Oriental Insurance Company Ltd. vs Naveen Goyal
2018 Latest Caselaw 7235 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  RFA No. 827/2006

%                                                7th December, 2018

ORIENTAL INSURANCE COMPANY LTD.           ..... Appellant
                 Through: Mr. Vishnu Mehra, Advocate
                          (M. No.9811059674).
                          versus

NAVEEN GOYAL                                         ..... Respondent

Through:

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

1. This Regular First Appeal under Section 96 of the Code

of Civil Procedure, 1908 (CPC) is filed by the appellant/defendant/

insurance company impugning the Judgment of the trial court dated

06.09.2006 by which the trial court has decreed the suit filed by the

respondent/plaintiff/insured, and passed a money decree for a sum of

Rs. 8,79,184/- alongwith interest. The money decree was claimed by

the respondent/plaintiff on account of the insured goods having been

lost on account of theft/burglary.

2. The respondent/plaintiff filed the subject suit for recovery

of Rs. 8,79,184/-. Out of this amount of Rs. 8,79,184/-, the principal

amount was of Rs. 7,17,375/- comprising of the value of stock of Rs.

6,20,245/- and cash stolen of Rs. 97,130/-. To this amount, interest of

Rs. 1,61,409/- was added and which resulted in the suit amount of Rs.

8,79,184/-.

3. At the outset, I would like to note that the

appellant/defendant was proceeded ex parte in the trial court. As the

appellant/defendant was proceeded ex parte, the appellant/defendant

has not cross-examined the two witnesses of the respondent/plaintiff

and no evidence was led in the trial court by the appellant/defendant.

4. The facts of the case are that the respondent/plaintiff filed

the subject suit for recovery pleading that he had taken from the

appellant/defendant/insurance company an insurance policy with

respect to his stocks in the premises bearing no. N-5, Bajrag House,

Ring Road, South Extension Part I, New Delhi-110049. The burglary

took place on 11.07.2003 and FIR No. 274/2003 was lodged on

11.07.2003 with the police station Kotla Mubarakpur. The claim was

also lodged with the appellant/defendant for a sum of Rs. 7,17,375/-.

The insurance policy in question was for the period from 03.01.2003

to 02.01.2004 and the burglary took place on 11.07.2003 i.e. within

the period of the policy. The police made efforts to catch the thief but

the efforts were of no avail, and ultimately an untraceable report was

sent by the police on 07.09.2003. The respondent/plaintiff pleaded

that the appellant‟s/defendant‟s surveyor rejected the documents given

to him on flimsy grounds which included the following documents:-

"I. Item wise, quantity wise detail of purchases from 1st April 2003 to 10th July 2003, II. Quantity wise and value wise detail of clothing stock as on 31st March 2003.

III. Provisional Final Account for the year ending 31st March 2003.

IV. The Audit Report for the financial year 2002-2003. V. Copy of Income Tax return for the assessment year 2002- 2003.

VI. Copy of Sales tax return for the financial year 2002-03. VII. Details of Stock from 10th July 2003 to 13 July 2003. VIII. Layout of Showroom and Godown and all other documents as required by surveyor."

5. The respondent/plaintiff pleaded that he was asked to

receive a letter dated 15.03.2004 from the appellant/defendant wherein

it was stated that it was not possible to assess the loss in the absence of

stock register and inventory. By the said letter, the

appellant/defendant assessed the loss of 15 handsets at rate of Rs.

4918/- and a further loss of Rs.7500/- in cash. The respondent/

plaintiff rejected the offer of the appellant/defendant for a sum of Rs.

81,270/- vide the respondent‟s/plaintiff's letter dated 24.03.2004.

After serving the legal notice dated 07.05.2004, the subject suit for

recovery was filed.

6. Appellant/Defendant contested the suit by filing its

written statement. It was pleaded that as per Clause 3 of the General

Conditions of the subject insurance policy, an insured is required to

maintain all records and books of account and since this requirement

is not complied with, the claim was rightly rejected.

7. The following issues were framed in the suit:-

"i) Whether the plaintiff has not approached the Court with clean hands and has suppressed various material facts from this Court as mentioned in the preliminary objections 1 & 2 of the written statement? OPD

ii) Whether the plaintiff is entitled to recovery an amount of Rs. 8,79,184/- from the defendant? OPP

iii) Whether the plaintiff is entitled to interest, if so, at what rate and for what period? OPP

iv) Relief."

8. As already stated above, since the appellant/defendant

was ex parte, the two witnesses of the respondent/plaintiff were not

cross-examined, and the appellant/defendant has led no evidence. The

trial court has by referring to the depositions of the witness of the

respondent/plaintiff and the documents proved by them, has decreed

the suit.

9. At the outset, it is argued on behalf of the

appellant/defendant that the trial court has erred in dismissing the

application filed under Order IX Rule 7 CPC vide Order of the trial

court dated 06.09.2006. It is argued that the trial court has wrongly

held that a lawyer must appear during strike, failing which ex parte

proceedings are justified. It is argued that this view of the trial court is

erroneous and cannot be sustained as the client should not suffer on

account of his advocate not appearing on the date of strike.

10. In my opinion, though the trial court was not justified in

rejecting the application, as the counsel for the appellant/defendant

failed to appear on 23.02.2006 when there was a strike, however, the

issue is not only of non-appearance on 23.02.2006 but the fact of the

matter is that after 23.02.2006 the suit was not straightaway decreed

but there were as many as five hearings on 30.03.2006, 24.04.2006,

17.05.2006, 01.06.2006 and 17.07.2006. The application under Order

IX Rule 7 CPC was filed by the appellant/defendant only later on

20.07.2006. On 30.03.2006, the matter was adjourned to 24.04.2006

when the evidence of the PW1 was recorded on behalf of the

respondent/plaintiff. On the next date on 17.05.2006, the summoned

witness PW2 from the bank with whom stock was hypothecated was

called, and he proved the record with the bank of the stock of the

respondent/plaintiff. On 17.05.2006 after closing of evidence by the

respondent/plaintiff the matter was listed for final arguments on

01.06.2006 when final arguments were heard and the matter fixed for

judgment on 17.07.2006. On 17.07.2006, the judgment was not

pronounced and the matter was listed for further arguments on

24.07.2006. Therefore, in my opinion, the contention of the

appellant/defendant is misconceived that the ex parte proceedings

against the appellant/defendant have to be set aside inasmuch as the

appellant/defendant, even though had a reasonable cause for non-

appearance on 23.02.2006 when there was a strike, but there is no

sufficient cause for non-appearance thereafter till 20.07.2006 when the

application under Order IX Rule 7 was filed.

11. In fact in the application filed under Order IX Rule 7

CPC, two grounds are mentioned for setting aside the ex parte

proceedings; one being of non-appearance on 23.02.2006 because of a

strike; and the second ground being that the chamber of the counsel

for the appellant/defendant was shifted from Tis Hazari Courts to

Delhi High Court whereby the files were lost and misplaced. I also

reject the stand of the appellant/defendant that the appellant‟s/

defendant‟s counsel could not appear for as many as six dates because

the files were being shifted from District Courts to the High Court

inasmuch as dates are mentioned besides on the files, on the case diary

of the Advocate as well, and therefore the excuse given in para 4 of

the application of shifting of chamber cannot be accepted.

12. This Court, therefore, rejects the challenge laid by the

appellant/defendant to the order dated 06.09.2006 whereby the ex

parte proceedings against the appellant were not set aside.

13. On merits, it is seen that the trial court has referred to

various documents filed and proved on behalf of the

respondent/plaintiff with respect to the stocks, and therefore, no

illegality can be found in decreeing the suit by the trial court by

holding that stock did exist in the premises of the respondent/plaintiff

and the same was stolen. I may note that there is no dispute that there

was a valid policy as on the date of theft being 11.07.2003 and also the

fact that there was a theft in the premises of the respondent/plaintiff.

The relevant para of the trial court proving the original documents of

the respondent/plaintiff reads as under:-

"Issues No.2 & 3: The onus of these issues is on the plaintiff. To prove these issues plaintiff has examined Shri Satya Naraian Goel as PW1. PW1 has reiterated the contents of the plaint. He proved power of attorney as Ex.PW1/1, insurance policies as Mark B (which have not been disputed by the defendant), letter dated 11.7.2003 as Mark B, FIR as Mark „A‟, details of stock as Ex.PW1/6, details of stolen goods as Ex.PW1/7, untraced report as Mark C, details of purchases as Ex.PW1/10, details of closing stock as on 31.3.2003 as Ex.PW1/11, Provisional Final Account as Ex.PW1/12, Audit Report as Ex.PW1/13, Income Tax Return as Ex.PW1/14, Sales Tax Return as Ex.PW1/15, details of stock from 10.7.03 to 13.7.03 as Ex.PW1/16, layout of showroom and godown as Ex.PW1/17 and legal notices as Mark G. The testimony of PW1 has remained unrebutted. Thus, plaintiff is entitled to 18% interest from the date of theft till the filing of the suit. From the perusal of evidence on record, I am of the opinion that plaintiff is entitled to recover an amount of Rs.8,79,184/- from the defendant. Hence, these issues are decided in favour of the plaintiff and against the defendant."

14. However, in my opinion, there are two arguments of the

counsel for the appellant/defendant which deserve to be accepted. The

first argument is that the trial court has erred in granting a decree for a

sum of Rs. 97,130/- as this cash is stated to be stolen from the

premises of the respondent/plaintiff on the date of theft on 11.07.2003,

inasmuch as the subject insurance policy had insured cash in till only

to the extent of Rs. 7500/-. The respondent/plaintiff has himself

proved relevant page of the policy as per the complete policy which is

proved and exhibited as Ex.PW1/3. Ex.PW1/3 clearly in column no.3

shows that cash which is insured is only of Rs.7500/-. Therefore, the

decree with respect to loss of cash granted by the trial court for Rs.

97,130/- is reduced to a sum of Rs. 7,500/-.

15(i). The second argument of the counsel for the

appellant/defendant is that the trial court has passed a decree for Rs.

8,79,184/- which includes the claim of the interest as on the date of

filing of the suit for the sum of Rs. 1,61,409/- at 18% and this rate of

interest is too high a rate of interest. It is also argued that this interest

amount be reduced by awarding pre-suit interest only at 6% per

annum.

15(ii). I agree with the argument that the rate of interest @ 18%

per annum claimed by the respondent/plaintiff for the pre-suit period

is very high and therefore it is ordered that pre-suit rate of interest

would only be 9% per annum simple, with interest being calculated @

9% per annum simple on an amount of Rs. 6,20,245/- plus Rs. 7,500/-

i.e. Rs. 6,27,745/-. Interest will be payable @ 9% per annum simple

from 07.05.2004 when the legal notice has been sent by the

respondent/plaintiff to the appellant/defendant till the date of filing of

suit and thereafter at the rate of 6% pendente lite and future till

payment.

16. In view of the aforesaid discussion, this appeal is partially

allowed. The suit of the respondent/plaintiff is decreed for a sum of

Rs. 6, 27,745/- with interest @ 9% per annum simple from 07.05.2004

till the date of filing of the suit on 04.11.2004. Pendente lite and

future interest will continue at the same rate of 6% as granted by the

trial court. The respondent/plaintiff will also be entitled to costs as

assessed by the decree of the trial court at Rs. 11,264/-. The parties

are left to bear their own costs so far as this appeal is concerned.

Decree sheet be prepared. Trial court record be sent back.

DECEMBER 07, 2018                            VALMIKI J. MEHTA, J
Ne



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