National Insurance Company Ltd. vs ARUNKUMAR SAH

O.P.-National Insurance Company has preferred this appeal against the order dated dated 24.4.2003 passed by District Forum, Begusarai in Complaint Case No. 08/97 whereby and whereunder directed the appellant to pay 75% of Rs. 1,01,000/- on non-standard basis with interest @ 6% per annum and litigation cost of Rs. 2,000/-.

THE brief fact of the case is that complainant took insurance policy on 6.12.1995 by the appellant-O.P. for the goods of his shop namely Arun Khad Bhandar situated at Begusarai. THE complainant further alleged that he took a loan from Central Bank of India, Teghra Branch under PMRY scheme for the shop. It is further alleged that a theft was committed in his shop in the night of 13/14.5.1996 by unknown person for whom Criminal Case No. 78/96 was lodged with Teghra Police under Section 457/380, I.P.C. THE police after investigation submitted final report on 24.6.1996. THE complainant alleged that though his shop was insured at a sum of Rs. one lac he made a claim after the occurrence of theft for Rs. 1,05,000/- on 19.6.1996 and submitted all the claim papers through Central Bank of India, Teghra Branch. In spite of all efforts the complainant could not get any amount claimed for. THEreafter he filed the complaint case. THE O.P.-appellant appeared and submitted rejoinder stating therein that after receipt of the claim papers from the complainant a Surveyor was appointed who visited the spot on 6.7.1996. This Surveyor did primary investigation and submitted the report. THErefore, the Insurance Company appointed a final Surveyor in the month of November, 1996 who by his letters asked the complainant to submit the relevant papers including books of account, stock register, purchase invoice, sale register, cash book, Bank statement and copy of F.I.R. but the complainant did not cooperate with the Surveyor nor supplied with the required papers. He only submitted photocopy of the purchase bills. It was also alleged on behalf of the Insurance Company that complainant should have made Central Bank of India a necessary party through which the insurance was made. THE Bank statement regarding his loan and repayment was never produced either with the Insurance Company or before the Surveyor. THErefore, the claim was not settled and the company cannot be held deficient in service. After hearing both the parties the District Forum passed the impugned order against which the appeal has been preferred. From the perusal of the impugned order it is clear that most of the facts of the case are not in dispute. The insurance coverage is admitted. The ground for repudiation of the claim is non-filing or production of some important documents by the complainant to enable to settle the claim effectively. The District Forum placed reliance on the copy of the F.I.R. dated 14.5.1996 (Exhibit C/15) and Exhibit C/17 is the copy of the supervision note of the police. This F.I.R. shows that it was a joint F.I.R. by the complainant and one Ajay Kumar Singh in whose shop in the same night burglary were committed. The police found the occurrence of burglary is true. Exhibit C/16 is the petition, which was sent through Branch Manager, Central Bank of India to the police stating that Bank has advanced loan to the complainant in the name of the shop and it has received the information about the occurrence of theft. Thereafter the police submitted the final report (Exhibit C/18), which mentions as occurrence true but no clue. The District Forum also considered Exhibit C/14, which is the copy of the order sheet of the Court of C.J.M. where the police sent the copy of the F.I.R. In view of these documents the District Forum held that complainant has been able to show and prove that a burglary was committed in his shop, which was insured with the appellant. The District Forum further held that from these documents it appears that burglary of 100 bags of DAP and 5 bags of Urea and other articles were stolen. It was fertilizer shop of the complainant. The District Forum held that the complainant has failed to produce the bills, cash memo, purchase receipt, stock register, etc. as per demand by the Surveyor as mentioned in report [Exhibit O.P. (5)]. The complainant before the Surveyor produced only photocopy of the cash memo. Exhibit O.P.-4 is the first report of the Surveyor dated 22.4.2001. The District Forum held that before the Surveyor report dated 22.4.2001 was sent the complainant had sent the photocopy of the cash memo and other documents, which have been marked Exhibits C/10 to C/10 C. After perusal of the cash memo the District Forum held that it establishes the purchase of fertilizer, etc. by the complainant for his shop before the alleged date of burglary. The photocopies of these cash memos were also filed before the District Forum and a copy was also sent to the Surveyor before he submitted the report. The District Forum held that complainant before the police and also in his letter addressed to the Insurance Company has intimated that in the case of theft some important registers including stock register, etc. were also found missing, therefore, it could not be produced before the Surveyor. However, the District Forum held that on this ground only the entire claim of the complainant cannot be in negative because from the cash memo and other documents produced by him it is clear that he has purchased articles alleged to be stolen and were kept in the shop before the date of occurrence. The District Forum without discussing the contention of the Insurance Company, which has relied on Clause No. 5(b) of the insurance policy which mentions that complainant has to furnish detail particulars of the amount of loss or damages together with such explanation and evidence to substantiate the claim and if it is not fulfilled by the complainant in that case the insurance becomes voidable. The District Forum held that even if the insurance has become voidable due to non-fulfilment of the condition of Clause 5(b) of the policy still in view of the admitted fact that complainant''s shop was insured and a theft was committed it was open for the Insurance Company to settle the claim as on non-standard basis because on this ground the insurance policy has not become ab initio void. Applying the policy on non-standard basis and in view of the amount of policy and the amount of loss committed in the burglary the District Forum held that 75% of the claim should be settled by the Insurance Company and on this basis directed the Insurance Company to settle the claim @ 75% of the policy amount.

The main contention of the appellant before us is that District Forum has only considered the purchase aspect of the fertilizer and other articles by the complainant on the basis of photo copy of the purchase bills but did not consider that out of these articles how much were sold till the alleged date of occurrence. The complainant failed to produce cash memo to show that from the date of purchase and the date of occurrence of theft how much articles were sold only then the balance amount could have been ascertained. Therefore, the order of the District Forum is based on hypothecation and not on actual stock of goods on the date of alleged theft. The Bank statement was an important document, which was also not produced before the District Forum, nor the complainant has ever prayed before the District Forum to call for these documents from the Central Bank of India. The Surveyor''s report has mentioned all these facts but the District Forum did not consider it. The non-standard claim to pay 75% of the claim amount is the maximum limit, which is not applicable in this case because the complainant did not produce some important documents. Therefore, the Insurance Company was justified in repudiation of the claim.

IN reply the learned Lawyer of the respondent submitted that in the F.I.R. and in his statement before the police the complainant has alleged that the cash memo and other register were also stolen and looted away by the miscreants at the time of occurrence, therefore, the complainant was unable to produce the bills, cash memo, etc. The statement of account was not called for from the bank because it was not relevant to decide the claim of the complainant nor it could have been helpful to come to the conclusion that all the articles were available in the shop on the date of occurrence. The account of Central Bank of INdia could have only shown that complainant has taken a loan from this Bank and that fact is not in dispute. The Surveyor''s report cannot be disbelieved in all the contention of the complainant and it has also recommended for settlement of the claim on the basis of 75% of the claim amount on non-standard basis. Therefore, the order of the District forum was based on equity and justice and on technical ground the INsurance Company should not deny the claim of the complainant. We have considered the submissions made on behalf of the parties and also carefully scrutinized the order of the District Forum, which has discussed every aspect of the matter in detail. In our view the District Forum has rightly based its order on the photo copy of the purchase bills because it was the case of the complainant that everything was looted away by the miscreants at the time of occurrence including the bills cash memo and this fact is mentioned in the police report which includes the statement of the complainant recorded by the police. The District Forum has considered the Surveyor''s report and on that basis held that complainant was entitled for 75% of the claimed amount on non-standard basis. The learned Lawyer of the appellant could not give any satisfactory explanation as to why the report of the Surveyor should not be accepted. In view of the admitted fact that shop of the claimant was insured and there was burglary in the shop and most of the articles were looted away. In the interest of justice, it was mandatory for the Insurance Company to settle the claim reasonably and it was not justified on its part to reject the claim on mere technical ground for non-production of cash memo, stock register, etc. The equity and justice demands that in view of the admitted fact of the case the claim amount should be settled primarily on the basis of Surveyor''s report. In the fact and circumstances, we are of the view that impugned order of the District Forum does not require our interference.

IN the result, we do not find any merit in this appeal, which is dismissed. The impugned order is confirmed. The appellant is directed to pay 75% of Rs. 1,01,000/- on non-standard basis to the complainant within three months from the date of this order. The rate of interest @ 6% allowed by the District Forum is also on the lower side, therefore, the appellant is entitled to pay interest @ 6% from the date of filing of the case (22.1.1997) till the date of payment. However, the litigation cost of Rs. 2,000/- appears to be on higher side, which is reduced to Rs. 1,000/- only. With this modification in the impugned order the appeal fails. Appeal dismissed.