GWALIOR FREIGHT CARRIERS-/ vs NATIONAL INSURANCE CO.-/

THE appellant had filed a complaint against the respondent - Insurance Company complaining about the nonpayment of the insurance money which according to the appellant was due on the insurance policy dated 24.12.1990 (Ex. P-11).

THE appellant had contended in the complaint that he had taken the insurance cover for loss of money in transit. He was carrying a sum of Rs. 1,39,000/- from Bombay to Gwalior, and had started on 20.12.1990. As he could not get a direct reservation upto Gwalior he got down at Bhopal railway station in search of the conductor for getting his ticket extended upto Gwalior leaving the brief-case containing the money unattended on the upper berth occupied by him. When he returned, he found that the briefcase had disappeared and on enquiry from fellow passengers could not get any information as to who has taken away the brifecase. He immediatly lodged a report with the Railway Police Station, Bhopal, the Insurance Company. THE Insurance Company did not pay the claim and, therefore, the complaint was lodged with the District Forum, Gwalior. In their reply, the Insurance Company refuted the allegations and took a stand that the claim was false and actually the briefcase and the money had not been lost. The plea was taken on the basis of reports of investigation by two Investigators appointed by the Insurance Company and on the basis of the conduct of the complainant in not taking proper care of the money.

After recording the evidence, the District Forum dismissed the complaint holding that no theft had taken place and the complaint was false. Aggrieved by the order, the appellant has now come up before the Commission in appeal.

WE have heard the Learned Counsel for both the parties and have perused the record of the case. In our opinion, the case has not been approached by the parties as well as the Forum from a proper angle. The crux of the matter was whether under the terms of the policy the Insurance Company was liable to pay. It was not really necessary to go into the question as to whether actually theft had taken place or not. The policy (Ex.P-4) does not require the person to prove the theft or loss of money with the standard of proof required by a Criminal Court. Reasonable safeguards against false claims have been taken by the Insurance Company by putting several conditions on which the policy was given. Firstly, to ensure that actual cash is shown in the hands of the ensured persons, the money has to be deposited in and taken out of a Bank named in the policy. The other condition is that the money has to be carried in the personal custody of the insured or the insured''s authorised employee. The insured is required to give immediate notice to the police and to take all practical steps to discover and to get, punished any guilty person or persons and to trace and recover any part of the money lost. The insured has also to give forthwith notice to the Office of the Insurance Company which has issued the policy and a final statement of the loss has to be given to the Insurance Company within a fortnight. The Insurance Company has absolute conduct and control of all the proceedings necessary for the purpose of tracing and recovering the money lost and the insured is supposed to assist in this. All these are safeguards against false claims. The Insurance Company cannot shirk from its responsibility only by taking a plea that the complaint of loss or theft was false.

THE business of insurance runs on faith and trust. Just as the insured reposes faith and trust in the insurer that in the event of loss covered by policy having occurred, the insurer shall honor the policy and compensate for the loss suffered by the insured, the insurer also is under obligation not to start with a presumption that every complaint made by every insured person is a false complaint. If, an insured has to prove before the Insurance Company the loss or theft in the same manner as he has to prove it before a Court of law, the very purpose of taking an insurance cover shall be defeated. THE proper course for an Insurance Company is to pay the money payable under the policy to the insured and, if, on investigation it is found that he complaint was false to proceed against the insured under the criminal law of the land and also recover the money paid by it on the false claim with compensation. In the present case, the claim has been denied by the Insurance Company after getting it investigated through two investigators who were not amenable to any challenge by way of cross examination or otherwise from the insured person. This is highly objectionable and cuts at the root of the very foundation on which the business of insurance stands. The correct approach in the case would be to, examine as to whether the conditions of the policy have been fulfilled by the insured person or not. Let us examine the present case from this angle. The policy (Ex. P-4) in the very second paragraph provides as under:- "Now this policy witness that subject to the terms, exceptions and conditions contained herein or endorsed hereon the Company will indemnity the insured against loss of money belonging to the insured or for which the insured is responsible in the circumstances and situation described in the schedule occurring during any period of insurance."

Condition No. (1) appended to the policy reads as under:- "1. The insured shall take all ordinary and reasonable precautions for the safety of the money."

IN the cases like the present, the decision on whether the aforesaid condition of taking all ordinary and reasonable precautions for the safety of the money, has been fulfilled or not, shall be decisive of the fate of the claim. IN the present case, all other conditions of ploicy have been fulfilled by the insured and if, it is proved by the insured that he had taken all reasonable and necessary precautions for the safety of the money, would be entitled to claim of the amount on the basis of the policy.

LET us examine the circumstances in which the money is said to have a disappeared. The complainant was travelling from Bombay to Gwalior. He was carrying Rs. 1,39,000/- in a brief case. He was not accompanied by any other person, an employee or a friend. As found by the Forum, he had not taken precaution to secure the brief case carrying money with any chain or latch or lock, fastening it with the Compartment in such a manner that it becomes impossible for anyone else to take it away. He left it unattended and got down at Gwalior station in search of the conductor without even putting the briefcase in temporary charge of a co-passenger. It cannot be said that an ordinary prudent man would have acted in the same manner in the same situation. It is therefore, clear that the appellant did not take all the ordinary and reasonable precautions for the safety of the money. This condition of the policy having not been fulfilled, the insurer was within its right to reject the claim. The Forum has rightly held that reasonable precaution was not taken for the safety of the money by the insured but has on that basis disbelieved the factum of theft itself. There was no warrant for such an inference. We therefore, uphold the rejection of the claim but not for the reason that it is false. We would reject the claim for the insured having not fulfilled one of the essential conditions of the policy viz., taking of all ordinary and reasonable precautions to safeguard the money in transit. The appeal is dismissed. However, in the circumstances of the case, there shall be no order as to costs. Appeal dismissed.