ORIENTAL INSURANCE CO LTD vs Navdurga Traders

THIS appeal under Section 16 of the Consumer Protection Act, 1986 (hereinafter called as Act for short) is directed against the order dated 26.10.2002 in Case No. 257/2002 by the district Consumer disputes Redressal Forum, Raipur (hereinafter called as Distt. Forum for short) partly accepting the claim of complainant and awarding compensation of Rs. 67,000/ - to the complainant/respondent.

RELEVANT undisputed facts stated in brief are: that the complainant/respondent had obtained a Burglary and House Breaking Policy for his business from the insurer/appellant. The said policy was in force for the period from 1.3.2001 to 28.2.2002. The appellants shop was burgled in the night intervening between 21.2.2002 and 22.2.2002, i.e., during the currency of the policy. The complainant/respondent herein lodged a police report about the incident as also intimated the appellant/insurer and prayed that amount under the insurance policy be paid to him. The appellant appointed Shri S.K. Kesharwani as Surveyor who in his report assessed the loss at Rs. 67,000/ -. However, the claim of the complainant/respondent was repudiated by the appellant/insurer stating that the claim was not covered by the terms of the policy. The complainant/respondent, therefore, preferred a complaint before the Distt. Forum claiming compensation of Rs. 91,204/ - with interest, etc. The appellant resisted the complaint. They denied that there was any burglary in the complainants shop. It was averred that the complainants servant Bablu got prepared a duplicate key of the lock put on the shop and thereafter had during night removed the goods from the shop. It was, therefore, averred that there was a criminal breach of trust on the part of the said servant which was not covered by the terms of the policy.

LEARNED Distt. Forum held that the appellant was not justified in repudiating the claim and that the appellant has committed deficiency in service by repudiating the claim. Accordingly, the amount of Rs. 67,000/ - as assessed by the Surveyor, was awarded in favour of the complainant/respondent. Learned Counsel for the insurer/appellant submitted that though the loss or damages to the property was covered by the policy yet since the loss were caused by the servant of the insured/respondent; hence in view of the Exclusion Clause of the policy, the appellant/insurer was not liable to compensate such loss or damage. It was, therefore, submited that the repudiation on the part of the appellant/insurer was justified and the learned Distt. Forum erred in awarding compensation to the complainant/respondent.

AS against the above, the learned Counsel for the complainant/respondent submitted that the servant had committed a theft and house breaking by preparing a duplicate key. The incident took place at night time and possibly, another person that is the guard of the adjoining complex was also involved and collaborated with the servant Bablu in committing the said offence. In view of the above, the exclusion clause could not be resorted to by the appellant/insurer. It was, therefore, submitted that the learned Distt. Forum was justified in awarding compensation. In view of the rival contentions as above, the basic question that arises for consideration is: as to whether the appellant/insurer could take shelter under the exclusion clause of the policy or should be held liable for the loss to the complainant/respondent under the policy obtained by him?

AS noticed above, the incident of theft on the night intervening between 21.2.2002 and 22.2.2002 in the shop of the complainant is not denied. In fact, a police report was promptly lodged by the complainant about the incident and offence was also registered. Further some stolen material was also recovered during investigation. From the nature of incident as reported by the complainant/respondent there appears to be no scope to doubt that theft and house breaking in the shop of the complainant had taken place. From the material placed on record, it appears that in the said incident, the servant of the complainant Bablu who was helped and aided by the Guard of the adjoining building (complex) were responsible for the said offence.

IN the circumstances, the question that now deserves consideration is as to whether the loss or damage due to burglary and house -breaking as above could be covered by exclusion clause of the policy? It may be noted in the above context that operative clause of the policy reads as follows: Operative clause - ''This company hereby agrees subject to terms, conditions and exclusions herein contained or endorsed or otherwise expressed heron to indemnify the insured to the extent of instrinsic value of: (a) Any loss or damage to property or any part thereof whilst contained in the premises described in the schedule hereto due to Burglary or House -breaking (theft following upon an actual forcible and violent entry of and/or exit from the premises) and Holdup. (b) Damage caused to the premises to be made good by the insured resulting from burglary and/or house -breaking or any attempt/threat any time during the period of insurance: Provided always that the liability of the company shall in no case exceed the sum insured stated against each item or total sum insured stated in the schedule.''

Relevant exclusion clauses on which the learned Counsel for the appellant/insurer relied upon read as below: ''The company shall not be liable in respect of - (i) ** (ii) Loss or damage where any inmate or member of the insureds household or of his business staff or any other person lawfully in the premises in the business is concerned in the actual theft or damage to any of the articles or premises on where such loss or damage have been expedited or any way assisted or brought about by any such person or persons........... (iii) to (vi)** (vii) Loss of money and/or other property abstracted from safe following the use of the key to the said safe or any duplicate thereof belonging to the insured unless such key has been obtained by assault or violence or any threat.''

SO far as exclusion Clause (vii) above is concerned, it only refers to the loss of money or other property abstracted from safe. However, in the instant case, money or property was not abstracted from safe. Hence, the question of application of the said clause does not arise.

NOW , it has to be considered as to whether the exclusion Clause (ii) would be applicable? It may be noted in the above context that though Bablu was a servant of the complainant -proprietor of the shop yet the manner of the incident would show that he in a planned manner prepared a duplicate key of the lock. After opening the lock of the shop at night time in the absence of the complainant, theft was committed in the said shop as reported by the complainant/respondent. It also appears from the material placed on record that the Guard of the adjoining building (complex) was also involved with Bablu in the commission of the said ofence. Thus, Bablu, the servant of the complainant/respondent and the said Guard committed offence as above in collaboration with each other. Therefore, it cannot be said that loss or damage due to theft or burglary as above was by the servant Bablu alone. Further, it cannot be said that servant Bablu or the Guard were present lawfully in the business premises of the complainant/respondent at the time of the incident. That being so, Clause (ii) of the exclusion clause of the insurance policy would also not be applicable in the foregoing circumstances. Learned Counsel for the appellant has relied upon the decision of the State Commission of Himachal Pradesh in Surendra Singh Chouhan v. United India Insurance Co. Ltd., I (2003) CPJ 163, in support of is contention that as the offence was committed by the servant of the complainant, the matter would be covered by the exclusion clause. However, it appears from perusal of the said judgment that the facts of the said case were entirely on a different footing than the facts of the present case. In the said case, the offence appears to have been committed by a domestic servant and the question that arose for consideration in that case was as to whether said servant would be treated as employee? The answer of the Commission in view of the policy issued in that case as quoted in the said judgment was in the affirmative. It was, therefore, held that the repudiation by the insurer was proper. However, the terms of exclusion clause in the policy issued in the present case are different and the fact situation as noticed above is also different. Hence, the decision in the above case would not support the appellants cause.

LEARNED Counsel for the appellant also relied upon the judgment of the Tamil Nadu State Commission in Divisional Manager, Oriental Insurance Co. Ltd. v. Superintending Engineer, Tamilnadu Electricity Board, 1999 (1) CPR 334. However the fact of the said case are entirely different from the facts of present case. In that case, it was observed that question of incident of burglary itself was in dispute and the Surveyor appointed by the insurer had expressed doubt about the genuineness of the said incident. That being so, it was held by the Tamil Nadu State Commission that the repudiation by the insurer could not be called into question. This is not so in the instant case. In the present case, there is no dispute that the incident of theft and house breaking had taken place. The incident as above also is established from the documents and material placed on record as noticed above. Hence, the appellant cannot get any assistance from the said pronouncement.

CONSEQUENTLY , it does not appear that the appellant/insurer justifiably repudiated the claim of the complainant/respondent. Therefore, the learned Distt. Forum rightly held that there was deficiency in service on the part of the appellant/insurer. That finding calls for no interference and is affirmed. This appeal has no substance. It is accordingly dismissed. However, in the circumstances of the case, it is ordered that parties shall bear their own costs. Appeal dismissed.