Ranka Jewellers v. National Insurance Company Ltd — 1994 DIGILAW 18 (BOM)

JUDGMENT - G.G. LONEY, President:---In this complaint, a grievance is made by a policy holder against the National Insurance Company for not settling his legitimate and genuine claim for un-justifiable reasons. It is alleged by the complainant that he is a Jeweller and had obtained the Block Insurance Policy dated 11-3-1991 for a sum of Rs. 70 lakhs to insure the stock of gold and jewellery of his business. The complainant alleged that while travelling on 15-4-1991 by Deccan Queen Express from Pune to Bombay, the bag containing 967.600 grams of gold ornaments, diamond rings and other valuable articles belonging to complainant were stolen. The complainants partner, Omprakash and his employee Vinod Kothari were travelling in 1st Class and 2nd Class respectively having 2 different seats. It is alleged that both travelled from his shop to Pune Railway Station in the same auto and Vinod was carrying the canvass bag containing the aforesaid valuable articles. Vinod entered his compartment SC 5 and kept the bag on the rack above his seat. When the train reached, Shivaji Nagar Station at about 7.20 a.m. Vinod found that his bag was missing, and after enquiries with fellow passengers, he informed, Omprakash, complainant who was travelling in another compartment about the theft. However, they could not trace the canvass bag containing the valuables. In train first halted at Lonawala and both of them got down to lodge the complaint at Lonawala Railway Police Station. However, they were informed by the Lonawala Railway Police Station to lodge the complaint at Pune Railway Police Station and immediately on the same day the complaint was lodged at Railway Police Station at Pune, who started investigation. The Pune Railway Police Station registered the offence of theft `A summary on 1-8-1991 was submitted in respect of the said crime No. 51/91. The complainant notified the theft to Sarafa Association, Jhaveri Bazar, Bombay. The complainant also informed the opposite party about the theft and about the report made to Pune Railway Police Station and thereafter submitted his claim for claiming compensation on the basis of his Insurance Policy. The opposite party appointed M/s. Kabade as surveyor. But the said surveyor did not submit his report to the complainant, though demanded from time to time. The opposite party appointed M/s. Kabade as surveyor. But the said surveyor did not submit his report to the complainant, though demanded from time to time. The complainant waited for considerable long time for issuance of the surveyors report and informed the opposite party on 27-3-1993 about the settlement of the insurance claim. In the meantime, the opposite party renewed the complainants block policy for a further period from 11-3-1992 to 10-3-1993. However, the opposite party by its letter dated 24-5-1993 repudiated the complainants claim for the loss of Jewellery under exclusion Clause 8(b) and violation of condition Nos. 10, 13(a) and (b). In the meantime, M/s. Kabade surveyors report was available. The complainant alleged that as the opposite party spent more than 2 years to settle the complainants claim and thereafter rejected it for unjustifiable reasons, the complainant has filed this complaint claiming Rs. 3,50,025/- towards the value of the valuable articles and Rs. 1,42,000 for the loss of interest and also claimed Rs. 22,500/- as compensation. 2. In respect of the notice under section 13 of the Consumer Protection Act dated 29-7-1993, the opposite party filed its written version and surveyors report before Commission. Inter alia, it is contended by the opposite party that there is no deficiency in its service. According to opposite party the remedy for the complainant lies in the Civil suit and therefore, the complainant be directed to present his case before the Civil Court. It is further contended that the complainant has not informed the opposite party about the theft within 24 hours as per the conditions in the policy. It is also contended that there was delay on the part of the complainant to report the incident to Insurance Company in violation of the conditions of the policy. It is also contended that the complainants failed to extend necessary co-operation and failed to furnish the necessary details of the incident to the surveyors as contended. Finally, according to the Insurance Company, they have rightly repudiated the insurance claim of the complainant. It is also submitted that the liability of the opposite party was limited to Rs. 1 lakh only under the sub-section (a) of section II of the relevant policy. 3. We have heard Shri Deepak More, Advocate for the complainant and Shri M.A. Yayeda, Advocate for the opposite party. 4. It is also submitted that the liability of the opposite party was limited to Rs. 1 lakh only under the sub-section (a) of section II of the relevant policy. 3. We have heard Shri Deepak More, Advocate for the complainant and Shri M.A. Yayeda, Advocate for the opposite party. 4. In this complaint grant of Block Insurance Policy dated 11-3-1991 to the complainant to indemnify the loss of gold and jewellery in the sum of Rs. 70 lakhs is not in dispute. Similarly the renewal of the said policy for further period from 11-3-1992 to 10-3-1993 is also not in dispute. The main grounds of opposition to the complainants claim are technical. The 1st contention raised by the opposite party is that there was utter negligence on the part of the complainant to protect the ornaments. There is no substance in this contention in as much as the insurance polices are obtained by the insured persons to cover the accidental loss of property in case of their negligence or inadvertantly due to any other reasons. Therefore, the negligence of on the part of the complainant is not relevant so as to repudiate the policy claim. 5. Another contention raised by the opposite party is that this Commission has no jurisdiction and that the claim should be filed in Civil Court also do not merit any consideration. The law has been settled on this point that if there is any deficiency in the service of an insurer, the consumer dispute can lie before a Consumer Forum. Thus this contention of the opposite party does not hold any water. 6. The next contention raised by the opposite party is that the complainant did not inform the opposite party within 24 hours about the loss of property as per condition of the policy. It is the contention of the complainant that the incident was reported to Pune Railway Police Station on 15th April, 1991 about the loss of bag containing valuables worth Rs. 2,50,000/-. The said Railway Police Station is situated in the premises of the Pune Railway Station, which is hardly a distance about 5 minutes walk from the office of the Insurance Company and about 10 minutes distance from the office of M/s. Kabade surveyors. 2,50,000/-. The said Railway Police Station is situated in the premises of the Pune Railway Station, which is hardly a distance about 5 minutes walk from the office of the Insurance Company and about 10 minutes distance from the office of M/s. Kabade surveyors. The complainant has promptly and immediately reported the incident by lodging F.I.R. to the Police Station and therefore, the Insurance Company or surveyor could have more easily obtained the information from the Police Station when the claim was lodged. It is therefore, clear that the insurance policy in this case is repudiating the complainants claim purely on technical grounds. More-over the fact that the opposite party renewed the complainants insurance policy for further period shows that the opposite party was in not so serious about the technicality of the complainants claim and when the complaint has been filed before this Commission. The technical objection is raised merely to oppose the complainants claim any how. The next contention of the opposite party is that the complainant did not extend necessary co-operation and failed to furnish the necessary details of the incident to the surveyor. We do not agree with this submission of the Insurance Company for the simple reason that the complainant has alleged that all the necessary information was given to the Insurance Company and to the surveyor. The complainant has submitted that Insureds have systematic procedure for all the transactions. Vouchers and challans are issued for all such items obtained from the customers and to be transported away from Pune. It is also submitted that M/s. Ranka Jewellers are a well known and leading goldsmith and jewellers in Pune City, operating from their own five storyed building and therefore it is wrong according to them that they have not co-operated with the surveyors. It is also submitted that the surveyors has verified the copies of vouchers, challans and the details which are in this report and which show that the ornaments lost by the complainant were valued at Rs. 3,49,324/-. The complainant submits that the surveyor has quantified the complaints claim for Rs. 3,49,324/- on the basis of detailed statement submitted with their claim to the surveyor. According to complainant, the contention raised by the opposite party that the complainant did not co-operate the surveyor is entirely wrong. 7. Lastly according to the opposite party, the liability of the Insurance Company is limited to Rs. 3,49,324/- on the basis of detailed statement submitted with their claim to the surveyor. According to complainant, the contention raised by the opposite party that the complainant did not co-operate the surveyor is entirely wrong. 7. Lastly according to the opposite party, the liability of the Insurance Company is limited to Rs. 1 lakh only under sub-clause (a) of section II of the relevant policy. The sub-clause (a) of the section II are reproduced as below : (a) Property insured whilst in the custody of the insured, his partners or his employees Rs. 1,00,000/-. (b) Property insured excluding cash and currency notes whilst in the custody of persons not in regular employment of the insured such as brokers or cutters or goldsmiths Rs. 2,00,000/-. (1) Warranted that if stock with any one person specified in section II Schedule exceeds Rs. 2 lakhs it shall be secured in a Burglar Proof Safe Business hours at all times. (2) Warranted that the sum insured under this section should not exceed gross sum insured under section I, the aforesaid so called conditions are totally unreasonable in as much as loss to the extent of Rs. 2 lakhs is being awarded whether the property whilst in the custody of a person not in regular employment of the insured such as brokers or agents of cutters or goldsmiths. Whereas in sub-Clause (a) property insured whilst in the custody of the insurer, his partners or his employees is said to the extent of Rs. 1 lakh. In our view, the aforesaid note in section II(a) appears to be unreasonable. When the policy is for the total sum of Rs. 70 lakhs obviously covers any loss caused to the insured to the extent of Rs. 70 lakhs in the event of theft. Moreover, when the said property is in the custody of the insurer or his partner, the liability is the extent of Rs. 1 lakh and if the case and currency notes is in the custody of the servants, the liability is Rs. 2 lakhs. In our view when the Block Policy is to the extent of Rs. 70 lakhs, such a restriction of Rs. 1 lakh if the property is in the custody of the insurer is apparently unreasonable. It appears that the benefit assured in the policy are nullified by Clause (a) and (b) mentioned above. 2 lakhs. In our view when the Block Policy is to the extent of Rs. 70 lakhs, such a restriction of Rs. 1 lakh if the property is in the custody of the insurer is apparently unreasonable. It appears that the benefit assured in the policy are nullified by Clause (a) and (b) mentioned above. Under these circumstances, we find that the Insurance Company is deficient in its service in rejecting the complainants claim. The complainant has proved his allegations in this complaint, which are supported by affidavit and documents on record. 8. In the instant case, we find that surveyor has clearly opinion that the complainant suffered the loss of his gold ornaments to the extent of Rs. 3,49,324/-. Therefore, there should be no difficulty on the part of the opposite party to accept the surveyors report and settle the complainants claim. The complainant has given all details of the loss of property with vouchers and all details and therefore, when the policy is block policy covering the loss to the extent of Rs. 70 lakhs and when the theft has been committed causing loss to the property of the complainant he is entitled to the settlement of his claim to the extent of loss estimated by surveyor. We therefore find that the complainant has proved his allegations. We further find that the opposite party has been seriously deficient in not settling the complainants justifiable claim for unjustifiable reasons. The opposite party should have waived clause of section II mentioned above as they are inconsistent with the main object and purpose of the policy in question to sub-serve the interest of consumer under the facts and circumstances of this case. ORDER 9. The complaint is allowed. The opposite party is directed to settle complainants claim for Rs. 3,50,025 with interest at the rate of 18% per annum from 15th April, 1991 till realisation. The complainant also be awarded Rs. 500/- as cost of the complaint. The rest of the complainants claim is hereby rejected. Complaint allowed with cost.