NEW INDIA ASSURANCE CO LTD Vs. CENTIMENTS GARMENTS

JUDGEMENT

(1.) Brief facts giving rise to this appeal at the behest of New India Assurance Company against the order dated 10.3.2006 of District Forum, Gurdaspur, may be noticed : The complainant, M/s. Centiments Garments, was carrying on the business in readymade garments. They had got their stock insured with the Insurance Company in the sum of Rs. 2.50 lacs. During the subsistence of the policy, it was alleged, that in the intervening night of 12th/13th June, 2003, a theft had taken place in complainant s shop by opening the main gate of the shop. Some readymade garments, cosmetics, artificial jewellery and flowers were stolen. F.I.R. No. 34 dated 29.3.2003 regarding the theft was lodged with the Police Station, Gurdaspur. Information regarding theft was also given to the Insurance Company. A Surveyor was appointed by the Insurance Company who assessed the loss to the tune of Rs. 66,514. In fact, as per the Surveyor s report, the loss which had occurred to the complainant was Rs. 94,562. Since, according to the Surveyor, the total value of the stock on the date of theft was Rs. 3,55,409 and the stocks had only been insured to the tune of Rs. 2.50 lacs, the Surveyor came to the conclusion that the stocks were under-insured to the extent of 29.66%, and therefore, the loss was reduced accordingly and the net loss was assessed at Rs. 66,514. Since the amount was not paid, the complainant filed a complaint before the District Forum which has allowed the complaint on March 10, 2006 in the following terms

(2.) It was argued on behalf of the Insurance Company that no fault can be found in the Surveyor s Report inasmuch as the stock, on the date of theft, was assessed at Rs. 3,55,409 whereas the insurance was only of the stock to the extent of Rs. 2.50 lacs. Since the stocks were under-insured to the extent of 29.66%, the average clause would become applicable and the total loss had to be reduced by 29.66%. Accordingly the Counsel argued that the District Forum could not have granted relief beyond 70.34%.

(3.) On the other hand, learned Counsel for the respondent-complainant argued that in the Insurance Policy, there is no condition/clause regarding the applicability of average clause. In other words, if the stocks are more than the insured, then average clause cannot be made applicable unless there is specific condition in the insurance policy. Accordingly, learned Counsel argued that under the policy, the Insurance Company was liable to indemnify the loss to the extent of 2.50 lacs maximum. It was further argued that no fault can be found with the judgment of the District Forum.