AI Structured Summary
Not yet generated for this judgment
Judgment
C. Viswanath, J
According to the Complainant, it had taken a Special Contingency Insurance Policy No. 230102/46/06/39/00000174 valid form 27.09.2006 to 19.09.2007 for a sum insured i.e. Rs.2 Crores for stock, and Rs.5 Lakhs cash from the Opposite Party Insurance Company. The Complainant was a traditional jeweller dealing with polishing and sale of precious stones. The Complainant had taken all safety precautions and security measures at their business premises, apart from availing the insurance policy.On the night of 10.08.2007, burglary took place in the premises as the main access door was forcefully broken.The Burglars cut open the steel walls of the heavy safe weighing more than 1 ton, kept against a concrete wall. The thieves escaped with diamonds, precious stones and cash valued more than two crores kept in the safe. The only hope to recover the business from such a big loss was the insurance claim availed from the Opposite Party, since the lost articles could not be recovered by the Police or the Opposite Party. The Police report and the findings of the surveyors engaged by the Opposite Party confirmed the loss. Instead of settling the claim, the Opposite Party harassed the Complainant for two and a half years by demanding irrelevant particulars and raising frivolous objections. Ultimately, vide letter dated 23.01.2009, the Opposite Party repudiated the claim, on the ground that the theft was committed by 3 Nepali Boys, who were the employees of the Complainant. It was submitted that it is a well settled position in law, that the insurer must give valid reasons for rejecting any claim. The onus of proof of the reasons rests heavily upon the insurer. The Opposite Party did not produce any cogent or valid evidence to establish that the Nepali boys were employees of the Complainant. The observation of the Surveyor, on the basis of an alleged statement of job workers, that the 3 Nepali Boys were allowed to stay with them in the servants quarter of the building for sweeping and cleaning and giving tea and water to the said job workers, does not prove that the they were the employees of the Complainant. As observed by this Hon'ble Commission in New India Insurance Co. Ltd. Vs. Uniply Industries -2013 (III) CPJ, 571 NC at page 519 para-5 that it is settled law that surveyors report cannot be treated as the last word and a gospel truth. The other two allegations in the repudiation letter being that the complainant did not inform the Opposite Party the periods of operation of CCTV, and the safe in the premises not being attached to the floor of the premises. Hence, the Complaint was filed.
Alleging deficiency on the part of Opposite Party, Complainant filed a Complaint before this Commission under Section 21 of the Consumer Protection Act, 1986, praying relief as under:-
Allow the claim of Rs.2,06,10,856 for loss of diamonds with interest @18% from the date of loss, i.e. 11.08.2007, till the payment.
Allow the claim of Rs.1,65,000 towards loss of cash with interest @18% from the date of loss. i.e. 11.08.2007, till the payment.
Allow compensation of Rs.10 lakhs against the respondent towards financial/business loss, mental and physical harassment suffered by the Complainant.
Allow Rs.5 lakhs against the Opposite Party towards the legal and other expenses from the Opposite Party.
Interest @18% form 11.08.2007 to the pendent elite and future interest in respect of claims prayed for in clause (a) to (c) and (d).
Pass anysuch order and/or grant such other and further reliefs, as this Hon'ble Commission may deem fit and proper in the interest of justice: and
Complaint was contested by the Opposite Party wherein it was contended that the Complainant/Insured had taken a Special Contingency Insurance Policy No. 2301012/46/06/39/00000174 valid from 27.09.2006 to 19.09.2007 for stock for Rs.2 Crores and Cash for Rs.5 lakhs on the premises. A theft/burglary took place at the insured premises on the night of 10.08.2007 and 11.08.2007. The facts and circumstances of the present case and the grounds for repudiation show that the present Complaint would give rise to issues of evidence which cannot be adjudicated upon and disposed of in the summary procedure of this Commission. The policy in Section IV reads: "Provided always that the Company shall not be liable for under this Policy in respect of Loss or damage occasioned by theft or dishonesty or any attempt thereat committed by or where such loss or damage has been expedited in any way sustained or brought about by.....
(b) Any servant or traveler or messenger in the employment of the insured.
(c) Any customer or broker or broker's customer or anagadias cutters or golds smiths in respect of the property hereby insured entrusted to them by the insured, his or their servants or agent.
In the present case, theft/burglary was committed by three Nepali boys who were the employees of the Complainant as evident from the contents of FIR, report of the Preliminary Surveyor and Legal Notice. Under the circumstances the theft/burglary in the case falls under the Exclusion Clause (8) of the Policy. In the proposal form the Complainant had in response to Question 3(d) categorically stated that the premise would be covered by a 24 hours watchman and that a CCTV camera system had been installed and that the Safe would be fixed to the floor.
Conditions 2 and 4 of the General Conditions of the policy provide that the insured shall take all responsibility for the safety of the property as regard selection and supervision of employees securing all doors and windows and other means of entrance or exit otherwise and shall not withdraw or vary the protection and/or safeguards as are referred to in the proposal form to the detriment or the interest of the Company without its consent.
(4) No claim shall be recoverable hereunder if any change shall be made in the premises or in the conditions of the risk as existing at the time of acceptance unless the Company shall endorsing hereon declare the insurance to be continued.
The Complainant was in material breach of the aforesaid provisions of the policy. The Final Surveyor reported that during the visit to the insured premises, it was found that the insured watchman was guarding the main gate of the premises. It was also noticed that the C.C.T.V. installed in the office premises of the insured was shut down after the business hours. During night time only one watchman/guard was at the main gate of the premises. The Final Surveyor further stated that during verification it was found that the Godrej safe with the insured was not fixed to the floor as per the proposal form. By not fixing the safe to the floor, the insured made the job easier for the burglars. The claim of the Complainant was, therefore, repudiated in accordance with law, vide letter dated 23.01.2009, for violation of the policy conditions and/or falling under the exclusion clauses of the policy. There was no deficiency of service committed by the Opposite Party under the Consumer Protection Act, 1986.
The Complainants have relied on the following judgements as stated below:-
In New India Assurance Company LimitedVersus Abhilash Jewellery, the Supreme Court held that since the word "employee" has not been defined in the contract of insurance, we have to give it the meaning which it has in common parlance. In common parlance, an apprentice is a trainee and not an employee. Even if he is given a stipend that does not mean that there is a relationship of master and servant between the firm and the apprentice. Hence, we cannot agree with the view taken by the National Commission. In our view, the claim before the National Commission was not maintainable.
In Balwant Rai Saluja and Another versus Air India Limited and Others, the Supreme Court held that the workers engaged by a contractor to work in the statutory canteen of a factory would be the workers of the said factory but only for the purposes of Factories Act, 1948, and not for other purposes, and further for the said workers, to be called employees of the factory for all purposes, they would need to satisfy the test of employer-employee relationship and it must be shown that the employer exercises absolute and effective control over the said workers.
Heard the Learned Counsel of the Complainant as well as the Opposite Party and also carefully perused the record.
It is an admitted fact that there was a burglary and theft of diamonds and cash committed at the insured premises of the Complainant M/s. Aviraj Gems, on the intervening night of 10th and 11th August 2007, by breaking open the safe of the insured. The same was covered by the Special Contingency Insurance Policy No. 230102/46/06/39/ 00000174 which was issued by the Opposite Party to cover the risk of Rs.2 crores for the stock and Rs.5 lakh for cash at the premises for the period 27.09.06 to 19.09.2007. The Policy was in force since the previous three years, i.e., from 27.09.2004 and earlier to that Insurance Policy was taken from their Mumbai Head Office. This was the first case of such an incident of theft and burglary claim at the insured premises. On 10.08.2007 at around 8:30PM the office of the insured was closed and access doors duly secured. On 11.08.2007 at about 7:45AM when the partner of the insured firm went to open the office he found that the locks of the access doors of entry to the office had been broken. Immediately the Police was informed and FIR was lodged. The Insurance Company was also informed about the burglary and theft on 11.08.2007.
The three Nepali boys residing in the servant quarters of the insured premises were suspects in this crime.The job of the Nepali staff was serving tea, sweeping and cleaning of the office.The frequency of their service being very repetitive, they were allowed to stay on the premises in the servant quarters in the basement.When the Police arrested one of the culprits, he confessed committing the burglary with the help of Nepali staff working in the diamond office. The 3 Nepali boys connived with the culprits who committed burglary of diamonds and cash.
Immediately the Insurance Company appointed preliminary surveyor. Subsequently the second surveyor was appointed to assess the loss.He submitted his report on 18.03.2008 and assessed the loss at Rs.1,68,42,699/-.Based on Surveyor report, the claim of the Complainant was repudiated on the following grounds:-
The insured had declared that there would be watchman on the insured premises for 24 hours and CCTV camera had been installed at the insured premises.During the course of surveyor investigation it was found that the watchman was deployed at the ground floor and not at the insured premises, i.e., 3rd floor.
The insured had declared that the premises would be occupied by their employees/job workers for 24 hours beyond working hours.The offence was allegedly committed by three Nepali boys who were employed by the Complainant at the premises for sanitary work.
The Insurance Company repudiated the claim under the Policy as exclusion clause 8(b)(c) excludes loss / damages that occurred due to proximity cause of infidelity committed by employees.
Further, it was not informed in the proposal form that CCTV camera would be switched off after business hours.
It was declared in the proposal form that safe was attached to the floor, but in fact safe fixed to a temporary partition on a side.
The main ground of repudiating the claim appears to be the fact that the offence was committed by three Nepali boys who were the alleged employees of the Complainant and residing in the insured premises.As can be seen from the surveyor's report, the offence was committed by a group of culprits, in connivance with Nepali staff working in the diamond office.The Nepali employees did not commit the offence alone, but appear to be accomplices in the Commission of the offence.They were also not regular employees of the company but working as service boys to cater tea, water to the workers and attended to cleaning of the premises.As regards keeping the premises secured, the stock as well as cash were kept in a safe manufactured by Godrej Company and the premises was also duly locked and the entire premises was guarded by watchmen taking their turns.Watchmen were also residing in the basement and sufficient precaution had been taken to keep the premises secured.CCTV was also installed in the premises and not providing information that CCTV would be switched off after business hours cannot be construed as any material misrepresentation.Another cause for repudiation was that safe was not fixed to the floor.This aspect is not relevant in the present case as the burglars neither removed the safe outside the premises nor did the burglars open the safe from the bottom.The safe was fixed to a wall and the burglars did make a hole through the back of the safe.
The offence took place on 10.08.2007 and the claim was repudiated after two and a half years on 23.01.2009, despite the Complainant having valid insurance cover, timely reporting and having suffered a loss duly assessed by the Surveyor appointed by the Opposite Party.We are not convinced with the reasons given for repudiating the claim, as detailed and discussed above.The claim made by the Complainant was wrongly repudiated by the Opposite Party and we direct that the loss of Rs.1,68,42,699/- as assessed by the surveyor be paid to the Complainant alongwith interest @6% p.a. from the date of filing of the present Complaint till final payment. The payment be made within 8 weeks from the date of passing of this order.