(Per Shri P.N.Kashalkar, Hon’ble Presiding Judicial Member)

(1)               This complaint is filed against The New India Assurance Co.Ltd. (hereinafter referred to as insurance company) alleging deficiency in service on the part of insurance company.  According to the complainant, Shri Badarmal Jain is a proprietor of M/s.Santosh Jewellers, who is having shop bearing No.2, Alpesh building, Station Road, Bhayender (West), Thane.  He had taken an insurance cover for his shop from opponent insurance company.  He had insured stock and stock in trade, consisting of jewellery, gold or silver ornaments, plate pearls and precious stones and cash & currency notes and/or other merchandise and material usual to conduct of the complainant’s business, belonging to and/or held in trust or on commission for which the complainant is responsible, from the opponent insurance company for 30,00,000/- for the period from 16/07/2005 to 15/07/2006.  According to the complainant, his shop was burgled in the afternoon of 03/12/2005 when the staff and owner had just left for lunch, closing the shop for a short duration.  The thieves made entry in the shop of the complainant by breaking a common wall between their shop and the other adjacent Gala which was earlier occupied by Varalaxmi Hotal and was closed when the incident took place.  Complainant lodged FIR with Bhayender Police Station on 03/12/2005.  The officials of Bhayander Police Station visited the site and conducted the preliminary investigation at his shop.  The officials of Bhayander Police Station visited the site and conducted the preliminary investigation at shop.  The opponent insurance company appointed Shri R.G.Verma as a surveyor to assess the loss.  Mr.Verma visited the complainant’s shop on 11^th, 12^th and 13^th December, 2005 in order to assess the loss.  The complainant produced all documents before Mr.Verma.  In spite of submitting all documents, opponent insurance company did not settle his genuine claim under Jewellers’ Block Insurance Policy and hence the complainant wrote letters to the opponent insurance company for early settlement of his claim vide letter dated 26/06/2006.  Instead of settling the claim of the complainant, the opponent insurance company sent repudiation letter dated 27/06/2006.  The complainant, therefore, sent legal notice calling upon the opponent insurance company to settle their genuine claim within 15 days.  Even after notice, complainant’s advocate Shri S.V.Chaubal received a letter dated 24/03/2007 from the opponent insurance company confirming the repudiation of claim.  Therefore, the complainant filed this consumer complaint claiming an amount of `22,07,362/- (an amount assessed by the surveyor) with interest @12% p.a. from the date of submission of documents.  The complainant also sought `25,000/- for legal expenses incurred and `2,00,000/- as compensation for mental harassment. 

(2)               Opponent insurance company filed written version and contested the complaint.  According to the insurance company, they are not guilty of deficiency in service.  They pleaded that on complainant’s own showing, the ‘theft’ had occurred by removing the insured property i.e. gold ornaments from the ‘safe’, keys whereof were alleged to have been secured in the wooden cash drawer of the counter within the insured premises when the insured premises/shop was closed for lunch hours i.e. from 2.00 p.m. to 4.00 p.m.  This risk was not covered under the policy besides there has been breach of warranty and/or conditions of the policy.  The opponent insurance company further pleaded that relevant records as to book keeping and/or daily records was not maintained/produced which are conditions precedent for payability of the claim.  Opponent insurance company further pleaded that claim was not genuine as apparently, the loss due to said burglary/theft had occurred on account of removal of the insured property/gold ornaments from the show case which is not covered in closed and unattended shop an in any event, the cover was to the extent of 9,50,000/-.  This fact is apparent from the FIR lodged by one Shri Kantilal Jain immediately after the incident.  In the FIR, the first informant has not clearly described about the ornaments that were allegedly removed from the trays of the show-case but has also clearly described that the common wall between the insured shop and another premises was broken open, the ‘safe’ and the debris viz. cement, brick-pieces etc. were lying near the ‘safe’.  According to the opponent insurance company loss of ornaments was allegedly from the safe which is mentioned with malafide intent to bring about the claim within the ambit of the policy.  According to the opponent, vague and motivated further statement was given to the police after about 4 days of occurrence interalia mentioning therein that the ornaments that were stolen were kept in the safe.  The said statement is an after thought.  According to the opponent, purported claim is beyond the purview of the policy and hence not payable.  Opponent, however, admitted that the complainant had taken Jewellers’ Block Insurance Policy with certain exceptions.  According to the opponent, insured property/ornaments must be removed to secured locker/safe at all times out of business hours.  The keys of safe must not be left on the premises unless the said premises is duly attended by authorized employee or insured himself but the same should be kept at some secured place within the insured premises.  Opponent further pleaded that when the shop is unattended and closed i.e. out of business hours, the keys of the shop and/or the safe must be kept somewhere else at a secured place and not in the insured premises/shop.  These were conditions/warranties of the policies.  They were violated by the complainant and therefore claim was not payable at all.  According to the opponent, goods/ornaments were stolen from showcase during the ‘non-business hours i.e. when the shop was closed for lunch hours from 2.00 p.m. to 4.00 p.m. and no attendant was left to safeguard the shop.  The policy did not include loss of ornaments removed from the showcase at non business hours.  When the shop is closed, insured property must be secured in the safe, but this was not done in any case.  The surveyor, Mr.R.G.Verma submitted his survey report dated 10/03/2006 interalia assessing loss to the extent of `22,07,362/-.  The claim of the complainant was rejected after scrutiny of the documents submitted by the complainant and after considering surveyor’s recommendations.  The said letter of repudiation is dated 27/06/2006.  Thereafter, the insurance company received legal notice from the complainant, it was duly replied by the opponent.  The opponent says that the claim was rightly repudiated given reasons in the repudiation letter.  The opponent further pleaded that the claim of the complainant is barred by limitation and the complainant is not entitled to get anything in respect of said claim.  Hence, they pleaded that the complaint should be dismissed with costs. 

(3)               Both the parties filed affidavit evidence.  They also filed brief notes of written arguments.  We heard both the advocates.  Short points that arise for our determination are :-

REASONS : Point No.(i)

                   It has been mentioned in the written version that the complaint is barred by limitation, however we are finding that the loss to the insured premises occurred on 03/12/2005 on which day burglary took place in the afternoon.  The claim was repudiated by the insurance company by sending letter dated 27/06/2006 and complaint has been filed on 10/07/2007.  So, from the date of accrual of incident, which occurred on 03/12/2005, within two years the complaint has been filed on 10/07/2007.  So, it is well within limitation.  Hence, answer to the Point No.(i) is in the negative.

Point No.(ii)

                   The insurance company sent repudiation letter dated 27/06/2006.  In the said repudiation letter, opponent insurance company clearly mentioned that the surveyor appointed by them had found many breaches of policy conditions and it has been mentioned by the opponent as well as by the surveyor that conditions No.2 regarding maintenance of keys was violated by the complainant in as much as Conditions No.2 enjoins the duty on the insured that “the keys of the premises/safe should not be left on the premises out of business hours unless the premises are occupied by the insured: in which case, such keys if left on the premises shall be deposited in a secured place.”  According to the opponent insurance company, surveyor found that when loss had occurred, the premises were locked and none of the staff members or owner was present on the premises.  The staff had gone for lunch from 2.00 p.m. to 4.00 p.m.  As per the complainant’s own statement, during the period, the premises were locked.  So, this period is not from the business hours and keys of the safe were kept in drawer.  This amounts to gross negligence on account of insured.  The repudiation letter further mentioned that the condition No.1 requires a daily record of the property (quality & value) both on the premises and entrusted to any person covered under the policy.  Such record shall be deposited in a secured place in the insured premises and copy be maintained at a place other than insured’s business premises and this conditions is also breached or not complied with by the insured.  The opponent insurance company also in its repudiation letter stated that in the proposal form proposer has giver description of safe as ‘1995 Godrej make’ whereas the safe from which the property was said to have been stolen was of ‘Venus’ as was found by the surveyor.  The answers given by the proposer in the proposal form are promissory nature and breach thereof amounts to breach of policy conditions and on this ground, the insurance company told the complainant that they were repudiating the claim.

                   In the course of arguments, Mr.S.R.Singh, learned counsel for the opponent insurance company brought to our notice the fact that in the FIR lodged by the complainant immediately after occurrence, he had mentioned that gold jewellery items were stolen from showcase, but on 07/10/2005, he made supplementary statement before the police informing that the jewellery was kept in the safe from which it was stolen.  Mr.Singh pointed out us that policy did not cover any loss/damage to any insured articles during the time when the shop is closed unless kept in safe as per clause 12 of the police and therefore, the complainant took summersault with reference to FIR and made supplementary statement on 07/10/2005 that the jewellery was kept in the safe when they had gone out for lunch and jewellery kept in the safe was stolen and not one kept in the showcase.  This is a contradictory statement made by the complainant before police because the complainant knew that jewellery stolen from the showcase out of business hours was not covered under the policy.  He also brought to our notice the fact that the keys were kept in the drawer and it was not kept safely when the complainant and his staff had gone out for lunch between 2.00 p.m. to 4.00 p.m.  Under Clause 11 of the policy, the loss is also not covered when the safe/locker is opened with key unless such key has been obtained by threat or by violence by the burglars.  In this case, the complainant and his staff had closed the business for two hours for lunch and during this period they had not properly secured keys at a safe place and burglary took place when there was nobody in the shop premises.  Mr.Singh further pointed out us that specific warranty is required to be given by the complainant that all the insured property to be secured in locker/safe at all times out of business hours.  When the complainant himself had closed the shop and had gone out for lunch, during their absence insured property was not kept secured since it was out of business hours.  He emphasized that loss of jewellery in the showcase or kept anywhere in the premises out of business hours is expressly excluded unless it is secured in the safe as provided in the policy and in the proposal form the complainant specifically mentioned that he would keep jewellery/ornaments in the Godrej 1995 make safe, but it was found that he had kept the same in the ‘Venus’ make safe contrary to what he had mentioned in the proposal form.  Mr.Singh also pointed out that jewellery was stolen from the trays of the showcase when the shop was closed.  Hence, there is no question of indemnity being given under the policy because jewellery/ornaments were kept in the trays of the showcase when the shop was closed.  In fact, policy condition was required that when the premises is closed out of business hours, all the jewellery/ornaments ought to have been kept in safe/locker that too of Godrej 1995 make as mentioned in the proposal form.

                   Mr.Singh brought to our notice that the complainant had failed to produce any evidence in the form of daily records as required by Clause No.1 of the condition precedent to liability.  The complainant also failed to take reasonable precaution or exercise due diligence as required by condition No.2 and 10 of the policy and therefore, he submitted that this is a case wherein the loss occasioned to the complainant could be indemnified by allowing the claim lodged by the complainant.  We have also gone through the surveyor’s report.  Surveyor in his detailed report mentioned that when Mr.Kantilal came back from lunch at 4.00 p.m. and opened the shop, he found that all the jewellery in the tray boxes were scattered all over places in the shop and jewellery kept in the safe was found missing and safe was lying open.  Lock of the drawer and cabin was found broken.  He noted in survey report that cash book was not produced for verification.  He assessed the loss occasioned to the complainant to the extent of `25,76,905/-, but observed that keys to the premises or safe should not be left in the premises unless the premises are occupied by the insured or authorized employee of the insured; in which case such keys if left on the premises shall be deposited in a secure place.  So, there is clear cut violation of condition No.2 of the policy by the insured.  Subsequently, he also opined that as per para 2, the insured was required to take all reasonable steps to safeguard property and this reasonable care was not taken in as much as in proposal form he had mentioned that he would keep ornaments in Godrej 1995 make safe/locker, but this was not done so actually.  So, there is breach of condition of clause 4.20 (b) in respect of reasonable care.  They have not taken due care to protect the insured property.  In fact, in our view when Mr.Jain was going out for lunch along with staff for two hours, he should have taken keys of premises along with keys of locker.  He left the keys of the locker in the shop premises, but kept no employee to watch the premises.  So he has certainly committed breach of condition of taking care of valuable ornaments kept therein.  According to the para 1 of Condition precedent to liability, the insured should keep daily record of the property (quality & value) both on the premises and entrusted to any person covered under the policy.  Such record shall be deposited in a secured place in the insured premises and preferably a copy maintained at a place other than the insured’s business premises.  The record should be produced as documentary evidence in support of a claim under the policy.  The surveyor observed that the daily record or stock/quantity/value has not been maintained for stock in premises.  Insured does not have any such stock details of insured stock.  As such these records have not been produced as documentary evidence in support of the claim under the policy.  Making these observations, the surveyor opined that the insured has violated the terms & conditions by not keeping details of stock and as such insurer’s liabilities are not engaged under the policy.  It is acting on the surveyor’s report after thorough scrutiny that the insurance company was pleased to repudiate the claim by sending repudiation letter dated 27/06/2006.  In our view, looking to these aspects of the matter, it was the insured who committed breach of important terms & conditions of the policy and therefore, the opponent insurance company was not obliged the law to approve their insurance claim.  They have rightly repudiated the claim by citing cogent and convincing grounds and we agree with the same.  We are finding that the repudiation made by the opponent insurance company is justified one and therefore, we turn down the plea of the complainant that there has been deficiency in service on the part of the insurance company in repudiating the claim.  We, therefore, answer the point No.(ii) as ‘yes’.  In the result, we find that there is no substance in the complaint.  As such, we pass the following order.

ORDER

(1)     Complaint stands dismissed.

(2)     No order as to costs.

(3)     Inform the parties accordingly.

Pronounced on 31^st August, 2012.