Chandigarh

StateCommission

A/32/2015

The Oriental Insurance Company Ltd. - Complainant(s)

Versus

Paramjit Kaur - Opp.Party(s)

J.P.Nahar, Adv.

24 Mar 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

First Appeal No.	:	32 of 2015
Date of Institution	:	10.02.2015
Date of Decision	:	24.03.2015

 

The Oriental Insurance Company Ltd., Divisional Office 3, through its Branch Manager, SCO-72-73-A, Sector 26 Chandigarh Insurer of Truck No.PB-65-E-4833, Chassis No.444026LTZ229120, Model 2006, Make TATA vide Policy No.233100/31/2011/11781. Now through its authorized signatory, B. S. Ahuja, Deputy Manager, Regional Office, SCO No.109-111, Sector 17-D, Chandigarh.

……Appellant/Opposite Party No.1.

Versus

1. Paramjit Kaur w/o Sh.Amrik Singh, resident of House No.1834, Randhawa Road, District Mohali, Punjab.

       2nd Address:-

House No. 548, New Police Colony, Sector 26, Chandigarh.

              ....Respondent/Complainant.

2. INDUSIND Bank, through its Branch Manager, Phase-3B2, Mohali, Loanee of Vehicle/ Truck No.PB-65-E-4833, Chassis No.444026LTZ229120, Model 2006, Make TATA vide Loan Agreement No.PCC-22-D dated 4.3.2011.

 

3. Police Station, Khaga Janpat, Fatehpur, Uttar Pradesh, through its S.H.O. vide its F.I.R. No.112/11, dated 16.5.2011 regarding Vehicle/Truck No.PB-65-E-4833, Chassis No.444026LTZ229120, Model 2006, Make TATA.

 

….Respondents/Opposite Parties No.2 & 3.

 

Appeal under Section 15 of the Consumer Protection Act, 1986.

 

BEFORE:   JUSTICE SHAM SUNDER (RETD.), PRESIDENT.

                MR. DEV RAJ, MEMBER.

                MRS. PADMA PANDEY, MEMBER

 

Argued by: Sh. J. P. Nahar, Advocate for the appellant.

                   Sh. S. K. Guleria, Advocate for respondent No.1.

Service of respondents No.2 & 3 already dispensed with vide order dated 11.02.2015.

 

PER DEV RAJ, MEMBER

              This appeal is directed against the order dated 01.01.2015, rendered by the District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (hereinafter to be called as the District Forum only), vide which, it partly allowed Consumer Complaint No.193 of 2014, and directed Opposite Party No.1 (now appellant) in the following manner:-

“13.      Hence, the present complaint of the Complainant deserves to succeed against the Opposite Party No.1, and the same is partly allowed. The Opposite Party No.1 is directed to:-

 

[a]   Pay Rs.8,75,000/- i.e. the Insured Declared Value (IDV) of the stolen vehicle to the Complainant, along with interest @9% p.a. from the date of filing of the claim, till realization;   

 

[b]   Pay Rs.15,000/- on account of deficiency in service and causing mental and physical harassment to the Complainant; 

 

[c]   Pay Rs.10,000/- towards costs of litigation

             

               The Complainant against Opposite Parties No.2, 3 & 4 fails.

 

14.               The above said order shall be complied within 30 days of its receipt by the Opposite Party No.1; thereafter, it shall be liable for an interest @12% per annum on the amount mentioned in sub-para [a] of Para 13 above from the date of filing of the claim, till it is paid. Similarly, the compensation amount as per sub-para [b] of para 13 above, shall carry interest @12% per annum from the date of institution of this complaint, till it is paid, apart from costs of litigation of Rs.10,000/-.”  

 

2.           The facts, in brief, are that the complainant for earning her livelihood got financed Truck No.PB-65-E-4833, Chassis No.444026LTZ229120, Model 2006 (make TATA) from Opposite Party No.2. It was stated that the said Truck had National Permit and was to be plied throughout India. It was further stated that the truck was insured with Opposite Party No.1, vide Policy No.231300/31/2011/11781 (Annexure C-3). It was further stated that the said truck was loaded from Ritco Logistic Pvt. Ltd., Haldia West Bengal, on 16.5.2011, with 50 Tonnes Plastic Dana, valuing Rs.14,91,749.99, vide Bill No.610001093 to be delivered at Baddi (H.P.) on 23.5.2011. It was further stated that an advance amount was also paid to the driver on 16.05.2011. It was further stated that the said truck did not reach the destination and its driver had switched off his mobile. It was further stated that later on, it was found that the driver and owner committed fraud and disposed of and misappropriated the loaded material. It was further stated that, accordingly, FIR was registered with the Police Station, Khaga Janpat, Fatehpur, Uttar Pradesh. It was further stated that the accused persons were arrested. It was further stated that the loaded material was also recovered by the Police, but the truck was not recovered, till date and the Police submitted untraced report (Annexure C-5). It was further stated that copy of the Invoice issued by the Lito Logistic Pvt. Ltd. was Annexure C-6.

3.           It was further stated that a claim was lodged with Opposite Party No.1. It was further stated that an Investigator was, accordingly, appointed by Opposite Party No.1, who demanded various documents from the complainant vide letter dated 29.6.2011 (Annexure C-7) [in fact Annexure C-7 is letter dated 22.06.2011 written by the complainant to Opposite Party No.2], which were submitted by the complainant with Opposite Party No.1. It was further stated that Opposite Party No.1 vide letter dated 17.5.2012 (Annexure C-8) repudiated the claim of the complainant on the ground that loss of the truck, was owing to the act of criminal breach of trust on the part of the driver and the act of criminal breach of trust was not covered under the Policy and the said incident was not theft.

4.           It was further stated that the aforesaid act of Opposite Party No.1, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing Opposite Party No.1, to pay Rs.10,75,000/- alongwith interest @18% per annum w.e.f. 16.05.2012 till actual realization.

5.           Opposite Party No.1, in its written version, while admitting the factum of issuance of Insurance Policy,  stated that the driver of the truck, in question, had committed an offence of criminal breach of trust, whereby, he while driving the truck from Kolkata to Chandigarh, sold the truck alongwith goods loaded therein. It was further stated that after the arrest of the driver, the material was recovered, whereas, the truck could not be traced, since, the same was subjected to repeated sale by the purchaser(s). It was further stated that it was criminal breach of trust and not theft. It was further stated that Opposite Party No.1 deputed M/s Royal Associates, Investigators to investigate the incident, which after due investigation filed its investigation report dated 08.08.2011 (Annexure R-1/1). It was further stated that the as per the Investigator, the driver had sold the truck alongwith goods on the way and had been arrested by the Police. It was further stated that, hence, the claim for loss on account of theft was not tenable. It was further stated that the complainant was not entitled to any claim/compensation from Opposite Party No.1. It was further stated that Opposite Party No.1, legally and validly repudiated the claim of the complainant. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party  No.1, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.

6.           Opposite Party No.2, in its written version, stated that it was not liable for the act and conduct of Opposite Party No.1. It was further stated that the complaint was not maintainable against Opposite Party No.2, since no relief had been sought against it by the complainant. It was further stated that, moreover, there was no deficiency in service on the part of Opposite Party No.2 as the loan account of the complainant had already been settled by it and NOC had also been issued to the complainant. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party  No.2, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.

7.           Despite service of notice, nobody appeared on behalf of Opposite Party No.3, therefore, it was proceeded against ex-parte by the District Forum vide order dated 08.05.2014.

8.           The complainant filed replication, wherein she reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of Opposite Party No.1.

9.           The Parties led evidence, in support of their case.

10.         After hearing the Counsel for the parties, and, on going through the evidence and record of the case, the District Forum, partly allowed the complaint, as stated above, in the opening para of the instant order.

11.         Feeling aggrieved, the instant appeal, was filed by the appellant/Opposite Party No.1.

12.         We have heard the Counsel for the parties, and, have gone through the written synopsis of respondent No.1/complainant and record of the case, carefully.

13.         Counsel for the appellant/Opposite Party No.1 submitted that the driver of the truck had committed an offence of criminal breach of trust as he sold the truck alongwith the goods loaded therein. He further submitted that after the arrest of the driver, the material was recovered but the vehicle could not be traced since the same was subjected to repeated sale by the purchasers. He further submitted that claim of the complainant for alleged theft was not tenable since no theft took place. He further submitted that respondent No.1/complainant was not entitled to any claim/compensation. He further submitted that the loss of truck was the result of criminal breach of trust committed by the driver of respondent No.1/complainant. He further submitted that, accordingly, the claim of respondent No.1/complainant was legally and validly repudiated vide letter dated 17.05.2012. He prayed that the order of the District Forum being illegal and wrong was liable to be set aside.

14.         On the other hand, the Counsel for the respondent No.1/complainant, submitted that the investigator in the investigation report, in his opinion, stated that the theft of truck, in question, seemed to be genuine and the particulars of the vehicle as mentioned in the FIR, RC and Insurance Policy were the same. He further submitted that this was clearly a case of theft and, as such, the claim was wrongly repudiated by the appellant/Opposite Party No.1. He further submitted that the order of the District Forum was correct and the same deserves to be upheld.

15.        It is evident, from record, that respondent No.1/complainant No.1 got his truck bearing No.PB 65 E 4833 insured with the appellant/Opposite Party No.1 vide Policy (Annexure C-3), which was valid for the period from 09.12.2010 to 08.12.2011 and paid the total premium of Rs.20,154/-. The said truck was got financed from respondent No.2/Opposite Party No.2 i.e. INDUSIND Bank and had the National Permit (Annexure C-2) for plying the said vehicle including trailer of the alternative articulated vehicles, valid for the period from 15.7.2010 to 14.7.2015.  Undisputedly, the said truck was loaded with 50 tonnes Plastic Dana, valuing Rs.14,91,749.99, from Ritco Logistic Pvt. Ltd., Haldia West Bengal on 16.5.2011, which consignment was to be delivered at Baddi (H.P.) on 23.5.2011 as is apparent from thecopy of challan (Annexure C-6). However, the said tuck did not reach its destination viz. Baddi (H.P) and FIR u/s 406 IPC (Annexure P-4 colly.) regarding theft of the truck was got registered. Respondent No.1/complainant also intimated Opposite Party No.2 regarding the same vide letter dated 22.6.2011 (Annexure C-7). Respondent No.1/complainant also gave intimation of loss to the appellant/Opposite Party No.1, vide letter dated 04.06.2011. The appellant/Opposite Party No.1 appointed Royal Associates, Investigating & Detective Agency, to investigate the claim, which submitted its report dated 8.8.2011 (Annexure R-1/1). The Investigator, in its report (Annexure R-1), after detailed investigation and recording the statements of respondent No.1/complainant, Sh. Kewal Singh, Sh. Ram Kumar Sharma, Sh. Lakha Singh and Sh. Avtar Singh, recorded the findings, which inter-alia, are extracted hereunder:-

“5.   FIR No.166/11 dated 02/06/2011 at Police station Khaga Distt. Fatehpur (UP) was lodged on the statement of Sh. Arun Tiwari, transporter through whom the truck was loaded while it was on the way to Baddi from Kadkatta. FIR was lodged U/s 460 IPC. As per Police record they received information about theft on 02/06/2011. As per FIR the driver had sold the truck on the way.

6.    The truck with goods (plastic granuels worth Rs.15 lacs) was sold by the driver at Imphal. Police has recovered the goods but truck could not be recovered at the same was sold further and exchanged  many hands. The police has arrested the driver and his family members under section 406 IPC and the search for the truck is on.

7.    The vehicle was duly locked at the time of theft. Insured has one original key as second key was misplaced long time ago…..”

16.         The opinion of the Investigator, as recorded by him, in his investigation report, is extracted hereunder:-

“On the basis of above said findings, we are of the opinion that theft of the truck seems to be genuine. The insurance company was informed about the theft of vehicle on 22/06/2011 i.e. after about one month from the date of incident. Particulars of the vehicle as mentioned in the FIR, RC and Insurance Policy are same. The truck with goods (plastic granules worth Rs.15 lacs) was sold by the driver at Imphal. Police has recovered the goods but truck could not be recovered at the same was sold further and exchanged many hands. The police has arrested the driver and his family members under section 406 IPC and the search for the truck is on. Insurer may deal with claim as per terms and conditions of policy, keeping in view of above said findings. The report is issued without prejudice.”

                                                  

17.         The appellant/Opposite Party No.1, repudiated the claim of the complainant vide letter dated 17.05.2012 (Annexure C-8), on the following grounds:-

“Kindly refer to the claim lodged by you under Policy No.231300/31/2011/11781 vide your loss intimation letter dated 04/06/2011. In this connection we wish to inform you that while processing your claim case, we have identify the following:-

1. You authorized your driver, namely, Sandeep Agnihotri son of Gajender Agnihotri, resident of Rampur, PS Kishenpur, Distt. Fatehpur (Kanpur), to bring back your above mentioned Truck from Kolkata to Chandigarh, while the Truck was loaded in Kolkata with Plastic Granuels, worth Rs.15 Lacs, for delivery to a consignee at Baddi.
2. Your said driver left Kolkata for Baddi on 16/05/2011. On the way the said driver sold the material loaded in the truck and also the truck. By doing so the said driver committed the offence of Criminal Brach of Trust.
3. The said incident was not theft. Hence, the claim for theft of vehicle is not tenable.

In view of the above facts, the incident dated 16/05/2011, which resulted in the loss of your truck, is owing to the act of Criminal Breach of Trust, on the part of your driver. Since, the act of Criminal Breach of Trust is not covered under the Policy, your subject claim, under the head ‘theft’, is not tenable. Consequently, your claim is hereby repudiated.”

18.         Though the report of the Investigator (Annexure R-1/1) was not the last word, yet, ignoring the findings of the investigator that theft of the truck seemed to be genuine, the claim of respondent No.1/complainant was repudiated by the appellant/Opposite Party No.1.

19.         The case of the appellant/Opposite Party No.1, was that the loss of truck was the result of criminal breach of trust, committed by the driver of respondent No.1/complainant, who sold the same, alongwith the goods loaded therein, while coming from Calcutta to Chandigarh and, as such, the claim was not tenable. The Investigator had also in its Investigator Report (Annexure R-1/1) recorded that “the driver had sold the truck along with goods, on the way and has been arrested by the Police, which has recovered the goods, but not recovered the truck, which has been sold further many times and search for the same is being on…”. The Investigator in its report clearly stated the claim to be genuine and was of the opinion that it was a case of theft.

20.         Similar issue came up before the National Consumer Disputes Redressal Commission, New Delhi, in United India Insurance Co. Limited & Anr.. Versus Ravi Kant Gopalka, IV (2007) CPJ 32 (NC), wherein, the driver was not traceable and the claim was not settled by the Insurance Company and a contention was raised that the Police had registered a case under Section 406 IPC and it was not a case of theft. The National Commission observed as under:-

“4.    In our view, this submission is without any justification because of the definition of ‘theft’ under Section 378 of the I.P.C. Illustration (d) to Section 378 specifically provides that –

 

“A, being Z’s servant, and entrusted by Z with the care of Z’s plate, dishonestly runs away with the plate, without Z’s consent. A has committed theft.”

 

5.     In any case, this would be a malicious act and the Policy covers such peril. Further the exclusion Clauses also nowhere provide that an offender under Section 406 of I.P.C. is excluded.”

 

21.         In another case S. Bhagat Singh Versus the Oriental Insurance Company Limited, II(1991) CPJ 700, the National Commission held that even if the driver dishonestly took away the vehicle, the case would be covered by illustration (d) appended to the definition of “theft” given in Section 378 of the Indian Penal Code and the driver would be deemed to have committed theft of the vehicle.

22.         In the instant case, the vehicle, in question, was stolen and was sold alongwith the goods on the way and the Insurance Company repudiated the claim as the loss was owing to the act of criminal breach of trust. The law settled by the National Commission in United India Insurance Co. Limited & Anr.. Versus Ravi Kant Gopalka’s and S. Bhagat Singh Versus the Oriental Insurance Company Limited’s cases (supra), is applicable to the facts of the instant case.

23.         However, the judgment relied upon by the Counsel for the appellant/Opposite Party No.1 in Haabia Advertising (India) Pvt. Ltd. Vs. United India Insurance Company Limited & Anr., II (2012) CPJ 327 (NC), is distinguishable on facts, as in that case, the National Commission held that damage to advertisement hoardings erected at various places occurred due to malicious act. Interestingly in that case, the Opposite Parties did not appoint any Surveyor. Further, placing reliance on the judgment of Hon’ble Supreme Court in National Insurance Co. Ltd. Vs. M/s Ishar Das Madan Lal, Appeal (Civil) No.6113 of 2000 decided on 20.02.2007, the Counsel tried to lay emphasis on the definitions of ‘criminal breach of trust’ and the word ‘entrust’, which is not more or less relevant as in the instant case, the Investigator in his report held the claim to be genuine.  As such, no benefit can be derived by the appellant/Opposite Party No.1 out of it. Thus, there was deficiency, in rendering service, on the part of the appellant/Opposite Party No.1, in repudiating the claim of respondent No.1/complainant. The District Forum, thus, correctly allowed the complaint, while taking note of the law settled by the National Commission and rightly directed the appellant/Opposite Party No.1, to pay the IDV of the stolen vehicle alongwith interest @9% per annum.

24.         However, in our considered opinion, awarding interest @12% per annum in case of default in compliance of the impugned order, is somewhat on the higher side and the same needs to be reduced to 10% per annum. The District Forum allowed interest from the date of filing the claim, which, in our considered opinion, is also not correct. Moreover, as per the Insurance Regulatory and Development Authority (Protection of Policyholder’s Interests) Regulations, 2002, in special circumstances of the case, the Surveyor, could take six months for submission of his report, from the date of his appointment. After the claim is filed, the Insurance Company has to appoint Investigator or the Surveyor and to process/examine the documents to come to a definite conclusion. In the instant case, after receiving the report of the Investigator and examining the same, the claim was repudiated on 17.05.2012 and the complaint was filed on 24.03.2014. Therefore, award of interest @9% per annum from the date of filing the complaint, instead of from the date of filing the claim, would be appropriate. Further, the District Forum also erred in not directing respondent No.1/complainant to transfer the RC of the vehicle and execute subrogation documents in favour of the Insurance Company, in respect of the vehicle, in question, if at all, it was recovered at a later stage. Thus, the order impugned needs modification to the extent indicated above.

25.         The order of the District Forum granting compensation in the sum of Rs.15,000/- and cost of litigation of Rs.10,000/- is correct and the same does not call for any interference.

26.         In view of the aforesaid discussion, the appeal is partly accepted with no order as to costs. The order of the District Forum is modified and the appellant/Opposite Party No.1 is directed as under :-

1. pay Rs.8,75,000/- i.e. the Insured Declared Value (IDV) of the stolen vehicle to respondent No.1/complainant, alongwith interest @9% p.a. from the date of filing of the complaint, within a period of one month from the date of receipt of a certified copy of the order. 
2. pay an amount of Rs.15,000/- as compensation for deficiency, in service and causing mental and physical harassment to respondent No.1/complainant, as awarded by the District Forum, within a period of one month from the date of receipt of a certified copy of the order.
3. pay an amount of Rs.10,000/- towards costs of litigation, as awarded by the District Forum.
4. Respondent No.1/complainant shall transfer the RC and other documents of the vehicle in favour of the appellant/Opposite Party No.1 (Insurance Company), so as to vest ownership of the vehicle in its name, if ultimately the same was recovered at a later stage.
5. In case the amounts mentioned in Clauses (i) and (ii), above are not paid by the appellant/Opposite Party No.1, within the stipulated period, then the amount mentioned in Clause (i) above shall be payable by the appellant/Opposite Party No.1 alongwith interest @10% per annum, instead of 12% per annum awarded by the District Forum, from the date of filing the complaint till actual payment and the amount mentioned in Clause (ii) above, shall be payable with interest at the same rate viz. 10% per annum, from the date of default till actual payment, besides payment of cost of litigation.
6. All other directions given, and reliefs granted by the District Forum, in the impugned order, subject to the modifications, aforesaid, which are contrary to and, in variance of this order, shall stand set aside.

27.         Certified copies of this order, be sent to the parties, free of charge.

28.         The file be consigned to the Record Room, after due completion.

Pronounced.

March  24,  2015

Sd/-

 [JUSTICE SHAM SUNDER (RETD.)]

PRESIDENT

 

 

Sd/-

(DEV RAJ)

MEMBER

 

 

Sd/-

(PADMA PANDEY)

      MEMBER

Ad