National Insurance Company Ltd. vs M/S Malhotra Traders
2017 Latest Caselaw 3668 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RSA No.280/2016

%                                                      27th July, 2017

NATIONAL INSURANCE COMPANY LTD.           ..... Appellant
                 Through: Mr. Manoj R. Sinha, Advocate.
                          versus

M/S MALHOTRA TRADERS                                    ..... Respondent

                 Through:                Mr. B.S.Dhir, Advocate.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1. This Regular Second Appeal under Section 100 of the

Code of Civil Procedure, 1908 (CPC) is filed by the defendant in the

suit impugning the judgment of the first appellate court dated

27.1.2016. The first appellate court vide its impugned judgment dated

27.1.2016 has set aside the judgment of the trial court dated 28.9.2013

whereby the trial court had dismissed the suit for recovery of

Rs.1,57,300/- filed by the respondent/plaintiff claiming the amount of

the value of the vehicle covered under the insurance policy. The first

appellate court while allowing the first appeal and decreeing the suit

filed by the respondent/plaintiff held that the vehicle was stolen during

the currency of the policy i.e after a cover-note was issued by the

agent of the appellant/defendant and counter-signed by the officer of

the appellant/defendant company and whereafter theft of the vehicle

took place.

2. The facts of the case are that the respondent/plaintiff was

the owner of the vehicle Maruti Esteem bearing registration no. DL-

4CC-6186. This vehicle was regularly insured by the

respondent/plaintiff from the appellant/defendant company from the

year 1997. The last period covered under the insurance policy was

28.12.1999 to 27.12.2000 and when it expired. Thereafter, as per the

respondent/plaintiff, there was a break in the policy for two days, and

a fresh cover-note was got issued on 29.12.2000 by the

respondent/plaintiff from the agent of the appellant/defendant

company and which cover-note was duly countersigned by the

employee (Assistant Administrative Officer) of the

appellant/defendant company. Cover-note was issued on the insurance

premium cheque of Rs.2906/- dated 29.12.2000 bearing no.006275

drawn on Oriental Bank of Commerce, Kingsway Camp Branch,

Delhi and was handed over by the respondent/plaintiff to the agent of

the appellant/defendant insurance company. The vehicle in question is

said to have been stolen from outside Palika Bazaar, New Delhi on

31.12.2000 and with respect to which an FIR was lodged on 1.1.2001.

Respondent/plaintiff claims that he informed both the agent of the

appellant/defendant company as also the officer of the

appellant/defendant company on 31.12.2000 and 1.1.2001, and also

ultimately informed this fact in writing to the appellant/defendant

company on 15.1.2001. Since the appellant/defendant company

refused to pay the insured amount, the subject suit came to be filed.

3. The appellant/defendant contended that the cover-note

issued was as a result of collusion of the respondent/plaintiff with the

agent Sh. Girish Chawla of the appellant/defendant company who had

issued the said cover-note, and that there was further collusion with

the employee Sh. Ravi Jain (Assistant Administrative Officer) of the

appellant/defendant company who had countersigned the cover note.

The appellant/defendant claimed that the vehicle was stolen on

31.12.2000 but there was no valid cover-note issued on 29.12.2000

and in fact the cover-note was got issued after the theft of the vehicle

giving a back-dated cheque of 29.12.2000 and getting the cover-note

issued of the same date of 29.12.2000, and which as stated above is on

account of collusion of the respondent/plaintiff with the agent Sh.

Girish Chawla and the employee of the appellant/defendant company

Sh. Ravi Jain.

4. The trial court dismissed the suit by holding that the

cover-note has got been issued on account of fraud and cheating being

perpetrated on the appellant/defendant company. Trial court in this

regard relied upon the fact that the cheque no.6275 was not issued on

29.12.2000 inasmuch as the copy of the bank account filed by the

respondent/plaintiff showed that the earlier serial number cheques

bearing nos. 6721-24 were in fact issued subsequent to 29.12.2012 but

got cleared earlier than the premium cheque no. 6725. The trial court

disbelieved the case of the respondent/plaintiff that the cheque for the

premium amount was given by the respondent/plaintiff to the agent of

the appellant/defendant company on 29.12.2000. Trial court therefore

held that the cover-note in question no. 521799 was not issued on

29.12.2000 but was actually issued on 1.1.2001 and hence vehicle was

not covered by an insurance policy on the date of theft being

31.12.2000.

5. The first appellate court has set aside the judgment of the

trial court and decreed the suit for recovery by holding that the cover-

note was issued on 29.12.2000 and this becomes clear from the fact

that no action has been taken by the appellant/defendant company

against its officer Sh. Ravi Jain who has countersigned the cover-note

and that Sh. Ravi Jain was not even brought as a witness by the

appellant/defendant company. I have also put a query to the counsel

for the appellant as to whether any departmental action was taken

against Sh. Ravi Jain or any criminal case filed against Sh. Ravi Jain

for allegedly counter-signing the cover-note back-dated, however, it is

conceded that there is no record filed in this case which shows that

any departmental action was taken by the appellant/defendant

company or that any criminal complaint was filed against Sh. Ravi

Jain for cheating and defrauding.

6. Learned counsel for the appellant/defendant once again

argued the same aspects which were accepted by the trial court and

also further argued that appellant/defendant had taken action against

the agent Sh. Girish Chawla by cancelling his agency vide letter dated

9.1.2003 and put a ban on his renewal, however, the fact of the matter

is that the crucial cog in the wheel in this case was the employee of the

appellant/defendant itself namely Sh. Ravi Jain and who

countersigned the note on 29.12.2000. Ranking of Sh. Ravi Jain is of

an Assistant Administrative Officer and not some Class-IV employee.

Not only that a criminal case was not filed against Sh. Ravi Jain, even

departmental action has not been taken against Sh. Ravi Jain that he

has back-dated signed the cover-note on 29.12.2000 though the cover-

note was actually issued on 1.1.2001. Hence the first appellate court

was entitled to arrive at the conclusion that there was no back dating

of the cover-note. The conclusion arrived at by the first appellate court

is one possible and plausible view, that it may happen on certain

occasions that serial number of some cheques may be of an earlier

point of time/date and a later serial number of the cheque can be

issued on an earlier date, and which is not a conclusion which is

completely inconceivable in fact and law.

7. The fact of the matter is that from the totality of the

evidence the first appellate court, which is a court which is entitled to

reappraise the findings and facts of law, has come to a conclusion that

the cover-note was in fact issued on 29.12.2000 and the vehicle was

thereafter stolen on 31.12.2000. It is further to be noted that the first

appellate court was justified in arriving at the conclusion which is

arrived at for the additional reason which this Court gives under Order

XLI Rule 24 CPC that both Sh. Girish Chawla and Sh. Ravi Jain were

agents of the appellant/defendant company and not of the

customer/respondent/plaintiff. It was upon the agents of the

appellant/defendant company to deposit the cheque received from the

respondent/plaintiff and that the duty of the respondent/plaintiff came

to an end on handing over of the premium cheque to the agent of the

appellant/defendant company Sh. Girish Chawla on 29.12.2000. A

principal is bound by the act of its agent, and therefore,

appellant/defendant company was bound by the act of its agent Sh.

Girish Chawla and giving of cheque by the respondent/plaintiff to Sh.

Girish Chawla is giving of cheque to the appellant/defendant company

itself. If there is any delay in deposit of the cheque instead of on

29.12.2000 but subsequently on 1.1.2001, that lapse is of the agent and

the employee of the appellant/defendant company, and the

respondent/plaintiff cannot be denied the insurance claim amount on

account of any lapses and inadequacies of action of the agent and

employee of the appellant/defendant company.

8. I therefore hold that the first appellate court was justified

in decreeing the suit by directing payment of the loss value of the

vehicle to the respondent/plaintiff.

9. No substantial question of law arises. Dismissed.

10. Any amount deposited in this Court by the appellant be

released to the respondent in appropriate satisfaction of the subject

judgment and decree passed by the first appellate court in terms of the

impugned judgment dated 27.1.2016.

JULY 27, 2017/ib                            VALMIKI J. MEHTA, J