ASHOK KUMAR GOEL vs United India Insurance Co.Ltd.

IN an application filed under Section 12B of the Monopolies and Restrictive Trade Practices Act (for short the Act), the applicant, namely, M/s. Gyan Chand and Brothers has charged the respondent with adoption of and indulgence in unfair trade practices under Section 36A of the Act in so far as the respondent No. 1 has wrongly repudiated its insurance claim legally due to it. The (sic.) with interest @ 18% per annum and a sum of Rs. 2,000/- for mental agony and undue harassment.

THE applicant is a firm which is engaged in sale and purchase of goods. It was sanctioned an advance of Rs. 2.00 lakhs by respondent No. 2 i.e. Punjab National Bank. This was against the hypothecation of stock in trade. At the instance of respondent No. 2, Shopkeepers'' Insurance Policy was taken in respect of the stock of Hindustan Lever products and other similar products of the value of Rs. 3.86 lakhs. A premium of Rs. 1,982/- was also paid on behalf of respondent No. 1 by respondent No. 2 and was debited to the firm''s account. On the night of 4/5.9.1993, a theft took place in the shop-cum-godown of the firm and the goods of the value of Rs. 18,723.50 were stolen. An FIR was lodged with the Police Station, Dadri on 5.9.1993. The applicant approached the respondent No. 1 on 17.9.1993 for payment of Rs. 18,723.50 for the value of goods stolen. The respondent No. 1 denied the claim of the applicant on the ground that the insurance policy did not cover the goods stored in the godown. This led to the filing of an application before the Commission for compensation as stated earlier.

In its reply to the Notice as issued, it has been stated on behalf of the respondent No. 1 that the insurance policy did not cover the goods stored in the godown. As per the survey report, it was the goods stored in the godown which were stolen. Thus in terms of Insurance Cover Note the applicant was not entitled to its claim as filed.

THE respondent No. 2 on the other hand stated that since no relief has been claimed against it, the applicant as filed against it should be rejected. After the pleadings were complete, the issues were framed as under : (1) Whether the compensation application is not maintainable for the objections taken by R-2 in its reply ? (2) Whether the respondents have indulged in the unfair trade practices alleged in the compensation application ? (3) Whether the applicant Shri Ashok Kumar Goel has suffered any loss or damage as a consequence of the alleged unfair trade practices ? (4) Relief.

THE evidence on both sides was filed by way of affidavit and counter-affidavit alongwith the documents relied upon on both sides. We have carefully considered the submissions and have also perused the documents as brought on record. As to the preliminary objection raised on behalf of respondent No. 2, since no relief has been sought against it the application is not maintainable qua it. Accordingly the same is directed to be rejected. As regards respondent No. 1, both parties agreed that the theft took place on 4/5.9.1993 - the date covered under the period for which the premium stood paid. Admittedly the insurance taken was in respect of the goods of the value of Rs. 3.86 lakhs which in turn covered the value of goods as stolen. As per the insurance cover note No. D/R/92 No. 893605 the risk covered was as under : "3,86,000/- on the stock of Hindustan Lever Products and other such similar goods listed in Trade whilst stored/keptor lying in insured''s....(sic) Shop."

The expression ''stored/kept or lying'' as used therein by no means exclude the godown which adjoins the shop. Though it is true that the respondent No. 2 who had taken the policy on behalf of the applicant had clarified that the Insurance Policy did not cover the risk of the stock kept by the firm in the godown (Annexure F) in view of the fact that the stock of the value of Rs. 3.86 lakhs covered the value of goods as stolen, the denial of liability on the part of the respondent No. 1 on mere technical ground is unwarranted. It tantamounts to unfair trade practice for which the applicant is entitled to compensation in terms of the value of goods as stolen. In the premises, the respondent No. 1 is directed to pay a sum of Rs. 18,723.50 to the applicant alongwith damages of Rs. 2,000/- as claimed for mental agony and torture suffered. In view of the damages having been awarded to the applicant, it is not considered necessary to award payment of interest as claimed on behalf of the applicant. The amount is directed to be paid within 4 weeks from the service of the order and the affidavit of compliance be filed within 2 weeks thereafter. No order as to the costs. C.A. disposed of.