Kolkata man loses gold while moving house, national consumer commission rules he can’t claim insurance: Here’s why

AVM J Rajendra (Retd) and Justice Anoop Kumar Mendiratta were hearing the appeal filed by Bharat Qumar Nandy.

“In absence of any clause in the insurance policy which covers the incident of loss/theft during transit, the order passed by the learned State Commission cannot be faulted,” said the national consumer body on February 12.

NCDRC: Insurance contracts must be strictly interpreted

• The complainant has not been able to show whether the insurance policy covers loss, if any, during transit.
• Apparently, the incident of theft/loss of ornaments during transit in shifting from tenanted premises from Sudhashree II to Sudhashree I cannot be ruled out.
• As such, it cannot be said with certainty if the ornaments were stolen from the premises.
• Also, the said chest of drawers containing the ornaments is stated to have been carried to the new residence by the labourers engaged by the complainant without being locked, which reflects the absence of reasonable care expected to safeguard the property.
• The insurance policy between the insurer and the insured is to be strictly interpreted, and a new contract cannot be made out to cover the events which were not intended to by the insurer.
• Since the insurer undertakes to compensate the loss suffered by the insured on account of specific risks covered by the insurance policy, the insured cannot claim anything more than what is covered by the policy.

Revision petition dismissed

• Concluding that there was no infirmity in the state consumer commission’s reasoning, the national consumer body dismissed the revision petition as “devoid of merits” and declined to interfere with the order.
• “No order as to costs,” the bench added.

Jewellery missing after shifting

• The case traces back to October 2012, when complainant Bharat Qumar Nandy, who had obtained a ‘Household Package Policy’ from Reliance General Insurance Company Limited, shifted his residence within the same housing complex in Survey Park, Kolkata.
• According to the complaint, Nandy moved from Sudhashree II, Flat A-2, to Sudhashree I, Flat 1B, on October 4, 2012.
• During the process of unpacking, he allegedly discovered that certain gold ornaments kept in a wooden box inside a chest of drawers were missing.
• After searching until October 8, 2012, he lodged a police complaint on October 9 and informed the insurer on October 10.

Claim rejected

• The insurer rejected the claim on February 18, 2013, citing two key grounds.
• The first ground was that the loss allegedly occurred during transit, and no transit insurance had been taken.
• The second was that the insured exhibited “gross negligence” by allowing valuable ornaments to be transported inside an unlocked chest of drawers by labourers during the shifting process.
• The rejection letter specifically recorded that handing over such valuables to labourers “comes under gross negligence on the part of the insured” and that, in the absence of transit coverage, the company could not indemnify the loss.

District forum grants relief

• Aggrieved by the rejection, Nandy approached the district consumer forum in Kolkata.
• The district forum allowed the complaint, directing the insurer to pay Rs 3,73,317 towards the claim amount, Rs 20,000 as compensation for harassment and mental agony, and Rs 5,000 as litigation costs.
• However, the insurer challenged the order before the West Bengal State Consumer Disputes Redressal Commission.

State panel reverses decision

• The state commission allowed the insurer’s appeal and set aside the district forum’s order on November 28, 2017.
• It observed that the complainant had candidly admitted in his police complaint that the ornaments went missing during the process of shifting household articles.
• Since the policy did not cover loss during transit, the peril fell outside the scope of indemnity.
• The Commission also relied on the survey report, which noted there was no sign of forced entry or breakage of locks in the chest of drawers.
• It concluded that the valuables had been left unsecured, amounting to a breach of policy conditions.
• Calling the district forum’s order unsustainable in law, the state commission set it aside.

Arguments before NCDRC

• Advocate Priyanka Sinha, appearing for the complainant, argued that the insurance cover was not limited to the earlier tenanted premises and extended to the new address, which had been endorsed in the policy with effect from October 4, 2012.
• It was further contended that due care and caution had been exercised during the shifting and that negligence could not be presumed.
• Advocate Akansha Singh, the counsel for Reliance General Insurance, argued that the policy did not cover transit risk and that it could not be ruled out that the ornaments were stolen during transportation, a peril clearly outside the contract.