UNITED INDIA INSURANCE CO. LTD. VS HARCHAND RAI CHANDAN LAL

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

Supreme Court of India
S.N. Variava & A.K. Mathur, JJ.
UNITED INDIA INSURANCE CO. LTD.—Appellant
versus
HARCHAND RAI CHANDAN LAL—Respondent
Civil Appeal No. 6277 of 2004 from Judgment and Order dated 20.5.2003 of National Consumer Disputes Reddressal Commission, New Delhi in R.P. No. 2159 of 2002—Decided on 24.9.2004

Counsel for the Parties :
For the Appellant :Mr. P.P. Malhotra, Additional Solicitor General with Mr. A.K. De and Mr. Ashok K. Mahajan, Advocates.
For the Respondent:Mr. Sudarsh Menon and Mr. Bharat Swaroop Sharma, Advocates.

Headnote:Consumer Protection Act, 1986-Sections 12 and 17-Insurance claim-Burglary and/or house breaking policy-197 food grain bags were found stolen from premises-Appellant insurer repudiated claim on ground that theft was not covered by insurance policy as no burglary took place-District Forum allowed claim holding that burglary includes theft-State Commission and National Commission upheld the order-Appeal-Policy contained definition of burglary and/or house breaking and definition would be binding on parties-Terms of policy have to be construed as it is and nothing can be added or subtracted-It is not open to interpret the expression appearing in policy in terms of common law-Judgment of National Commission in Public Type College was not a good law-Insurance Company was well within its rights to repudiate the claim-However on point of equity since payment had already been made to respondents, it was not to be disturbed.
       The definition given in the policy is binding on both the parties. The policy is a contract between the parties and both parties are bound by the terms of contract. As per the definition of the word burglary, followed with violence makes it clear that if any theft is committed it should necessarily precede with violence i.e. entry into the premises for committing theft should involve force or violence or threat to insurer or to his employees or to the members of his family. Therefore, the element of force and violence is a condition precedent for burglary and housebreaking. The term burglary as defined in the English Dictionary means an illegal entry into the building with an intent to commit crime such as theft. But in absence of violence or force the insurer cannot claim indemnification against the insurance company. The terms of the policy have to be construed as it is and we cannot add or subtract something. Howsoever liberally we may construe the policy but we cannot take liberalism to the extent of substituting the words which are not intended. It is true that in common parlance the term burglary would mean theft but it has to be preceded with force or violence. If the element of force and violence is not present then the insurer cannot claim compensation against theft from the insurance company.
       It is not open to interpret the expression appearing in policy in terms of common law; but it has to give meaning to the expression as defined in the policy. The act that causes the loss must fall within the definition in the policy and it cannot take the cover and contents of the definition as laid down in the criminal law. Therefore, when the definition of the word burglary has been defined in the policy then the cause should fall within that definition. Once a party has agreed to a particular definition, he is bound by it and the definition of criminal law will be of no avail.
       However, all the three forums have already awarded compensation and the amount has been paid to the respondent, therefore, on the point of equity we would not like to disturb the payment which has already been made. However, in view of legal position stated by us, the orders of the District Forum, State Commission and the National Commission cannot be upheld.

Judgment

A.K. Mathur, J.—Leave granted.

This appeal is directed against the order passed by the National Consumer Disputes Redressal Commission, New Delhi in Revision Petition No. 2159 of 2002 confirming the order passed by the State Consumer Disputes Redressal Commission, New Delhi as well as the order passed by the Consumer Disputes Redressal Forum-II (District Forum-II), New Delhi.

2. The brief facts which are necessary for the disposal of the appeal are as follows. The respondent took out a policy by the appellant company for a sum of Rs. 7 lacs against burglary and/or house breaking policy with effect from September 22, 1991 to September 21, 1992. Necessary provisions of the policy read as under :

“The Company hereby agrees subject to the terms and conditions contained herein endorsed/or otherwise expressed hereon that if—

(a) The property hereinafter described or any part thereof be lost or damaged by burglary and/or house breaking or

(b) Any damage be caused to the premises to be made good by the insured from burglary and/or house breaking or any attempt thereat.”

3. The term “burglary and/or house-breaking” has been defined in terms of the policy also which reads as under :

“Burglary and/or house-breaking’ shall mean theft involving entry to or exit from the premises stated therein by forcible and violent means or following assault or violence or threat thereof to the insured or to his employees or to the members of his family.”

4. There are exceptions to it with which we are not concerned. During the currency of the policy, the respondent had his stock of food grains kept in godown No. 48, Srinagar Colony, Bharat Nagar, New Delhi. Shri Ashok Kumar Bansal, one of the partners of the respondent visited his godown on July 2, 1992 and there he found out that 197 bags of Gwar were stolen. An FIR was lodged at Police Station Sarai Rohilla under Section 380 of the Indian Penal Code on July 24, 1992. Therefore, the respondent raised a claim against the appellant company under the aforesaid policy for incurring the aforesaid loss by theft. The appellant company repudiated the claim of the respondent on the ground that theft is not covered by the insurance policy as no burglary took place in the godown by use of force or violence. Therefore, the respondent approached the Consumer Disputes Redressal Forum-II (District Forum) and made a claim for the loss of 197 bags of Gwar. The appellant company contested the claim and took the stand that the claim is not covered as per the insurance policy. However, the District Forum overruled the objection and held that burglary includes theft and by its order dated June 1, 1998 directed the appellant company to release the claim of the respondent within two months with interest at the rate of 15% per annum and also awarded cost quantified at Rs. 1,000/-. Aggrieved against the said order of the District Forum the appellant company preferred an appeal before the State Consumer Disputes Redressal Commission, New Delhi which was registered as Appeal No. 881 of 1998. The State Commission also by its order dated June 19, 2002 upheld the claim of the respondent taking the view that notwithstanding the definition of the term ‘burglary and/or housebreaking’ as defined in the policy, burglary includes theft also. It also relied upon a decision of the National Consumer Disputes Redressal Commission in the case of National Insurance Company Ltd. v. Public Type College, reported in II (2001) CPJ 26 (NC). The State Commission thus dismissed the appeal filed by the appellant company. Aggrieved by the said order of the State Commission a revision was filed before the National Consumer Disputes Redressal Commission. The National Commission by its impugned order affirmed the claim of the respondent and dismissed revision on May 20, 2003. Hence, the present appeal by way of special leave.

5. The question before us is whether in terms of the policy, the repudiation of the claim of the respondent by the appellant company

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Cases Referred (4)