Gupta Sales Corporation vs United India Insurance Company Ltd.

BRIEFLY stated the facts are that M/s. Gupta Sales Corporation was earlier partnership firm having two partners namely Satpal and Bhisham Garg. However, Sh. Bhisham Garg died and after his death, Sh. Satpal became the sole proprietor of the firm in 1989. It had been carrying on business of pesticides and seeds etc. from its inception.

IT was next averred that complainants had been storing goods into two godowns situated at opposite Krishna Talkies (old Cinema Road), Rampura Phul and opposite Lions Club, Rampura Phool. The back of both godowns joins each other. Both the said godowns were insured with United India Insurance Company vide cover note No. 821041 Ex. C-4 for Rs. two crores and vide insurance cover note No. 271135 Ex. C-5 for Rs. one crore for theft etc. and vide Ex. C.6 cover note No. 271134 for fire. Vide insurance policy Ex. C.7 the stocks at showroom with godowns were also insured. IT may be mentioned here that showroom/godowns were situated at old Cinema road, Rampura Phul. It was further averred that unfortunately on the night intervening 26/27 October, 2003, a theft took place at the aforesaid godowns and it came to the notice of complainants on 27.10.2003 at about 9.45 a.m. when Shri Harjit Singh, driver of truck No. PB-5-3947 reached the shop of Amar Enterprises which was also owned by Satpal adjoining the showroom/shop of Gupta Sales Corporation, Rampura Phul situated at Old Cinema Road, near Civil Hospital along with its employee Balram. They noticed that locks of godowns of Gupta Sales Corporation had been unlocked and removed by someone and immediately Balram rushed to Satpal and informed him about the theft/burglary. The said godowns on 26.10.2003 were locked by Sh.Balram and the keys remained with Satpal and he never handed over keys to anybody.

It was next averred that immediately Satpal informed the United India Insurance Company in writing at its Moga Branch on 27.10.2003 by sending his one of employees Munish that theft had taken place at the godowns and their claim be registered and necessary steps should be taken. Shri Satpal had also informed the police at about 11.30 a.m. on 27.10.2003 itself regarding theft and after half an hour the police had reached the spot i.e. godowns and started necessary investigation and thereafter Satpal called the police several times but the culprits could not be traced out.

IT was further averred that United India Insurance Company deputed Shri Rishi Kumar Mittal, Surveyor of Bathina. He visited the premises either on 28 or 29th October, 2003 and noticed necessary particulars and Satpal supplied all the requisite information to him and he further took necessary photographs. Both the godowns of complainants at opposite Krishna Talkies and Lions Club, were located in crowded locality. Thereafter Mr. Parmod Mittal Surveyor deputed by the insurance company visited the complainants concern and godowns on 6.11.2003 and collected necessary information and he demanded certain information in writing vide Ex. C.10 dated 10.11.2003 which was supplied to him in the month of November, 2003 and even additional information was also supplied to him. Thereafter, Shri S.N. Kochhar, retd. SP was appointed as investigator who deputed Sh. Mohinder Singh, retired Inspector of Police who contacted Satpal complainant and necessary information was supplied to him which is Ex. C.26 that the pesticides were exempted from octroi. However, vide letter dated 25.3.2004 Ex. C.26 the insurance company rejected the claim and closed it as no claim with mala fide intention for not paying the insured amount. Alleging deficiency in service, the complainants claimed Rs. 96,03,850 with interest @ 18% p.a. from the date of loss i.e. 26/27 October, 2003 till payment. Besides it, they claimed Rs. 50,000 as litigation expenses.

WITH these allegations, complaint was filed on 24.3.2005 in Punjab State Commission. Opposite parties contested the complaint and filed written reply. They took certain preliminary objections; that the complainants were indulging in commercial activities as they were dealing with pesticides, seeds, etc. at a large scale and as such did not come within the definition of ''consumer'' as defined under Section 2(d) of the Consumer Protection Act; that the complaint was bad on account of non-joinder of necessary party namely State Bank of India. On merits, they controverted the allegations and stated that there was no deficiency in service on their part as immediately after intimation of claim, M/s. Mittal Surveyors Pvt. Ltd. were deputed to assess the loss and they submitted their status report on 3.11.2003 and final report on 11.3.2004.After taking into consideration investigation report of M/s. Kochhar and Associates dated 8.2.2004 and Surveyor''s report, the claim had been rightly repudiated. They further stated that complainants had failed to furnish necessary information regarding purchase bills, volumetric analysis, etc. They further stated that in the policy it was defined that for covering the risks of burglary and house breaking, there must be some forcible entry in the premises which the complainants had failed to prove. They also stated that the complainants had failed to prove that it had suffered any loss. They denied that the complainant No. 1was a proprietary concern owned by Shri Satpal and on the other hand, it was partnership firm. They also stated that the police officials had refused to register FIR because after preliminary investigation, they could not find that any theft had been committed. The copy of the Surveyor repot is Annexure R-2 while copy of the investigation report is nnexure R-3. They also stated that the godowns of complainants were situated in a crowded locality and under no circumstance it could be presumed that a theft of around Rs. one crore took place in a crowded locality and no FIR had been recorded by the police and it could only happen when no theft had taken place. They also stated that the claim had been rightly repudiated. Parties adduced their evidence by way of affidavits.

WE have heard counsel for complainants Mr. Ram Lal Gupta , Counsel for opposite parties Mr. Suman Jain and carefully gone through the file.

THERE is no dispute about it that initially M/s. Gupta Sales Corporation was a partnership firm having two partners namely Bhisham Garg and Satpal. The copy of the partnership deed Ex. C.3 which is at page 24/40 of the file shows that Sh. Bhisham Garg and Satpal were the two partners who were real brothers and this partnership deed was executed on 31.3.1992. The copy of the death certificate Annexure C-3 shows that Sh. Bhisham Garg died on 25.9.2004. THEREafter deed of dissolution Ex. C. 32 was executed between Raj Rani widow of Shri Bhisham Garg and Satpal whereby partnership was dissolved and Satpal was permitted to continue the business under the name and style of M/s. Gupta Sales Corporation with effect from 26.9.2004 as sole proprietor and legal heirs of Bhisham Garg had no connection with the same. Thus, at present Sh. Satpal is the sole proprietor of Gupta Sales Corporation and as such is entitled to file the complaint. Counsel for OPs contended that M/s. Gupta Sales Corporation was dealing in pesticides, seeds at a large scale and were indulging in commercial activities, so, it was not a consumer as defined in Section 2(d) of Consumer Protection Act, 1986. In our opinion, the contention of learned counsel is not tenable. The complainants had insured the goods with United India Insurance company stored in two godowns situated on Old Cinema Road, Rampura Phul and burglary is alleged to have taken place there on 26/27.10.2003. It has been observed by Hon''ble National Commission in Harsolia Motors v. National Insurance Company Limited, I (2005) CPJ 27 (NC)=2005 (1) CPC 53, that insurance policy is availed for indemnifying loss which may be suffered by the insured. Even if complainants are carrying on commercial activities, the same cannot be held to be for commercial purpose as the policy is taken for reimbursement or for indemnity for the loss which may be suffered due to various perils. Therefore, the complaint is maintainable and the complainant is consumer as defined under Section 2(d) of Consumer Protection Act.

There is no dispute about it that cover notes Ex. C-4 and Ex. C-5 covered the loss of theft, burglary etc. which were valid from 9.9.2003 to 8.9.2004. Since the present occurrence is alleged to have taken place on the night intervening 26/27th October, 2003, so, the said occurrence is covered by the above mentioned cover notes. Vide cover note Annexure C-4 complainant had insured the stock of all kinds of fertilizers/pesticides while lying in the godown opposite Cinema and opposite Lions Club to the extent of Rs. two crores. Vide cover note Annexure C-5, they insured the stock of all kinds of fertilizers/pesticides to the tune of Rs. one crore lying stored in bags/boxes in the godown situated opposite Lions Club, Cinema Road, Rampura Phul. Ex. C-7 is copy of shopkeepers'' insurance containing terms and conditions of the insurance which is signed by Satpal on all pages. The definition of burglary/house breaking is given under the heading ''observance of terms and condition'' in Clause 11 as under: "DEFINITION : The term Burglary and/or House Breaking shall mean theft involving entry into or exit from the insured premises by forcible and violent means or following assault or violence or threat thereof to the insured on any employee of the insured or member of the insured''s family."

IT has been observed by Hon''ble Supreme court in United India Insurance Company Ltd. v. M/s. Harchand Rai Chandan Lal, IV (2004) CPJ 15 (SC)=V (2004) SLT 876=JT 2004 (8) SC 8, that the terms of the contract have to be strictly read and natural meaning should be given and no outside help should be sought unless the meaning is ambiguous. When the term ''burglary'' has been defined in the policy then the cause should fall within the definition. The element of force and violence is a condition precedent for burglary or housebreaking and therefore in terms of the definition, the theft should have preceded with force or violence and it is for the claimant to establish that theft or burglary took place precedent with force or violence and it is not then the insurance company will be well within their right to repudiate the claim. In the above mentioned case, theft of foodgrains bags had taken place from the godown where the bags were stored. Respondent (complainant) had lodged the FIR and subsequently raised the claim from the insurance company. The insurance company repudiated the claim on the ground that theft was not covered by the policy and there was no burglary. Respondent raised a consumer dispute, District Forum held that burglary included theft and hence appellant insurer was directed to settle the claim. State Commission and National Commission too held the decision of the District Forum but Hon''ble Apex Court allowed the appeal of insurer and held that terms of the contract have to be strictly read and since the theft was not preceded with force or violence, so, claim was rightly rejected. The term ''burglary'' has been defined in the English Dictionary which means an illegal entry into the building with an intent to commit crime such as theft. But in the absence of violence or force the insurer cannot claim indemnification against the insurance company. The terms of policy have to be construed as it is and we cannot add or subtract something.

ANNEXURE R-3 dated 8.2.2004 is investigation report of Kochhar and Associates appointed by OP. They had categorically stated that they had visited the spot and found that some stocks of fertilizers and pesticides were still in the godowns. The locks of the godowns could not be traced. They had not found any mark of violence on the shutter of one godown or door of other godown. They further stated that the police had visited the spot and made inquiries and had even sealed the godowns on that date and later on removed the seals. Admittedly the police had not recorded any FIR. It appears that after receipt of information, the police visited the spot and even sealed the godowns on that date but did not find any mark or trace of having committed theft and for this reason, they later on removed the seal as they did not believe the version of complainant Satpal that a theft had taken place. It is further mentioned in the investigation report that both godowns of complainants were located near each other , although in separate streets near Krishna Talkies, Mehraj Basi, Rampura Phul. Godown No. 1 had a corrugated tin gate while godown No. 2 had steel shutter. The gate of godown No. 1 opens towards east towards the side of wall of Krishna Talkies and a few labourers lived in one room of first floor of the house, otherwise there were godowns on the northern side of the godown, and after that is the shop of Shri Om Parkash proprietor M/s. Moni Electric Works. They had further mentioned that the miscreants had stolen selectively those pesticides which were very costly and had not touched the cheaper insecticides, fertilizers or the seeds which were lying in both the godowns and it would require at least a full truck and lot of time for the miscreants to carry away goods and possibility of which appeared to be very remote as nobody got even wind of the same during the night while it had required a lot time to load in the truck the quantity of insecticides alleged to have been stolen. They also made inquiry from the police officer concerned but they stated that they did not record FIR as there was no convincing evidence that any theft had actually been taken place in those two godowns. According to them, it appeared to be stage managed affair to get claim from the insurance company. The culprits are alleged to have not touched cheaper items but had only taken selected items i.e. costly items and theft committed was of one truck load which required a lot of time. It is admitted by complainants that godowns were situated in a crowded locality, therefore, prima facie it appeared to be a case of no theft because culprits would not have dared to afford time to commit theft of selected items by remaining there for a number of hours in the godowns and then carried the stocks in a truck. Several persons were required to commit such a theft which is not possible in a crowded locality even on night time. The broken locks were not found at the spot. There was no visible sign of violence available at the spot. If they had committed burglary then they must have broken some door or shutter of the godowns or foot print must have been found at the spot but nothing was found at the spot. There is also report of Surveyor M/s. Mittal Surveyors Private Limited dated 11.3.2004 Annexure R-2 on the file. They have clearly stated that the insured was asked for the documents required in the claim but in spite of repeated reminders, it had not submitted the documents. They have also stated that the claim should be repudiated as there was no forcible entry in the premises and from whatever information was supplied, they had come to the conclusion that the purchases were bogus and there were bogus book entries . They have also gone into the accounts of M/s. Rallies India Ltd., Bathinda, M/s. Bayer India Ltd., Bathinda and M/s. Bayer Crop Science India Ltd., Bathinda from whom complainants used to purchase insecticides or pesticides and found that complainants were under heavy debit as they were to pay about Rs. 3 crores to the suppliers because after July, complainants had started having credit purchases heavily. Therefore, the Surveyor had concluded that it was quite possible that in order to satisfy the suppliers, the insured had managed a drama of burglary in the premises. The investigator also recorded statements of some persons residing around about the godowns. From the circumstances narrated by OPs and the evidence of complainants, we are of the view that it has not been proved on file that the culprits/miscreants had allegedly taken away the goods stored in two godowns situated on old cinema road by forcibly entering into the godowns. In fact, it is not proved on file that there was theft of goods of the complainants which took place on 26/27th October, 2003. Consequently, there is no force in the complaint and as such it is dismissed. However, in the circumstances of the case the parties are left to bear their own costs.

COPIES of this order be communicated to the parties, free of charge. Complaint dismissed.