ORDER
First Appeal No.12 of 2016 has been filed by the Appellant M/s.Dharmanandan Dismonds Pvt. Ltd. against the order dated 30.10.2015 of the State Consumer Disputes Redressal Commission, Gujarat (in short 'the State Commission') passed in Complaint No.40/2007 and First Appeal No.36 of 2016 has been filed by the appellant New India Assurance Co. Ltd. against the order dated 30.10.2015 of the State Commission, Gujarat passed in Complaint No.40/2007.
2. Brief facts of the case are that complainant M/s.Dharmanandan Dismonds Pvt. Ltd. has given diamonds to one commission agent Mr. Arjanbhai Mangukia to show the diamonds to the prospective buyers by issuing janghad slip on 10.06.2002. However, on 11.06.2002, it was informed by the police that Mr. Arjanbhai Mangukia was murdered and he did not possess the diamonds. On 11.06.2002 the complaint was lodged with the police. On 12.6.2002, the Insurance Company was also informed about the incident. The police did not lodge the FIR and therefore, criminal complaint was lodged with Additional Chief Metropolitan Magistrate. The claim for Rs.78,62,388/- was lodged with the Insurance Company. The Insurance Company appointed a surveyor who has assessed the loss to the tune of Rs.55,19,316/- . The Insurance Company repudiated the claim on the following grounds on 19.07.2007:-
"1. The absence of safe at the Brokers premises is a breach of warranty material to the loss, as the loss could have been averted had the packets of diamonds been kept in a standard safe.
2. The change of address was not made in the policy. This is crucial for the loss as the entrustment was made from the new address, which was not covered by the policy."
3. The complainant then filed a consumer complaint before the State Commission being complaint no.40 of 2007. The complaint was resisted by the Insurance Company on the same grounds on which the repudiation letter was issued. However, the State Commission allowed the complaint and passed the following order:-
"1. Complainant's complaint is partially allowed.
2. Insurance Company is hereby ordered to pay applicant Rs.55,19,316/- i.e. Rs.Fifty five lacs Nineteen thousand three hundred sixteen in words with 9% interest from the date of repudiation.
3. Opponent Insurance Company is also ordered to pay Rs.5000/- towards the cost of complaint."
4. Both the parties filed appeals against the order dated 30.10.2015 of the State Commission passed in complaint No.40/2007.
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5. Heard the learned counsel for both the parties and perused the record. The parties are being referred to as complainant and the opposite party for clarity. The learned counsel for the opposite party/ Insurance Company stated that the commission agents are covered under Section II of the Policy and the following warranty is mentioned for this Section:-
"Warranted that if insured property with any one person specified in Section II of the schedule exceeds Rs.2 Lacs, the same shall be placed in an inbuilt locker of a steel cupboard. But if the property exceeds Rs.10 Lacs it must necessarily be secured in a safe of standard make."
6. From the above warranty, it is clear that the insured property was required to be kept in a safe lock of a standard make. The commission agent has been murdered at Mumbai residence and the insured property has not been recovered from there. It means that the insured property was not kept inside a safe lock as required under the warranty clause. It was also argued by the learned counsel that it was not correct to say that commission agent was to return the insured property by the evening of the same day. The complaint in the consumer complaint has itself mentioned the following:-
"10. Arjanbhai used to travel regularly in the morning from Surat to Mumbai and use to stay in Mumbai from Monday to Saturday and for his stay he rented one small Mezanine compartment, 306, 3rd Floor, Building No.42/276, Nanubhai Desai Marg, Suttar Gali, Mumbai-4 and he used to stay there alone from Monday to Saturday and used to have food on different lodges and on Friday or Saturday evening he used to return home to Surat and stay with his family."
7. In para 6 of the complaint, the complainant has mentioned that the commission agent takes the diamond and returns the same on the same day by evening. These two averments made in the complaint are contradictory to each other. The complainant had admitted that the commission agent Mr. Arjanbhai Mangukia was staying at Mumbai residence for five days and that he was coming back to Surat on weekends. Thus, it was not possible for the commission agent to have come back and to have returned the insured property on the same day. Thus, if the case property was to be kept for more time at the residence of commission agent at Mumbai, it was required to be kept in the safe as per the warranty clause. This warranty has been clearly breached and therefore, the claim is not payable. Though, the surveyor has assessed the loss, however, the surveyor has not given any observation on the adherence to the warranty clause. Clearly, the surveyor has omitted his comment on warranty either purposely or inadvertently, therefore, fact of assessment of the loss by the surveyor cannot be read in favour of the complainant.
8. Learned counsel further stated that the complainant in para 4 of the complaint has clearly mentioned that they were taking the insurance from the opposite party since 1999 and then the complainant cannot say that they were not aware about the terms and conditions of the policy. Moreover, this condition relating to warranty is mentioned in the first two pages of the policy, which has been admittedly received by the complainant. Learned counsel relied on the following judgements in support of his argument:-
1. United India Insurance Co. Ltd. vs. M/s. Orient Treasures Pvt. Ltd., Civil Appeal No.2140 of 2007, decided on 13.01.2016 (SC). It has been held that:-
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42) It is a settled rule of interpretation that when the words of a statute are clear, plain or unambiguous, i.e., they are reasonably susceptible to only one meaning, the courts are bound to give effect to that meaning irrespective of consequences. In other words, when a language is plain and unambiguous and admits of only one meaning, no question of construction of a statute arises, for the Act speaks for itself. Equally well-settled rule of interpretation is that whenever the NOTE is appended to the main Section, it is explanatory in nature to the main Section and explains the true meaning of the main Section and has to be read in the context of main Section (See - G.P.Singh -Principle of Statutory Interpretation 13th Edition page 50 and
172). This analogy, in our considered opinion, equally applies while interpreting the words used in any contract."
2. RP No.429 of 2017, Aman Kapoor Vs. National Insurance Co. Ltd. & 2 ors., decided on 17.04.2017 (NC). It has been held that:
"24. Another plea has been taken by the petitioner/complainant that he was not aware of the terms and conditions of the policy as the same had never been supplied to him. This too has been taken into account by the State Commission which has found itself unable to accept this plea on the ground that there seems to have been no effort on the part of the petitioner/complainant to obtain a copy of the terms and conditions. We are inclined to also agree with this view. We further contend that it is incumbent upon the consumer to be an informed and responsible consumer in order to be able to avail of relief under the Consumer Protection Act, 1986. Ignorance of terms and conditions of the policy is no excuse and provides no shelter to the petitioner complainant."
9. On the other hand, learned counsel for the complainant stated that the warranty in respect of keeping the insured property in lock safe cannot be adhered to when the diamonds were given to broker or commission agent as they have to show the diamonds to different customers and they return the diamond to the firm on the same day. In the present case, the commission agent was murdered between 7:30 -9:30 pm and police did not recover the diamonds from him. Had the commission agent been alive, he would have returned the diamonds the same day. In these circumstances, the application of warranty is not possible in the present case.
10. It was further argued that the surveyor appointed by the Insurance Company has clearly recommended that the assessed loss of Rs.55,19,316/- is payable to the complainant. The surveyor has not recorded breach of any warranty, rather the surveyor has found the insurer as liable to pay this amount. The State Commission has accordingly rightly accepted the report of the surveyor and has partly allowed the claim of the complainant. The appeal by the complainant has been filed for enhancement of the compensation as the compensation was filed for Rs.78,62,388/-, but the State Commission has awarded Rs.55,19,316/-. If the Insurance Company was not satisfied with the report of the surveyor as the surveyor had not allegedly indicated any observation in respect of the warranty, the Insurance Company should have asked the clarification from the surveyor. In fact, Insurance Company did not seek any clarification from the surveyor and therefore, by implication, accepted the report of the surveyor. Now, Insurance Company cannot take a stand that the surveyor has not mentioned about the breach of the warranty.
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11. We have carefully considered the arguments advanced by both the learned counsel for the parties and examined the record. The final report filed by the police and the report of the surveyor confirmed that the diamond was given to Arjanbhai Mangukia by complainant and Arjanbhai Mangukia was murdered at his Mumbai residence. In the present case, the surveyor has assessed the loss to the tune of Rs.55,19,316/-. The broker or commission agents are covered under Section II of the Policy as given below:-
Section II
| a) Property Insured excluding cash & currency notes whilst in the custody of the Insured, his partners, directors, employees, duly constituted attorneys : |
s.20,00,000 |
| b) Property insured by the insurer excluding cash and currency notes whilst in the custody of brokers or agents or cutters or goldsmiths or stores of diamonds not in regular employment of the insured, whether directly entrusted by the insured or otherwise subject to appropriate documentary evidence being available relating to such entrustment : |
s.1,20,00,000 |
| Total Sum Insured (Section II) |
s.1,40,00,000/- |
12. Clearly, the warranty clause attached to this Section requires the insured property to be kept in a safe lock of standard make if the value of the property is more than Rs.10 lacs. This warranty clause is specifically mentioned under Section II of the policy and therefore, it clearly means that this warranty is applicable for the insured property and the same was to be kept under safe lock even by the broker or commission agent. Clearly, this warranty has not been adhered to by the complainant or his broker or commission agent and therefore, the relevant terms and conditions of the policy have been violated. It is important to note the following judgments in this regard:
(a) In General Assurance Society Ltd. Vs.Chandmull Jain, [1966 ] 3 SCR 500, it was held as under:-
17." …In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties,
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because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves."
(b) in Oriental Insurance Co. Ltd. Vs. Sony Cherian II(1999 )CPJ 13 (SC ), it has been observed as follows:-
"16. The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy. That being so, the insured has also to act strictly in accordance with the statutory limitations or terms of the policy expressly set out therein."
(c) United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal, (2004) 8 SCC 644,
the Hon'ble Apex Court held as follows:-
"6. ….The terms of the policy have to be construed as it is and we cannot add or subtract something: Howsoever liberally we may construe the policy but we cannot take liberalism to the extent of substituting the words which are not intended.
9. …It is settled law that terms of the policy shall govern the contract between the parties, they have to abide by the definition given therein and all those expressions appearing in the policy should be interpreted with reference to the terms of policy and not with reference to the definition given in other laws. It is a matter of contract and in terms of the contract the relation of the parties shall abide and it is presumed that when the parties have entered into a contract of insurance with their eyes wide open, they cannot rely on definition given in other enactment.
14. Therefore, it is settled law that the terms of the contract has to be strictly read and natural meaning be given to it. No outside aid should be sought unless the meaning is ambiguous."
13. From the above authoritative judgments, it is clear that a consumer forum or any court for that matter, does not have power to relax the warranty clause or any terms and conditions of the policy. From this point of view, the order of the State Commission cannot be sustained.
14. In the complaint the complainant has mentioned its address as follows:-
"M/s. Dharmanandan Diamonds- Partner of Partnership firm Shri Laljibhai Tulsibhai Patel, Aged About: 52 years, Occ-Business, Address: N/H Patel Falia,
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Gotalawadi, Katargam Road, Surat -395004"
15. Complainant has alleged that the complainant gave the insured property to the commission agent Arjanbhai Mangukia as is evident from the following assertion of the complainant in the complaint:-
"9. Complainant M/s. Dharmanandan diamonds on 10/6/2002 gave the goods of polished diamonds worth Rs.78,52,388-02/- of 418.13 carats to Mr. Arjanbhai. This Mr. Arjanbhai has many years of business experience and he was associated to many Brokers, Traders and Exporters of diamond business. He was knowing them since years."
16. From the above, it is indicated that the insured property was given to the commission agent Arjanbhai Mangukia as Surat.
17. The issue of warranty has been dealt by the State Commission in the following way:-
"18. At this juncture Shri Nanavati drawing my attention on page no.417 sec.2 has stated that if the cost of the property is more than 10 lacs then such property is required to be kept in standard safe, when in this case complainant's commission agent who took the goods on challan has not kept in the standard safe in that circumstances as per the terms and conditions of the policy complainant is not entitled to receive the amount of Insurance. At this juncture Shri Nanavati has vehemently argued that in this case the property is polished diamonds which were kept in the custody of commission agent Arjanbhai and when it was known that he is passed away it came to be known that he died because of hit on the back part of head as per the police investigation and receipt of goods given on challan was recovered by him. But the polished diamonds given to him were not recovered from his body. In that circumstances the applicant is not eligible to receive the amount of Insurance. At this juncture, Shri. Dudhiya on behalf of the applicant has strongly argued that complainant's commission agent namely Arjanbhai according to the customs & tradition of the business taken the polished diamonds from the applicant to show it to the customer and accordingly in this incidence also he took polished diamonds from complainant to show to customer. In that circumstances it would not be possible to keep the diamonds in the Standard Safe and show to the customer and as per the customs and traditions with that commission agent, he has to keep the diamonds in his custody to show it to the customer. In these circumstances complainant has not done anything wrong in giving the diamonds to his commission agent without Standard Safe. Moreover as stated by Shri Dudhiya, commission agent cannot carry the standard safe with him in the market, and although if he carries away the standard safe with him than the people may come to know that he is carrying some valuable thing with him which may endanger his life and property. In these
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circumstances the reason for repudiating the claim as stated in reason No.1 of the Repudiation Letter not reasonable and lawful & that complainants complaint cannot be rejected for that reason such argument of Shri Dudhiya deserves to be accepted."
18. It seems that the State Commission has agreed with the assertion of the learned counsel for the complainant that the condition of the warranty is impractical and cannot be observed as main work of the commission agent is to show the diamonds to the prospective buyers and therefore, it is not possible to keep the diamonds in the locked safe of standard make at all the time. This argument does not seem to hold good in the present case as in the present case, the diamond seems to have been given at Surat and the commission agent Arjanbhai Mangukia came of Mumbai and he was staying in Mumbai for the whole week and used to return to his home town at Surat on the weekend. Moreover, the commission agent Arjanbhai Mangukia has been murdered at his residence and not at the shop of any other diamonds dealer or jeweller. Clearly, when the diamonds are to be kept at residence, they were required to be kept under locked safe of standard make as per the warranty condition of the policy.
19. Based on the above discussion, we are of the considered opinion that the warranty mentioned in Section II of the policy has been breached and therefore, the insurance claim is not payable. Accordingly, FA No.36 of 2016 M/s. The New India Assurance Co. Ltd. vs. M/s. Dharmanandan Diamonds is allowed and the order dated 30.10.2015 of the State Commission is set aside. Consequently, the complaint is also dismissed. In view of the dismissal of the complaint, FA No.12 of 2016 M/s. Dharmanandan Diamonds Pvt. Ltd. vs. The New India Assurance Company Ltd. also stands dismissed.
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PREM NARAIN
PRESIDING MEMBER
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C. VISWANATH
MEMBER
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