YODEVA SYNTHETIC PVT. LTD. vs National Insurance Co. Ltd.

THIS is a petition of complaint u/Section l7 of the Consumer Protection Act, 1986. The petitioner is a Private Limited Co. carrying on business of designing and manufacturing of plastic moulded products etc. and has its factory, office at Behala Industrial Estate, Calcutta. The petitioner''s business was to procure its own raw materials to be converted into finished goods for which an insurance policy was taken with the National Insurance Co. Ltd. (O.P. No. 1). The policies in this respect were taken up with the opposite parties since 1987 till September, 1995. The petitioner''s Company was last insured with the opposite party No. 1 from 16.9.1992 to 15.9.1993 and the relevant policy covered stock-in-trade for 9 lakhs. Under the terms of the policy the petitioner kept its factory-cum-office well secured and there were security personnel guarding the said premises for 24 hours. In spite of such vigilant guarding a burglary took place in the factory-cum-office of the petitioner on 6.12.1992 and the miscreants took away raw materials and finished goods of a total value of Rs. 6.93 lakhs. Immediately after the occurrence an F.I.R was lodged with the Behala Police Station on behalf of the petitioner and after a thorough investigation the police submitted a report that a robbery was committed on 6.12.1992. The petitioner kept its stock-in-trade hypothecated with the Punjab National Bank, Behala Branch, Calcutta against its working capital loan advanced to the petitioner by the said Bank. Because of such hypothecation the Bank used to inspect and checked the stock-in-trade regularly. The said Bank last verified the stock in May, 1992 and found that stock was about 7 lakhs in value. From 23.5.1992 the petitioner''s Company was closed down due to labour problem and since then the factory premises had been kept under lock and key and the petitioner engaged Oriental Security and Investigation Unit, Calcutta for. security purposes.

ON 10.3.1993 the Punjab National Bank to whom the petitioner''s stock-in-trade was hypothecated lodged a claim with the National Insurance Company. The petitioner on the other hand lodged its claim with the National Insurance Company on 20.3.1993 for the loss suffered by it on account of the burglary. The respondent had appointed M/s. Mehta & Padamsey Surveyors Pvt. Ltd. for verification of the claim. The said surveyors visited the place of occurrence and verified various documents and records. As the claim was not settled within a reasonable time the petitioner reminded the Insurance Company urging them to make an early settlement. In reply to their correspondence the Insurance Company informed the petitioner from time-to-time that the matter was being looked into. But the claim was neither settled nor repudiated and the petitioner has filed this complaint before this State Commission for redressal of his grievances. The petitioner has made a total claim of Rs. 18,53,658.66 p. including the amount of claim, loss and damages for non-payment, loss on account of Bank loan and other expenses and also compensation for harassment. The case is contested by the Insurance Company by filing a written objection. Its main objections are that the case is bad for non-joinder and mis-joinder of parties, that the information of burglary was not given to them according to the terms of the policy, that the case was bad for violating the general condition No. 2 of the policy which requires that any material change in the risk insured under the policy should be intimated to the Insurance Company that necessary documents for verifying the claim were not supplied to the surveyor and that the claim was highly exaggerated. The points for determination are : 1. If the petitioner''s claim is a genuine one, and 2. What relief, if any, the petitioner is entitled to. FINDINGS

The fact that a burglary was actually committed in the office-cum-factory of the petitioner''s Company on 6.12.1992 is not disputed. This is also proved by the police report and also by the evidence of Mr. Swaminathan Arunachalam. The F.I.R. made before the police and the result of the police investigation also prove the fact of burglary. It is also admitted that the claim was enquired into by a surveyor. The goods involved are also admitted under the insurance coverage of the policy. There is also no doubt that the burglary took place when the subject matter of insurance was under the insurance risk. The question is whether the petitioner is entitled to have any claim of compensation as made out in the petition of complaint.

THE technical objections raised by the opposite parties are not weighty enough. THE first objection is that the case is bad for non-joinder of the Punjab National Bank and mis-joinder of the General Insurance Corporation of India. It is true that the Punjab National Bank also lodged an information with the Insurance Company as they granted loan against hypothecation of the stock-in-trade belonging to the petitioner. But in our opinion the case filed at the instance of the petitioner who actually held the Policy is maintainable. As regards the joinder of General Insurance Corporation of India, the said corporation is not directly involved in the cause of action but they were added as they were connected with the opposite party Company. However, we do not think that the case is not maintainable on account of the joinder of opposite party No. 4. The next objection raised is that there was violation of Clause 2 of the policy. There is an allegation that the fact that the Company was under closure was not intimated to the Insurance Company and that it affected the risk covered by the policy. We are however not satisfied that this is a serious lapse on the part of the petitioner and that the policy is void for suppression of any material fact. We are inclined to hold that the risk covered in this case was not affected by the non-mention of the closure by the petitioner in the proposal. It has also not been shown before us how this fact affects the risk factor of the policy. There is no evidence that there was any deficiency in the matter of guarding the premises or altering the subject matter of insurance by the petitioner. So we reject this plea of defence of the opposite party Insurance Company.

ON the basis of the facts analysed above we hold that the petitioner has a prima facie case against the Insurance Company. It may also be noted in this connection that a part of the stock-in-trade kept in the same godown and subjected to the same burglary was insured with the Oriental Insurance Company Ltd. It is understood that the claim lodged with the Oriental Co. Ltd. has since been settled. As the claim arises out of the same incident of burglary it cannot be argued in the absence of a very cogent reason why the claim against the National Insurance Company should also not be allowed. As a matter of fact the claim was duly investigated by the Insurance Company and a surveyor was also appointed, but unfortunately no report finally settling the claim has been submitted. The claim has neither been settled nor repudiated. Under the settled principle of the National Commission such an attitude on the part of the Insurance Company amounts to deficiency in service. We take particular note of the fact that the occurrence of burglary has been well proved in this case and that the matter has been reported to the police and the Insurance Company and the risk is covered by the policy. So there cannot be any serious ground for repudiating the claim of the petitioner. As regards the amount of compensation we are satisfied that there was a stock of Rs. 6,93,408.66 p. in the godown of the petitioner when the burglary took place. So this amount will be payable to the petitioner. As regards the various amounts of compensation demanded by the petitioner we are of the opinion that these have to not been proved categorically by cogent evidence. The petitioner is however entitled to have proper compensation for the monetary loss they had to suffer on account of the Bank loan and other miscellaneous expenses incurred by it. It is in evidence that the surveyor submitted his report in August, 1995. We do not find any cogent reason for not settling the claim after the submission of this report. So in our opinion the petitioner is entitled to interest @ 18% on the amount of claim i.e. Rs. 6,93,408.66 p. from September, 1995 till payment. This case is accordingly allowed. The petitioner do realise an amount of Rs. 6,93,408.66 p. (Rupees six lakh ninety three thousand four hundred eight and paise sixty-six only) from the opposite party No, 1 with an interest @ 18% p.a. from September, 1995 till payment. The opposite party No. 1 shall also pay cost of Rs. 5,000/- (Rupees five thousand only) as cost of this case. The entire dues allowed above shall be paid within 30 days after communication of this order. Complaint allowed with costs.