Petitioner/Opposite Party being aggrieved by impugned order dated 25.2.2011 passed by State Consumer Disputes Redressal UT, Chandigarh (for short ‘State Commission’) has filed present revision under Section 21(b) of the Consumer Protection Act, 1986 (for short, ‘Act’).
2. Respondent/Complainant had filed Complaint Case No.136 of 2004 before District Consumer Disputes Redressal Forum-II, UT, Chandigarh (for short, ‘District Forum’) on the allegations, that it obtained an insurance policy for Rs.1.35 crores under the class of risk ‘burglary & housebreaking’ for its stocks valid from 29.12.2006 to 28.12.2007. On the intervening night of 19/20.07.2007, a burglary was committed in the manufacturing unit of the respondent by entering into the premises through opening exhaust fan and stole raw materials worth Rs.8 lacs. Respondent immediately intimated the petitioner as well as police about the theft. On basis of suspicion, name of one Mr. Sushil Kumar who was working as electrician in the company was also mentioned in the report. F.I.R. No.83 dated 23.07.2007, under sections 457/380 IPC was registered by the police. The police arrested the suspected person on 23.7.2007, but police failed to trace out the theft and submitted untrac
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e report, which was accepted by the Magistrate vide order dated 16.01.2009.
3. It is further stated, that petitioner appointed M/s Mittal Surveyors Pvt. Ltd. as surveyor to assess the loss. The said surveyor visited the premises on 21.07.2007 and thereafter, wrote letter dated 23.07.2007 requiring respondent to submit some documents. Respondent submitted all the requisite documents as desired by surveyor and also submitted the untrace report to petitioner. Ultimately, petitioner repudiated the claim, vide letter dated 13.02.2009 on the ground, that the 'fidelity of an employee is not covered under the policy and loss by an employee is an excluded peril'. It was also averred that name of one of its employee was given by respondent on the basis of suspicion only and he was arrested and remained in police remand but nothing was found against him. Thus, burglary was not committed by any employee of Respondent’s Company and repudiation of claim after two years of the incident was illegal, baseless and contrary to the terms and conditions of the insurance policy. Hence, alleging deficiency in service on the part of petitioner, respondent filed complaint seeking insurance claim of Rs.8 lacs alongwith interest besides compensation of Rs.one lac for harassment and costs of Rs.15,000/-
4. Petitioner in its written statement pleaded, that burglary was committed by an employee of the respondent namely Sh.Sushil Kumar, who was working as an Electrician with the company at the relevant time. The said fact find mention in the F.I.R. and claim form submitted by the respondent, surveyor report dated 14.03.2008 and in the statement of Sh.Suresh Kumar Singla. Thus, claim had been rightly repudiated in view of clause ‘C’ under the heading 'exceptions' of the insurance policy, as the infidelity of an employee is not covered under the policy and loss by an employee is an excluded peril, which is a cogent ground for non-payment of the claim amount. As such, there was no deficiency in service on the part of the petitioner.
5.District Consumer Disputes Redressal Forum-II, UT, Chandigarh (for short, ‘District Forum) vide order dated 09.07.2010 allowed the complaint and passed following directions to petitioner;
'To pay to the complainant as sum of Rs.3,13,600/- along with Rs.1,00,000/- as compensation for mental agony and harassment. In addition to this, OP is also directed to pay Rs. 5,000/- as costs of litigation to the complainant.
This order be complied with by the OPs within 45 days from the date of receipt of its certified copy, failing which the OPs shall be liable to pay Rs.4,13,600/- to the complainant along with penal interest @ 18% p.a. from the date of filing of the complaint i.e. 06.10.2009 till its realization besides costs of litigation.'
6. Aggrieved by order of District Forum, both parties filed separate Appeals, i.e, (Appeal No.272 of 2010) was filed by the petitioner whereas, Respondent filed ( Appeal No.406 of 2010) before the State Commission.
7. The State Commission vide its common impugned order dated 25.2.2011, dismissed both appeals.
8. Now only petitioner has challenged the impugned order.
9. We have heard learned counsel for parties and gone through the record.
10. It is submitted by learned counsel for petitioner, that as per terms and conditions of the policy of insurance particularly Exception (c), which clearly stipulate that the policy does not cover loss or damage to the property insured contained in the premises by theft or attempt threat in which there is concerned or privy any member of the insured’s business staff or any person lawfully on the premises.
11. Further, as per FIR lodged by Sh.Suresh Singla, Director of Respondent’s Company, he himself has stated that person involved in the theft is their employee Sh.Sushil Kumar, electrician. However, later on said Director made a statement before the Court of Magistrate, that he has no objection in keeping the case as untraced. Since, employee of respondent’s company was involved in this case, therefore petitioner rightly repudiated claim of respondent, as per exceptional clause.
12. On the other hand it has been contended by learned counsel for respondent, that no criminal case was made out against the employee of respondent’s company. The criminal court has kept the case as untraced, so under these circumstances exceptional clause of policy is not applicable.
13. District Forum vide its order dated 09.07.2010 held;
'From the evidence on record, it is apparent that the person who committed the theft could not be traced and the stolen raw-materials could not be recovered. In these circumstances, the reports of the surveyors based upon the above said documents to the effect that Sushil Kumar committed the theft are absolutely wrong. So the repudiation of the claim on the basis of the surveyor reports alone is also illegal and unjustified. However, the surveyor has assessed the liability of the insurance company to the tune of Rs.3,13,600/-. So, the complaint is entitled to Rs. 3,13,600/- only.'
14. The State Commission, while dismissing the appeals observed;
'6. The learned counsel for the complainant has argued that in the F.I.R, he had mentioned the loss to the extent of Rs.8.5 Lacs but it was wrongly read by the surveyor as Rs.3.5 Lacs and on its basis, the compensation assessed was reduced to Rs.3,13,600/-. According to him, he should be paid an amount of Rs.8.5 Lacs along with the compensation and litigation costs as awarded by the learned District Forum. This contention is opposed by the OPs. According to them, Sh. Sushil Kumar was an employee of the complainant who was suspected of committing the theft and therefore, in view of the Exception (c) to Policy (Annexure R-2), the complainant is not entitled to any compensation.
7.We would first deal with the contention of the OPs. Exception (c) reads as under: -
(c) to the property insured contained in the Premises by theft or attempt threat in which there is concerned or privy any member of the Insured’s business staff or any person lawfully on the Premises.
In order to cover the case under the above said exception, it is necessary to refer to the evidence to prove that Sushil Kumar was concerned or privy to the theft. The complainant has only suspected him to be privy to this theft but there is no direct evidence. It is argued that Sushil Kumar aforesaid was arrested by the police but no recovery has been effected from him. There is no witness in whose presence, the alleged theft may have been committed by Sushil Kumar. We are, therefore, of the opinion that mere suspicion would not bring the case under Exception (c) and the claim cannot be rejected on this ground.
8.As regards the contention of the complainant that he had mentioned the loss of Rs.8.5 Lacs in the F.I.R and therefore, the compensation of Rs.8.5 Lacs should be awarded to him, we do not find any merit in this argument also. The assessment was not based on the loss mentioned in the F.I.R but as is clear from the surveyor’s report (Annexure R-4), it was based on the purchase opening stock, sales and past results of the complainant company. From the stock and other documents submitted by the complainant, the surveyor came to the conclusion (as mentioned at Page 6 of its report) that the total loss was Rs.3,13,600/-. He applied the average clause on the ground that the sum insured was Rs.1,35,00,000/- whereas the value at risk was Rs.1,57,52,192/- and therefore, the loss payable was worked out to be Rs.2,68,762/-. The learned District Forum did not agree with the average clause applied by the OP and ordered the full payment of Rs.3,13,600/- along with compensation. We are, therefore, of the opinion that the mere fact that the complainant mentioned the loss in the F.I.R. as Rs.8.5 Lacs would not entitle him to claim the said amount as compensation.
9.In view of the above discussion, we are of the opinion that the learned District Forum has correctly decided the complaint. There is no merit in the appeals filed by the parties. Both the appeals areaccordingly dismissed. The parties are left to bear their own costs of litigation.
10.Before parting with the case, it may be made clear that the OPs would be free to recover the amount of compensation and /or litigation costs from the Branch Manager due to whose fault, the payment of compensation was delayed, of course after serving a notice on him and hearing him before passing an order.'
15. Though it is an admitted fact, that initially one of the respondent’s employee was named as accused in the F.I.R. However, after investigation was conducted by the police, no evidence was found against any of the employee of the respondent’s company. Therefore, vide order dated 16.01.2009 passed by Mr.Gaurav Sharma, Judicial Magistrate 1st Class, Kasauli, FIR No.83 of 2007 was kept as untraced. Thus, it is manifestly clear from the record, that no employee of respondent’s company was involved in theft case. Hence, ‘Exceptional Clause (c)’ of Insurance Policy in not applicable in this case at all and same is reproduced as under;
'(c) To the property insured contained in the premises by theft or attempt threat in which there is concerned or privy any member of the Insured’s business staff or any person lawfully on the premises.'
16. It is well settled, that under Section 21(b) of the Act, scope of revisional jurisdiction is very limited. This Commission can interfere with the order of the State Commission only where such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.
17. The Hon’ble Supreme Court in Mrs. Rubi (Chandra) Dutta Vs. M/s United India Insurance Co. Ltd. 2011 (3) Scale 654 has observed;
'Also,it isto be noted that the revisional powers of the National Commission are derived from Section 21 (b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21 (b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two Fora'.
18. From the examination above it is clear that findings of fact reached by Fora below are based on correct appreciation of the evidence on record. The impugned order does not suffer from any illegality, material irregularity or jurisdictional error which could justify intervention in exercise of powers under Section 21(b) of the Act. Thus, present revision petition having no legal force, is hereby dismissed.
19. No order as to cost.