United Insurance Co.,Ltd. vs Battineni Laxmaiah
2022 Latest Caselaw 5481 AP

             THE HON'BLE Ms. JUSTICE B.S.BHANUMATHI


                       Appeal Suit No.738 of 1998

JUDGMENT:

This appeal is preferred against the judgment and decree, dated

29.01.1998, passed in O.S.No.87 of 1987 on the file of the Court of

Principal Senior Civil Judge, Narasaraopet.

2. The pleadings of the parties are as follows:

2(a) The plaint averments, in brief, are that the plaintiff insured his

entire rice and flour-mill machinery including Huller, Sheller, separator

and electrical motor and other allied fixtures and fittings, wooden

structures and old silent machinery parts pertaining to dall mill

property of the plaintiff kept in the above premises including furniture,

cup boards, tables, chairs and weighing scale with dead weights and

packing materials of gunny bags is bundled against loss due to risk of

burglary, house breaking by taking policy for a period from 31.12.1985

to 31.12.1986 with the defendant. The defendant issued policy

bearing No.051000/01/1/06750, insuring the above referred materials

which are kept in Door No.6-184, Chilakaluripet Municipality for a sum

of Rs.1,30,000/-. The plaintiff also paid the premium for this policy on

31.12.1985 itself.

2(b) On the night of 04.02.1986, there was burglary in the insured

premises. Iron rods of the window were twisted and broke open and

the burglars entered into the mill machine hall. They broke open the

lock of the outside door, outdoor of the mill premises and other doors

of the premises. The goods worth Rs.90,050/- were stolen away by

the burglars. This was reported on the next day, i.e., on 05.02.1986

BSB, J A.S.No.738 of 1998

to the Divisional Manager of the defendant who along with the

Assistant Divisional Manager inspected the premises. They were

completely satisfied with the genuineness of the complaint of burglary.

Thereafter, a thorough survey was conducted by the defendant by

deputing their own Surveyor who assessed the damage due to the

burglary to the extent of Rs.55,195/- net loss after deducting the

depreciation. The plaintiff is thus entitled for the above referred

amount as per the contract of insurance referred above. The

defendant, without any basis, had repudiated the claim of the plaintiff

stating that there is no burglary. The plaintiff got issued a registered

notice to the defendant on 12.12.1986, however, there was no reply.

The plaintiff is entitled to claim interest at 18% per annum from the

date of repudiation of the contract from the defendant. Hence, the

suit.

3. The defendant filed written statement denying the averments

made in the plaint. The suit is not properly laid and is therefore, not

maintainable. The insured is M/s. Sri Kodanda Rama Rice and Flour

Mill and not Bathineni Lakshmaiah. Hence, the plaintiff is not entitled

to file the suit or claim the amount from the defendant. The insured

gave telegram, dated 05.02.1986, alleging theft/burglaryof machinery.

The insured also informed the defendant by letter, dated 07.02.1986

that it has reported the matter to the police and that the investigation

is in progress. The defendant has received copies of FIR, and Final

Investigation report from the Superintendent of Police, Guntur. The

investigation clearly reveled that there was no possibility for any

offender to commit theft by entering into the mill through the gap

created in the window, that there was dust in the mill as it was not in

BSB, J A.S.No.738 of 1998

use and that no foot prints were found on the floor. The police

investigated into the complaint given by the insured and found that the

insured complained only with a view to claim insurance to clear all the

debts and that a false complaint was given. In view of the clear

findings of the police, on due investigation, the defendant was

constrained to repudiate the claim of the insured as the alleged

burglary is clearly false. Hence the claim of the insured is untenable.

The plaintiff is not entitled to any amount from the defendant, much

less Rs.55,195/- or any interest thereon. Hence, the suit is liable to be

dismissed.

4. On the basis of the above pleadings, the following issues were

framed for trial:

1. Whether the frame of the suit is correct?

2. Whether the plaintiff is entitled for the suit claim?

3. To what relief?

5. The plaintiff examined himself as PW1 and got examined two

more witnesses as PWs 2 & 3 and got marked exhibits A1 to A7. On

behalf of the defendant, its Senior Branch Manager is examined as

DW1 and exhibits B1 to B4 were marked.

6. On a consideration of the evidence on record and upon hearing

the counsel for the parties, the trial Court decreed the suit for a sum of

Rs.55,000/- with costs and interest at the rate of 6% per annum from

the date of the suit till the date of realization.

7. Hence, the aggrieved defendant preferred this appeal mainly

raising the following grounds:-

BSB, J A.S.No.738 of 1998

(i) The trial Court ought to have seen that the respondent/plaintiff

has not made out any case of burglary or theft under the terms

and conditions of policy;

(ii) The trial Court failed to see that the police, after thorough

investigation, referred the case as 'false';

(iii) The final report submitted by the police further indicates that the

complainant, with a view to claim heavy insurance and clear off

all his bank debts, given a false complaint;

(iv) The report of the police was issued after thorough enquiry and

investigation, which is binding on all the parties;

(v) The trial Court ought to have seen that mere appointment of

Surveyor by the appellant does not mean that the insurance

company accepts the report of the Surveyor and that the

Surveyor was appointed only without prejudice to ascertain the

loss subject to the terms and conditions of the policy;

(vi) The trial Court failed to take note that the report of the

Surveyor cannot be taken into consideration for the purpose of

ascertaining as to whether the claim is false or not except to the

extent of assessing the loss sustained;

(vii) The trial Court erred in law in casting the burden on the

appellant-insurance company to prove that there was no theft or

burglary;

(viii) The trial Court erred in fastening the liability on the insurance

company on the basis of evidence of PWs 1 to 3 as against the

BSB, J A.S.No.738 of 1998

documentary evidence furnished by the appellant-insurance

company;

(ix) The trial Court ought to have seen that the appellant is right in

repudiating the claim of the plaintiff as the alleged burglary was

false;

(x) The trial Court ought to have seen that the entire evidence

adduced would lead to a conclusion that there was no proof of

theft and as such the judgment impugned in this appeal was not

in accordance with the evidence brought on record by the

plaintiff;

8. Heard Smt. S.A.V.Ratnam, learned counsel for the appellant/

defendant and Sri M. Ravindranath Reddy, learned counsel for the

respondent/ plaintiff. The parties shall hereinafter be referred to as

the plaintiff and the defendant.

9. Obviously, the appellant/defendant has not challenged the

finding of the trial Court on issue No.1. Since the claim of the plaintiff

is based on loss of property due to theft, which is denied by the

defendant, taking the initial burden of the plaintiff to establish the

same, the plaintiff relied on his own evidence as well as the evidence

of PWs 2 and 3 who are neighbors to the mill. Similarly, the defendant

got examined its Senior Branch Manager as DW1 and relied on exhibits

B1 to B4. Since both parties have lead evidence on the disputed fact,

the significance of the burden of proof vanishes and the evidence in its

entirety shall be considered. None of the witnesses, PWs 1 to 3, is an

eyewitness to the alleged theft. Therefore, it is only the circumstantial

BSB, J A.S.No.738 of 1998

evidence which throws light on the disputed fact and is required to be

considered.

10. According to the defendant, there was no possibility of theft of

huge machinery from the space made by bending the iron rods of

window as opined by the Investigating Officer, since the doors of the

mill were under lock intact. Further, the Investigating Officer referred

the case as 'false' with the observation that there were no marks of

footprints on the dust gathered on the floor and whereas the

complainant/plaintiff is indebted to many, this was an attempt to

realize the insured money to clear off debts. The fact that the police

referred the case as 'false' has not been denied or disputed. On the

other hand, the plaintiff expressed ignorance. Such ignorance cannot

be believed as there is every chance for the complainant being put to

notice of such reference by the court concerned or even he can make

enquiry about the progress in the case and is supposed to do so in

view of the claim made in the suit. Moreover, when exhibits B1 to B4

were filed through DW1, no suggestion is given to him that they are

documents created for the purpose of the case. The report of the

Surveyor under exhibit A5 cannot be taken in aid by the plaintiff to

support his allegation of theft, since the work assigned to the Surveyor

is only to assess the loss and not for the purpose of making

investigation as to the fact of theft. Since the case was being

investigated into by the police, the very fact that the insurance

company has not made effort to engage the services of other agencies

for the purpose of investigation into the fact of theft does not negative

its defence. The trial Court has erroneously observed that it is not the

case of defendant that the plaintiff himself removed the machinery

BSB, J A.S.No.738 of 1998

from the insured premises. When the very case of the defendant is

that the case of theft is false as investigated by the police authorities,

there need not be any specific requirement of going into the details as

to how the case was falsely set up. Insofar as the reason for coming

to the conclusion of false case, it is pointed out by the police that there

were no footprints on the dust gathered on the floor and the trial Court

has pointed out that even if the plaintiff has removed such machinery,

there must be footprints. Since it is the case that burglary was

reported on a day just before the day of making complaint to the

police, it is expected that footprints would be visible on the dust. If

the plaintiff has set up the false case of theft, the machinery need not

be removed on a day just before the day of complaint and there is

every possibility of removing such machinery at any earlier date and

thereafter lodging complaint at a convenient time. Therefore, it is not

a point to be taken into consideration against the defendant.

11. As rightly contended by the appellant/defendant, the trial Court

has wrongly placed burden on the defendant to establish the

probability of false case of theft, rather than examining the evidence of

the plaintiff in the light of the case set up by the plaintiff and the

reasons stated by the Investigating Officer. Moreover, no reason is

put forward for not examining the person who has informed the

plaintiff about the theft. It is also to be noted that the date of theft is

not reported in the complaint. One can understand from the complaint

that the damage to the window was noticed on 04.02.1986 by the

worker of the rice mill.

12. It is an admitted fact as reported in the complaint also that the

mill was closed. The evidence is silent as to how long back the plaintiff

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or the worker visited the place of mill before 04.02.1986 or how often

they used to visit such place and whether there is any security

provided to the mill. Since all these facts would throw light on the

alleged fact of theft, absence of evidence on these aspects cannot be

ignored. For all these reasons, this Court finds that the plaintiff could

not establish that there was really theft of the machinery in the mill

with clinching evidence. On the other hand, the defendant could place

evidence probabilizing the defence that a false case was built up by the

plaintiff. Therefore, the suit claim is not sustainable and the impugned

judgment and decree are liable to be set aside.

13. In the result, the appeal is allowed setting aside the judgment

dated 29.01.1998, passed by the Principal Senior Civil Judge,

Narasaraopet in O.S.No.87 of 1987 and the suit is dismissed.

There shall be no order as to costs.

Miscellaneous petitions pending, if any, shall stand closed.

________________ B.S BHANUMATHI, J 23rd August, 2022 RAR