Insured's failure to comply with policy conditions leads to rejection of insurance claims despite a theft being reported.

JUDGMENT:

This Appeal, under Section 96 of the Code of Civil Procedure [for short ‘the C.P.C.’], is filed by the Appellant/defendant No.1 challenging the Decree and Judgment, dated 23.11.2005, in O.S.No.482 of 1996 passed by the learned III Additional Senior Civil Judge (Fast Track Court), Guntur [for short ‘the trial Court’].

2. The appellant herein is the defendant No.1, the respondent No.1 herein is the plaintiff and the respondent No.2 herein is the defendant No.2 in O.S.No.482 of 1996.

3. Originally, the respondent No.1/plaintiff herein filed the suit in O.S.No.482 of 1996 against the defendants seeking for recovery of a sum of Rs.1,72,650/- towards damages from the defendants with future interest and costs.

4. Both parties in the Appeal will be referred to as they are arrayed before the trial Court.

5. The case of the plaintiff as per the plaint averments in O.S.No.482 of 1996, in brief, is as follows:

The plaintiff had been carrying on business in cloth under the name and style of ‘Monolisa Emporium’ and applied for financial assistance to the Swasakthi, Guntur as a un-employee graduate. The plaintiff pleaded that the Swasakthi authorities recommended the defendant No.2 for sanction of loan to the plaintiff and subsequently, the defendant No.2 provided cash credit facility to the plaintiff with a meager capital and the plaintiff commenced his business. The plaintiff further pleaded that the defendant No.2 insisted the plaintiff that the stocks lying in the premises of the plaintiff should be insured against fire etc., and accordingly the stocks lying in the shop of the plaintiff were insured with the defendant No.1 for Rs.2,25,000/- under cover note No.68739, dated 27.11.1990, which is valid up to 26.11.1991 and paid a premium of Rs.609/-.

The plaintiff further pleaded that on 26.10.1991, some miscreants forcibly lifted the stock worth of Rs.1,25,000/- from the shop of the plaintiff, while the plaintiff was away and immediately, the said fact was informed to the defendant No.1 in his letter dated 27.10.1991 and the plaintiff also gave a complaint to the Pattabhipuram Police station. The plaintiff pleaded that the defendant No.2 failed to send a claim to the defendant No.1 immediately and the defendant No.1, who received the information of theft from the plaintiff on 28.10.1991, suppressed the fact. The plaintiff pleaded that he filed C.D.No.152/1993, on the file of the District Consumer Forum, Guntur and both the defendants contested the said complaint and the defendant No.1 filed his version in C.D.No.152/1993, on the file of the District Consumer Forum, Guntur, and repudiated the claim of the plaintiff. The plaintiff further pleaded that the District Consumer Forum, Guntur, while dismissing the complaint of the plaintiff, opined that there are complicated questions of fact are involved and the plaintiff has to agitate his rights in Civil Court. Hence, the suit.

6. The case of the defendant No.1 as narrated in the written statement is as follows:

The plaintiff obtained Shop Keepers Insurance Policy from the defendant No.1 through the defendant No.2 on 27.11.1990, under a Cover Note No.68739 for a period of one year from 27.11.1990 to 26.11.1991. The defendant No.1 pleaded that the plaintiff approached the defendant No.2 through Swasakthi Authorities, Guntur, and the defendant No.2 sanctioned a loan of Rs.50,000/-, to the plaintiff for running cloth shop on his executing necessary documents as collateral security. The defendant No.1further pleaded that the plaintiff failed to pay any amount on the credit bills to the dealers in spite of their demands. While so, the defendant No.2 inti