1.       This appeal has been filed under section 19 of The Consumer Protection Act, 1986 in challenge to the Order dated 07.04.2015 of the State Commission in complaint no. 03 of 2014.

2.       Mr. Sukumar Pattjoshi, learned senior counsel makes submissions on behalf of the appellants (the ‘complainants’).

Mr. D. Varadarajan, learned counsel makes submissions on behalf of the respondents no. 1 to no. 3 (the ‘insurance co.’)

Mr. Prabhat Kr. Chaurasia, learned counsel makes submissions on behalf of the respondents no. 4 and no. 5 (the ‘bank’).

3.       The matter relates to repudiation of an insurance claim.

Briefly, the complainants had taken insurance for a sum of Rs. 50 lakh (for Diamond Rs. 35 lakh + for Gold Rs. 15 lakh). The bank had provided cash credit limit to the complainants against hypothecation of stock. As such the insurance had been taken through the bank. It was first taken for one year on 05.03.2010 at premium of Rs. 35008/-, then for another year at premium of Rs. 10786/- and then again for another year i.e. 23.03.2012 to 22.03.2013 at premium of Rs. 24222/-. The premium was debited to the complainants’ account by the bank and remitted to the insurance co. In the night of 14/15.12.2012 i.e. when the policy had been taken for the third year an incident of burglary occurred in the insured premises. An F.I.R. was lodged with the police. The insurance co. was intimated. The complainants submitted a claim of Rs. 70.92 lakh i.e. more than the sum assured. A surveyor was appointed by the insurance co. The surveyor assessed the loss at Rs. 30.59 lakh i.e. less than the claimed amount. It also pointed out that there was violation of clause 13 of the policy. The relevant extract of the surveyor’s report is reproduced below for reference:

Present claim has occurred under Clause 6 (Burglary) of Section I of Jewellers Block Insurance Policy. As stated earlier, insured suffered loss of Jewelleries from its’ display, window, display counter and table drawer and no loss occurred from its’ safe. Now; attention of insurer is invited to the EXCLUSION under clause 13 of the Policy; which states “Loss and/or damage to property insured under section I whilst in display windows at night and / or whilst kept out of safe after business hours.” 

The insurance co. repudiated the claim vide its letter dated 28.06.2013 on ground that clause 13 of the terms and conditions of the policy had been violated.

Vide its impugned Order of 07.04.2018 the State Commission dismissed the complaint, holding that the claim had been rightly repudiated by the insurance co.

4.       Learned senior counsel for the complainants submits that the terms and conditions of the policy including clause 13 had not been communicated to the complainants. In this regard he draws attention to paras 6 and 7 of the affidavit dated 18.01.2017 filed by the insurance co. during the course of the appellate proceedings before this Commission. The same are being reproduced below for reference:

6. I state that in the present case, the business was generated through the Bancassurance Channel, i.e. sourced through the bank. In cases where policy is issued through Bancassurance Channel, the policy along with terms and conditions are dispatched to the Bank as the same is obtained to protect the loans and advances.

7. I further state that in the present case the relevant insurance policy along with the applicable terms and conditions was dispatched to the Indian Overseas Bank at the relevant time, i.e. on 05.04.2011. Copy of the Courier Receipt dated 05.04.2011 is being annexed herewith as Annexure-A. 

Submission is that though the policy along with its terms and conditions was supplied by the insurance co. to the bank but the bank in turn did not supply the same to the complainants.

5.       Learned counsel for the insurance co. submits that in the normal course of business two copies of the policy along with its terms and conditions are supplied to the bank through which the insurance has been taken. While one copy is retained by the bank the other is provided to the insured.

Learned counsel for the bank confirms this scheme of functioning.

In this regard both learned counsel also draw attention to paras 7 and 8 of the affidavit dated 15.09.2017 filed by the bank during the course of the appellate proceedings before this Commission. The same are being reproduced below for reference:

7. I say that as a practice adopted by the Respondent Insurance Company, the Respondent Insurance Company sends two copies of the Insurance Policy to the Respondent Bank, one copy of the Insurance Policy is handed over to the Insured/Appellants and another copy set is kept by the Respondent bank for its record.

8. I say that the Respondent Bank is merely intermediary between the Respondent Insurance Company and the Appellants and the Respondent Bank has handed over the copy of the Insurance Policy as it is which was received by the Respondent Bank from the Respondent Insurance Company and the Respondent Bank has no other role to play, whatsoever. I also say that the choice of the insurance company was that of the Insured/Appellants and the same in no manner concerns the Respondent Bank which had extended financial facility to the Appellants.

Submission is that in the normal wont two copies of the policy along with its terms and conditions which included clause 13 were sent by the insurance co. to the bank and the bank in turn retained one copy and provided the other to the complainants. Further submission is that such scheme of functioning has also been affirmed on affidavit, which is not rebutted.

6.       Learned senior counsel has tried to submit that the bank’s affidavit is not available in the briefing file available with him.

It is however pointed out by learned counsel for the insurance co. and the learned counsel for the bank that this affidavit is part of the case-file in this appeal and the complainants ought to be cognizant of the same. The otherwise contention made in this regard is nothing better than a lame excuse.

7.       Learned counsel for the insurance co. also draws attention to the extracts of the surveyor’s report where the replies of the complainants to certain questions posed by the surveyor are recorded. The same are being reproduced below for reference:

          2.  At the time of our visit to your shop on 17.12.2012, you stated that “No night guard is available at the shop”. Whereas the copy of attendance register for Dec’2012 shows at serial no. 07 Sri Vijay Shankar Chaudhary as :Guard”.

               Reply of Insured: It is true that no night guard is available at the shop. Attendance register you seen, was actually belong to the guard deputed during the period of business hour of shop.

          3.  The list of 268 items lost plus Kilsara Brand (Diamond Rs. 89,912/- & Gold Rs. 87,583/-) has been submitted for Rs. 70,92,220/-; whereas photocopies of one register named “Stock Register” from 01^st Dec to 31^st Dec’2012 shows 349 number of pieces of Jewellary in hand on 14.12.2012. Please explain the reason of variations in number of items.

              Reply of Insured: There was 349 no. of pieces of jewellery lost. 268 is not no. of items, it is serial number of different type of items.

          4.  You have submitted photocopies of one register; which is named as “Stock Register” but it is not a normal stock register showing Opening; Receipt; Issue & Closing Stock position; whereas this register is simply showing Company / product names & quantities checked on 01.12.2012 and one piece each sale on 11.12.2012 & 14.12.2012 only. Your auditor has given “Disclaimer” about Physical verification of stock in Audit Report. Where are the stock register copies for earlier months & year?

              Reply of Insured: Stocks in our shop reconciled on day to day basis. We did not keep copy of stock maintained by us for previous period.

          5.  Sum Insured under the Policy is Rs. 50,00,000/- (Diamond : Rs. 35,00,000/- & Gold :Rs. 15,00,000/-). Please submit the details of Jewellaries lost bifurcating between the cost of Diamond & Gold value separately.

              Reply of Insured: It is not possible to derive separate cost valuation of diamond and gold portion from a piece of jewellery. We can only give you weight wise bifurcation of gold and diamond of an ornament. So far their rate is concerned it is not possible to distinguish purchase price of gold and diamond separately from a particular ornament.

          6.  You stated that burglars took away all the jewellaries from shop after breaking the locks of display counters & display windows. There was one big “Steelage” Safe inside shop. But no jewellary was kept / stored inside safe, hence there is no loss of jewellery from safe. Please explain the reason for not storing the jewellaries inside safe; while closing the shop after business hours.

              Reply of Insured: On working days we did not keep ornaments in “Steelage” (Safe). At the eve of Saturday we remove ornaments from show case and keep the same in steelage. But theft incident took place on week days.

Submission is that the incongruities and the gaps in the replies furnished by the complainants ought to be read against them.

8.       We have perused the record in the light of the submissions made.

9.       We may first note that it is hard to accept that a reasonable man of ordinary prudence would not take the normal care to know and understand the terms and conditions of insurance especially when insurance was being taken for the third successive year and that too for valuables like diamond and gold.

10.     The import of the affidavits filed by the insurance co. and the bank conveys that the insurance co. sent two copies of the policy along with its terms and conditions to the bank and the bank in turn retained one copy and supplied the other one to the complainants.

These affidavits have not been rebutted by the complainants.

11.     As per a fundamental principle contained in section 114 of the Indian Evidence Act, the court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case; illustration (e) specifically says that the court may presume that judicial and official acts have been regularly performed.

In the instant case there is nothing on record to bring out enough reason to presume otherwise. On the contrary there is on record unrebutted express affirmation on affidavit.

12.     We also note that different pleas are being taken before the State Commission and this Commission. In the State Commission a plea was taken that the bank was paying premium to the insurance co. without the knowledge of the complainants. In this regard para 4 of the State Commission’s impugned Order is reproduced below:

The counsel for the complainants submit that the cash credit facility against hypothecation of Stock of Rs. 35 lacs was sanctioned by the O.P. Bank with certain terms and conditions who had insured the goods of the complainants under Jewellary Block Insurance policy schedule with O.P. insurance company. The O.P. Bank used to pay Insurance Premium to its joint Venture insurance company without their knowledge. Rs. 35008/- was debited from the account of the complaints on 11.03.2011, Rs. 10,786.00 (Rs. Ten thousand, seven hundred and eighty six only) was debited on 10.03.2012 and Rs. 24,222/- on 23.03.2012. The O.P. Bank is jointly and severally liable for payment of Insurance claim.

But in the arguments today learned senior counsel fairly admits that the fact of insurance being taken and premium being debited to their account was in the knowledge of the complainants, their only case is that the terms and conditions were not supplied to them. The dichotomy of stand certainly does not add value or credibility to the complaint.

13.     The circumstances in their totality point towards a ring of untruth on the part of the complainants.

14.     Here we may reproduce clause 13 for reference:

13) Loss and/or damage to property insured under section I whilst in display windows at night and/or whilst kept out of safe after business hours.

The clause inter alia does not cover loss or damage to property “whilst in display windows at night and / or kept out of safe after business hours”. This is but only an express articulation of normal prudence in print, and in itself cannot be said to be in any manner unreasonable or unjustifiable or extraordinary.

And in the instant case it is an admitted position that the jewelry had not been kept in a safe at night.

15.     Learned senior counsel has some judgments which deal with the consequences of not supplying the terms and conditions of insurance to the insured. He however agrees that there would be no need to examine them if clear findings are being arrived at that in fact the terms and conditions of the policy were made available to the complainants and were in their knowledge.

16.     Sequel to the above discussion, we find no ground or reason to take a different view of the matter than what has already been taken by the State Commission.

17.     In the result, the appeal fails and as such stands dismissed.

18. The Registry is requested to send a copy each of this Order to the parties in the appeal and to their learned counsel immediately. The stenographer is requested to upload this Order on the website of this Commission immediately.