Back
PUNJAB STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, CHANDIGARH
Honble Mr. Justice A.L. Bahri, President; Mr. Ram Lal Gupta &
Mrs. Gurkanwal Kaur, Members
UNITED INDIA INSURANCE COMPANY LTD. & ANR.—Appellants
versus
ISSEWAL CO-OP. AGRICULTURAL SERVICE SOCIETY LTD.—Respondent
Appeal No. 65 of 1996—Decided on 4.6.1996
Counsel for the Parties :
For the Appellants :Mr. D.P. Gupta, Advocate.
For the Respondent:Mr. Satinder Khanna, Advocate.
The terms and conditions of an insurance policy should be interpreted to achieve the object of the policy, not to render it redundant.
Headnote:
CONSUMER PROTECTION ACT - INSURANCE POLICY - SECTION 2(1)(g) - INSURANCE POLICY COVERING LOSS OF MONEY DURING TRANSIT AND TERRORIST ACTIVITY - INTERPRETATION OF TERMS AND CONDITIONS - CLAIM FOR LOSS OF MONEY DURING BURGLARY - HELD, CLAIM COVERED UNDER POLICY.
Fact of the Case:
Complainant, a cooperative agricultural service society, purchased an insurance policy from the appellant insurance company covering loss of money during transit and terrorist activity. On October 29, 1990, unknown persons entered the complainant's premises and stole Rs. 46,250/- at gunpoint. The complainant filed a claim with the insurance company, which was repudiated. The complainant then filed a complaint with the District Forum, which allowed the complaint and directed the insurance company to pay the claim amount with interest.
Finding of the Court:
The court held that the claim was covered under the insurance policy. The court interpreted the terms and conditions of the policy to mean that the risk of loss of money was covered during the entire process of receiving, counting, keeping in safe, taking out of safe, and taking to the bank. The court also held that the incident was a terrorist act, as mentioned in the FIR, and was therefore covered under the policy.
Issues: 1. Whether the claim was covered under the insurance policy. 2. Whether the incident was a terrorist act.
Ratio Decidendi: The court held that the claim was covered under the insurance policy because: * The policy covered the risk of loss of money during transit and terrorist activity. * The terms and conditions of the policy should be interpreted to achieve the object of the policy, not to render it redundant. * The risk involved was covered by all three clauses referred to in the policy. * The money was not required to be kept in the safe for all times to come. * The transit process started when the money was taken out of the safe to be taken to the bank. * The incident was a terrorist act as mentioned in the FIR.
Final Decision: The court dismissed the appeal filed by the insurance company and affirmed the directions given by the District Forum to pay the insurance amount with interest.
Mr. Justice A.L. Bahri, President — This appeal is by United India Insurance Company Ltd. filed against order of the District Forum, Ludhiana dated February 2,1996. The complaint filed by Issewal Coop. Agricultural Service Society Ltd. was allowed with the direction to the Insurance Company to pay a sum of Rs. 46,250/-with 15% interest p.a. w.e.f. October 29, till realisation, except for the period May 9, to June 15, 1993 during which period the fault lay with the complainant as he had filed a suit against the opposite party.
2. The complainant-Society purchased an insurance policy from the appellant on December 8,1989. The policy was valid up to December 7, 1990. The risk covered under the policy was against burglary, accident or misfortune, terrorist act and during transit from the complainant's premises to the bank premises in the district for the moneys handled by the complainant. On October 29, 1990 when employees of the complainant were handling cash in order to take it to the bank, while in the premises of the complainant, some unknown persons entered the same and deprived them of the cash amount of Rs. 46,250/- on gun point. A report was lodged with the police and claim was lodged with the Insurance Company. Legal notice was also served upon the Insurance Company to settle the claim. The complainant filed a suit for mandatory injunction, which was dismissed on June 15,1993 on the ground that there were other more effecttive remedies available, it was thereafter that the present complaint was filed, claiming aforesaid amount with interest @ 18% p.a. w.e.f. October 29,1990.
3. The Insurance Company contested the claim inter alia taking up several legal pleas. One of them being that the complaint was barred by time and the other that the incident was not covered by the terms of the policy. It was further stated that the complaint was not filed within 12 months from the repudiation of the claim. Otherwise, it was admitted that insurance policy was obtained by the complainant as stated above. In appeal learned Counsel for the Insurance Company—the appellant has argued that since Civil Suit was earlier filed, no relief under the provisions of the Consumer Protection Act could be granted to the complainant. This contention is devoid of merit. As already stated above, the suit was dismissed on technical ground that appropriate other remedy was available. The suit was not decided on merits. Such a decision cannot be treated as bar for approaching the District Forum for the grant of relief as permissible under the Act.
4. Learned Counsel for the appellant has strongly argued that the incident was not covered under the terms and conditions of the policy. He has made reference to such terms as contained in the copy of the insurance policy Annexure C-2. The relevant clause reads as under:
"The Company hereby agrees subject to the terms and conditions contained herein or endorsed or otherwise expressed hereon the insured shall sustain LOSS of MONEY by
(b) ACCIDENT or MISFORTUNE whilst such money in hands of the insured's employees is in transit between the places stated herein or
(c) BURGLARY and/or HOUSEBREAKING whilst such money after arrival at the insured premises stated herein is retained for a period not exceeding forty eight (48) hours from the time of arrival provided such money is secured in burglar resisting safe or strong room installed in the insured premises."
The endorsement Annexure 'C’ attached thereto covers the risk for transit and terrorist activity. The relevant clauses read as under :
"Loss or damage to the property insured by explosion or otherwise directly caused by :
(i) an act of terrorism committed by a person or persons acting on behalf of or in connection with any organisation.
(ii) the action of any lawfully constituted authority in suppressing or attempting to suppress any such act referred to in (i) or in minimising the conesquence thereof.
5. Three contentions have been raised by learned Counsel for the I
