New India Assurance Co. Ltd. vs KISHORE P.MASTAKAR

THIS is a first appeal filed by two appellants, The New India Assurance Co. Ltd. and Shri Mohan S. Bhawe, Development Officer, The New India Assurance Co. Ltd. against the order dated 3.6.1994 by Maharashtra State Commission in Complaint No. 491/1992, allowing the complaint and directing the appellants/opposite parties to pay the respondent/complainant Shri Kishore P. Mastakar a sum of Rs. 3,41,994/- with interest at the rate of 18% p.a. on the aforesaid amount from the date of repudiation of insurance claim. 1. The facts necessary for the disposal of the appeal lies in a narrow compass and may be stated here. Admittedly the respondent Shri Kishore Mastakar, a proprietor of Auto Service Station, Bombay had two insurance policies i.e. "fire policy" and "money in transit policy" for the period of 14.5.1991 to 13.5.1992. The appellant No. 2 visited the respondent on or around 3.5.1992 and collected the premium amount of Rs. 15,938/- for renewal of "money in transit policy" valued at Rs. 5,10,000/- to cover loss upto Rs. 4,25,000/- which is mentioned in the renewal form. Appellant No. 2 gave a receipt for the cheque being No. 20244 with the proposal form duly filled in after calculating the amount of premium which meant all the formalities have been completed except for the issuance of insurance policy.

THE respondent approached appellant No. 2 for issue of "money in transit policy" repeatedly but he was given empty answers that the policy was ready but was never handed over to him. On 20.7.1992, the respondent''s business premises were attacked by the dacoits and the incident was reported to the Police and claim was submitted to the appellants accordingly. THE respondent was awaiting for the payment to be made by the appellants, on the "money in transit policy" for which full premium of Rs. 15,938/- as calculated by appellant No. 2 was paid within time. Appellant No. 1 repudiated the claim saying that the cheque for the premium amount of Rs. 25,938/- was not deposited through Bank to them and hence "Money in Transit Policy" was not issued. On 5.8.1992, the respondent approached appellants through lawyer''s letter requesting to issue "money in transit policy" duly renewed which was not replied to by the appellants. The State Commission allowed the complaint and directed appellants to pay the amount claimed. In appeal the appellant''s contended that there is no concluded contract between the parties since the cheque was not encashed and, therefore, the risks were not covered under the conditions of insurance policy. It is further contended that there was no communication from them that they were accepting the risk. Mere endorsement dated 14.5.1992 under the signature of appellant No. 2 stating therein that the proposal was recommended to enhance the limit of the proposal with a cheque is not a concluded policy. The appellants pleaded their case that there was an earlier claim and, therefore, the Divisional Manager put an endorsement for obtaining the first proposal form before the acceptance of risk and that it is requested to be approved by their Bombay Regional Office. Though in accordance to this endorsement, the proposal form was given to the respondent which although was duly filled in and paid for, before the communication of acceptance of the said proposal, the alleged burglary took place on 20.7.1992. It is also contended by the appellants that mere delay in giving an answer cannot be construed as acceptance, as, prima facie acceptance must be communicated to the offer made in the present appeal.

The question for us to decide upon is whether there is deficiency in service by the appellants in repudiating the claim. We heard both the parties and after seeing the documents on record we find appellants were not justified in repudiating the claim. Reasons for the above conclusion are as follows : (a) The amount of premium Rs. 15,938/-,calculated by appellant No. 2, the Development Officer Mr. Mohan Bhawe, is not in dispute by both the parties. This amount was discussed in person by him when he visited the respondent on 3.5.1992 to collect the premium amount for renewal of policy is not in dispute. (b) On the proposal form submitted by respondent and in turn given to Branch Manager who wrote himself "Recommended for acceptance being renewal" on 22.6.1992 on record. The intention of appellant to renew is affirmed and not in dispute. (c) It is nobody''s case that there was insufficient funds in the respondent''s Bank account and, therefore, cheque could not have been honoured. As for the respondent, he was under the impression the cheque was being encashed and said premium was paid by him and handed over to them in person. (d) There is no dispute or even a whisper by the appellants that the dacoity/burglary did not take place on 20.7.1992. There is no denial or doubt expressed by appellants about the loss assessed and claimed by the respondent. Therefore, the incidence of burglary and the quantum of claim are not under dispute. (e) On face of the policy dated 21.5.1991 which was live for 13.5.1991 to 12.5.1992, it is seen that Rs. 3,00,000/- was the limit of liability in respect of the said loss as seen below :

Money in Transit Policy "On money whilst in direct transit between any of the following places from the time it is received by the insured or authorised employee or employee of the insured at one of the places until delivered to another. From insured''s Service Station to Bank of India, Andheri Branch and/or verse within a radius of 5 km. 1. The limit of liability of the Company in respect of any one lose ...Rs. 3,00,000/- 2. Estimated amount in transit during the period of the policy Rs. 3,60,000/-. This policy also covers robbery, dacoity, hold-up, riot and strike and cash in counter upto Rs. 3,00,000/-."

On the basis of this, Rs. 3,00,000/- the respondents should have considered the fresh premium paid, is for the renewal of the above policy since Mr. Bhave who is the Divisional Manager himself collected the cheque. Why he did not encash the cheque is not clear. It is internal correspondence between Divisional Manager, Branch Manager and Head Office as to when to send the Insurance Policy cannot help the respondent for his loss. Mr. Bhave, the appellant No. 2 being the Divisional Manager has himself approved the policy on behalf of appellant No. 1 and collected the premium which makes the policy is in continuation. They should have released at least Rs. 3,00,000/- immediately. By not encashing the cheque given as premium by the respondent and not communicating to them is itself deficiency in service. Either they decide to give the policy or they decline to give is their prerogative. Having given policy earlier and approached respondents personally and collected the cheque for the premium and the amount is also decided by their Divisional Manager is as good as the Company appellant No. 1 itself. Nowhere have they expressed their intent to refuse/discontinue the policy and on the other hand all the notings by officers of the appellant No. 1 are in favour of the respondent. We find appellants were not justified in repudiating the claim in these circumstances. With the above discussions, we find there is no infirmity in the order passed by the State Commission. They have allowed the complaint after thorough consideration of all facts. We affirm the said order and the appeal is dismissed. No order as to costs. Appeal dismissed.