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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Ashok Bhan, President and Vineeta Rai, Member
NEW INDIA ASSURANCE CO. LTD. - Appellant
Versus
PANKAJ KAPOOR AND ORS. - Respondents
First Appeal No. 206 of 2007 from Order dated 15.1.2007 in Complaint Case No. C-121/98 of State Consumer Disputes Redressal Commission, New Delhi
Decided on : 04-03-2013
Mr. R.B. Shami, Advocate, for the Appellant; Mr. S.B. Singh, Advocate, for the Respondent
Insurable interest ceases after property taken over, Delay in informing Insurance Company fatal to claim, Force or violence required for burglary
Headnote:
Insurance - Burglary Insurance - State Financial Corporation Act, 1951 - Sections 29, 31
Fact of the Case:
Complainant failed to repay loan, HFC took possession of property, Complainant claimed theft of machinery, Appellant denied claim, State Commission allowed complaint, Appellant appealed, Complainant did not appear for appeal, Appellant's plea upheld
Finding of the Court:
Complainant had no insurable interest after property was taken over by HFC, Value of stolen property not proven, No evidence of theft, Delay in informing Insurance Company fatal to claim, No force or violence in alleged theft
Issues: Insurable interest, Value of stolen property, Evidence of theft, Delay in informing Insurance Company, Force or violence in theft
Ratio Decidendi: After property taken over, no insurable interest, Value of stolen property must be proven, Delay in informing Insurance Company fatal, Force or violence required for burglary
Final Decision: Appeal accepted, State Commission's order set aside, Complaint dismissed
ORDER
Ashok Bhan, President - Appellant which was Opposite Party Nos. 1, 2 before the State Commission, has filed this Appeal against the judgment and order dated 15.1.2007 passed by the State Consumer Disputes Redressal Commission, Delhi (in short, the State Commission ) in Complaint No. C-121/1998 wherein the State Commission allowing the complaint has directed the Appellant to pay a sum of Rs. 8,00,000 to the Respondent/Complainant along with compensation of Rs. 50,000 for mental agony and harassment.
Facts:
2. Complainant/Respondent No. 1 (hereinafter to be referred to as the Complainant ) had set up a plastic factory. He was sanctioned and disbursed a loan of Rs. 7,50,000 by the Haryana Financial Corporation, Respondent Nos. 2, 3 herein (for short, the HFC ). He executed a mortgage deed dated 10.2.1995 in favour of the HFC which contained the various terms and conditions on which the loan was granted and the schedule of repayment. Complainant took a Burglary Insurance (Business Premises) Policy for Rs. 8,26,000 from the Appellant Insurance Company for the period from 8.8.1996 to 7.8.1997.
3. Complainant failed to repay the instalments and the loan amount. HFC took steps for recovery of the loan amount. In spite of several reminders sent for repayment of the loan, Complainant did not pay the same. HFC issued a recall notice dated 3.2.1997. When no response came from the Complainant, another notice dated 19.3.1997 was sent wherein it was mentioned that if the Complainant did not pay the loan amount, action would be initiated for recovery of the loan amount under Sections 29 and 31 of the State Financial Corporation Act, 1951. Loan amount was not repaid. HFC in exercise of its power under Sections 29 and 31 of the State Financial Corporation Act, 1951, took the possession of the factory premises, machinery and plant on 8.4.1997. HFC issued another notice dated 29.10.1997 to the Complainant regarding sale of property and when no response was received, the factory premises, machinery and plant were sold and the proceeds of the sale were adjusted against loan amount.
4. Complainant filed a civil suit in the City Civil Court, Sonepat challenging the legality of the taking over of the insured property. A Court Commissioner was appointed by the Civil Court to prepare an inventory on 2.8.1997 who reported that a part of the machinery was missing.
5. Complainant thereafter without filing the FIR or lodging a claim with the Appellant filed a complaint in the State Consumer Disputes Redressal Commission at New Delhi claiming an amount of Rs. 8,00,000 being the purported price of the stolen machinery along with interest @ 18% p.a., Rs. 2,00,000 towards financial loss and mental agony besides Rs. 2000 each towards travelling allowance and filing of complaint.
6. Appellant, on being served, entered appearance and took the plea that the complainant was guilty of concealing material facts; that it was neither a case of theft nor burglary as the Complainant had taken a loan from HFC and when he failed to pay even a single instalment, HFC took possession of the factory for the purpose of recovery of the loan; that no FIR regarding the theft of part of the machinery was lodged with the police; that there was delay in intimating the Appellant about the theft in violation of the terms and conditions of the policy which deprived the Appellant of its legitimate right to enquire about the theft as well as to trace the stolen property; that there was no insurable interest left in the Complainant as by the time the alleged theft was committed, the property had already been taken over by the HFC.
7. HFC filed a separate written statement stating therein that since the Complainant had failed to repay the loan as per the agreement arrived at between the parties, it had taken possession of the factory premises along with machinery, etc. in exercise of its power under Sections 29 and 31 of the State Financial Corporation Act, 1951 by breaking the locks. It was d
