Oriental Insurance Co. Ltd. vs SATKAR

BY way of this appeal, original opponent-Oriental Insurance Company Limited seeks to challenge order dated 23.6.2003 rendered by the learned Consumer Disputes Redressal Forum, Kachchh in Complaint Application No. 81 of 2002.

IT would appear that the complainant carried on business in readymade garments, ladies'' wear and dress materials at the address stated in the complaint and got insured the stock of garments and readymade materials with the opponent Insurance Company for Rs. 1,01,000/- as per the particulars of policy of insurance set out in the complaint. The complainant used to maintain regular books of account regarding purchase and sale of garments and readymade materials. On 26.1.2001 there was severe earthquake in the city of Bhuj, Kachchh and for that matter in the whole of the State of Gujarat. The complainant, therefore, closed the shop by applying lock on the shutter as soon as he felt earthquake tremor. When he visited the shop in the evening at about 7.30 O''clock, he found that the lock of his shop was broken open by damaging the shutter and stock worth Rs. 1,40,000/- was stolen from the shop. In fact the complainant had lost his house and person and property of the members of his family was seriously adversely affected requiring him to settle with his family at Adipur-Nakhatrana from 28.1.2001. He, however, lodged complaint in Bhuj city police station on 14.2.2001 as his efforts to lodge the complaint before that date went in vain on account of disruption of life in the area. Opponent Insurance Company was also immediately informed about the theft in question and the Surveyor had carried out spot survey. The complainant submitted all required documents to the Surveyor. However, opponent Insurance Company did not process and sanction the claim with the result that the complainant was required to file complaint for recovering Rs. 1,40,000/- being the value of the stolen goods, Rs. 36,400/- being the amount of interest from 26.2.2001 to 26.3.2002, Rs. 10,000/- being the amount of mental agony and hardship and Rs. 5,000/- being the amount of cost, in all Rs. 1,91,400/-.

Opponent resisted the complaint inter alia on the ground that it was not liable to pay any amount under the policy of insurance in question as exclusion Clause No. 1 provided for exemption from liability on account of fire and allied perils. Besides, the policy of insurance was in the sum of Rs. 1,01,000/- and, therefore, the complainant was not entitled to claim more than that amount. Opponent Insurance Company finally resisted the complaint on the ground that the matter was filed for being tried by appropriate Civil Court.

AFTER considering the material placed on record and the submissions made by the parties, the learned Forum came to the conclusion that opponent Insurance Company was deficient in rendition of service both on the ground of delay in processing and repudiating the claim as well as on the ground of incorrectly applying the exclusion clause which was never intimated to the complainant and was not appearing in the policy of insurance issued to the complainant. The learned Forum also referred to the survey report reciting theft having been taken place in the complainant''s shop and assessment of claim after considering the documents including stock register and other accounts submitted by the complainant. The learned Forum also appears to have considered all the decisions which have been submitted to it by the learned Advocates for the parties. It ultimately proceeded to grant the claim of Rs. 1,01,000/- as per the policy of insurance in question with interest at the rate of 9 per cent per annum from 26.2.2001 and compensation in the sum of Rs. 5,000/- on the count of mental agony and hardship and cost in the sum of Rs. 1,000/-. That is how the opponent Insurance Company is before this Commission. We have heard the learned Advocates for the parties. We have gone through the impugned order. We have also gone through the memorandum of appeal. It has firstly been submitted that alleged theft was committed on 26.1.2001 whereas the complaint, though stated to have been filed on 12.2.2001, Panchnama was recorded on 7.5.2001. From this it was impliedly submitted that the very case of theft alleged by the complainant becomes doubtful. In our considered opinion, this submission cannot be accepted inasmuch as the allegations of facts with regard to theft were minutely examined and investigated from the side of the opponent Insurance Company and there is not a shadow of doubt about the complaint''s bona fides in respect of his complaint concerning loss of stock on account of theft. However, the learned Advocate for the complainant has shown to us copy of communication dated 14.2.2001 addressed to the Superintendent of Police, Bhuj, Kachchh with regard to the complainant''s shop having been broken open and theft of stock/goods committed by some miscreants taking advantage of the post-earthquake situation in the city of Bhuj. Reference has also been made to a copy of communication dated 14.2.2001 addressed by the complainant to the opponent Insurance Company with regard to lodging of claim for the said cause. Detailed facts with regard to the incident in question have been recorded by the learned Forum and we have no reason to take a view different from what the learned Forum has taken. As a matter of fact, it is a publicly known fact that life was totally paralysed in the city of Bhuj after the calamity of earthquake ad be fallen on the city. Under such circumstances, it cannot be said by any stretch of imagination that there was delay on the part of the complainant in lodging the complaint as well as in lodging the claim with the opponent Insurance Company. In fact, the Surveyor has surveyed and processed the claim and the report of the surveyor was placed on record before the learned Forum. No other submissions have been made on the merits of the matter but from the facts and circumstances of the case the learned Forum clearly appears to have rightly held about the opponent Insurance Company having not correctly canvassed the alleged exclusion clause and about the risk of theft having really attached to the insured property.

WE have gone through the decisions submitted from the side of the complainant. In M.K.J. Corpn. v. United India Insurance Co. Ltd., II (1995) CPJ 112 (NC)=1986-96 National Commission and SC on Consumer Cases 3204 (NS), the National Commission has been shown to have observed that instructions of the Insurance Tariff Advisory Committee are not binding on the insured so long as they are not incorporated in the contract of insurance i.e., the insurance policy issued to the insured. Hence, repudiation of the claim was held to be not bona fide in that case. The National Commission proceeded to award compensation for the loss of stock and compensation for loss suffered during the period of one month over and above interest at the rate of 18 per cent per annum. In National Insurance Co. Ltd. v. Public Type College, II (2001) CPJ 26 (NC)=2001 CCJ 1210, the National Commission held that in common parlance burglary will certainly mean theft. In B.V. Nagaraju v. Oriental Insurance Co. Ltd., II (1996) CPJ 28 (SC)=1996 (3) CPR 222, the Apex Court has held that exclusion term of the insurance policy must be read down so as to serve the main purpose of policy that is indemnifying the damage caused to vehicle.

IN New Jaipur Dyeing and Tent Works v. National INsurance Co. Ltd., III (2003) CPJ 140 (NC), the National Commission has held that Surveyor''s report is an important document and the same would merit proper consideration at the hands of the Forum or the Commission, as the case may be.

IN Modern INsulators Ltd. v. Oriental INsurance Co. Ltd., I (2000) CPJ 1 (SC)=II (2000) SLT 323=AIR 2000 SC 1014, the Honourable Supreme Court has observed that it is the duty of both the parties to the contract of insurance to disclose relevant/material facts and if exclusion clause is neither part of the insurance policy nor disclosed, the insurer cannot claim benefit of such exclusion clause. Reference has finally been made to a decision of this Commission in the case of National Insurance Co. Ltd. v. Shyam Intermediates, II (2002) CPJ 391, where this Commission had an occasion to observe that exclusion clause cannot defeat the main purpose of the policy. In our considered opinion, there is no scope for dealing with this decision in this appeal, for, there is not one submission which would call for being answered by having recourse to one or the other of the aforesaid decisions. The learned Forum has considered the decisions cited before it. The learned Advocate for the opponent Insurance Company has not referred to the ground of repudiation in the letter of repudiation which was placed on record before the learned Forum. To reiterate, only submission which came to be canvassed on behalf of the opponent Insurance Company was with regard to when the complaint was filed, when claim was lodged and what would be the effect thereof on the merits of the matter. We have held that the complainant''s claim was found to be correct and bona fide even by the Surveyor appointed by the opponent Insurance Company. It is certainly not a case of frivolous/mala fide claim set out by the insured. In that view of the matter, the main part of the impugned order cannot be faulted.

It has been submitted on behalf of the opponent Insurance Company that the learned Forum ought to have awarded interest after passage of around 4 months from the date on which the claim was preferred by the complainant. Therefore, even if the claim was treated to have been preferred by the complainant in the month of February 2001, the learned Forum ought not to have awarded interest from February 2001. In reply it has been submitted that in one of the decisions referred to above, period of one month has been treated to be longer period by granting relief of compensation for such period. In our considered opinion, now the questions is not res integra and it is settled by the Honourable National Commission that it would take at least 4 months for the Insurance Company to process and answer the claim put up by an insured. In that view of the matter, it would be just and proper if interest was awarded from 1.7.2001.

INSOFAR as compensation on the head of mental agony and hardship is concerned, the complainant would be entitled to some amount on that head but certainly not the maximum of Rs. 5,000/- which amount has been awarded by the learned Forum. In fact, the Surveyor who attended to the work of survey had considered the claim papers and the material/documents supplied by the complainant and submitted his report but for which the complainant would have been required to prove the claim by adducing evidence afresh before the learned Forum. Bearing in mind all the facts and circumstances of the case we are of the considered opinion that it would be just, fair and proper to award Rs. 2,000/- on this head of compensation. We, however, do not propose to disturb the order of cost. Hence, following order is passed. ORDER Impugned order dated 23.6.2003 rendered by the learned Consumer Disputes Redressal Forum, Kachchh in Complaint Application No. 81 of 2002 is hereby maintained except with regard to the date from which interest has been awarded by altering the date and replacing the same with 1.7.2001 and modifying the amount of Rs. 5,000/- on the head of compensation for mental agony and hardship to Rs. 2,000/-. This appeal is accordingly partly allowed, with no further order as to costs. Appeal partly allowed.