ABHILASH JEWELLERY Vs. NEW INDIA ASSURANCE CO LTD

JUDGEMENT

(1.) THIS petition is by the complainant who had alleged deficiency in service by the respondent-Insurance Company. Petitioner-complainant has its business establishment at Vellappad in Trissur District in the State of Kerala. It took a Jeweller's Block Policy for Rs. 1,15,00,000/-. During the currency of the policy complainant lodged a claim with the respondent for loss of gold ornament weighing 587.870 grams which was being carried by one of its employees in the State of Kerala itself. The claim under the policy was repudiated by the respondent holding that loss of the gold occasioned as it was in the custody of an apprentice and he being not an employee it was not covered under the policy and as such claim was repudiated. This is what letter dated 22.7.1997 of the respondent reads :

(2.) COMPLAINANT , therefore, approached the District Forum seeking the value of the gold. District Forum dismissed the complaint holding that the apprentice could not be covered under the definition of an employee and, moreover, clause X of the policy was violated which required that insured shall use due diligence and shall do everything reasonably possible to avoid or diminish any loss under the policy. It was held by the District Forum that the complainant entrusted insured gold to a person with "exceptionally careless behaviour" which violated the mandatory condition clause X of the policy.

(3.) IT is not disputed that the business establishment of the complainant comes within the purview of the Kerala Shops and Commercial Establishment Act. Clause (6) of Section 2 of this Act gives the definition of 'employee'. Here 'employee' means "a person wholly or principally employed in and in connection with, any establishment and included an apprentice". In spite of clear definition of the term 'employee' which includes apprentice as well clause II of the policy, Mr. Paul, learned Counsel for the respondent strenuously argued apprentice could not be an employee under the policy in question. His argument was that term of the policy covers whole of the country and the definition of employee which though includes apprentice under the Kerala Shops and Commercial Establishments Act could to be applicable to the policy issued to the complainant. We are unable to agree to any such contention. The policy of insurance was taken by the complainant who is based in Kerala and the loss of gold ornaments also took place there. Business establishment of the complainant is covered under the local Kerala Shops and Commercial Establishment Act and when the policy was taken it must be presumed that the Insurance Company was well aware of the provisions of that Act where the employee included apprentice as well. Moreover, clause II of the policy quoted above squarely covers the case of an apprentice. Mr. Paul then referred to two decisions of the Supreme Court in support of his contention. In the Employees' State Insurance Corporation and Anr. v. The Tata Engineering and Co., Locomotive Co. Ltd. and Anr., AIR 1976 SC 66, the question before the Court was if an apprentice could be an 'employee' under the provisions of Employees State Insurance Act, 1948. The Court held that word 'apprentice' was not defined in the Act, nor was it specifically referred to in the definition of 'employee' by either inclusion or exclusion. The Court, therefore, said that it was unable to hold that in ordinary acceptation of the term 'apprentice' a relationship of master and servant was established under the law. State of Haryana and Ors. v. Rani Devi and Anr., 1996 5 SCC 308, a compassionate employment was given to the widow of the deceased apprentice Canal Patwari on the ground that she was dependent on the deceased employee. Relevant Government Circular provided for employment of a dependent on the death of "deceased government employee". Court held that an apprentice could to be an employee to whom the Government Circular would apply., Both these judgments in our view are not relevant in the present case either in law on facts.