PER SUBHASH CHANDRA

This First Appeal assails the order dated 06.02.2020 of the State Consumer Disputes Redressal Commission, Maharashtra (for short “the State Commission”) in Complaint No.36 of 2017 dismissing the said Complaint of the Appellant who had preferred a claim under a Money Insurance Policy obtained from the Respondent Insurance Company.

2.     The Appellant is engaged in the activity of cotton ginning and pressing and had obtained the Money Insurance Policy valid from 20.12.2012 to 19.12.2013 to ensure the amount of cash which it transacts on a daily basis in the course of its business.  According to the insurance policy Section 1A-1C, the limit of loss was ₹25,00,000 in respect of cash.  On 18.05.2013 it’s employee Mr. Janardha Sopanrao Ghatual along with Driver Sahebrao withdrew ₹25,00,000/- from the State Bank of India, Parbhani Branch, Hyderabad and while transporting the same in a bag in a car, the amount was stolen along with ₹2,47,000/- belonging to M/s Maheshwari Oil Industries.  An FIR for the loss was immediately lodged under Section 379 of IPC wherein it was stated that ₹1,00,000/- of the Appellant Company and ₹3,000/- of M/s Maheshwari Oil Industries had not been stolen as it was in another bag. The cash claim for ₹24,00,000/- was filed on 18.05.2013.  The Respondent’s Surveyor, Shri Ashok Motiani, visited the Appellant Company on 16.08.2013 and all necessary documents were provided to him.  Despite several efforts to expedite the settlement of the claim through letters, the Respondent repudiated the claim on 14.10.2016 on the ground that the actual money in transit exceeded the sum insured under the policy and that as per the policy conditions no liability arose.  The Appellant sent a legal notice on 02.02.2017 and filed a Consumer Complaint before the State Commission on 13.07.2017 which was contested by the Respondent by way of Written Statement.  Based on the evidence affidavit the State Commission dismissed the Complaint vide the impugned order dated 06.02.2022.  The Appellant has challenged this order on the ground that the State Commission did not record cogent reasons and failed to observe that the insurance policy’s Section 1 A- 1 C describes the limit of cash transit per day and that the estimated total money in transit permitted is ₹15 Crores and that there is no condition in the policy that the total money in transit till the date of theft has to be less than the estimated total as stated by the Respondent.  It is contended that the State Commission failed to consider that as per IRDA (Protection of Policyholder’s Interests) Regulations, 2002 it was mandatory for the Surveyor to submit the survey report within 30 days, extendable by a further period of 30 days with consent of the Complainant.  The repudiation of the claim after three years of the incident is stated to be erroneous.  The amount of ₹24,00,000/- for which the claim was filed is stated to be within the ambit of the insurance policy.  The repudiation of the claim is stated to be a deficiency in service as also the non settlement of the claim within the stipulated time.  It is argued that the conclusion of the Respondent that the bag stolen contained ₹26,47,000/- of which only ₹24,00,000/- belonged to the Appellant and the balance ₹2,47,000/- belonged to M/s Maheshwari Oil Industries.  Reliance is placed on this Commission’s order in Aggarwal Agencies vs. United India Insurance Co. Ltd. and Anr., 2012 2 CPR (NC) 155 which held

“It is an insurance policy and the proposal form which constitutes a contract between the two parties, the Respondent/Insurance Company erred in including the money-in-transit between Bank and the Dealer while tabulating the annual limit of ₹3,00,00,000/- by relying on the proposal form.”

3.     The Respondent filed written synopsis denying the allegations of deficiency in service on its part.  The Money Insurance Policy for the period from 20.12.2012 till 19.12.2013 and the facts of the theft and FIR were, however, admitted.  It was argued that the impugned order was in accordance with law and the Appeal is liable to be dismissed since the Respondent had repudiated the claim in accordance with the terms and policies of the policy.  Sections 1 A and 1 B of the policy clearly limited the loss to ₹25,00,000/- to be carried in transit against a sum of                    ₹15 Crores as per policy schedule.  The terms and conditions also provided for a specific Special Condition No.3 which stated that if at the time of loss it was found that the actual money in transit exceeded the sum insured under the policy, no liability would be attached.  It is the case of the Respondent that the Complainant had admitted that the car from which the theft occurred had been carrying a sum of ₹26,47,000/- inclusive of ₹2,47,000/- of M/s Maheshwari Oil Industries.  FIR dated 18.05.2013 with Nava Mondha Police Station, Parbhani mentioned the sum stolen as ₹26,47,000/-.  Therefore, the findings of the State Commission were in order as there was no deficiency service on the part of the Insurer.

4.     We have heard learned Counsel for both the parties and perused the records carefully.

5.     The facts of the case are not in dispute with regard to existence of a policy and the theft of the money.  The claim dated 18.05.2014 was repudiated by the Respondent vide its letter dated 14.10.2016 which states as below:

“With reference to the above, we hereby inform to you that, the Competent Authority at Regioinal Office, Nagpur vide their letter No.NRO/MISC/TECH/303/2016-17 Dated: 22/06/2016 has repudiated your above claim under the above mentioned policy as actual cash turnover had exceeded the sum Insured and hence there was no coverage available under section – I as per special condition No.3 of the policy narrated below:

“If at the time of loss, it is found that the actual money in transit has exceeded the sum insured under the policy, no liability shall attach.”

          We also inform to you that, Surveyor’s recommendations: Considering all the facts and aspects such as cause of loss and adequacy of sum insured the surveyor Mr.Ashok Motiani has recommended for repudiation of claim as the actual amount of money in transit ₹18,07,65,000/- has exceeded the Sum Insured ₹15,00,00,000/- on the date of loss.  And Divisional office agreed with surveyor’s recommendation that actual transaction have exceeded the sum insured and hence recommended for repudiation of claim. 

Hence we close your claim file as “No Claim”.  

6.     From this letter of repudiation, it is evident that the Respondent Insurance Company repudiated the claim on the ground that at the time of loss the actual money in transit exceeded the sum insured under the policy.  It has also based this conclusion on the basis of report of the Surveyor (Shri Ashok Motiani) who recommended repudiation as the actual amount of money in transit exceeded the sum insured of ₹18,07,65,000/- on the date of loss. 

7.     It is manifest from the Schedule that the details of the cash limit under Section 1 was ₹30 Lakhs for payment of wages, salaries etc. and under Section 1-B, the money insured in the personal custody of the insured or its authorized employees while in transit was ₹30,00,000/-.  In addition, under 1-C, the money collected by and in the personal custody of the insured or its authorized employees within a period not exceeding                 48 hours from the time of collection was also ₹30,00,000/-. Under the Exclusion Clause, loss of money under various circumstances has been described and under Special Conditions the liability of the insurer has been stated to be as “that if at the time of loss, it is found that the actual money in transit has exceeded the sum insured under the policy, no liability shall attach.  However, this does not apply to the cash in the premises during business hours.”  The reason for repudiation is stated to be that the ceiling amount of ₹ 15 Crores had been exceeded by the Appellant and that the total cash in transit as on the data of loss was ₹18,07,65,000/-.  The State Commission has concluded as under:

“……. We find terms and conditions which are argued in the light of documents on record are crystal clear and certain.  As indicated above if at the time of loss it is found that in transit cash carried exceeding the sum insured under the policy no liability shall be attached.  Thus terms and conditions of the policy which is in question in the present case did not permit the cash to be carried in the excess of the lime of ₹25 Lakhs which limit was not observed on behalf of complainant in the present case at the time of alleged theft in respect of which FIR was lodged.  That being so, the repudiation made on behalf of insurance company is free from any fault imputable to the insurance company looking into the clear terms and conditions of the insurance policy contract.  We therefore do not find any deficiency in service on the part of the insurer in the fact and circumstances of the present case.  Therefore we dismiss this complaint with cost of litigation quantified in the sum of ₹5,000/- payable to the Opposite Party.”

8.     From the record, it is evident that the claim for the money loss preferred by the Appellant relates to an amount of ₹24,00,000/- as ₹2,47,000/- was from the account of M/s Maheshwari Oil Industries.  This is not controverted by the Respondent.  The claim has been disallowed on the ground that the overall cash limit of ₹15 Crores stood exceeded in view of the total amount of cash transaction amounting to ₹18 Crores as on the date of loss.  The letter of repudiation dated 14.10.2016 also mentions the same was based on the basis of the report of the Surveyor.  However, no copy of the Surveyor’s report has been provided to the Appellant.  The Appellant has relied upon IRDA Guidelines which make it mandatory for submission of the report by the Surveyor within 30 days or with consent of the insured, within another 30 days.  It is contended by the Complainant that no consent was obtained from him by the Respondent/Surveyor.  It is not in dispute that the repudiation, based on the Surveyor’s report was after approximately three years and five months of filing of the claim.   

9.     The Respondent has also not brought on record any statement indicating that the cash limit of ₹15 Crores was exceeded which is stated to have amounted to ₹18,07,65,000/-.  It is not denied that the cash loss comprised of two components of which ₹24,00,000/- pertained to the Appellant and the balance amount of ₹2,47,000/- pertained to M/s Maheshwari Oil Industries.  Therefore, the contention that the Appellant had violated the special conditions 1-A to 1-C of the policy is not substantiated by any evidence on record by the Respondent.  On the contrary, it has delayed the acceptance of the Surveyor’s report by nearly 3½ years in finalizing the claim which is against IRDA Guidelines.  Thus, even though a Surveyor’s report is essential under Section 64 UM of the Insurance Act, 1938 as held by the Hon’ble Supreme Court in Sri Venkateswara Syndicate vs. Oriental Insurance Company Limited, (2009) 8 SCC 507, this report cannot be considered to be the final word or so sacrosanct that cannot be departed from as also held by the Hon’ble Apex Court in New India Assurance Company Limited vs Pradeep Kumar (2009) 7 SCC 787.  The Respondents should have been cognizant of the guidelines of time prescribed by the IRDA which had been clearly violated by the Surveyor.  In view of these reasons, the Appeal is liable to succeed.

10.    In view of the foregoing discussion and in the facts and circumstances of the case, the Appeal is allowed.  The Respondent is directed to accept and settle the claim of ₹24,00,000/- filed by the Appellant under the Money Insurance Policy with compensation in the form of interest @ 6% per annum from the date ­of submission of the claim.  This order shall be complied with within four weeks failing which interest @ 9% would be payable.  Litigation costs of ₹50,000/- shall also be paid by the Respondent to the Appellant.

11.    All pending applications stand disposed of by this order.