1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

    CIVIL APPEAL NO(S). 3912 OF 2019   (@SLP(C) No. 25468/2016)

BHARAT WATCH COMPANY THROUGH ITS PARTNER       Appellant(s)

                               VERSUS

NATIONAL INSURANCE CO. LTD. THROUGH  ITS REGIONAL MANAGER   Respondent(s)

JUDGMENT

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

in the premises.  The theft was detected at about 9 A.M. on the

next day after the shop opened for business.

1 “NCDRC” 2 “District Forum” 3 “SCDRC”

2

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

3

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.

4

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

5

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.

6

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.

...............................J.      (DR. DHANANJAYA Y. CHANDRACHUD)

...............................J.      (HEMANT GUPTA)

NEW DELHI  APRIL 12, 2019

7

ITEM NO.44               COURT NO.11               SECTION XVII

              S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS

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

NATIONAL INSURANCE CO. LTD. THROUGH  ITS REGIONAL MANAGER   Respondent(s)

 Date : 12-04-2019 This petition was called on for hearing today.

CORAM :           HON'BLE DR. JUSTICE D.Y. CHANDRACHUD          HON'BLE MR. JUSTICE HEMANT GUPTA

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.

(MANISH SETHI)                                  (SAROJ KUMARI GAUR) COURT MASTER (SH)                                  BRANCH OFFICER

(Signed reportable judgment is placed on the file)