State Consumer Disputes Redressal Commission
National Insurance Co. Ltd., vs Pravinkumar B. Jain on 5 July, 2012
BEFORE THE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION PANAJI GOA First Appeal No. 14/2011 National Insurance Co. Ltd., Panaji Divisional Office-1. Diamond Chambers, 18th une Road, Panaji-Goa. Appellant (Original O.P. No.1) v/s 1. Pravinkumar B. Jain Sole Proprietor, running his business Under the name & style of Vinay Exports, D-2/9, Mapusa Industrial Estate, Mapusa-Goa. (Original Complainant) 2. Mrs. Prisca Caroline Fernandes, M/s Goa Detective & Security Services, G-32, Alfran Plaza, M.G. Road, Panaji-Goa. Respondents (Original O.P. No.2) Appellant/O.P. No.1 is represented by Adv. Shri E. Afonso. Respondent No.1/Complainant is represented by Adv. Shri N.G.Kamat. Respondent/O.P. No.2 is represented by Shri R. Rao. First Appeal No.17/2011 Mr. Pravinkumar B Jain, Sole Proprietor, running his business Under the name and style of Vinay Exports, D-2/9, Mapusa Industrial Estate, Mapusa-Goa Appellant (Original Complainant) v/s 1.National Insurance Co. Ltd., Panaji Divisional Office-1. Near Laxminarayan Temple, Mapusa Goa. (Original O.P. No.1) 2 M/s Prisca Caroline Fernandes, M/s Goa Detective & Security Services, G-32, Alfran Plaza, M.G. Road, Panaji-Goa. Respondents (Original O.P. No.2) Appellant/Complainant is represented by Adv. Shri N.G. Kamat. Respondentno.1 /O.P. No.1 is represented by Adv. Shri E. Afonso. Respondentno.2/O.P. No.2 is represented by Shri R. Rao. First Appeal No.20/2011 M/s Prisca Caroline Fernandes, M/s Goa Detective & Security Services, G-32, Alfran Plaza, M.G. Road, Panaji-Goa. . Appellant (Original O.P. No.2) v/s 1. Mr. Pravinkumar B Jain, Sole Proprietor, running his business Under the name and style of Vinay Exports, D-2/9, Mapusa Industrial Estate, Mapusa-Goa (Original Complainant) 2. National Insurance Company Limited, 3rd Floor, Vaman Smruti Building, Mapusa Bardez Goa. Respondents (Original O.P. No.1) Appellant /O.P. No.2 is represented by Shri R. Rao. Respondent no.1/Complainant is represented by Adv. Shri N.G. Kamat. Respondent No.2 /O.P. No.1 is represented by Adv. Shri E. Afonso. Coram: Shri Justice N.A. Britto, President Smt Vidhya Gurav, Member Dated:05-07-2012 ORDER
[Per Shri Justice N.A. Britto, President] These appeals can be conveniently disposed off by this common order.
2 These appeals have been filed by all the parties in CC No. 45/2006, and are directed against order dated 24.3.2011 of the Lr. District Forum, North Goa at Porvorim, by which the Opposite Parties, inter alia, have been directed to pay to the Complainant Rs.15,50,836/- and Rs.16,655/- jointly and severally with interest at the rate of 12% from 09-02-2004.
3. The parties to these appeals shall hereinafter be referred to in the names as they appear in the cause title of the complaint.
4. The Complainant is the proprietor of a business of assembling of Analog Quartz watches, electronic digital watches, etc. which he carries on in the name and style of M/s. Vinay Exports situated in Mapusa Industrial Estate, Mapusa.
5. The Complainant entered into an agreement with the Opposite Party No.2 on or about 01/12/2003.
The Opposite Party No. 2 is a proprietor of M/s Goa Detective and Security Services.
As per the said agreement, Opposite Party No.2 was to depute security personnel to look after the security arrangements of the said Complainants factory from 01-12-2003 to 30-11-2004. The security was to be provided from 8 a.m. to 8 p.m. on all days including Sundays and holidays. As per the said agreement, Opposite Party No.2 deputed one security guard by name Amit Mohmmad Ansari, a native of Bihar, and as the cross-examination of Opposite Party No.2 would later show, he was employed without verifying his antecedents. Clause 9 of the agreement dated 01-12-2003 shows that:-
(9) that the party of the first part (Opposite party No.2) will indemnify the party of the second part (Complainant) for the losses that may be caused due to the acts of negligence or commission of the security staff. (emphasis supplied)
6. The Complainant also took from Opposite Party No.1, National Insurance Company Ltd., a policy known as Burglary and House Breaking, so as to secure the raw material, semi finished goods and finished goods for an assured sum of Rs.50,00,000/-. The operative clause of the said policy would show that the Opposite party No.1 had agreed, subject to terms, conditions and exclusions to indemnify the insured to the extent of intrinsic value of :
(a) any loss of or damage to property or any part thereof whilst contained in the premises described in the schedule hereto due to burglary or house breaking (theft following upon an actual forcible and violent entry of and /or exit from the premises) and Hold up.
(b) Damage caused to the premises to be made good by the insured resulting from burglary and/or house breaking or any attempt any time during the period of insurance.
7. The policy also contained exclusion clauses. The Company would not be liable in respect of :
(1) ..
(2) Loss or damage where any inmate or member of the insureds household or of his business staff or any other person lawfully in the premises in the business is concerned in the actual that (sic theft) or damage to any of the articles or premises only where such loss or damage have been expedited or any way assisted or brought about by any such person or persons.
(3) .
(4) (a).
(b) .
(c) .
(5) (a) .
(b) .
(6) .(7)
Loss of money/and or other property abstracted from safe following the use of the key to the said safe or any duplicate thereof belonging to the Insured unless such key has been obtained by assault or violence or any threat thereat
8. The facts brought on record would show that the Complainant had a Manager named Dilip Gowani who was the whole and soul, so to say, of the said business of the Complainant. At the end of the day he would close the factory and take the keys alongwith him.
07-02-2004 was a Saturday and he had to go to Mumbai to attend a wedding. He closed the factory at about 6 p.m. in the presence of one Dinesh Mehta and the said Ansari (hereinafter to be referred to as the accused). It is the accused who put the locks to the said factory. The said Dilip Gowani had made arrangements to keep the key in the premises of Dunkan Industries which belongs to a friend of the Complainant by name Hasmukh Raj Vardhan. The key was kept duly sealed in the custody of one Shailesh, the clerk in the said Dunkan Industries. The key was collected on 09-02-2004 by said Dinesh Mehta who opened the factory at about 8.45 a.m. At the time of opening the accused was absent. On opening the factory, they found that boxes containing wrist watches were scattered on the floor, the watches were missing.
The cash box was found forced open. The safe was not touched. Cash of Rs.71,655/- which was earlier counted and kept in the cash box by Accounts Assistant Mrs. Namrata Vaze was missing and also one silver coin having the impression of Goddess Laxmi on one side and OM on the other side, was missing from the cash box. (The weight and/or the value of the said coin has been lost in the controversy). About 3,002 wrist watches costing about Rs.425/- each valued at Rs.12,75,850 were found missing. In view of the absence of the accused, he was suspected in the commission of burglary. Dilip Gowani was informed telephonically. He advised to file a complaint and accordingly a complaint to the Police was filed by the said accounts assistant Mrs. Nirmala Vaze . The complaint was investigated by PSI Shri Tushal Vernekar who after investigation, filed a charge sheet against the accused which came to be registered as CC No.121/S/2004/F and the accused after trial came to be convicted by Lr. JMFC, Mapusa by judgment/order dated 26-11-2004 under sections 454, 457 and 380 IPC.
9. The Complainant informed O.P. No.1 about the theft by letter dated 10-02-2004.
The Complainant then lodged an insurance claim for Rs.13,46,700/- plus excise duty of Rs.2,04,136/-, total Rs.15,10,836/- and followed it up by various letters. Stock valuation report was submitted to Opposite Party No.1.
Opposite Party No. 1 appointed in April 2004, surveyors who submitted a report dated 18-10-2004. Opposite Party no.1 concurred with the report given by their surveyors, namely Shinde Surveyors, that the loss sustained by the Complainant was not within the scope of policy of insurance. According to them, the theft was committed by the watchman who was lawfully in the premises and effected entry by using duplicate keys and by virtue of exclusion No.2 and 7, Opposite Party no. 1 was not liable to settle the claim of the Complainant. The claim in fact was repudiated by letter dated 08-12-2005. According to Opposite Party No.1, the said accused was lawfully in the premises and committed theft in the premises and therefore the theft was by the inmate and as such Opposite Party No. 1 was not liable to settle the claim. O.P. No.1 stated that as per report of Shinde Surveyors, the stock was under insured to the extent of 94.6%.
10. The Complainant claims that he is entitled to have his claim settled by Opposite party No.1 in full, so as to make good his loss without prejudice to his rights against Opposite Party No.2.
Complainant states that the conduct of Opposite party no.2 in the whole episode was most shocking, as after the theft Opposite Party no,.2 completely left the scene and did not bother about the gross deficiency in the service. According to Complainant, Opposite Party No.2 did not bother to verify the antecedents of their security guard and took the risk at Complainants expense in which the Complainant suffered loss and continues to suffer the same. According to Complainant, the height of deficiency was when no security was provided after the incident, without any intimation to the Complainant. The Complainant claimed to recover Rs.15,50,536/- plus balance of Rs.16,655 of cash stolen with interest at 18% jointly and severally from the Opposite Parties. The Complainant also claimed damages in the sum of Rs.50,000/-. and compensation of Rs. 1.5 lakhs and costs.
11. According to Opposite Party No.2, the said security guard was deputed to the factory and attended duty on 07-02-2004 upto 8 p.m. According to Opposite Party No.2, the complainant had refused to take any help from Opposite Party No.2 and had orally refused to take the services when Opposite party No.2 approached the Complainant.
Opposite Party No.2 stated they had thoroughly verified the antecedents of Ansari/accused who was not having any criminal background. O.P. No.2 stated that the Complainant orally refused to take security which caused the Opposite Party No.2 loss of Rs.35,000/-. Opposite Party No.2 states that they had replied to the Complainants letter dated 02-03-2006 by her reply dated 21-03-2006.
12. The Ld. District Forum concluded observing that the antecedents of the security guard/accused were not properly checked by Opposite Party No.2 before employing him.
The Lr. District Forum disagreed with the theory of duplicate key, as invented by Shinde Surveyors and further held that the rejection of the claim of the Complainant based on exclusion clause No.2 was wrong, arbitrary and illegal.
13. We have heard the Lr. Advocates on behalf of the parties and have perused the records.
14. Shri N.G. Kamat, the lr. advocate appearing on behalf of the Complainant has contended that FA/20/11 filed by Opposite Party No.2 is not maintainable because the same has not been filed with a power of attorney given by Opposite Party No.2 in favour of her husband Mr. Paul Mendonca. Lr. advocate has relied on some authorities which we have perused. We are not inclined to accept the objection taken by lr. advocate Shri N.G. Kamat to the appeal filed by Opposite Party no
2. We have already noted that Opposite Party No.2 is a proprietary concern of Mrs Prisca Fernandes and the agreement dated 01-12-2003 was signed in her name by Shri Paul Mendonca , as Manager. Now Mrs. Fernandes has given authority letter in favour of her husband the said Mr. Paul Mendonca to appear on her behalf, sign or verify or affirm any pleadings and appoint any advocate etc. before the Goa State Commission. In our view the said letter of authority is more than sufficient to maintain the appeal atleast in this consumer jurisdiction. Shri Rao has also submitted that the O.P. No.2 is prepared to ratify the filing of the appeal. The authorities cited by Shri Kamat do not pertain to authority given by an individual. The said decisions were rendered in relation to limited companies.
15. The first objection taken to the complaint by Shri R. Rao, on behalf of Opposite Party No.2, is regarding limitation. According to lr. advocate the objection regarding limitation was taken by Opposite Party No.2 before the Lr. District Forum and was noted in the impugned order, but has not been adverted to. Referring to section 24 A of the Consumer Protection Act, 1986, Shri Rao would submit that the complaint ought to have been filed within a period of two years or else the delay ought to have been explained for sufficient reasons.
Shri Rao would submit that the burglary or theft took place on 09-02-2004 and the complaint is filed on 19-04-2006 much beyond the period of two years and therefore ought to have been dismissed as barred by limitation. Shri Rao has placed reliance on SBI v/s M/s B.S. Agricultural Industries (AIR 2009 SC 2210).
Shri Rao would further submit that the Complainant sent a letter to the Opposite Party no.1 dated 10/02/2004, and Opposite Party No.2 would not be concerned about the same. According to him, the Complainant addressed a letter to Opposite Party no.2 for the first time on 02-03-2006 after a lapse of two years and Opposite Party No.2 replied on 21-03-2006 denying the liability. Shri Rao states that another letter was sent to the Opposite Party no.2 on 28-03-2006. It is his submission that the Lr. District Forum ought to have dismissed the complaint, the same not having been filed as required under sub-section 1 of section 24 A, latest by 09-02-2006 .
16. On the other hand, Shri Kamat would submit that the FIR was filed on 09-02-2004 and thereafter the Opposite Party No.2 declined to provide any security. According to him, the agreement dated 01-12-2003 was to expire on 30-11-2004 and he could have filed the complaint within two years thereafter. Alternatively, Shri Kamat submits the said Ansari/accused was only a suspect in the commission of offence but he was convicted on 26-11-2004 and that gave him a fresh cause of action to file the complaint. According to him, the complaint was filed within two years either from 30-11-2004 or 26-11-2004 and therefore has got to be considered as within time.
17. We are entirely in agreement with the submissions made by Shri Kamat. The agreement dated 01-12-2003 came to an end on 30-11-2004. It is also the case of the Complainant that O.P. No.2 abandoned supplying security after 09-02-2004. The Complainant could have waited for Opposite Party No.2 to provide security after the same was discontinued with the disappearance of Ansari/accused, until 30-11-2004 and file the complaint within two years thereafter, after the said agreement came to an end. In our opinion, the complaint against Opposite party No,.2 is well within time, the same having been filed on 19-04-2006 i.e. within two years from 01-12-2004.
18. Shri R. Raos next submission is that the contract of Opposite Party no.2 with the Complainant was of personal service to provide security for 12 hours per day. He further submits that Ansari/accused has not been made a party. We are not inclined to accept this submission, either.
The contract dated 01-12-2003 between the Complainant and Opposite Party No.2 was a contract to provide security personnel to look after the security of the factory of the Complainant.
Ansari/accused was a servant of Opposite party No.2 and not of the Complainant. His duties more particularly described in the said agreement, were to keep a watch over and maintain the records of all persons and material entering or leaving the premises of the factory; to prevent unauthorized entry or exit or removal of personal and material into and from the said premises; to take precaution against fire and other hazards and assist in fire fighting and other rescue operations whenever necessary; to diligently, prevent pilferage or loss of damage to the said premises. Ansari/accused might have been required to work under the general directions of the Complainant but he was not a servant of the Complainant but that of Opposite party No.2 and was being paid by them and not by the Complainant. The Apex Court in the case of Indian Medical Association, AIR 1996 SC 550, has held that a contract for services implies a contract whereby one party undertakes to render services e.g. professional or technical services, to or for another in the performance of which he is not subject to detailed direction and control but exercises professional or technical skill and uses his own knowledge and discretion . A contract of service implies relationship of master and servant and involves an obligation to obey orders in the work to be performed and as to its mode and manner of performance. The Apex Court further observed that they entertained no doubt that Parliamentary draftsman was aware of the well accepted distinction between contract of service and contract for services and has deliberately chosen the expression contract of service instead of the expression contract for services in the exclusionary part of the definition of service in Section 2 (1)(o). The reason being that an employer cannot be regarded as a consumer in respect of the services rendered by his employee in pursuance of a contract of employment. By affixing the adjective personal to the word service the nature of the contracts which are excluded is not altered. The said adjective only emphasizes that what is sought to be excluded is personal service only. The expression contract of personal service in the exclusionary part of Section 2(1)(o) must, therefore, be construed as excluding the services rendered by an employee to his employer under the contract of personal service from the ambit of the expression service .
19. The contract dated 01-12-2003 was a contract for service i.e. to provide security services to the Complainants factory. There has been gross deficiency to provide the same atleast from 08-02-2004. This is a case of the fence eating the crop. In other words the very person who was to provide the security, committing the theft. O.P. No.2 is vicariously liable to the acts of its servants. O.P. No.2 may not be criminally liable for the criminal acts of its servants but certainly is liable civilly for the criminal acts of its servants.
As far as the liability of Opposite Party No.2 is concerned, the same can also be fastened on them by virtue of clause 9 of the contract to which we have already made reference. The loss suffered by the Complainant is due to the act of commission of the security guard/accused within the meaning of clause 9 of the said agreement. Firstly, it would be irrelevant to find out whether the antecedents of the accused were at all verified by Opposite party no.2 or not before employing him. Even if they were so verified Opposite Party no.2 would continue to be liable to the Complainant the moment there was a breach of the condition of the agreement by its employees. That apart, we are inclined to believe, as the cross examination of Opposite Party no.2 shows, that the antecedents of Ansari/accused were not at all verified. That his finger prints were obtained by O.P. No.2 and then handed over to the Police is no sign of diligence. Finger prints must have been obtained only with a view to track him in case there was a foul play. If at all Opposite Party No.2 deposed in a criminal case it was part of its public duty.
20. We are inclined to accept the complainants version that there was a breach of the agreement dated 01-12-2003, first, by Opposite Partys security guard/accused committing burglary and then by not providing security from the date of the theft until 30-11-2004. Except for a vague statement that the complainant orally refused, to take security, without any details, we are not inclined to accept that Complainant had orally refused to take the services of Opposite Party No.1. We are inclined to accept the Complainants assertion that Opposite Party no.2 completely left the scene and failed to provide security. Least which was expected on the part of the Opposite Party No.2 was a written apology for the acts committed by its servant, the security guard/accused with an offer to replace him by another security guard after he had disappeared from the scene, after committing theft.
21. We also find that there is no contributory negligence on the part of the Complainant as submitted by Shri Rao, lr. advocate on behalf of Opposite Party No.2. The key was kept in safe custody after office hours of 07-02-2004 with Shailesh of Dunkan Industries and it was collected on the following Monday by Complainants employee Shri Dinesh Mehta who opened the factory at 8.45 A.M. on 09-02-2004. The factory of the Complainant was therefore not put on peril at all by the said Shri Dilip Gowani, Manager, as contented. In fact he took every precaution to ensure that the key was kept in safe custody.
22. O.P. No.2 can have no grievance about the report of Shinde Surveyors not being supported by an affidavit against the Complainant. Grievance, if any, should have been made against O.P. No.1. Shinde Surveyors was appointed by O.P. No.1.
23. Shinde Surveyors, in their report dated 18-10-2004 opined that :
Loss or damage where any inmate or member of the insureds household or his business staff or any other persons lawfully in the premises in the business is concerned in the actual that or damage to any of the articles or premises only where such loss or damage have been expedited or any way assisted or brought about by any such person or persons.
As per the Exclusion No.7.
Loss of money and/or other property abstracted from safe following the use of the key to the said safe or any duplicate thereof belonging to the insured unless such key has been obtained by assault or violence or any threat thereat ..
After going through the First information report and Exclusion given in the policy of insurance as per our opinion loss sustained by insured property is not within the scope of policy of insurance.
24. The claim of the Complainant was repudiated by Opposite party No.1 by letter dated 08-12-2005 stating as follows:-
As per the policy condition, under section II cash (other than described in section 1 A above) whilst on the premises during business hours or whilst secured in locked safe or locked strong room on the insureds premises out of business hours against the risk of burglary, hours breaking and hold up is insured with nil sum insured.
25. We are unable to understand as to what Shinde Surveyors or for that matter O.P. No.1 seek to convey from what they have stated hereinabove. They were expected to convey the repudiation in clear, simple language which could be understood by a common man. We have already extracted and reproduced hereinabove the relevant clauses of the insurance policy. The policy is a contract between the parties and its terms cannot be added, deleted or substituted. There can be no doubt about the legal position, as reiterated by the Apex Court in United Indian Insurance Co. Ltd., v/s Harchand Rai Chandanlal (2004) 8 SCC 644 with reference to previous decisions of the Apex Court :
17The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy. [1999(6) SCC 451] In interpreting documents relating to a contract of insurance, the duty of the Court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves. Looking at the proposal, the letter of acceptance and the cover notes, it is clear that a contract of insurance under the standard policy for fire and extended to cover flood, cyclone, etc. had come into being. [AIR 1966 SC 1644] The Apex Court then proceeded to hold that:
14..
Therefore it is settled law that the terms of the contract have to be strictly read and natural meaning be given to it.
No outside aid should be sought unless the meaning is ambiguous
26. However, in our humble opinion, the ratio of Harchand Rai Chandanlal (supra) cannot be applied to the facts of the case at hand for there is material difference in the wordings of the operative clause
(a) in the case at hand, and clause (a) as seen reproduced in para 4 of the judgment in Harchand Rai Chandan Lals case. In Chandan Lals case burglary and /or house breaking were defined in terms of the policy to mean theft involving entry to or exit from the premises by forcible and violent means or following assault or violence or threat thereof to the insured or to his employees or to the members of his family. In the case at hand the expression used in operative clause (a) is burglary or housebreaking. The expression burglary is not defined and it is only the expression housebreaking which has been further qualified by words theft following upon an actual forcible and violent entry of and/or exit from the premises and hold up. The expression OR between burglary and house breaking makes all the difference.
27. Admittedly, entry into the factory was gained by the security guard without any use of force. The safe was not touched but the cash box was forced open. Burglary, is not defined in the policy. In the absence of such definition we would prefer to go by the ordinary dictionary meaning. Concise Oxford English Dictionary defines burglary as an illegal entry into the building with intent to commit a crime such as theft. The definition does not speak of any force required to be used. In our Criminal jurisprudence, burglary is equivalent to house breaking, as defined by Section 445 IPC, clause fourthly i.e. when a person enters or quits by opening any lock in order to the committing of the house trespass or in order to the quitting of the house after house trespass, for which Ansari/accused has been convicted and punished under section 454 IPC.
The said Ansari/accused having committed burglary, which expression in the case at hand has not been defined in the policy, and we have preferred to go by the ordinary dictionary meaning, any loss or damage arising therefrom was liable to be indemnified by the Opposite Party No.1, in terms of the said policy.
28. It is the Police, first, who proceeded with a rather careless statement that Ansari/accused effected entry into the factory by using a duplicate key and Shinde Surveyors appear to have blindly followed the same theory . From where did Ansari/accused get the duplicate key? It appears that the Police used the said expression very loosely meaning thereby that accused opened the lock by another key, and in all probability, the accused must have opened the lock/s by a master key, as suggested by Shri Kamat the Lr. Advocate on behalf of the Complainant. It was not the case of anyone that either the Complainant or for that matter the said Dilip Gowani had kept a duplicate key anywhere which could be accessed by the accused. On the contrary, Dilip Gowani was on record of the case to say categorically that there was no duplicate key. The only available key was kept by Dilip Gowani in the safe custody of one Shailesh of Dunkan Industries from where it was brought by Dinesh Mehta to open the factory on 09-02-2004, when it was found that the premises were burgled. The factory was locked from 6p.m. of 07-02-2004 to 8.45 a.m. of 09-02-2004. If that be so, how could Shinde Surveyors contend, and O.P. No.1, repeat in parrot like fashion, that the accused was lawfully on the premises, within the meaning of exclusion clause No.2 of the policy? Secondly, the accused was not at all a member of the business of the Complainant. Clause 2 was therefore, clearly inapplicable. Neither Shinde Surveyors nor O.P. No.1 are clear in their minds why they have repudiated their liability. Even if they are clear in their mind, the same, they have not been able to express with sufficient clarity, as can be seen from the reasons given by them, reproduced herein above.
29. The Complainant have made serious allegations against the said Shinde Surveyors that they have given a negative report because he did not accede to some demand made by them. We need not go into the merits of the same. Illogical conclusion arrived at by them would raise enough suspicion. The Opposite party No.1 was bound to indemnify the Complainant for loss caused by the burglary committed by Ansari/accused security guard provided by Opposite Party No.2. The duty of Ansari/accused was not inside the premises of the factory but was outside as rightly submitted by Shri Kamat.
30. Lastly, it is submitted by Shri Afonso that compensation payable ought not to exceed Rs.79,919/- as assessed by Shinde Surveyors in view of clause 6 of the policy in question. Clause 6 is what is known as average clause. It states that if the property insured shall at the time of any loss or damage be collectively of greater value than the sum insured thereon, then the Insured shall be considered as being his insurer for the difference, and shall bear a rateable proportion of the loss or damage accordingly. Every item, if more than one, in the Policy shall separately subject to this condition. Clause 7 states that:
7. CONTRIBUTION:
If at the time of the happening of any loss or damage covered by this Policy there shall be existing any other insurance of nature whatsoever covering the same, whether effected by the Insured or not then the Company shall not be liable to pay or contribute more than its rateable proportion of any loss or damage.
31. We are not impressed with this submission as well. The total valuation of stock at Rs. 9,25,05, 575 cannot be accepted.
That has been arrived at in the absence of statements of accounts submitted by the insured/Complainant either as on 31-03-2003 or 07-02-2004 (before theft), and submission of final investigation report-whatever it means - which was never submitted. Shinde Surveyor himself is not sure of the loss assessed and he has left it for the confirmation of the O.P. We have not believed him on the interpretation given by him to the clauses of the agreement and therefore we would not like to place reliance on his report on total valuation assessed by him, as well.
32. Admittedly, the Complainant has separate causes of action. One against Opposite Party No.2, for breach of agreement dated 01-12-2003 and the other for being indemnified by Opposite Party No.1. The Lr. District Forum has ordered a sum of Rs.15,50,836/- plus Rs.16,655/- to be paid by both the Opposite Parties jointly and severally and so also a compensation of Rs.50,000/- and cost of Rs.20,000/-
to be paid jointly and severally.
33. We have heard Lr. Advocates on behalf of the parties on this aspect as well. Shri Kamat would submit that the Complainant was entitled to claim compensation independently from the Opposite Parties but with a view to avoid multiciplity of proceedings, he filed only one complainant. Shri Kamat says that the Complainant had sought compensation of Rs.1.5 lakhs from Opposite Party No.1 and Rs.50,000/- from O.P. No.2, which is not awarded to the Complainant, by the Lr. District Forum. Shri Afonso points out to Clause 7 of the policy. Shri Rao submits that O.P. No.2 did not know of the existence of agreement with O.P. No.1 and there is nothing in common between O.P. No.1 and O.P. No.2. However, all the Lr. Advocates concede that the Complainant is not entitled to recover the loss caused from each of the Opposite Parties, separately.
34. We have given anxious consideration to this aspect.
Complainant is entitled to claim compensation jointly and severally. A liability is said to be joint and several when the creditor can sue one or more of the parties to such liability separately or all of them together at his option. We uphold the compensation awarded i.e. Rs.15,50,836/- + Rs.16,655/- but direct the same to be paid at current rate of interest of 9% from 09-02-2004. We also direct the Opposite Party No.1 to pay the compensation of Rs.1 lakh in terms of prayer clause (c) and Opposite Party No.2 Rs.50,000/- in terms of prayer clause
(d). Cost of the complaint are reduced to Rs.5000/-. The impugned order dated 24-03-2011 shall stand accordingly modified and the complaint, the appeals accordingly disposed off and the appeals with no order as to costs.
[Smt. Vidhya Gurav] [Shri Justice N.A. Britto] MEMBER PRESIDENT