GANESWAR MOHANTY vs DIVISIONAL MANAGER, THE NEW INDIA ASSURANCE CO.LTD

THIS is an appeal by the complainant.

SHORT case of complainant is that he has a manufacturing Unit to manufacture ready made garments for which he obtained loan of Rs. 25,000/- from Berhampur (Balasore District Branch) of United Bank of India. This unit was insured against burglary and house breaking. Bank on behalf of the complainant submitted a proposal to the respondent insurer to cover risk of Rs. 25,000/- in respect of readymade garments dress etc. and premium was paid on 4.6.1987. Policy No.7353200172 dated 5.6.1987 was issued by respondent covering the risk for the period between 5.6.1987 and 5.6.88 noon. In the night of 17.12.1987 there was burglary in the Unit by breaking the locked chain of the door. In the morning of 18.12.1987 information was lodged at Berhampur P.S. Information was also given to insurer. Claim in the prescribed form was made on 12.1.1988. Stating that the total loss on account of burglary was Rs. 58,040/-. List of articles lost was also indicated. On 14.2.1989, insurer intimated the Bank that from the claim form it is seen that there is no loss of readymade garments and hence insurer is not liable for the loss of other than readymade garments. Regret was made on account of inability to entertain the claim as per policy condition on 29.1.1991, Bank addressed a letter to the insurer that insurance policy covers risk for ready made garments etc. dress etc. which include cloth materials and hence there is liability to make good the loss. However, on 21.2.1991 Bank intimated that claimant has not paid principal amount of Rs. 15,000/- and interest of Rs. 9,320.86 paise till 31.12.1990. After waiting for some time to the reply of insurer to letter of the Bank dated 21.2.1991, this complaint was filed on 20.11.1991. Insurer replied that complaint is barred by limitation. It denied that there was any theft on 17.12.1989. Claim form was submitted through Bank on 30.12.1987. Insurer appointed a Surveyor to make an enquiry about the loss due to theft. He reported with certified copy of First Information Report, seizure list, filial report and some cash memos which he obtained from complainant. From these documents it was found that neither garments were stored or stolen. For this claim was not settled. Intimation was given on 14.2.1989.

Bank stated on affidavit that on receipt of information from complainant on 18.12.1987 about theft, Bank wrote to Divisional Manager of insurer about the burglary claim and received negative reply on 14.2.89. Bank received letter from District Industries Centre on 20.7.1990 and a letter dated 6.2.1991 from Lead Bank Officer for settlement of burglary claim. Loan outstanding against complainant with interest as on 31.12.1991 is Rs. 27,168.10 paise.

COMPLAINANT and insurer filed documents. On basis of those documents District Forum held that complainant had justful claims against opposite parties. It, however, held that claim ought to have been made within three years from the date of occurrence of the theft and in the Civil Court relying upon the decision of the National Commission reported in 1991 (2) CPR 54 (Jaheed Hussain v. M/s Shah & Lohiya Auto Pvt. Ltd. & Ors.) and 1991 (2) CPR 18 (M/s Junta Machine Tools v. Oriental Insurance Co. Ltd.). Aggrieved by this decision complainant has preferred this appeal. It is submitted by appellant that District Forum ought to have held that limitation would run from the date of repudiation and not the date of theft. Besides, all facts being not in dispute, redressal agency under the Act had jurisdiction and a party ought not to be driven to Civil Court. Mr. P. Roy, learned Counsel submitted that entire claims depends on interpretation of the term of policy and ''Ready made garment dress etc.'' would not include cloth for preparation of ready made garments and Khurdha gamchha, wollon chadar, Dhoti in no case would come under the policy coverage. Therefore, the claim was rightly repudiated and District Forum was not justified in finding that claim of complainant is justified.

ON perusal of record, we find that parties and District Forum did not address to the real questions to be considered. Insurance and Banking are services. Deficiency in services was the subject of consideration by the District Forum. There was no consideration in that respect. District Forum is not correct that complaint is barred by limitation having filed three years after the theft. Burglary in shop is not the cause of action for the complaint. Repudiation of claim of complainant by the insurer on 14.21989 is the cause of action since deficiency in service arise there from. Delay of the Bank in addressing letter to insurer on 29.1.1991 and demand to pay the principal and interest before finality of claim from insurer is alleged to be the deficiency in service. Besides, claim of interest even on finding of the Bank in letter to insurer on 29.1.1991 that complainant is not able to run the unit due to want of fund is a deficiency in service. Since deficiency in service by the insurer and Bank and insurer is alleged and the same is not considered by District Forum, the decision is set aside. We make it clear that cause of action against insurer arose on repudiation on 14.2.1989 and complaint filed on 20.11.1991 is not barred by limitation. Complainant need not be driven to Civil Court since facts in this case are simple and elaborate procedure of Civil Court is not necessary. Ratio of National Commission in the decision reported in 1991 (2) CPR 18 (supra) is not applicable. Mr. Roy stated that on repudiation the dispute ought to have been referred to arbitration. Insurer has not filed the copy of the policy in full wherefrom we can find the written agreement for arbitration. However, we give the insurer liberty to refer the dispute to arbitration if there is such a clause. Since insurer has not filed the complete policy, it will not be permitted to raise any question of delay. If dispute is referred to arbitration, reference shall be made to decide the meaning of etc. after Readymade garment dress and a clear finding shall be given whether the other articles are included and what is the loss of the claimant. Whether interest is payable is a matter for consideration of arbitrator also. Insurer on referring the matter to arbitration shall intimate the fact to the District Forum on or before 31.5.1993.

IN result, appeal is allowed, complaint proceeding is remitted to District Forum for fresh disposal in accordance with law. Appeal allowed.