National
Consumer Disputes Redressal Commission
New
Dehi
Revision Petition No.3049 of 2005
(From the order
dated 29.9.2005 passed in Appeal No. A-01/2001 by the State Commission,
M/s. Mono Industries
69,
Near Shadipur Flyover,
New Delhi-110 015 … Petitioner
Versus
New India
Assurance Co. Ltd.’
CDU – 311200, 13/46, Scindia
House
2nd Floor, Kasturba
Gandhi Marg,
New Delhi-110 001 … Respondent
Revision Petition No.251 of 2006
(From the order
dated 29.9.2005 passed in Appeal No. A-01/2001 by the State Commission,
New India
Assurance Co. Ltd. … Petitioner
Versus
M/s.Mono Industries … Respondent
Before:
HON’BLE
MR. JUSTICE M.B.SHAH, PRESIDENT
HON’BLE
MRS. RAJYALAKSHMI RAO, MEMBER
For the Petitioner : Mr. H.C.Goel,
(M/s. Mono Industries) Advocate.
For the Respondent : Mr. P.K. Seth,
(Insurance Company) Advocate.
Dated
O R D E R
M.B.SHAH, J., PRESIDENT:
The
issue that came up for consideration in this case is, whether the loss of goods
sustained by the insured, fall within the meaning of ‘burglary’ as stated in
the insurance policy?
It appears that the judgment rendered by the Apex Court in the case of United India Insurance Co. Ltd. vs. Harichand Rai Chandan Lal - (2004) 8 SCC 644 is misunderstood by the Insurance Company. In the said case, it has been held that ‘theft from the premises by forceful and violently’ would mean entry by use of any force, however slight it may be. As such, an entry obtained by picking the lock or forcing back the catch by means of an instrument involves the use of violence. Whether it is burglary or not, depends upon the facts and circumstances of each case. In the present case, entry by the culprits was by removal of roof sheet which cannot be done without use of force. Hence, it would be a case of violent entry for committing theft/burglary.
Facts:
It
is the say of the Complainant that the Complainant is engaged in manufacturing
of Polythene rolls, bags and tubes. It had obtained an insurance policy from
the New India Assurance Co. Ltd. for a sum of Rs.4 lakhs, for the period from
10.4.1992 to 9.4.1993 on payment of Rs.1,140/- towards
the premium. On the intervening night of 31st August and
The stand taken by the Insurance Company
before the District Forum was that : (i) on survey
being conducted, it was found that there was no burglary, but that it was only
a case of theft, which was not covered under the insurance policy; and, (ii)
the Complainant did not furnish any proof of burglary, and hence the claim of
the Complainant was not tenable.
The District Forum after hearing both the parties and taking into consideration that the Complainant had shown to the investigator the broken roofing sheet which might have been removed by the miscreants to enter the premises, directed the Insurance Company to pay to the Complainant the value of the stolen goods to the tune of Rs.2,37,500/- with interest at the rate of 18% p.a. from 1.9.1992, i.e. the date of the occurrence of the loss, till the date of payment. Rs.2,000/- was also awarded by way of costs.
Feeling
aggrieved, the Insurance Company went in appeal to the State Commission,
Against that
order, both the parties have filed revision petitions before us.
The
Insurance Company filed Revision Petition No.251 of 2006 for dismissal of the
complaint and setting aside the order of the District Forum.
Revision
Petition No.3049 of 2005 is filed by the Complainant praying that interest on
the amount as awarded by the District Forum requires to be confirmed.
As
both the revision petitions arise out of the same judgment and order of the
State Commission, we dispose of both of them by a common order.
In the revision
petition filed by the Insurance Company, the learned Counsel Mr.Seth contended
that:
.(i). no burglary occurred in the
premises of the Complainant, hence, the loss or damage caused to the
Complainant is not covered by the policy, as it is only a case of theft as registered
by the Police under Sec.380 IPC;
.(ii). there
is no evidence on record to establish that the Complainant suffered loss of
Rs.2.37,500/-;
Findings:
.I. Whether
it is a case of burglary or theft?
The
learned Counsel Mr.Seth appearing on behalf of the Insurance Company heavily
relied upon the decision of the Apex Court in the case of United India
Insurance Co. Ltd. Vs. Harichand Rai Chandanlal, (2004) 8 SCC 644 and contended
that in case of theft Insurance Company is not liable to reimburse.
In
our view, the aforesaid judgment is misunderstood by the Insurance Company.
In the aforesaid
case it is clearly held that if the entry is effected
by exercise of any force, however slight, it was sufficient to constitute
an entry within the meaning of the policy.
Such entry can be described as violent in nature and character. For this
purpose, the Court referred to Queen’s Bench decision in the case of George and
Goldsmiths and General Burglary Insurance Assn. Ltd.(1989) 1 All ER 422 : (1989)
1 Lloyd’s Rep 379 (CA), wherein it has been held as under:
“In the context of a policy of insurance against theft from premises
by ‘forcible and violent’ means of entry, the word ‘violent’ was to be
construed according to its ordinary meaning and meant entry by the use of any
force which was accentuated or accompanied by a physical act which could
properly be described as violent in nature and character. In the context of
such a policy the word ‘violent’ accordingly referred to the physical character
of the means of entry and not merely to its unlawful character.”
In
the same context, the Court also referred to the passage from the Halsbury’s
Laws of England, 4th Edn., para 646 wherein it has been observed
that an entry obtained by picking the lock or forcing back the
catch by means of an instrument involves the use of violence and is therefore
covered.
Thereafter,
the Court held that:
“The determination of what constitutes visible marks or visible evidence within the meaning of such a provision, and of where such marks or evidence must be located in order to satisfy the policy requirement, is to a great extent dependent upon the particular facts involved in relation to the specific requirements imposed by the policy. Where, for example, a burglary or theft policy requires that there must be visible marks of force or violence ‘at the place of entry’ into the premises, this requirement has been held complied with if the visible marks are only on one of the outer doors to the insured’s premises, which the burglars or thieves must have used to accomplish their deed.”
Keeping the
aforesaid principle in back ground we would first refer to the finding recorded
by the State Commission on the basis of the evidence of the Complainant.
The
State Commission after appreciating the evidence which was brought on record
arrived at the conclusion that it was a clear case of burglary. For this
purpose, the State Commission relied upon the version of the Complainant that
at about
Further, with
regard to cause of incident, the surveyor appointed by the Insurance Company
also stated to the same effect in the interim survey report dated 19.7.1993, which is as under:
“During
our Survey, following are our observations:
.1. The main
gate/entry, made of steel shutters were duly locked
and intact with no breakages at all either in the locks, shutters or their
Kundas etc.
.2. There is a
small door entering in the godown from inside the shed which was opened by the
culprits after using the key in the lock but it was not tampered at all.
.3. After entering
this godown, the culprits broke the Kundas of he steel door/gate with locks
intact in the hooks and thus opened it and through which the insured’s raw
material packed in bags ware taken out from this godown and were loaded on a
truck just waiting outside on the main road on exit of this broken door/godown
as claimed by the insured.
.4. On enquiring
the matter and how the culprits in the above circumstance entered the
factory, the insured replies that he exactly does not know but there is
possibility that the culprits must have entered after removing the roofing
sheet of the shed. During our survey
the sheet was already placed in its original position as per statement of the
insured and before our arrival at the Insured factory. Reason given by the insured is that for further
security and to stop water coming inside the shed during the rainy day which
was already on during that period.
In the circumstances, as stated above the forcible entry
inside the shed premises is yet to be established and it is under our
investigations.”
This
would mean that even the Surveyor has considered it to be probable that entry of the culprits
must be by removing the sheet of the roof.
It
is also to be stated that by letter dated 1.2.1996 the Complainant informed the
Grievance Officer of the Insurance Company as under:
“This is further to our letter dated 8.8.1994. We write with
much regret that no reply has been received from you. We contacted you
personally and explained in detail the entire case.
Recently, we have been contacted by Police Inspector of
Samaipur Badli, Police Station, regarding the burglary occurred at our factory
on
Now it has been proved that the burglary took place at our
factory/godown on 31.8.92. Therefore,
we request you once again to kindly look into the matter carefully
and settle our claim at the earliest.”
Despite this,
the Insurance Company never bothered to verify from the Police Officers with
regard to the incident.
In the light of the
aforesaid evidence, the finding recorded
by the District Forum and the State Commission
that burglary as contemplated by the terms of the policy has taken
place. The entry of the culprit was by removal of roof sheet and exist was by
breaking of locks. This would amount to forceful entry and forceful exit.
.II. Assessment of
loss:
The next
question is with regard to assessment of loss.
Admittedly, the
Insurance Company had appointed a surveyor. Thereafter, the Chartered
Accountant appointed by the surveyor examined the records and arrived at
the conclusion that the total value of the stock was Rs.15,54,820/-.
However, as stock was kept in two godowns, they arrived at the conclusion that
it was not possible to work out the closing stock just before the occurrence of
the loss at the factory premises where the burglary had occurred, with the
records available with the insured.
As against this,
it is to be stated that as per the policy which is produced on record, the sum
insured is Rs.4 lakhs on stock used in manufacturing of polythene sheets/bags,
whilst stored and/or lying in the insured’s factory at the address mentioned
therein, i.e. at the place where the burglary took place. It is also to be
stated that to avoid any further complications, in appeal, the State Commission
by order dated 24.1.2005 directed that as there was no dispute as to the price
of the goods lying in the factory and as the surveyor appointed by the
Insurance Company has not assessed the loss on the ground that it was because
of theft which was not covered by the policy and that he was not in a position
to assess the loss for want of documents which were to be furnished by the
Complainant, directed the Insurance Company to call upon the Complainant within
a period of one week from the date of the order
to furnish the requisite documents
on the basis of the claim preferred by the Complainant. Despite this
specific order, assessment was not made by the surveyor/or the Insurance
Company.
It is to
be stated that the Divisional Manager wrote a letter to the Legal Department on
“As already informed to you that the
assessment of the above loss was not done by the Surveyor, Mr. A.K.Gupta who
had only issued the Interim Report in regard to the loss. The undersigned had personally
discussed the matter with the Surveyor over telephone who has informed that
since he is going to
In these circumstances, we request you to advise us whether we should satisfy the Award given by the consumer Court amounting to Rs. 2,37,500/- + interest @ 18% p.a. from the date of loss, i.e. 1-1-92 till the date of payment or we may get the loss assessed by the Surveyor on the basis of the adequacy of the sum insured since the amount of Rs. 2,37,500/- is the estimated loss of the insured.”
Further,
it is to be stated that by letter dated
“Please
refer our letter dated 15.3.94. We have received a copy of our letter of the insured
dated 9.11.93 photocopy attached herewith for your records. As reported by the
bankers of the insured that all your requirements had been completed by the
insured but till date we have not received the report. Further, we would like to inform you that all
the required documents are available with the insured’s banker. You may contact
them also if required.”
The surveyor has not complied with this.
It is not the fault of the Complainant if the Surveyor fails to assess the loss for the
reasons best known to him, despite necessary records furnished by the Complainant, then the complainant should not
suffer.
Further, even in
the stock statement dated 7.10.1992 which is produced on record before this
Commission, the Dena Bank has specifically deducted a sum of Rs.2,37,500/-. This would indicate that immediately after the
burglary even the Bank has accepted the said amount as the loss suffered by the
Complainant for the loss of goods weighing 4,750 kgs.
In
this set of circumstances, the consistent version given by the Complainant with
regard to the loss suffered by him was accepted by the State Commission as well
as the District Forum. As per the facts and circumstances of the case, the
finding recorded by the District Forum and the State Commission cannot be said
to be in any way illegal or irregular which would call for interference.
.III. Whether the Complainant is
entitled to any interest?
The
next question which requires consideration is whether the order passed by the
District Forum directing the Insurance Company to pay the amount with interest
at the rate of 18% p.a. requires to be restored or not?
The learned
Counsel for the Complainant submitted that there was no justifiable reason for
the State Commission in not awarding the interest on the amount of loss
suffered by the Complainant and in awarding only Rs.25,000/- in lump sum.
In our view, the
aforesaid submission is also justifiable. Because, the
incident of burglary took place on the intervening night of 31st
August and
Revision Petition No.251 of 2006:
In view of the
aforesaid discussion, the Revision Petition No. 251 of 2006 filed by the
Insurance Company is dismissed.
Revision Petition No.3049 of 2005:
In the result,
the Revision Petition No.3049 of 2005, filed by the Complainant is partly
allowed. The Insurance Company is directed to pay the sum of Rs.2,37,500/- with interest at the rate of 10% from
There
shall be no order as to costs in both the Revision Petitions.
……………………………J.
( M.B.SHAH )
PRESIDENT
……………………………..
(RAJYALAKSHMI
RAO)
MEMBER
……………………………..
(P.D.SHENOY)
MEMBER