United India Insurance Company Ltd. vs DILIP INDUSTRIES

THIS appeal has been heard ex parte as the respondent did not appear in spite of the notice. O.P. is the appellant-United India Insurance Co. (hereinafter referred to as Insurance Company) which has preferred the appeal against the order dated 26.10.1995 passed by District Forum, Rohtas (Sasaram) in Complaint Case No. 36/92 whereby and whereunder the appellant has been directed to pay Rs. 11,450/- as claim amount with 18% interest from the date of filing of the complaint case (11.11.1992) till the date of payment and in addition Rs. 7,000/- has been allowed as compensation for harassment and Rs. 1,000/- as cost of litigation.

THE brief fact of the case is that complainant is the proprietor of M/s. Dilip Industries at Sasaram (Rohtas). THE said industries was insured with the O.P.-Insurance Company for a sum of Rs. 45,000/- for the period 21.12.1983 to 20.12.1984. THE industries were financed by State Bank of India, Sasaram Branch THE industries were manufacturing utensils. It is alleged that in the night of 2/3.8.1984 during the period of insurance a theft was committed in the industries and several articles including utensils, etc. worth Rs. 11,450/- were stolen. A police report was lodged bearing No. 372/84 dated 3.8.1984 before the local police. After investigation the police submitted final form in the case stating occurrence true but no clue. THE final form was accepted by the CJM, Sasaram. THE complainant intimated the occurrence to the Insurance Company and demanded the claim. THE Insurance Company did not finalize the claim and ultimately the industries were closed. THE State Bank of India which has financed the industries filed a case in the Civil Court for the recovery of the amount and the complainant had to pay Rs. 1,19,927/- to the Bank. THE complainant served legal notice to the Insurance Company but the amount was not settled. THErefore, the complaint was filed before the District Forum claiming Rs. 85,000/- as compensation and other cost. The Insurance Company appeared and filed written statement alleging therein that no theft took place in the industries as alleged. The Insurance Company admitted about the insurance of the industries during the alleged date of occurrence. No evidence was produced on behalf of the complainant in support of his alleged loss of property due to theft. The Insurance Company asked the complainant to produce the relevant papers but nothing was produced hence the claim was not settled.

The District Forum after considering the facts and evidences on record held that in view of the admitted fact that industries was insured with the Insurance Company during the date of theft and an F.I.R. was lodged with the police with regard to theft. The factum of theft is proved beyond doubt. The complainant has also examined witnesses before the District Forum in order to prove the occurrence of theft and amount of loss. The District Forum after considering the facts and contentions held that complainant was able to prove the factum of theft but it was the deficiency on the part of the Insurance Company that he did not settle the claim amount. The District Forum further held that complainant has claimed Rs. 11,450/- only which appears to be reasonable amount on the basis of evidence adduced on his behalf. As such allowed the claim of this amount besides compensation and cost as mentioned above.

THE appellant-Insurance Company submitted that though the complainant has not been able to prove the factum of theft beyond all reasonable doubt nor produced the relevant documents before the Insurance Company in view of the fact that industries was insured. THE appellant is ready to pay the claim amount of Rs. 11,450/- only as awarded by the District Forum. THE learned Lawyer submitted that award of interest @ 18% is on higher side and it should not be more than 10%. It was also submitted that award of compensation of Rs. 7,000/- is against the provision of the law because it will amount to double punishment when interest has already been awarded on the compensation amount. THE cost of litigation of Rs. 1,000/- is also on higher side. In the fact and circumstances we are of the view that finding arrived at by the District Forum directing the appellant to pay Rs. 11,450/- as claim amount is based on material available on record and it does not require our interference. This part of the order is hereby confirmed. We agree with this contention of the appellant''s lawyer that rate of interest @ 18% is on higher side which is reduced to 12% per annum. We also agree with this submission of the appellant that when interest has been awarded in favour of the complainant the District Forum should not have allowed a further compensation of Rs. 7,000/- in his favour. This amounts to double punishment to the appellant. Therefore, this part of the order is set aside. However, the award of cost of Rs. 1,000/- appears to be reasonable and just, as such, this part of the order is confirmed.

IN the result, the appeal is allowed in part with a direction that appellant-INsurance Company shall pay Rs. 11,450/- with interest @ 12% from 11.11.1992 till the date of actual payment and a cost of Rs. 1,000/- within three months from the date of this order. With this modification in the impugned order the appeal is disposed of. Appeal partly allowed.