Aicam Engineering Limited vs National Insurance Co. Ltd. And Anr.

COMPLAINT was filed, inter alia, alleging that the complainant is engaged in the business of fabricating, erecting, commissioning structural and mechanical components and plant segments for industrial and infrastructural projects like steel plants, power stations and refineries, etc. Complainant had several items of machinery at Rourkela, Vandalur factory in Chennai and other places. As the items of machinery at Rourkela were not needed further, they were in the process of being shifted to Mathura and other sites where the complainant was carrying out major jobs for public sector undertakings. Opposite party No 1 -Insurance Company was approached by the complainant for issue of Burglary and House Breaking Policy as also Fire Policy with all India coverage. It was represented by the Insurance Company that the machinery can be freely moved from place to place and the premium for burglary was the same regardless of the places. Complainant purchased burglary and house breaking policy bearing No. 501600/46/03/96/235 dated 31.3.1997 which was valid for one year starting from 31.3.1997. It also purchased Fire Policy bearing No. 11/33/96/1483 on the same items of machinery expiring on 30.3.1998. It was further alleged that some unknown persons broke open the stores and cut and removed the wire fencing of the cordoned area and stole several items of insured machinery detailed below: "Electric Winches -2 MT - 2 Nos. AG7 Grinder - 10 Nos. Portable Drilling Machine - 4 Nos. Welding Rectified -400 Amp - 8 Nos. Plate Rolling Machine - 1 No. Arc Welding Machine - 6 Nos. Arc Welding Machine - 8 Nos. Diesel Welding Generator - 1 No. Welding Rectifier - 6 Nos. Welding Rectifier -600 Amp - 10 Nos. Heavy Duty Derrick (Revolving type) - 2 Nos. Arc Welding Machine - 10 Nos. Derrick -40 T (Rotating type) - 2 Nos. Derrick -60 T (Revolving type) - 2 Nos. Power Winch -10 MT - 2 Nos. Electric Winch -10 MT - 2 Nos. Electric Winch -6 MT - 1 No. Steel Plate Rolling Machine - 1 No. Diesel Generator - 1 No. Welding Generator -400 MPH - 10 Nos. Electrode Heating Oven - 5 Nos. Hydraulic Pipe Bending Machine - 1 No. Electric Winch 10 MT - 2 Nos. Torque Control Panel - 1 No. Temprature Recorder - 2 Nos. Armoured Cable (3.5 x 50 Sq. mm.) - 212 Mtrs.

COMPLAINAN T made complaint to the concerned police. It lodged a claim on opposite party No. 1 on 14.3.1998 for Rs. 1,73,39,856 with supplementary claim on 21.1.1999 for the value of the stolen equipments under the policy. It was stated that by the letter dated 15.10.1999, opposite party - Insurance Company repudiated the claim. Attributing deficiency in service, direction was sought to be made to opposite party No. 1 to pay to the complainant a sum of Rs. 1,92,19,856 with interest @ 24% p.a. from 14.4.1998 and from 20.2.1999 on Rs. 18,80,000 as also Rs. 5.00 lakh as damages.

STATE Industrial Promotion Corporation of Tamil Nadu Ltd., Chennai against whom no relief is claimed, was arrayed as opposite party No. 2 as the items of machinery stolen were hypothecated with it. Opposite party No.1 -Insurance Company contested the complaint by filing written version. Though issuance of the Burglary and House Breaking Policy dated 31.3.1997 was not denied but it was alleged that the Insurance Company never issued any policy in regard to the machinery at Rourkela. Opposite party had insured various machineries lying at the locations set out in the Schedule of the policy. Since the machinery lying at Rourkela was never insured the claim made was repudiated vide letter dated 15.10.1999. It was further alleged that the complainant claims to have lost 26 items of machinery. Out of them the items mentioned at serial Nos. 2, 3, 5, 9, 11, 12, 13, 14, 16, 18, 19 and 23 never entered in the premises as no Red Card was produced in support of the entry of these items of machinery. Whenever any material enters the premises at Rourkela Steel Plant a Red Card pass is issued by the Superintendent. It was denied that the complainant approached the answering opposite party for taking policy on all India basis as alleged. It was stated that under the House Breaking and Burglary Policy places are required to be mentioned and Rourkela was not an insured site. Denying deficiency in service, liability to pay the amount claimed was denied.

WE have heard Mr. Ajay Choudhary for the complainant and Mr. Sudarsh Menon for opposite party No. 2. No one was present on behalf of opposite party. No. 1 -Insurance Company on 4.3.2009.

ISSUANCE of Burglary and House Breaking Policy dated 31.3.1997 is admitted by opposite party No. 1. In regard to theft of 26 items of machinery during May to July, 1997 from the stores and open courtyard of Rourkela Steel Plant modernization project a complaint by registered post on 7 -27.8.1997 was sent by the complainant to the Inspector Incharge PS Thankarpali Police Station (near Fertilizer Plant), Rourkela. Claim lodged by the complainant regarding stolen items of machinery was repudiated by the Insurance Company by the letter dated 15.10.1999 on the ground that items of machinery lying at Rourkela were never insured by it. Short controversy between the parties, thus, centres around the issue if the items of machinery for theft whereof report was made to the police, are/are not covered by the said policy dated 31.3.1997? Copy of the policy along with schedule and list is at pages 24 to 30 on the paper book. Operative Clause of the policy being material at page 24 is reproduced below: "Operative Clause The Company hereby agrees subject to terms, conditions and exclusions herein contained or endorsed or otherwise expressed hereon to indemnify the insured to the extent of intrinsic value of - (a) Any loss 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 the reat any time during the period of insurance: Provided always that the liability of the Company shall in no case exceed the sum insured stated against each item or total sum insured stated in the Schedule."

Omitting immaterial portion, schedule at page 28 runs as follows: "Name of the insured and address : SIPCOT. Madras -8 A/c M/s. AICAM Engineering Limited Y -211 Second Avenue, Anna Nagar, Madras -40. Occupation/Business : Engineering construction. Period of Insurance : From .... a.m. On 31.3.97.... p.m.. To Mid -Night On 30.3.98 Premises: (Description and situation of the premises containing the property insured). Various locations as per list lodged. Note: The premises shall not include any yard, garden, open space or out -building not communicating with the main building. Occupied as: Office -cum -Factory PROPERTY INSURED Item No. Full Description of Property Sum Insured (a) On stock -in -trade, i.e. the Property of the Insured pertaining to the business or occupation. Various machineries as per list lodged Rs. 3,60,87,000 (b) Goods held in trust or on commission for which Proposer is responsible. (c) Furniture, Fixtures, Fittings, Utensils and Appliances in Trade. (d) Coins/or Currency Notes in locked safe. (e) Others (to be specified). Additional Conditions (if any) Bank Clause attached. In witness whereof this policy has been signed at Madras on 31st March, 1997".

List attached to this schedule gives the details of the machinery, machine number, location and the sum assured. Under the heading Location'' the names of Mathura, Surat, Numaligarh, Mangalore, Vandalor and Pata are mentioned. To be only noted that Rourkela is not shown as one of the locations where the insured items of machinery lay, in this list. Relying on the letter dated 18.4.1997 at page 40 it was submitted by Mr. Choudhary, Adv. that the complainant operates on all India basis and the machines keep moving from place to place and one of the sites to which the machines were to be shifted from Rourkela, was Mathura and as the name of Mathura appears in the list the items of machinery lying at Rourkela were covered by the policy. We do not find any merit in this submission. Terms of the policy including the schedule and list appended are to be construed strictly. Aforesaid operative clause of the policy, schedule and the list attached, unambiguously go to show that the machines lying at the locations shown in the list alone were insured and as Rourkela did not figure in that list, the items of machines lying there were, therefore, not covered by the policy. Said letter dated 18.4.1997 does not help the complaint. Insurance Company had rightly repudiated the claim by the letter dated 15.10.1999 and the complaint thus deserves to be dismissed being without any merit. Accordingly, the complaint is dismissed. No order as to cost. Complaint dismissed.