National Insurance Co. Ltd. vs VENUS ENGINEERING

NATIONAL Insurance Company challenges order of District Forum, Amritsar dated December 24, 1996. In this appeal, a direction was given to the appellant- Insurance Company to pay Rs. 1,80,304/- with interest @ 15% p.a. from the date of submission of the claim till payment. A sum of Rs. 1000/- was ordered to be paid towards costs to the complainant-Venus Engineering W/s Co- operative Industrial Society, Amritsar.

THE complainant had taken an insurance policy from the Insurance Company on December 9, 1991. THE same was valid upto December 9, 1992. All the stocks in the factory premises of the complainant such as wood, screw and rivets, raw material of B wire, cutting oil and such like other goods for a sum of Rs. 3 lacs. Sometime earlier, the terrorists visited the factory and demanded shelter for the night. THE management as well as the Watchman Tilak Raj declined the request. Tilak Raj was further instructed not to open the factory door for any unidentified person. THEreafter on January 15,1992, a letter was also received on the letter pad of Khalisthan Liberation Force, threatening the complainant to closedown the factory and to give cooperation. On March 23, 1992, some terrorists visited the factory premises and fired shots. Hence factory was closed. On September 14,1992, few terrorists again visited the factory premises and fired shots, threatening Tilak Raj, Chowkidar from whom whereabouts of owner of the factory were being sought. Tilak Raj is stated to have left in panic after locking the factory. On September 23,1992, Jagtar Singh of the complainant-Society visited the factory premises and came to know that on the night of 14th and 15th September, 1992, a theft had taken place in the factory premises. Hence he lodged the report at the Police Station Sultanwind under Sections 457 and 380, 1PC. THE complainant lodged the claim with the Insurance Company. Since the Insurance Company filed the claim as "No Claim", the District Forum was approached. In the meantime, their representation to the Insurance Company did not bear any fruit. THE Insurance Company submitted its version alleging therein that the claim was rightly repudiated being false and not maintainable under the terms and conditions of the policy as the factory premises remained unguarded day and night for a period of more than seven days. Both the parties led their evidence on affidavits and documents. THE Insurance Company also produced copy of Surveyor''s report wherein loss was assessed at Rs. 1,80,304/-. The contention of learned Counsel for the Insurance Company is that the case was fully covered under the exclusion clause contained in the insurance policy, which reads as under : Exclusions: "This policy shall cease to attach: viii(a) If the premises shall have been left uninhabited by day and night for seven or more consecutive days and nights while the premises are left uninhabited. (b) If the insured shall cause or suffer any material alteration to be made in the premises or anything to be done whereby the risk is increased. (c) To any property the interest of the insured in which shall pass from the insured otherwise than by Will or operation of law. Unless in every case the consent of the Company to the continuance of the insurance thereon is obtained and signified on the policy".

The contention of Counsel of the appellant is that since the Chowkidar employed by the complainant to guard the factory had left months prior to the alleged date of recording of the FIR/ the Insurance Company is not liable to pay the insured amount as no intimation was given and no endorsement in that respect was obtained in modification of the terms and conditions of the policy. There is fallacy in this argument. Clause (a) of the Exclusions as reproduced above no doubt protects the Insurance Company against any loss, if the premises had been left uninhabited for seven or more consecutive days and nights. The theft is alleged to have taken place on the night of 14th and 15th September, 1992 although theft was noticed on September 23,1992. In order to attract the Exclusion Clause as referred to above, it was incumbent upon the Insurance Company to collect material to support its finding that prior to September 14 and 15, 1992, the premises were left uninhabited. As per evidence produced by the complainant, on September 14, 1992, in the evening time, few terrorists came to the factory premises and fired certain shots in the air. They asked Tilak Raj, Chowkidar about the where abouts of the owner of the factory. It was at that time that Tilak Raj left the factory premises in panic, locking the same. If after the occurrence of theft, the Chowkidar had left the premises, the liability of the Insurance Company is not washed away. The District Forum rightly came to the conclusion that the Insurance Company in the facts of the present case was liable to compensate the complainant regarding the loss suffered on account of theft.

LEARNED Counsel for the appellant has argued that the disputed question of fact was involved in this case, which required detailed evidence and the complainant should have been relegated to Civil Court for the remedy. This contention in the present case cannot be accepted. Primary questions for decisions were about the actual date of commission of theft and as to when the Chowkidar of the premises left the factory premises unattended. The evidence of the complainant produced in this case consisted of affidavit of Jagtar Singh and copy of the FIR on this point. Whereas on behalf of the Insurance Company, affidavit of Buta Ram Mahajan, Divisional Manager of the Insurance was produced. The other evidence related to the Surveyor''s report and the material produced before the Surveyor. The District Forum rightly accepted the version of the complainant in the present case and we concur with the finding. The repudiation of the claim was arbitrary and non settlement of the claim amounts to deficiency in rendering service on the part of the Insurance Company. For the reasons recorded above, this appeal fails and is dismissed with costs of Rs. 2,000/-. The directions given by the District Forum and as above be complied within a month of receipt of copy of the order. Appeal dismissed with costs.