National Consumer Disputes Redressal
National Insurance Co. Ltd. And Anr. vs Yodeva Synthetic Private Ltd. on 21 March, 2006
Equivalent citations: IV(2006)CPJ210(NC)
ORDER
B.K. Taimni, Member
1. Appellant National Insurance Company was the opposite party before the State Commission where the Yodeva Synthetic Pvt. Ltd. was the complainant.
2. Very briefly the facts of the case are that the respondent/complainant was running a plastic moulding unit in Behala Industrial Estate, Kolkata. The appellant's business was to procure its own raw material, to be converted into finished goods, for which an Insurance Policy was taken from the appellant National Insurance Company. The policy in this respect was being taken from the appellant, since 1987. The factory was last insured for the period of 16.9.1992 to 15.9.1993. There was a case of burglary on 6.12.92 wherein the miscreants took away the raw material and finished goods of a total value of Rs. 6.93 lakh, vis-a-vis, covered under policy at issue. The matter was reported to the Police Station. It is also the case of the complainant that the stock-in-transit was hypothecated with the Punjab National Bank against its working capital and its last stock verification was done by the Bank on 9.5.1992 and it had found that the stock was of value of about Rs. 7 lakh. It is also admitted position that on 3.5.1992 the appellant's factory was closed down and the factory premises was handed over to Oriental Security and Investigating Unit, Kolkata for security purposes. It was only on 10.3.1993 that the Bank lodged a claim with the appellant Insurance Company, while the complainant lodged its claim to the Insurance Company only on 20.3.1993. The Surveyor was appointed who submitted its report but when the matter was not getting settled despite several approaches by the respondent/complainant to the Insurance Company, a complaint was filed before the State Commission, who after hearing the parties directed the appellant Insurance Company to pay a sum of Rs. 6,93,408.66ps. along with interest @18% p.a. from September 1995 till payment along with cost of Rs. 5,000. Aggrieved by this order this appeal has been filed before us.
3. Mainly four pleas have been taken by the appellant-firstly, that the incident of burglary took place on 6.12.1992 whereas, this factum was reported to the appellant Insurance Company only in January, 1993; secondly, the factum of factory having been closed, was never brought to the notice of the appellant, thus violating condition 2 of the terms of the policy; thirdly, for almost 9 months after the episode of burglary, Surveyor was not permitted to enter the premises to assess the loss; and fourthly, no evidence has been brought on record about the quantity of stocks available in the godown at the time of incident.
4. Dealing with the first plea taken by the appellant, we find that admittedly, the burglary took place on 6.12.1992 and also admittedly for the first time the respondent/complainant informed the appellant about the episode of theft only on 20.3.1993. Even though, this date is disputed by the learned Counsel for the appellant but this itself is a case of deficiency on the part of the complainant when it takes over month and a half to inform to the insurers about the episode of theft. The explanation advanced by the learned Counsel for the respondent/complainant is that matter could not be reported earlier to the insurers, as the director was unwell. We are not impressed by this argument. If the director was ill, there could have been some one to report the matter to the Insurers. This late intimation deprived the insurers to appoint a Surveyor in time who could have carried out first hand investigation of loss on the spot. The finding on this point by the State Commission that since burglary is admitted to have taken place, Surveyor was appointed, FIR was lodged, hence this plea has no merit, is beyond our comprehension. The State Commission perhaps forgot the need for timely reporting by the insured under condition 4 of the policy and also the steps which the insurers take to carry out 'on-the-spot' assessment of the loss as well as the cause of such an event. In this case, they were deprived of this. We hold this to be a negligence/deficiency on the part of the respondent/complainant.
5. Coming to the second plea taken by the appellant there is also no dispute that there was an existing policy and a fresh policy was taken on 16.9.1992 and it is admitted position that factum of the factory having been closed down on 23.5.1992 was never shared with the insurers; this was not brought to the notice of the appellant Insurers either during the life of the previous policy, nor for that matter, at the time of taking the fresh policy. A facile plea is purported to be taken by the learned Counsel for the respondent/complainant that there is no such column in the proposal form. We are afraid that this does not impress us. Condition 11(b) of the policy reads as follows:
2(b) If there be any other material change in the risk insured under this Policy or any change in the facts stated in the proposal unless the Company shall by Memorandum hereon or attached hereto signed by a duly authorised representative of the Company agree to continue the Insurance in force.
6. One needs not to be a research scholar to interpret this clause as what is material change or otherwise? If a functionary factory is closed, it is a material change and also the factum that instead of the factory working it has been kept under the security cover of a Security Agency. In our view, we have no hesitation that the insured failed to discharge his duty enjoined upon him under Condition 2(b) of the Policy, reproduced earlier.
7. The third plea taken by the appellant is not denied by the respondent/complainant. The plea of the appellant is also supported by the correspondence on record as also the report, of the Surveyor that almost 9 months after the event they could not enter the premises despite repeated requests to the complainant. It is settled law that in order to help himself, the insured has to help insurer as well. In this case the insured, by not helping the insurers, did not help himself and failed to discharge his obligations to render all possible assistance to enable him to assess the loss.
8. Coming to the fourth plea taken by the appellant, we find that the copy of the FIR and the FIR brought on record make a very revealing reading firstly, in the FIR what is mentioned is a few bags have been taken away but the Investigating Officer (I.O.) in this regard has reported/noted the entry in the diary in the following terms:
During investigation of the case the Chairman and other witnesses stated that the goods stolen were in different lots and different times which was not mentioned previously and they also do not know the actual amount of property stolen in this case on 6.12.1992 as the factory was under closure from 23.5.1992 and was under lock and key and from that day nobody opened the shed. I found the upper of the grill gate broken and ascertained the fact that the theft was committed many times before this incident. However, it is a fact that robbery was committed on the date mentioned.
(emphasised supplied)
9. We are afraid that this does not help the case of the complainant at all. Thefts were taking place with great regularity and the I.O. also found the upper part of the grill got broken. In these circumstances, what happened in the 9 months period about the stock, can be any one's guess. There is no record of the Bank having ascertained/verifying the stock position after 9th May, 1992 as also after the closure of the factory from 23.5.1992 till the date of burglary which is on 6.12.1992. In between, what stock was there and what particular material was taken away by the particular episode of theft or by any authorised people also could be any one's guess.
10. In view of the above, we find that the complainant has completely failed to establish the quantum of loss starting with the report to the police where the word "few bags" is referred to, whereas later on they report of loss of 1600 bags, 800 bags belonging to some other party and 800 belonging to the complainant.
11. In our view, the State Commission went wrong on all these four points and exceeded its jurisdiction to grant the awarded amount as it did.
12. In the light of aforementioned circumstances and facts of the case, we find that the order passed by the State Commission cannot be sustained. Same is set aside and the complaint is dismissed.
13. It has also been brought to our notice an amount of Rs. 5,79,956 already stands paid by the Insurance Company sometime in Sept. 1998 being 50% of the amount awarded by the State Commission as per our order dated 31.8.98. The respondent/complainant is directed to refund this amount within a period of 8 weeks failing which the amount shall become payable along with interest @ 12% p.a.
14. This appeal is allowed in above terms.