexure C- 2. The relevant clause reads as under:
The company hereby agrees subject to the terms and conditions contained herein or endorsed or otherwise expressed hereon the insured shall sustain LOSS of MONEY by
(b) ACCIDENT or MISFORTUNE whilst such money in hands of the insureds employees is in transit between the places stated herein or
(c) BURGLARY and/or HOUSE BREAKING whilst such money after arrival at the insured premises stated herein is retained for a period not exceeding 48 hours from the time of arrival provided such money is secured in burglar resisting safe or strong room installed in the insured premises.
The endorsement Annexure C attached thereto covers the risk for transit and terrorist activity. The relevant clauses read as under:
Loss or damage to the property insured by explosion or otherwise directly caused by:
(i) An act of terrorism committed by a person or persons acting on behalf of or in connection with any organisation.
(ii) The action of any lawfully constituted authority in suppressing or attempting to suppress any such act referred to in (i) or in minimising the consequence thereof.
8. On the basis of the facts and the terms of the policy, the Punjab State Commission finally held as under:
Three contentions have been raised by learned counsel for the Insurance Company. First contention raised is that since the alleged incident took place when the money was not in the safe, the complainant is not entitled to the amount. Secondly, the money was not in transit as it was still at the premises of the complainant and the complainant, therefore, cannot take benefit of the insurance policy. Finally, it is argued that in the complaint, there was no assertion that the intruders were armed with firearms when burglary was committed and thus the risk was not covered under the endorsement attached to the policy. In our considered view, there is no merit in these contentions. The insurance policy is to be read as a whole. The purpose was to insure the risk of loss money, which was being transacted by the complainant. The complainant used to receive money and the same used to be deposited in the bank. Thus, he got both the risks covered against burglary whether committed at the premises or during transit. The contention that one of the conditions of the policy contemplated that the money was to be kept in the safe does not mean that theft of money committed from the safe was only covered. It is a complete process of receiving money, counting it, keeping it in the safe and then at the appropriate time taking it out, counting it and then taking it to the bank, was the risk covered. The contract of insurance cannot be segregated into parts to suit the Insurance Company and the terms of the insurance policy are to be construed so that object of the insurance policy is achieved not that on flimsy ground, the insurance policy is rendered redundant. In other words, the Insurance Company cannot be permitted to raise technical or flimsy ground to deny the claim. In our view, the risk involved was covered by all the three clauses referred to above. Money was not required to be kept in the safe for all times to come. When it was put in safe it was to be taken out. The contention that only risk of loss of money from the safe itself was covered cannot be accepted. Secondly, the risk of taking money from the premises of the bank was also covered. It would be too technical to urge that the risk was covered during transit only when the person carrying the money left outer gate of the premises of the complainant. As already stated above, it was a process complete of received money, keeping it in the safe, taking it out and finally taking it to the bank. When the money was taken out of the safe for being taken to the bank, the transit process started.
[Emphasis supplied]
9. We have quoted the Punjab State Commissions order in extenso only to highlight that the terms of the insurance policy dealt with in that order were distinctly different from those of the insurance policy involved in this case (which is not at all to say that we are otherwise in agreement with the logic of that order). It is noteworthy that unlike in the case before the Punjab State Commission, the insured in the present case did not have any coverage for loss of money/cash either from the cashiers cabin or any other part of the showroom. In other words, the risk of any loss of cash from anywhere inside the showroom was to be borne by the insured. Therefore, to contend that transit of the money/cash in this case began as soon as the bag containing the money/cash left the cashiers cabin would not accord with the terms of the insurance policy in this case. If this interpretation of the transit of money were to be adopted, loss of money being carried from any part of the showroom to any another part thereof, claimed to be on way to any of the final destinations designated in the policy would be eligible for the insurance coverage. Consequently, an insurance policy for loss of money in transit would be also good enough for insurance of such loss from any point inside the showroom. Such an interpretation would be absurd. Therefore, from the explicit description of the coverage of the peril in the insurance policy, it has to be concluded that for a loss of money in transit to be reimbursable under this policy, the transit of the money would be reckoned to begin only when the money left the showroom premises, on its way to the defined locations, including the residence (of the partner).
10. In view of the foregoing discussion, we do not find any cogent ground to interfere with the impugned order of the State Commission. The appeal is accordingly dismissed, leaving the parties to bear their own costs.
Sd/-
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[R. C. Jain, J] Sd/-
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[Anupam Dasgupta] Satish