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Judgment
Dr. Sadhna Shanker, Member
The present Consumer Complaint has been filed by Mahamaya Polychem Pvt. Ltd. under section 21 (a) (i) of the Consumer Protection Act, 1986 against New India Assurance Company Ltd. & State Bank of India for an alleged erroneous repudiation of the complainant’s claim by the Insurance Company.
The Complainant is a Limited Company under the Companies Act, 1956 having its registered office and works at 228, Udyog Kendra, Extension-I, Eco-Tech-3, Greater Noida Industrial Development Authority, District Gautam Budh Nagar, Uttar Pradesh. It is engaged in the business of manufacturing and trading of chemicals & solvents of different types (Battery Acids & ETP chemical export washing spot cleaner & industrial reducer). The Complainant through Opposite Party-2 obtained a Standard Fire and Special Perils Policy from the Opposite Party -1 / Insurance Company vide Policy No. 32110411120100000382 for the period 30.08.2012 to 29.08.2013 for the sum insured to the tune of Rs. 2,30,00,000/- for the risk covered under the Policy including fire and special perils. The complainant also obtained a Policy Schedule for Burglary (Single Loaction) Insurance from the same Insurance company vide Policy No. 32110446120100000220 for the period 30.08.2012 to 29.08.2013 for the sum insured to the tune of Rs. 1,70,00,000/- for the risk covered under the Policy including MFG. of all kind of solvents and chemicals.
The complainant on 30.11.2012 & 01.12.2012 night was informed by Mr. Shanti that theft/burglary has taken place in the factory. Upon intimation, Complainant who was in Calcutta visited the factory in Greater Noida on 03.12.2012 and found that goods worth of Rs. 2 Crore were stolen. For this, the Complainant on 04.12.2012 approached the Police Station, District Gautam Nagar, for lodging the FIR but the same was not lodged on the pretext that firstly enquiry has to be conducted and only after that FIR will be lodged, therefore, Complainant gave a written complaint on the same date and got it received from the abovementioned Police Station, however, no enquiry was done by the police.
Thereafter, again on 19.12.2012 a written complaint was sent to S.H.O, Bisrakh, Gautam Budh Nagar by registered post. The FIR was lodged on 24.01.2012 u/s 380 I.P.C and the list of stolen goods was also provided to Police on 05.01.2013 and thereafter, on 18.01.2013, final report was filed by the police. The Complainant on 21.12.2012 & 22.12.2012 also intimated both the opposite parties about the theft/ burglary. The complainant further stated that the policy in favour of Complainant was taken by opposite party-2 from opposite party- 1 and the premium amount was paid from the account of the Complainant company, however the name of the insured company was different due to the fault on the part of opposite party-1 and opposite party-2 negligently paid the premium amount from the Complainant company’s account without verifying the name of the insured.
The insurance company vide letter dated 29.12.2014 repudiated the claim and the relevant portion of which is as under:
a. “You have purchased the Policy Number 32110446120100000220 for the period of 30.08.2012 to 29.08.2013 in favour of M/s Mahamaya Chemicals (P) Ltd, but all the documents submitted by you belong to M/s Mahamaya Polychem Pvt. Ltd. As such the alleged theft/loss had occurred in M/s mahamaya Polychem Pvt. Ltd., and not in M/s Mahamaya Chemicals Pvt., hence your claim is ab-initio, and not payable.
b. The Policy number 32110446120100000220 was issued along with the terms & conditions, subject to complied with by you. The Conditions No. 4(a) & (b) reads as follows:-
4(a) The Insured shall give immediate notice thereof in writing to the nearest office with a copy to the policy issuing office of the Company as well as lodge forth with a complaint with police.
4(b) The Insured shall deliyer to the Company within 14 days of the date on which the event shall come to his knowledge, a detailed statement in writing of the loss or damage, with an estimate of the intrinsic value of the property lost and the amount of damage sustained.
But you have informed to the Company on 21.12.2012 i.e. after 20 days, which is a breach of terms & conditions of the policy, hence your claim is not payable.
c. You have informed to the company that the alleged loss/theft had occurred on 01.12.2012, but on perusal of registered FIR, you have informed the police that the alleged theft/loss had occurred on 03.12.2012, as such your claim is based on false and incorrect facts, you have concealed the real facts, hence your claim is not payable.”
Being aggrieved by the aforesaid acts of the Opposite Parties/ Insurance Company, the Complainant filed the present Consumer Complaint before this Commission and prayed for the following relief :
(a) Award of Rs. 2,16,34,362/- be passed against the Opposite Parties/ Respondents along with interest @ 12% p.a on Rs. 2,15,89,362/- from date of Repudiation till payment;
(b) any other relief be also granted which the Hon’ble Commission deems fit in the circumstances.
The Opposite Party-1 / Insurance Company resisted the Complaint through reply and written synopsis. The Insurance Company informed the Complainant that Policy bearing no. 32110446120100000220 for the period of 30.08.2012 to 29.08.2013 with insured name M/s Mahamaya Chemicals Pvt. Ltd. However, the complaint has been filed by Mahamaya Polychem Pvt. Ltd., the relevant portion of the policy is as under:
“the company hereby agrees subject to terms, conditions and exclusion herein contained or endorsed or otherwise expressed hereon to indemnify the insured to the extent of intrinsic value of:
(i) Any loss of or damage to property or any part thereof whilst contained in the premises described in the schedule hereto due to Burglary or House-breaking (theft following upon an actual forcible and violent entry and/ or exit from the premises) and Hold-up.”
(b)………
The conditions no. 4 (a) & (b) read as under:-
“ 4(a). The insured shall give immediate notice thereof in writing to the nearest office with a copy to the policy issuing office of the company as well as lodge forth with a complaint with police.
4(b). The insured shall deliver to the company within 14 days of the date on which the event shall come to his knowledge, a detained statement in writing of the loss or damage, with an estimate of the intrinsic value of the property lost and the amount of damage sustained.”
The Complainant informed about the alleged theft on 21.12.2012 i.e, after 20 days of the incident and as per the terms and conditions of the Insurance policy there is substantial delay in informing the Insurance company, therefore, claim is not payable.
Learned Counsel of the opposite party-1 argued that there was no forcible entry/ exit by the burglars and therefore it only amounts to a simple case of theft in the insured premises and the present claim does not fall under Burglary Insurance Policy. Reliance is placed on the decision of United India Assurance Co. Ltd. Vs. Harchand Rai Chandan Lal, (2004)8 SCC 644 wherein it was held that:
“9. Therefore, it is settled law that the terms of the contract has to be strictly read and natural meaning be given to it. No outside aid should be sought unless the meaning is ambiguous.
From the above discussion, we are of the opinion that theft should have preceded with force or violence as per the terms of insurance policy. In order to substantiate a claim an insurer has to establish that theft or burglary took place preceding with force or violence and if it is not, then the insurance company will be well within their right to repudiate the claim of the insurer.”
After the intimation, the Insurance Company appointed the Surveyor, who gathered information about the incident and submitted its report on 14.10.2013 observing that the loss of Rs. 1,44,68,097/- with adjusted loss at Rs. 1,26,98,716/-. The relevant para of the Surveyors M/s Atul Kapur & Company report no. 4310, dated 14.10.2013 is as under:
“2. The contents of the intimation letters dated 04.12.2011, 19.12.2012 and 23.12.20212 given by the insured to police, FIR and final report confirms that no forcible entry/ Exit took place thus operative clause of the policy apparently did not operate which states that the insurers “ agree….. to indemnify the insured to the extent of intrinsic value of (a) Any loss of or damage to property or any part thereof whilst contained in the premises….. due to Burglary or House-Breaking (theft following upon an actual forcible and violent entry of and/ or exit from the premises)”
“3. …. It is apparent from the police final report that the police had closed their investigations under the same section i.e, 380 of IPC which indicates apparently that the police investigations also revealed that there was no forcible entry/ exit (Section 380 is for simple theft whereas the coverage in the policy is only that type of theft which is accompanied by forcible entry/ exit). In fact the first intimation to the police by the insured (see Encl-3) was given about 3 to 4 days after the loss and states that they had noticed some discrepancy in stock but does not mention forcible entry and not even that there was any theft by any intruders.”
“……. Even during our survey no sign of forcible entry/ exit were shown to us (see photos attached) and our observations/ verifications in the area indicated that there was hardly any business/ operations at the insured’s premises since the last few months.”
The contention of the Opposite Party-2 Bank is that the Bank was informed about the theft/ burglary only on 22.12.2012 i.e, after 21 days of the incident. The payment for the policy premium i.e. Rs. 58,793/- for Standard Fire and Special Perils and Rs. 11,814/- for Policy Schedule for Burglary Single Location Insurance were made on and from the account of the Complainant. The contention is that there was a change in the name of the insured and instead of sending the documents in the name of Mahamaya Chemical Pvt. Ltd., the documents related to the policy taken in the name of Mahamaya Polychem Pvt. Ltd. The Opposite party – 2 further contended that Execution Petition bearing No. RC/86/15 is pending before the Ld. DRT-III, New Delhi that has proceeded ex parte as the Complainant is willfully avoiding appearance in the proceedings. The relevant portion of the DRT order dated 02.06.2022 is reproduced below:
“The above said case was listed for hearing before the Recovery Officer, DEBTS RECOVERY TRIBUNAL DELHI (DRT 3) on 01/06/2022 but none appeared on your behalf.”
We have gone through the facts and circumsrtances of the case and perused materials available on record. The main issue in the present consumer complaint is whether the repudiation of the claim of the complainant on the stand taken by the Insurnace Company is justified or not.
The complainant has alleged that theft/ burglary occurred on 30.11.2012 & 01.12.2012 night, thereafter the insurance company appointed a surveyor who in the report dated 14.10.2013 stated that theft simpliciter has taken place and not burglary whereas the policy with the insured was in respect of burglary and not simple theft which is not covered under the policy.
We have gone through the FIR, the judicial magistrate’s order and surveyor’s report, and from the facts of the case it is evident that an offence of theft without any evidence of forceful entry appears to have been commited. The relevant part of the Order by the judicial magistrate is reproduced below:
“Complainant Smt. Papri Bhattacharya present. Application along with affidavit has been filed by the applicant to accept the final report in which it is stated that she has no objection against the final report being accepted.”
Therefore, after going through the material on record, we are of the view that the insurance company has justifiably repudiated the claim of the insured as a simple theft was not covered under the policy taken by the complainant. We are supported in our view by the law laid down by the Apex Court in the case of United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal, (supra).
This view has been reiterated by the Hon’ble Supreme Court in Suraj Mal Ram Niwas Oil Mills Pvt. Ltd. Vs. United India Insurance Co. Ltd. (2010) 10 SCC 567 and Canara Bank Vs. United India Insurance Co. Ltd. (2020) 3 SCC 455. The observations of the Hon’ble Supreme Court in Suraj Mal (Supra) are reproduced below:-
“26. Thus, it needs little emphasis that in construing the terms of a contract of insurance, the words used therein must be given paramount importance, and it is not open for the court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer. Therefore, the endeavour of the court should always be to interpret the words in which the contract is expressed by the parties.”
In view of the above discussions and our conclusions this Complaint has no merits and is accordingly dismissed.
Pending applications, if any, stand disposed of.