National Insurance Company Limited, Through Its Divisional Manager Vs. Reena Panwar - Court Judgment

Chander Shekhar Sharma, Presiding Member

1. This appeal is directed against the order of District Forum, Shimla, dated 1.12.2010 passed in Consumer Complaint No.107/2009, whereby the complaint was allowed and Insurance Company was directed to indemnify the complainant to the extent of Rs.1,80,000/- alongwith interest @ 9% per annum with effect from the date of filing of the complaint. Litigation cost was quantified at Rs.2500/-. Parties are hereinafter being referred to as per their status in the complaint.

2. Facts of the case as they emerge from the record are that the complainant who is owner of Tempo Trax Pickup bearing registration No.HP-63-0910 had insured her vehicle with the Insurance Company for an amount of Rs.1,80,000/- and this insurance was valid with effect from 24.8.2007 to 23.8.2008. Kulbhushan was appointed as driver who took the aforesaid vehicle to Solan and on 22.11.2007 he went away with the vehicle with all relevant documents and did not return back. Thereafter intimation was given to the Police regarding loss of the vehicle on 24.11.2007 and as such F.I.R. No.24 of 2008 was registered in Police Station, West for offences under Section 379 and 406 I.P.C. and the intimation was also given to the Insurance Company regarding loss/theft of the vehicle. Thereafter complainant lodged claim with the Insurance Company and the opposite party-Insurance Company vide letter dated 22.1.2009 asked for the copy of the untraced report which was submitted on 14.9.2009 but the Insurance Company has failed to honour the claim of the complainant. Hence, deficiency of service on the part of the opposite party was alleged. In this background present complaint under Section 12 of the Consumer Protection Act, 1986 was filed against the opposite party wherein complainant had claimed insurance amount of Rs.1,80,000/- alongwith interest @ 12% per annum from the date of filing the claim with the opposite party and claimed damages to the tune of Rs.50,000/- for mental harassment. Litigation cost of Rs.5,000/- was also claimed.

3. This complaint was resisted and contested by the opposite party on the ground that this case is covered under Section 406 of I.P.C. which is a criminal breach of trust and not covered under the terms and conditions of the Insurance policy as being a case of misappropriation and not of theft and it was contended that the insured vehicle was taken away dishonestly by the driver of the complainant and it is not a case of theft.

4. Brief resume of evidence led by the parties in the present case in nutshell is that the complainant in support of her case has filed her own affidavit and placed reliance upon number of documents, Annexures C.1 to C.7, which are, copy of the registration certificate of the vehicle, copy of insurance policy, copy of the Rapat No.3, dated 24.11.2007 lodged in Police Chowki, Summerhill by Shri Himanshu Panwar, copy of FIR No.24 of 2008 of Police Station, Shimla West, copy of letter date 22.1.2009 addressed to the complainant by the Insurance Company, demanding untraceable report, copy of letter, dated 14.2.2009, addressed to the Bramnch Manager by Reena Panwar whereby the copy of untraced report was filed, copy of the postal receipt, dated 19.12.20-09 addressed to the Branch Manager, National Insurance Company Ltd.

5. Opposite party in support of its case has filed affidavit of Shri Gurdeep Singh, Branch Manager of the Insurance Company and has placed reliance upon number of documents, Annexures R.1 to R.4, which are, copy of policy schedule alongwith terms and conditions of the policy, copy of untraced report filed in the Court of JMIC (3), Shimla in case FIR No.24/2008 and copy of letter dated 9.3.2009 addressed to the complainant by the Branch Manager of the Insurance Company.

6. We have heard learned Counsel for the appellant as well as learned Counsel for the respondent at length and have also gone through record of the case minutely. Ms Sunita Sharma, learned Counsel for the appellant argued that it is a case of criminal breach of trust which falls under Section 406 of the I.P.C. and is not a case of theft and as such it is not covered under the terms and conditions of the policy since it is a case of misappropriation as the insured vehicle was taken away dishonestly by the driver and it is not covered under the terms and conditions of the policy. As such, claim was rightly repudiated by the opposite party and there is no deficiency of service on the part of the opposite party in the present case.

7. Mr. Arun Sehgal, learned Counsel for the respondent had supported the order of the Forum below and as per him even in cases where vehicles were taken away by the driver, the Insurance Company was held liable for making payment of the insured amount since it is covered under the Insurance policy and he has placed reliance upon the judgment of this Commission given in the case of Smt. Dhayan Chandi Versus New India Assurance Company Limited, reported in Latest HLJ 2009 (HP)1290, wherein the Insurance Company Company was held liable where the vehicle was taken away by the driver and the case was declared untraced. Hence, the Forum below after placing reliance upon the aforesaid judgment of this Commission had concluded that repudiation of the claim of the complainant by the opposite party-Insurance Company was unjustified which amounts to clear-cut case of deficiency of service and unfair trade practice.

8. After hearing learned Counsel for the parties and going through the record of the case, we are of the considered view that there is no infirmity in the order of the Forum below which is based upon the judgment of this Commission given in the case of Smt. Dhayan Chandi, Latest HLJ 2009 (HP) 1290, (supra). In this case in paras 13 and 14 of the order passed by this Commission reliance was placed upon the judgment of the Honble National Commission given in the case of Venkateshwara Borewells Versus Oriental Insurance Co. Ltd., III (2002) CPJ 308 (NC) and judgment of this Commission given in the case of Oriental Insurance Company Ltd. Versus Shri Prem Lal, III (1996) CPJ 563 and also decision of the Honble National Commission given in the case of Oriental Insurance Co. Ltd. Versus Om Prakash Gupta and Anr. I (2009) CPJ 183 (NC). Relevant paras of this judgment are quoted hereinbelow for ready reference:-

“13.  In the case of Venkateshwara Borewells Versus Oriental Insurance Co. Ltd., III (2002) CPJ 308 (NC), insured drilling rig with compressor mounted on truck was stolen by the cleaner. Repudiation on the ground of criminal breach of trust by employee was set out as a defence while contesting the claim of the insured. Theft being not there was held to be no ground to refuse relief and Insurance Company was held liable while allowing the claim of the petitioner by the National Commission. This Commission, as far back as in the year 1996 in the case of Oriental Insurance Company Ltd. Versus Shri Prem Lal, III (1996) CPJ 563 had also similar view while dismissing the appeal of the Insurance Company.

14.  Again in a recent decision the National Commission in the case of Oriental Insurance Co. Ltd. Versus Om Prakash Gupta and Anr., I (2009) CPJ 183 (NC), while dealing with a case registered by the police under Section 379 IPC, negative the plea of the Insurance Company based on the fact that the case of criminal breach of trust was not covered by the terms of the policy. And rejected the defence of the Insurance Company”.

9.   In this case since the vehicle was insured for an amount of Rs.1,80,000/- on IDV basis as per Annexure R.1, which the insurance cover and the insurance was effected on 24.4.2008 to 23.8.2008 and the vehicle was taken away by the driver on 22.11.2007 and F.I.R. pertaining to theft of the vehicle was also lodged in Police Station, Shimla West and as per order of the Judicial Magistrate passed in untraced report in F.I.R. No.24 of 2008 the case was kept as untraced and no depreciation is allowed upto 6 months, as such the Forum below had rightly held the complainant entitled for the insured amount of Rs.1,80,000/- alongwith interest @ 9% per annum from the date of filing of the complaint and litigation cost was rightly quantified at Rs.2500/-. As such, there is no infirmity in the order of the Forum below and our view is also supported by the judgment of the Madhya Pradesh State Commission given in the case of Oriental Insurance Company Ltd. Versus V. Mumbeen and Anr., II (2003) CPJ 595, wherein it was held as under:-

“This Commission in the case of Deepak Agency v. Oriental Insurance Company Limited, III (1995) CPJ 38, a case where the driver of the truck disappeared with the truck, the Insurance Company repudiated the claim on the ground that it was a case of criminal breach of trust, following the decision of National Commission in S.Bhagat V.The Oriental Insurance Company Ltd., II (1991) CPJ 700, observed that 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 I.P.C. and the driver would be deemed to have committed theft of the vehicle. In such circumstances, this Commission held that the Insurance Company committed an error in repudiation of claim, which was a deficiency in service on the part of the Insurance Company.

In view of the above we hold that, the Insurance Company was deficient in not making the payment of the claim”.

10. No other point was urged.

In view of the aforesaid discussion and facts and circumstances of the case and legal position laid down in various judgments of this Commission as well as by the Honble National Commission, there is no force in the present appeal and consequently it is dismissed. No order as to costs.

All interim orders passed from time to time in this appeal shall stand vacated forthwith.

Copy of this order be sent to the parties free of cost as per rules.