National Consumer Disputes Redressal
M/S. S.B. Jewellers vs United India Insurance Co. Ltd. & Anr. on 4 April, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 154 OF 2013 (Against the Order dated 11/01/2013 in Complaint No. 35/2009 of the State Commission Haryana) 1. M/S. S.B. JEWELLERS THROUGH ITS PROPRIETOR, BHIM SAIN GARG, R/O. H NO. 404/8 TALAI BAZAR, KAITHAL HARYANA ...........Appellant(s) Versus 1. UNITED INDIA INSURANCE CO. LTD. & ANR. THROUGH MANAGING DIRECTOR (SALES), REGISTERED AND HEAD OFFICE, 24, WHITE ROAD, CHENNAI-600014 2. UNITED INDIA INSURANCE CO. LTD., THROUGH : BRANCH ANAGER, (SALES) RAILWAYS ROAD, KURUKSHETRA HARYANA ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Appellant : Mr. S.M. Tripathi, Advocate For the Respondent : Mr. Abhishek Kumar, Advocate
Dated : 04 Apr 2019 ORDER
JUSTICE V.K. JAIN, PRESIDING MEMBER
The complainant / appellant obtained a Jewellers Block Policy to the extent of Rs.48.00 lacs from the respondent for the period from 30.4.2008 to 29.4.2009. The case of the complainant / appellant is that at about 2.30 am on 21.9.2008, some burglars entered their jewellery shop pushing up the shutter of the said shop and took away gold and silver ornaments kept in a safe inside the shop. An FIR under Section 457 / 380 of IPC was lodged at the concerned police station. On intimation being given to the respondent a surveyor was appointed to visit the site and assess the loss. The surveyor Mr. Vinod Sharma submitted a final survey report dated 11.6.2009, recommending repudiation of the claim. Accordingly, the respondent vide letter dated 23.7.2009 repudiated the claim on the following grounds:-
"(1) proper stock and account books has not been maintained in which all sales and purchases are recorded.
(2) By keeping master key in the showcase due diligence was not used.
(3) There has not kept any watchman particularly for this premises / building."
2. Being aggrieved from the repudiation of the claim, the complainant/appellant approached the concerned State Commission by way of a consumer complaint.
3. The complaint was resisted by the respondent, relying primarily upon the survey report. It was pointed out in the reply filed by the respondent before the State Commission that the safe was found intact, there was no sign of breaking the safe or its locks, comprising master lock in safe, four internal locks, number lock system and external lock on the safe. It was pointed out that the external lock had not been used in the night in which the incident allegedly happened and master key was found lying in the glass showcase underneath a weighing scale. It was also submitted that the complainant had failed to keep proper stock and account books entering all transactions of the sale and purchase and had violated condition No.5 and 9 of the insurance policy.
4. The State Commission vide order dated 11.1.2013, dismissed the complaint on the ground that the insured had failed to take all reasonable steps for safety of the property and any loss by use of the keys of the safe or any duplicate key belonging to the insured, was not covered unless such keys or duplicate keys had been obtained by threat or violence.
5. Being aggrieved from the order passed by the State Commission, the appellant is before this Commission.
6. One of the exceptions contained in the insurance policy on which reliance is placed by the insurer reads as under:
"any loss following use of the key to the safe or any duplicate thereof belonging to the insured, unless such key or duplicate key has been obtained by threat or by violence."
Thus, if it is established that the safe had been opened by the intruders, using either the original or a duplicate key of the safe belonging to the complainant, the loss would not be covered unless it is shown that the key, or the duplicate key, as the case may be, had been obtained by threat or by violence. In the present case, the alleged used of the key belonging to the insured is based upon the fact that one key of the safe was found in a glass showcase underneath a weighing scale. The key which was found in the glass showcase is described as master key in the report of the surveyor. As noted earlier, there were multiple locks on the safe from which the jewellery was stolen, comprising master lock of the safe, four internal locks, numbered lock system and the external lock. The external lock, according to the preliminary survey report did not seem to have been used in the night in which the incident of burglary happened. Even if this is so, there were multiple locks on the safe as described hereinabove. The report of the surveyor does not indicate that all the locks of the safe comprising master lock, four internal locks and number lock system could be opened and closed with the key which was found in the glass showcase. The report does not indicate even an attempt by the surveyor to close and then open all the locks of the safe, using the key found in the glass showcase. Therefore, it would be difficult to say that the safe was opened, using the key found in the glass show case. Unless it is shown that all the locks on the safe i.e. master lock, four internal locks and number locks could be opened using the said key, it would be difficult to say that the safe was opened using the key found in the show case. Moreover, in the natural course of human conduct it is unlikely that the burglars would first take out the key from the glass show case, open the safe, remove the precious articles and then take the trouble of keeping the keys under the weighing scale in the same glass show case. In the normal course of human conduct either they would take away the key or just throw it somewhere in the shop, instead of making efforts of keeping it under a weighing scale inside the glass show case. Having committed the burglary they would have no reason to adopt such a course. Therefore, I am unable to accept the ground No.2 taken in the repudiation letter.
7. Coming to the second ground for repudiation of the claim, the insurance policy, to the extent it is relevant reads as under:
"Class II - warranted that insured having stated in the proposal form that all the premises specified in schedule I of the policy are fully protected by employment of a common watchman for the whole building or a night watchman as the case may be premises of the insured."
It would thus be seen that it was a condition of the policy that the premises where the jewellery was kept was to be protected by employing either a common watchman for the whole of the building of which the premises formed part or employing a night watchman specifically for the said premises. The surveyor noted that the insured had not kept any watchman for this premises / building. There was only a common watchman for the entire area. There is no evidence of the complainant / appellant having employed a night watchman, particularly for the premises in which the jewellery was kept. There is no evidence of a common watchman having been employed for the whole of the building of which the said shop formed part. Though, the learned counsel for the complainant / appellant submitted that there was only one building in the entire area and a common watchman had been employed, there is no evidence the building of which the shop of the complainant formed a part being the only building in the entire area. Had that been the case, the complainant / insured would have produced evidence to prove so when this was one of the grounds on which the claim had been repudiated. Therefore, I have no hesitation in holding that the complainant / appellant had breached the mandatory term of the insurance policy by not employing either a common watchman for the whole building of which his shop formed a part or a night watchman solely for his own shop. Employment of the watchman, in terms of the above extracted policy condition would be a mandatory condition of the policy considering the nature of the articles which were kept in the premises and were covered under the insurance policy. Therefore, repudiation of the claim, on account of the above referred breach of the policy condition, was justified.
8. The claim was also repudiated on the ground that the complainant/ appellant had not maintained proper stock and account books recording of sales and purchases made by him. The burglary took place in the financial year 2008-09. Unless the complainant / appellant is able to show how much was the value of the opening stock as on 1.4.2008, what was the value of the purchases made between 1.4.2008 to 20.9.2008 and what was the value of the sale made during this period, the actual loss to the complainant / appellant cannot be assessed. A perusal of the survey report would show that no books of accounts for the year 2006-07 and 2007-08 were produced by the complainant / appellant. Only, the purchase account and loss account prepared after the loss was produced before the surveyor. The said account could not have been verified in the absence of atleast the account books for the year 2007-08 since the closing stock as on 31.3.2008 would be the opening stock for the year 2008-09. Several other discrepancies in the accounts produced by the complainant / appellant were noted by the surveyor. His report to the extent it is relevant in this regards, reads as under:
" Purchase Vouchers - (i) No address was mentioned on the purchase vouchers from where the ornaments were purchased in second had condition. In the absence of address, no verification is possible. Copies of few purchase vouchers are enclosed (enclosure - 9(i).
(ii) In the purchase voucher book, we found blank voucher with serial No.94 which means Insured can easily show a bogus purchase by utilizing these blank vouchers (Enclosure - 9 (ii).
(iii) All the purchases were made in cash. When Insured is having loan facility of Rs.15.00 lacs form ICICI bank, why the purchases had not been made against draft / cheque, leaving doubt on genuineness about the purchases.
(iv) To avoid VAT, the Insured is not purchasing gold from various sources on proper bills. Instead of paying VAT, the Insured preferred to do regular business by purchasing second hand ornaments i.e. on cash basis.
(vi) The Insured has assessed total purchases including opening stock of Rs.29.46 lacs against which the sale of only Rs.2.18 lacs during the period of 5 & ½ months Prima facie, it appears that either the bogus purchases were shown or sales were not completely accounted for, resulting into a higher closing stock.
(vii) There are no records available on the basis of which Insured has given the description of sold items like rings, chains, tops etc., in the Claim Bill. All items and its rates are without any basis and without any documentary support. The Insured confirmed that it is prepared on the basis of memory.
(viii) There is no description of gold ornaments while doing purchase of gold ornaments like percentage of purity i.e. whether it is 22 carat or 18 carat and also there was no deductions for miscellaneous items like Moti, ruby, stones etc.
(ix) There is no record available for labour charges paid to karigars for melting of old ornaments and making new ornaments."
9. It is therefore, evident that the complainant / appellant was not maintaining proper books of accounts and has failed to prove the actual loss suffered by him.
10. For the reasons stated hereinabove, the order of the State Commission, dismissing the complaint filed by the appellant does not call for any interference by this Commission in exercise of its appellate jurisdiction. The appeal, being devoid of any merit, is hereby dismissed.
......................J V.K. JAIN PRESIDING MEMBER