1996 1 CLT 626 ; 1996 1 CPJ 325 ; 1996 1 CPR 81
KARNATAKA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, BANGALORE
Hon’ble Mr. Justice D.R. Vithal Rao, President;
Mr. Kumar Gowda & Mrs. Susheela Cheluvaraju, Members
DIAMOND JEWELLARY MART—Complainant
versus
UNITED INDIA INSURANCE CO. & ANR.—Opp. Parties
Complaint No. 152 of 1993—Decided on 31.10.1995
Act Referred :CONSUMER PROTECTION ACT : S.17, S.12
(A) This matter involves a complaint filed under Section 17 read with Section 12 of the Consumer Protection Act, 1986, wherein the complainant alleged a deficiency in service by an insurance provider for the repudiation of a burglary claim. The statutory framework under these sections empowers the forum to adjudicate upon disputes regarding deficiencies in services provided by insurance companies. The core of the legal analysis rests on whether the repudiation of the claim based on the specific terms and conditions of the insurance policy constitutes a 'deficiency in service' as defined under the Act, or whether the claim fell outside the scope of the contractual coverage agreed upon by the parties.
(B) The primary legal principle discussed is the sanctity of the insurance contract and the strict adherence to the description of insured property. It establishes that if a policy specifically limits coverage to items stored in a particular manner (e.g., steel safe cupboards), items stored outside that specified manner (e.g., glass showcases) are not covered, and repudiating such a claim does not amount to a deficiency in service.
Facts of the case:
A jeweler obtained a Burglary and House Breaking insurance policy for his shop. The policy specifically covered ornaments and precious stones kept in boxes and/or steel safe cupboards. Following a burglary, the complainant filed a claim for lost articles. The insurance company repudiated the claim on the grounds that the stolen articles were kept in glass showcases rather than the insured steel safe cupboards. The complainant subsequently approached the consumer forum seeking compensation for the value of the articles, interest, and mental agony.
Findings of Court:
The court examined the insurance policy and the police report (Mahazar). It found that while the complainant claimed in his affidavit that articles were in safe cupboards, the police report indicated that the stolen items were actually kept in show-cases. The court observed that the policy conditions explicitly limited coverage to property kept in steel safe cupboards and not in show-cases.
Issues:
Whether the repudiation of the insurance claim by the opposite party, on the grounds that the stolen items were not stored in the manner specified in the policy, constitutes a deficiency in service under the Consumer Protection Act.
Ratio Decidendi:
An insurance company is entitled to repudiate a claim if the loss occurs to property that does not meet the specific descriptive criteria of the insured property as defined in the policy. Since the stolen articles were in show-cases and the policy only covered items in steel safe cupboards, there was no breach of contract or deficiency in service.
Result:
The complaint was dismissed and the parties were directed to bear their own costs.
(A) This matter involves a complaint filed under Section 17 read with Section 12 of the Consumer Protection Act, 1986, wherein the complainant alleged a deficiency in service by an insurance provider for the repudiation of a burglary claim. The statutory framework under these sections empowers the forum to adjudicate upon disputes regarding deficiencies in services provided by insurance companies. The core of the legal analysis rests on whether the repudiation of the claim based on the specific terms and conditions of the insurance policy constitutes a 'deficiency in service' as defined under the Act, or whether the claim fell outside the scope of the contractual coverage agreed upon by the parties.
(B) The primary legal principle discussed is the sanctity of the insurance contract and the strict adherence to the description of insured property. It establishes that if a policy specifically limits coverage to items stored in a particular manner (e.g., steel safe cupboards), items stored outside that specified manner (e.g., glass showcases) are not covered, and repudiating such a claim does not amount to a deficiency in service.
Facts of the case:
A jeweler obtained a Burglary and House Breaking insurance policy for his shop. The policy specifically covered ornaments and precious stones kept in boxes and/or steel safe cupboards. Following a burglary, the complainant filed a claim for lost articles. The insurance company repudiated the claim on the grounds that the stolen articles were kept in glass showcases rather than the insured steel safe cupboards. The complainant subsequently approached the consumer forum seeking compensation for the value of the articles, interest, and mental agony.
Findings of Court:
The court examined the insurance policy and the police report (Mahazar). It found that while the complainant claimed in his affidavit that articles were in safe cupboards, the police report indicated that the stolen items were actually kept in show-cases. The court observed that the policy conditions explicitly limited coverage to property kept in steel safe cupboards and not in show-cases.
Issues:
Whether the repudiation of the insurance claim by the opposite party, on the grounds that the stolen items were not stored in the manner specified in the policy, constitutes a deficiency in service under the Consumer Protection Act.
Ratio Decidendi:
An insurance company is entitled to repudiate a claim if the loss occurs to property that does not meet the specific descriptive criteria of the insured property as defined in the policy. Since the stolen articles were in show-cases and the policy only covered items in steel safe cupboards, there was no breach of contract or deficiency in service.
Result:
The complaint was dismissed and the parties were directed to bear their own costs.
ORDER
Mr. Justice D.R. Vithal Rao, President— In this complaint under Section 17 read with Section 12 of the Consumer Protection Act, 1986, the complainant has sought compensation in a sum of Rs. 1,60,300/- from the opposite partiesUnited India Insurance Company.
2. The complainant is having a shop known as M/s. Diamond Jewellary Mart’, Broadway at Hubli. He is a jeweller. The complainant obtained an Insurance Policy on 29.2.89, the period of which was from 29.2.89 to 28.2.90. It was a Burglary and House Breaking policy in respect of his shop. The Insurance amount was Rs. 14,55,000/-.
3. It is the case of the complainant that during the night of 15/16th March, 1989 a theft of burglary took place in the said shop. The complainant came to know of this fact in the morning of 16.3.89 and made a report of the occurrence to the police. The police recorded the Mahazar. At the same time the complainant also filed a claim petition with the opposite party. The opposite party repudiated the claim on some untenable grounds. So the complainant filed the complaint seeking sum of Rs. 85,300/- towards the value of the lost articles; Rs. 65,000/- towards the interest and Rs. 10,000/- as compensation towards mental agony.
4. The opposite party filed its version and admitted the fact that a Insurance Policy was issued as averred by the complainant. The opposite party further averred that the goods insured were the goods kept in steel safe cupboards and whereas as per the complaint of the complainant, the articles stolen were kept in glass showcases and so that was not the goods covered under the policy. So the claim of the complainant came to be repudiated.
5. The opposite party further averred that there was no deficiency in service on their part in repudiating the claim of the complainant.
6. During enquiry the complainant filed the affidavit in evidence and got Exts. C.1 to C. 4 marked in evidence.
7. We heard the learned Counsel for the complainant, perused the pleadings and the material on record.
8. Ex. C.1 is the Insurance Policy. The properties insured under the said Insurance Policy read as under :
“On stock of Ornaments of Gold and /or Silver and/or such other metal articles and/or artificial stones and/or Diamonds in Boxes and /or kept in steel safe cupboards whilst stored/lying/kept at shop of 1st class construction building situated at Broadway, Hubli.”
9. The risk covered reads thus :
“Burglary and house breaking”.
10. The complainant has stated in the complaint that the stolen articles were kept in the steel cupboards and show cases which were under locks. Even in the affidavit the complainant has stated that he had stored and displayed valuable articles in safe cupboards.
11. Immediately after the occurrence i.e., in the morning of 16.3.89 the complainant made a complaint of the occurrence to the police as per Ex. C.2, wherein he has stated thus :
“xx xx xx”
12. This shows that the articles that were stolen away, according to the complainant, were the articles that were kept in the show-cases. The policy condition shows that the property that was insured was the property kept in steel safe cupboards and not the property kept in the show-cases.
13. The opposite party the Insurance Company on consideration of this fact that the articles that were stolen away were not the articles from the property insured by the complainant and so repudiated the claim of the complainant.
14. Having regard to these facts and in the circumstances of the case, we do not find any deficiency in service on the part of the opposite party in repudiating the claim of the complainant.
15. In the result, therefore, this complaint fails and it is dismissed.
16. The parties are directed to pay and bear their own costs.
Complaint dismissed.