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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
V.B. Gupta, Presiding Member and Vinay Kumar, Member
NATIONAL INSURANCE COMPANY LTD. AND ANR. - Appellants
Versus
BISWANATH TRADERS - Respondent
First Appeal No. 673 of 2006 against Order dated 18.8.2006 in C.D. Case No. 86 of 2001 of State Commission, Orissa
Decided on : 31-01-2012
Mr. Kishore Rawat, Advocate, for the Appellant; Mr. Suchit Mohanty and Mr. G. Biswal, Advocates, for the Respondent
Interpretation of insurance policy exclusion clause and its application to the specific circumstances of the burglary claim.
Headnote:
Insurance - Burglary Claim - Exclusion Clause 4(a) - [Burglary Claim] - [Insurance] - [Exclusion Clause 4(a)] - The court discussed the interpretation of Exclusion Clause 4(a) of the insurance policy, which excluded loss or damage directly or indirectly proximately or remotely occasioned by cyclone or other convulsion of nature or atmospheric disturbance. The court held that the burglary claim was not covered under the exclusion clause as there was no evidence to suggest that the burglary happened because of the cyclone. The court also noted that the forcible entry by the burglars could have taken place even before the cyclone, and therefore, the exclusion clause did not apply.
Fact of the Case:
The complainant, a storage agent, had a storage godown covered under a burglary insurance policy. After a cyclone, a theft occurred, and the insurance company repudiated the claim citing Exclusion Clause 4(a) which excluded loss or damage occasioned by a cyclone.
Finding of the Court:
The court found that the burglary claim was not covered under the exclusion clause as there was no evidence to suggest that the burglary happened because of the cyclone. The court also noted that the forcible entry by the burglars could have taken place even before the cyclone, and therefore, the exclusion clause did not apply.
Issues: Interpretation of Exclusion Clause 4(a) of the insurance policy, consideration of the claim as per the terms of the contract, and the effect of the cyclone on the burglary claim.
Ratio Decidendi: The court held that the burglary claim was not covered under the exclusion clause as there was no evidence to suggest that the burglary happened because of the cyclone. The court also noted that the forcible entry by the burglars could have taken place even before the cyclone, and therefore, the exclusion clause did not apply.
Final Decision: The court dismissed the appeal and confirmed the order of the Orissa State Consumer Disputes Redressal Commission, directing the insurance company to pay the claim amount with interest.
ORDER
Vinay Kumar, Member - This appeal is filed by the National Insurance Company Ltd. against the order of the Orissa State Consumer Disputes Redressal Commission in CD No. 86 of 2001 pronounced on 18.8.2006.
2. The case of the Complainant M/s. Biswanath Traders before the State Commission was that they were storage agent of the State Civil Supply Corporation; in which capacity they had a storage godown in Jagathsinghpur District. Stocks of rice, wheat, sugar, etc. stored in this godown were covered under a policy of protection against burglary and house breaking up to a limit of Rs. 6 lakh. The policy was taken on 15.7.1999 and was designed to indemnify the insured against any loss due to burglary and house breaking (theft following upon an actual forcible and violent entry).
3. On 29.10.1999, the area was hit by a cyclone. Two days later, on 31.10.1999 a theft took place, by breaking open the lock and grill of the godown. An FIR was lodged on the same day. Police investigation, which followed led to arrest of some persons and recovery of some stolen goods. The police thereafter filed a charge-sheet against the concerned. In the meanwhile, the Complainant made a claim under the insurance policy on 8.11.1999, which was repudiated by the OP/National Insurance Company through their letter of 31.7.2001 i.e. after a lapse of 20 months.
4. The letter of the Insurance Company explained its decision to reject the claim in the following terms:
"Please refer Clause 4(A) of Exclusion of Burglary and Housebreaking Policy (business premises) which states that "Loss or damage directly or indirectly proximately or remotely occasioned by cyclone or other convulsion of nature or atmospheric disturbance".
In view of the above exclusion of Burglary Policy we express our inability to accept the liability in the above claim."
5. It is alleged by the Complainant that the grounds for rejection of the claim is flimsy, colourable and illegal, which has put the Complainant to financial and mental suffering. The Complainant therefore claimed a sum of Rs. 6 lakh with 18% interest from 31.10.1999, i.e. the date of the incident together with Rs. 2 lakh for loss of goodwill/mental agony and Rs. 10,000 towards costs. Per contra, the case of the National Insurance Company was that it is not a case of deficiency in service, but of consideration of the claim as per the terms of the contract.
6. The State Commission noted that there was no dispute about the stocks being covered under the policy. The fact of burglary on 31.10.1999 is also not denied by the OP, Insurance Company. It also noted that an FIR had been registered on the same day and investigation taken up by the Police. In the charge-sheet, which was filed it was mentioned that local people numbering 2000 to 3000 came with deadly weapons and forcibly broke open the grill gate of the store and took away the stored article. In the course of investigation, two quintals of rice, 20 kgs of sugar and 4 litres of pamolein were seized from the house of some accused persons.
7. The claim of the Insurance Company, that this incident was occasioned by the cyclone of 29.10.1999 and, therefore, covered under Exclusion Clause 4(a) of the Policy, was rejected by the State Commission observing that:
"It is a fact that just prior to the date of occurrence the area was hit by super cyclone but in our opinion that has got nothing to do with the burglary committed by the accused persons who were charge-sheeted. It is futile to argue that because of cyclone theft was committed by the accused persons. There is nothing on record to suggest it. Therefore in absence of any material, it cannot be held that the burglary was occasioned because of cyclone. Stock of essential commodities was removed dishonestly from the petitioner's possession without his consent. It is a clear case of theft or burglary. For the reasons mentioned above, we hereby overrule the objection of the opposite party that the claim is hit by the exclusion clause."
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