ORIENTAL INSURANCE COMPANY LIMITED Vs. STATE OF BIHAR

JUDGEMENT

(1.) The Oriental Insurance Company Limited and its officials five in number posted in the regional offices at Patna, Bangalore and Gauhati, and the branch office at Patna have come to this Court for quashing the order of the Judicial Magistrate 1st Class, Patna dated 24-5-2000 in Complaint Case No. 610/2000 taking cognizance and issuing processes under Sections 406, 409 and 420 Indian Penal Code against them.

(2.) The case of the complainant-opposite party, M/s. Poddar Industries, is that it is a partnership firm. In 1992 the Branch Manager of the petitioner company approached its partner and requested him to insure the factory building with all equipments along with the boundary wall and the partners agreed for the same. The rate of premium was thereafter fixed after site inspection as per the cost value of the goods insured. Finally, the company issued fire policy "C" with coverage of special perils like flood etc. for one year. The policy was renewed every year. The last renewal was for the period 13-7-99 to 12-7-2000. On 1-8-99 in the night the boundary wall of the factory about 100 feet in length-fell down on account of heavy rains causing loss to the complainant. On 2-8-99 the local Branch Manager was informed about the loss and he was requested to depute a surveyer for assessment of the loss. The surveyer accordingly assessed the loss and the complainant submilted claim on 14-8-99. On 10-12-99 the complainant was informed by letter dated 30-11-99 that the claim had been rejected. On 10-12-99 itself the complainant sent letter to the Branch Manager requesting him to assign reasons why the claim had been rejected requesting him further to supply copy of the surveyer's report. On 14-12-99 the Branch Manager informed that the collapse of the boundary wall was on account of faulty design and structural defects and that on the date of occurrence there was no renewal of the policy. According to the complainant, the reasons are baseless and highly motivated. The complainant obtained the meteorgological report from the concerned department of the Government of India which shows that in the month of July, 1999 rainfall occurred on 24 days out of 31 days totalling 3359 mms. Further, the Company had received premium of Rs. 4668/- on account of renewal of the policy and the policy stood renewed. The reasons assigned tor rejecting the claim were thus false, groundless and motivated. The complainant on these facts alleged that it had been cheated by the accused persons in conspiracy with each other for their wrongful gain causing wrongful monetary loss to the complainant and also committed criminal breach of trust and are therefore liable to be punished for those offences.

(3.) The case of the petitioners as stated in the quashing application, briefly, is that the Oriental Insurance Company Ltd. is a subsidiary of the General Insurance Co. of India, a public sector company having its registered and head office at New Delhi and a regional office at Patna. A fire policy "C" was issued to the complainant on the basis of proposal submitted by it allowing insur ance cover for the buildings including plinth and foundation and other items for the period 13-7-98 to 12-7-2000. The policy covered loss of items insured due to flood. On 2-8-99 the complainant informed the Branch Manager of Branch I at Patna that in the preceding night boundary wall of factory about 100 feet in length had collapsed. Claim No. 1/2000 was lodged and the reason shown for the loss was that due to heavy rain the boundary wall had fallen and damaged the pipes. The company appointed Sri S. K. Sinha, Surveyer and Loss Valuers for the assessment of loss as required under Section 64UM of the Insurance Act 1938. On 7-9-99 he submitted report after obtaining opinion of the expert that fall of the structure was not due to flood or inundation. As per the rules, the Company appointed Sri Abhay Kumar Dutt Verma, Surveyer and Loss Valuers and Investigator to make investigation with respect to the rain fall on August 1, 2 and 3, 1999 at Patna. On 12-10-99 he submitted his findings after obtaining certificate from the Meteorological Department as per which rainfall on 1-8-99 was 0.0 mm; on 2-8-99, 33.00 mms; and on 3-8-99, 2.2 mms. On the basis of said reports on 30-11-99 the Branch Manager informed the complainant that its claim had been repudiated. On 14-12-99 the reasons for repudiation were communicated to the complainant on request. The complainant thereafter represented to the regional office for reinvestigation. On 17-3-2000 the regional office informed the complainant that on review of the claim the decision of the Branch Office was correct and the same did not require any modification.