BEFORE:

HON’BLE MR. SUBHASH CHANDRA, PRESIDING MEMBER

For the Appellant                 Mr Ritesh Khare, Advocate with

Mr Rishab Mishra and Mr Siddharth Sangal, Advocates

For the Respondent              Ms Anjalli Bansall, Advocate

ORDER

1.      This First Appeal under Section 19 of the Consumer Protection Act, 1986 (in short, ‘the Act’) assails the order dated 19.09.2019 in CC no. 233 of 2013 of the Maharashtra State Consumer Disputes Redressal Commission, Mumbai (in short, ‘the State Commission’), dismissing the complaint with no order as to cost.

2.     For the reasons stated in IA no. 19344 of 2019, the delay of 52 days in filing of this appeal is condoned in the interest of justice.

3.     We have heard the learned counsel for the parties and have carefully perused the material on record.

4.     The relevant facts of the case in brief are that the appellant is a partnership firm engaged in the business of Textile Trading Manufacturing and Exporting of readymade garments. It had hired 2 galas on leave on license basis from Manilal Sunerji Doshi on 23.12.2005 admeasuring 15,000 sq ft (ground floor) and 16,000 sq ft (1^st floor), Sundarbaug, Kurla (West) Mumbai for a period of 5 years. It had also installed machinery, stated to be valued at R.1,90,84,863/- along with furniture and fixtures in the premises. Two Fire, Building, Burglary Insurance Policies were taken from the respondent for the period 11.07.2010 to 10,07.2011 and 24.05.2010 to 23.05.2011 by paying a premium of Rs.23,683/- and Rs.63,903/- respectively. On 03.06.2009, as stated by the complainant, one Darshana Manilal Doshi took forcible possession of the premises and installed a separate lock on the premises. An FIR was lodged on 21.11.2009 and a Civil Suit No. 186 of 2010 claiming damages, was filed. The Bombay High Court appointed a Court Commissioner who inspected the premises on 02.05.2011 after breaking the locks. During this inspection, the appellant contends, it learnt about the theft of the plant and machinery installed by him in the premises.  According to the appellant machinery worth Rs.64,99,324/- had been installed in the premises. A claim was lodged with the respondent on 17.05.2011. A Government approved valuer visited the premises on 11.04.2011 and 17.06.2011. The respondent appointed M/s Sudhir Tandon and Co., as Surveyor on 24.08.2011. The respondent repudiated the claim on 24.08.2011 on the grounds that the premises were not in effective control of the appellant for long. Appellant filed a Consumer Complaint before the State Commission, although the respondent/opposite party did not file the written version, the State Commission held as under:

10.     In this case it is admitted fact that Ms.Darshana Manilal Doshi had forcibly taken possession of both galas on 03/06/2009 and since then prevented complainant from using that premises. In this case it is admitted fact that complainant has renewed the insurance policy in respect of that premises and machinery present in that premises on 11/07/2010. However, complainant had not informed about the dispossession of premises by him to opponent before renewing the insurance policy. Hence, it has become clear that complainant had renewed the policy in respect of that premises and machinery present in that premises without disclosing true fact about the same to opponent. Hence, policy became voidable at the option of opponent and opponent has every right to cancel the same or to repudiate the claim of complainant. In this case it is an admitted fact that complainant was dispossessed from that property from 03/06/2009. Thereafter, he was required to file civil suit in respect of that premises against Manilal Sunerji Doshi and he obtained order by filing notice of motion in that proceeding from Hon’ble High Court on 11/04/2011 to appoint Court Commissioner for making inventory of machinery and property present in that premises. Court Commissioner could execute that commission only on 16/05/2011 after obtaining permission from Hon’ble High Court to break open locks of premises. Hence, it has become clear that from 03/06/2009 till 16/05/2011 complainant was not having any knowledge about that premises and property present in that premises. Although it is the contention of complainant that he had put his security guard outside premises same cannot be accepted. Hence, we are of the opinion that property was not under the effective control of complainant since from 03/06/2009. Hence, complainant was having no knowledge that parts of machinery and other articles were stolen from that premises. He could not inform about the incident immediately to opponent. Opponent could not get any opportunity to investigate the matter on their own accord. In view of these facts opponent had no alternative but to repudiate the claim of complainant. We are of the opinion that the repudiation of claim of complainant by opponent appears to be legal and correct. Complainant has already filed civil suit against Manilal Sunerji Doshi for getting damages as he had taken unauthorised possession of premises from complainant. Complainant can plead and agitate all these points before Hon’ble High Court.

The complaint was accordingly dismissed without cost. This order is impugned before us.

5.     The contention of the appellant is that the claim had been rejected on technical grounds and arbitrary interpretations of the Policy Conditions. It is contended that repudiation of the claim was on the basis of the fact that they were contrary to the final Surveyor’s Report of M/s Sudhir Tandon and Co. and records of the case. It was contended that the claim of Rs.41,62,209/- was under the Policy against burglary including robbery and theft etc. It was submitted that the State Commission had erred in holding that the Leave and License Agreement was only for one year and extension of the same for five years was not based on any documentary evidence. It had also held that while the appellant had renewed the insurance policy it had not informed the insurance company about it having been dispossessed from the premises and therefore, the policy was renewed without disclosure of facts.

6.     The appellant contended that the insurance company had been orally kept informed while paying the premium and that since the premium had been accepted by the insurance company, it was to be inferred that they were aware of the facts regarding actual possession. It was submitted that the final Survey Report had noted that the premises was under the security of the appellant and therefore, the State Commission’s conclusion that the appellant had not in “effective control of the premises for long” was incorrect. It was further contended that the State Commission had failed to appreciate that as per Clause 4 of the General Conditions of the Policy, the insured was also required to immediately notify the respondent on becoming aware of the loss or damage which had not been done. It was submitted that the appellant was required to inform the insurance company only after becoming aware of the loss which was detected on 16.05.2011.

7.     The appellant also contended that the respondent had incorrectly stated in the repudiation letter that there was no sign of breaking-in or opening of the shutters of the premises entrances since the Surveyor’s Report had clearly stated that “though outside shutter locks were intact, inside doors had been broken opened”. Panchnama after the FIR also recorded this factum of breaking in.  It was argued that the Surveyor’s Report had ingeniously stated that the policy covered loss due to burglary, hold-up, robbery, and not due to theft. Although the policy specifically covered theft, the contention of the respondent that the policy shall cease to attach if the insured premises were left uninhabited for 7 consecutive days was not applicable since that condition was applicable only if the premises were voluntarily abandoned and not in the case of forced exit as was in the present case. The repudiation on the grounds that the loss was in the nature of pilferage is contrary to the report of the surveyor since it was an admitted position that the machinery along with important parts was stolen. It was contended that since the State Commission had rejected the written submission of the respondent, affidavit evidence should not have been considered. According to the appellant, the State Commission had erred in deciding the facts as stated by the respondent. It was therefore, contended that the respondent was liable for deficiency in service and unfair trade practice and the appeal be allowed with cost.

8.     Per contra, the learned counsel for the respondent argued that the claim had been rightly repudiated by it since there was no proper disclosure that the premises were not under the control of the insured on account of dispute of the insured with the land lord, which rendered the contract void, since the policy mentioned control of the insured over the premises. It was also contended that there was delay in intimating the breach of policy terms and conditions on this account. It was also contended that an FIR regarding theft had been registered by the appellant without intimating the same to the insurance company. It was argued that on account of the dispute between the landlord and the complainant in 2006, the complainant had in February 2008 stopped paying the licence fee of Rs.1,50,000/- per month and the production in the said premises was also stopped. Pendency of Civil Suit no.186 of 2010 was also not disclosed. It was argued that as per the police complaint, the appellant was prevented from removing his goods by the landlord who had put his own lock on the gate. While most of the machinery was removed prior to 08.05.2010, the balance of goods, as claimed by the appellant, had remained within the premises. It was contended that the appellant had obtained two policies from the respondent without disclosing the fact that the premises were no longer in possession.

9.     As regards the claim, it was argued that under the terms of the policy in question, only ‘burglary’ was covered and that ‘theft’ was not based upon forcible and violent entry which defined ‘burglary’. Intimation of ’theft’ was received on 17.05.2011 by the respondent after which a surveyor was appointed who assessed the loss after much correspondence with the complainant at Rs.9,25,445/-. The Survey Report observed that there was no forcible entry into the premises, and in view of material non-disclosure as well as other violations of policy terms and conditions, the claim of the appellant did not fall within the ambit of the policy and was accordingly repudiated. It was contended that the appeal was without merit and had been filed with the intention to obtain undue gain and therefore, deserved to be dismissed with cost.

10.   From the foregoing, it is manifest that the claim of the appellant under the policy which had been repudiated on the grounds that the premises were not in the insured’s control and was therefore, void. Admittedly, the landlord placed his own lock on the premises on 03.06.2009 since an FIR to this effect had been lodged by the appellant themselves. The renewal of the policy, thereafter on 24.05.2010, therefore, indicates that the renewal had been obtained without full disclosure of material facts. It is also relevant that the claim had been preferred by the appellant in respect of a theft on premises that were not in his effective control since the same has been under lock and key of the landlord. This is also evident from the civil suit pending as admitted by the appellant. The fact of loss also came to his knowledge only after the Government valuer inspected the premises after breaking open the lock under a court order in the suit proceedings. The respondent, therefore, cannot be found fault with in holding that the premises were not in effective control of the appellant. It is immaterial whether the appellant had his own security personal deployed on the premises or not in view of the policy terms and conditions having being violated.

11.   It is evident that repudiation of the claim by the respondent is based upon logical and cogent reasons. In view of this position, I see no grounds in the appeal that warrants our interference in the impugned order of the State Commission. The appeal is found to be without merits and is accordingly dismissed. There shall be no order as to costs.

12.   All pending IAs, if any stand disposed of by this order.