JAGRUT NAGRIK vs NEW INDIA ASSURANCE CO. LTD.

THE present revision petition has been filed by Jagrut Nagrik and Shri Mahendra Manilal Panchal (hereinafter referred to as the Petitioners) being aggrieved by the order of the State Consumer Disputes Redressal Commission (hereinafter referred to the State Commission) which has passed an order in favour of New India Assurance Co. Ltd. (herein referred to as the Respondent).

THE brief facts of the case according to the Petitioner are that Petitioner Shri Panchal had obtained a Jewellers Block Insurance Policy for safety of ornaments in his shop from the Respondent/Insurance Company for a sum of Rs.9,50,000/- and had been regularly paying the premium on this policy. A theft took place in the shop on the night of 28.09.2004, the cupboards in the shop were opened with a master key and gold and silver ornaments worth Rs.91,900/- were stolen. Petitioner lodged a complaint in this regard with the Police who carried out a detailed panchnama of the incident. Petitioner also intimated the Respondent/Insurance Company about the incident and the loss suffered by him and on 01.02.2004, Respondent/Insurance Company got the shop surveyed through J.P. Associates to assess the loss. Petitioner submitted the claim and all other papers thereafter to the Respondent/Insurance Company who on 10.05.2005 repudiated the claim on the grounds that the stolen articles were not properly secured and were lying in display on indoors. All efforts by the Petitioner to convince the Respondent/Insurance Company that he had kept the gold and silver ornaments in cover with standard locks and had checked these while closing after business hours, were in vain and, therefore, the Petitioner had no option but to file a complaint before the District Forum seeking a claim of Rs.91,900/- along with interest @ 18% from the date of theft, cost of the complaint and any other relief which it may deem fit. Respondent/Insurance Company denied these contentions and stated that the claim was rightly repudiated because the Petitioner did not adhere to the guidelines in the insurance policy. According to the Respondent, as per the terms and conditions of the insurance policy which had been taken by the Petitioner, all property including cash and currency notes whilst at the premises specified in the schedule shall be secured in locked safe of standard make at all times out of business hours. In the instant case, the Petitioner had kept his silver and gold ornament items displayed on showcases, windows as well on various drawers and therefore, Petitioner was not entitled to get Rs.91,900/- or any other amount as sought by him in his complaint.

The District Forum after hearing both parties allowed the complaint on the grounds that the negligence of the complainant was not so gross as to disentitle him for any compensation. The relevant part of the order of the District Forum reads as under: It is made out from the combined reading of the terms and conditions of the policy and the interpretation of the opponents own assessors that the jewellery on display in the showroom was covered by insurance. On the contrary the complainant has claimed less than the actual loss assessed by the assessor. The repudiation of the claim, therefore, is quite illegal and without application of mind. In the case of Oriental Insurance Company Limited Vs. Prem Prakash Mehra report in III 1998 CPJ at page 46(NC), the Honble National Commission, while interpreting the jewelers block insurance policy had laid down that unless the complainants negligence was so gross as to disentitle him for any compensation, the compensation is payable to the insured. In the case before the Honble National Commission, it was a case of theft of VIP suitcase containing golden jewellery from the railway compartment. Still, however, it was held by the Commission that the negligence of complainant was not so gross to disentitle him for any compensation. In this case, with which we are concerned, as already discussed, the jewellery kept on display in showcase is covered by the policy. Moreover, there is no negligence on the part of the complainant to disentitle him for the compensation. The repudiation being illegal and there being deficiency of service, the complainant is entitled for the compensation as prayed for. The loss assessed by the opponents own assessor is more than the claim. However, we will only grant the amount as prayed for.

THE District Forum, therefore, directed the Respondent to pay the Petitioner Rs.91,900/- with interest @ 9% from the date of repudiation of claim i.e. 10.05.2005 till its realization, Rs.3,000/- as compensation for mental agony and Rs.1,500/- as costs. Aggrieved by this order, Respondent/Insurance Company filed an appeal before the State Commission which allowed the appeal. The relevant part of the order of the State Commission reads as follows: In the present case the conditions laid down by Insurance Company are clear that except timing of business, insurance policy holder has to keep his ornaments and amount in the safe of well-known company make which can be locked as per policy of Jewellery Block and Insurance Holder has committed breach of the said condition. And Ld.Advocate of appellant has submitted judgement before me of AIR(2000) SC 10 Oriental Insurance Co. Ltd. V/s Samayanallayur Primary Agriculture Coop. Bank, in which Honble Supreme Court has specially clarified the word SAFE and also established clear principle that the word should not meant more than the meaning of condition of policy or it should not be enlarged. Therefore, taking it into consideration the conclusion of complaint it has been found by Ld.forum that is not proper and justified, therefore, it seems it is necessary to cancel it. As a result of it, present appeal is allowed. The State Commission while allowing the appeal also directed that Rs.50,000/- deposited by the appellant with the State Commission be refunded to him with interest after due verification.

HENCE, the present revision petition. Authorized representative on behalf of Petitioners and Counsel for Respondent were present and made oral submissions. Learned authorized representative for Petitioner after going through the provisions of the insurance policy, stated that he would limit his claim to payment of Rs.50,000/- only i.e. the silver ornaments that was stolen because as per clause 5 of the policy proposal form which deals with stock, in response to the query (b) which reads as Will the whole of your stocks when on your premises be kept in safe at night and at all times when the premises are closed If not, state value and class of stock which will be left outside safes., the Petitioner has answered silver items worth Rs.50,000/-. In the instant case, since the silver ornaments worth Rs.50,000/- had been kept outside the safe, it was obviously not covered under the policy. He further quoted a judgment of National Commission in Orient Treasures Pvt. Ltd. Vs. United India Insurance Co.Ltd. IV(2007) CPJ 146(NC), where under similar circumstances the National Commission had stated that if terms of policy are vague, interpretation should be such that purpose of insurance is not frustrated. Therefore, the repudiation of the total claim was unjustified. Learned counsel for Respondent/Insurance Company stated that clause 5 of the policy proposal form quoted by the Petitioner was a part of the earlier insurance proposal form. Since then the Respondent/Insurance had modified the terms and conditions of the Insurance policy, and therefore, in the present case these provisions are no longer relevant because there was no provision in respect of any goods being kept outside the safe and instead it was clearly stated as follows:- Warranted that all property including cash and currency notes whilst at the premises specified in the schedule shall be secured in locked safe of standard make at all times out of business hours. Therefore, the contention, as well as the judgment cited by the Petitioner is not relevant in the instant case. The terms and conditions of the policy are clear and unambiguous and being a contractual agreement is binding on the Petitioner, which he violated by not keeping stock properly secured in a safe. Learned counsel for Respondent cited a judgment of the National Commission in T.S.Vivekananda Kumar Vs. United India Insurance Co. Ltd. & Anr. I(2009) CPJ 288 (NC) wherein this Commission had cited the judgment of the Apex Court in Oriental Insurance Co.Ltd. Vs. Samayanallur Primary Agricultural Coop. Bank AIR 2000 SC 10, which reads as follows: The cashiers box could not be equated with the safe within the meaning of the insurance policy. The alleged burglary and the removal of the jewellery from cash box, the cash box was not covered by the insurance policy between the parties. The insurance policy was to be construed having reference only to the stipulations contained in it and no artificial farfetched meaning could be given to the words appearing in it. In the instant case, since the insurance policy clearly stated that all property was to be locked in safes and lock of standard make at all times out of business hours and this was violated by the Petitioner, which was also confirmed by the Surveyors report, the claim was rightly repudiated. We have heard the authorized representative and the learned counsel in respect of both parties respectively.

IT is a fact that ornaments worth Rs.50,000/- were not kept in the safe. On the other hand, there is no ambiguity in the terms and conditions of the insurance policy that all property including cash and currency notes as specified in the schedule shall be secured in locks and safe of standard make. Not adhering to this condition is clearly a violation of the terms and conditions of the policy which is a contractual agreement between the two parties. Keeping in view above ruling of the Honble Supreme Court in Oriental Insurance Co. Ltd. (supra) and the terms and conditions of the insurance policy as discussed above, Respondent/Insurance Company was right in repudiating the claim. We accordingly uphold the order of the State Commission in toto. The revision petition is dismissed with no order as to costs.