Dr. Dhananjaya Y. Chandrachud, J.
Leave granted.
The National Consumer Disputes Redressal Commission1 by
its judgment dated 16 April 2015 reversed the concurrent
findings arrived at by the District Consumer Disputes Redressal
Forum, Solapur2 and by the Consumer Disputes Redressal
Commission, Maharashtra3.
The appellant has a showroom at Solapur in which watches
are sold. The appellant had insured its stock of watches with
the respondent. During the course of the night on 3 August
2001, after the shop had closed for the day, a theft occurred
1 “NCDRC”
2 “District Forum”
3 “SCDRC”
A First Information Report was lodged with the Police and
a claim under the insurance policy was made. The surveyor
submitted a preliminary report on 4 September 2001 indicating a
loss of approximately Rs 3,86,395. The surveyor recorded that
they were informed by the partner of the firm that the theft
may have taken place by utilising duplicate keys. The
surveyor, however, found empty watch stands on which the strips
of the model numbers were lying behind the counters. There was
no sign of forcible entry. This was followed by a surveyor’s
report dated 30 November 2001.
After the claim was repudiated by the insurer, the
appellant filed a consumer complaint. By an order dated 26
April 2007, the District Forum allowed the claim in the amount
of Rs. 3,04,000. The decision of the District Forum was
affirmed, in appeal, by the SCDRC on 19 April 2010.
The NCDRC reversed the above decisions in its revisional
order dated 16 April 2015, relying upon a decision of this
Court in United India Insurance Co. Ltd. vs. Harchand Rai
Chandan Lal 4 . Construing the terms of the exclusion in a
policy of insurance against burglary and/or house breaking,
this Court had held that where the loss or damage was caused
without forcible and violent entry to and/or exit from the
premises, the claim could not be maintained. The terms of the
policy in the above decision of this Court read as follows:
“’Burglary and/or housebreaking’ shall mean
theft involving entry to or exit from the
premises stated therein by forcible and
4 (2004) 8 SCC 644
violent means or following assault or violence
or threat thereof to the insured or to his
employees or to the members of his family.”
Construing the above condition, this Court held:
“15….we are of the opinion that theft should
have been preceded with force or violence as
per the terms of insurance policy. In order
to substantiate a claim an insurer has to
establish that theft or burglary took place
preceding with force or violence and if it is
not, then the insurance company will be well
within their right to repudiate the claim of
the insurer.”
In the present case, the NCDRC in the course of its
decision adverted to “clause 8” of the insurance policy which
was in the following terms:-
“Loss of money and / or other property
abstracted from safe following the use of the
key to said safe or any duplicate thereof
belonging to the insured unless such key has
been obtained by assault or any threat”
This was in any event not applicable, since the loss was
not from a safe.
Clause (a) of the policy as extracted in the above
judgment reads thus:
“Any loss of or damage to the property or any
part thereof whilst contained in the premises
described in the schedule hereto due to
Burglary or Housebreaking (theft following upon
an actual forcible and violent entry to and /
or exit from the premises and hold-up”
Since clause (a) was pari materia with the clause which
was construed by this Court in the above decision of this Court
in United India Insurance (supra), the NCDRC reversed the
decisions of the District Forum and the SCDRC.
The basic issue which has been canvassed on behalf of the
appellant before this Court is that the conditions of exclusion
under the policy document were not handed over to the appellant
by the insurer and in the absence of the appellant being made
aware of the terms of the exclusion, it is not open to the
insurer to rely upon the exclusionary clauses. Hence, it was
urged that the decision in Harchand Rai (supra) will have no
application since there was no dispute in that case that the
policy document was issued to the insured.
This submission is sought to be answered by the learned
counsel appearing on behalf of the insurer by adverting to the
fact that the SCDRC construed the terms of the exclusion. The
SCDRC, however, did not notice the decision of this Court, and
hence, the NCDRC was (it was urged) justified in correcting the
error having regard to the law laid down by this Court.
Learned counsel urged that the appellant has been insuring its
goods for nearly ten years and it is improbable that the
appellant was not aware of the exclusion.
We find from the judgment of the District Forum that it
was the specific contention of the appellant that the
exclusionary conditions in the policy document had not been
communicated by the insurer as a result of which the terms and
conditions of the exclusion were never communicated. The fact
that there was a contract of insurance is not in dispute and
has never been in dispute. The only issue is whether the
exclusionary conditions were communicated to the appellant.
The District Forum came to a specific finding of fact that the
insurer did not furnish the terms and conditions of the
exclusion and special conditions to the appellant and hence,
they were not binding. When the case travelled to the SCDRC,
there was a finding of fact again that the conditions of
exclusion were not supplied to the complainant.
Having held this, the SCDRC also came to the conclusion
that the exclusion would in any event not be attracted. The
finding of the SCDRC in regard to the interpretation of such an
exclusionary clause is evidently contrary to the law laid down
by this Court in Harchand Rai (supra). However, the relevance
of that interpretation would have arisen provided the
conditions of exclusion were provided to the insured. The
NCDRC missed the concurrent findings of both the District Forum
and the SCDRC that the terms of exclusion were not made known
to the insured. If those conditions were not made known to the
insured, as is the concurrent finding, there was no occasion
for the NCDRC to render a decision on the effect of such an
exclusion.
In the circumstances, the NCDRC was in error in reversing
the decisions of the District Forum and the SCDRC which were
grounded on a pure finding of fact that the terms of exclusion
were not made known to the insured.
We clarify that in a situation where the terms of
exclusion as noted earlier apply, the law laid down by this
Court in Harchand Rai (supra) would undoubtedly stand
attracted. This case is, however, distinguishable on facts,
since the terms of exclusion were not communicated.
We accordingly, allow the appeal and set aside the
impugned judgment and order of the NCDRC. The order passed by
the District Forum shall accordingly, stand restored. There
shall be no order as to costs.
Pending application(s), if any, shall stand disposed of.
Petition(s) for Special Leave to Appeal (C) No(s). 25468/2016
(Arising out of impugned final judgment and order dated 16-04-2015 in RP No. 3836/2010 passed by the National Consumers Disputes Redressal Commission, New Delhi)
BHARAT WATCH COMPANY THROUGH ITS PARTNER Petitioner(s)
VERSUS
Date : 12-04-2019 This petition was called on for hearing today.
CORAM :
For Petitioner(s)
Mr. Sudhanshu S. Choudhari, AOR
Ms. Surabhi Guleria, Adv.
Mr. Yogesh Kalte, Adv.
Ms. Nandini Singla, Adv.
For Respondent(s)
Mr. Vishnu Mehra, Adv.
Mr. Anant Mehrotra, Adv.
Ms. Sakshi Mittal, AOR
UPON hearing the counsel the Court made the following
O R D E R
Leave granted.
The appeal is allowed in terms of the signed order.
Pending application(s), if any, shall stand disposed of.
(Signed reportable judgment is placed on the file)