Kerala High Court
M/S.Muthoot Bankers (Calicut), ... vs M/S.New India Assurance Co.Ltd on 24 March, 2022
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR
&
THE HONOURABLE MRS. JUSTICE C.S. SUDHA
THURSDAY, THE 24TH DAY OF MARCH 2022 / 3RD CHAITHRA, 1944
RFA NO. 730 OF 2014
AGAINST THE JUDGMENT AND DECREE DATED 21.07.2014 IN OS
NO.394/2003 ON THE FILE OF IST ADDITIONAL SUB COURT,
KOZHIKODE
NAME AND ADDRESS OF APPELLANT/DEFENTANTS 1 & 2:
1 NEW INDIA ASSURANCE CO.LTD,
NEW INDIA ASSURANCE BUILDING, 87,
MAHATMA GANDHI ROAD, FORT BOMBAY-400 001,
REPRESENTED BY ITS REGIONAL MANAGER,
REGIONAL OFFICE, ERNAKULAM.
2 NEW INDIA ASSURANCE CO. LTD.
DIVISIONAL OFFICE-II, 2ND FLOOR,
K.N.MATHEW BUILDING, G.A.KOIL STREET,
THIRUVANANTHAPURAM-695 001, REPRESENTED BY ITS
REGIONAL MANAGER, REGIONAL OFFICE, ERNAKULAM.
BY ADVS.
SRI.GEORGE CHERIAN (SR.)
SMT.K.S.SANTHI
NAME AND ADDRESS OF RESPONDENT/PLAINTIFF:
MUTHOOT BANKERS (CALICUT)
A REGD. FIRM HAVING OFFICE AT 5/3400,
PERACHUNNI TOWERS, MAVOOR ROAD,
CALICUT-4, KALATHUKUNNU AMSOM DESOM,
REPRESENTED BY PARTNER THOMAS JOHN MUTHOOT,
S/O. MATHEW M.THOMAS, 41 YEARS, RESIDING AT
TC4/1008(1) KURUVANKONAM, KAVADIYAR (VILLAGE),
THIRUVANANTHAPURAM.
RFA No.730 of 2014
& C.O.131 of 2015 2
BY ADVS.
SRI.ALEX.M.SCARIA
SRI.B.J.JOHN PRAKASH
SMT.D.REETHA
SRI.P.V.VINOD BENGALAM
M.RAMESH CHANDER (SR.)
THIS REGULAR FIRST APPEAL HAVING COME UP FOR
ADMISSION ON 24.03.2022, ALONG WITH CO.131/2015, THE
COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
RFA No.730 of 2014
& C.O.131 of 2015 3
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR
&
THE HONOURABLE MRS. JUSTICE C.S. SUDHA
THURSDAY, THE 24TH DAY OF MARCH 2022 / 3RD CHAITHRA, 1944
CO NO. 131 OF 2015
AGAINST THE JUDGMENT AND DECREE DATED 21.07.2014 IN OS
NO.394/2003 ON THE FILE OF IST ADDITIONAL SUB COURT,
KOZHIKODE
CROSS OBJECTOR/RESPONDENT IN APPEAL/PLAINTIFF:
M/S.MUTHOOT BANKERS (CALICUT)
REGD. FIRM HAVING OFFICE AT 5/3400,
PERACHUNNI TOWERS, MAVOOR ROAD,
CALICUT-4, REPRESENTED BY ITS PARTNER,
THOMAS JOHN MUTHOOT
BY ADVS.
M/S.INDIALAW
SRI.B.J.JOHN PRAKASH
SMT.D.REETHA
SRI.P.V.VINOD BENGALAM
APPELLANTS/DEFENDANTS:
1 M/S.NEW INDIA ASSURANCE CO.LTD
NEW INDIA ASSURANCE BUILDING, 87,
MAHATMA GANDHI ROAD, FORT, MUMBAI-400 001,
REPRESENTED BY ITS MANAGING DIRECTOR.
2 DIVISIONAL MANAGER,
NEW INDIA ASSURANCE CO. LTD.,
DIVISIONAL OFFICE II, 2ND FLOOR,
K.N.MATHEW BUILDING, THIRUVANANTHAPURAM-695 001.
RFA No.730 of 2014
& C.O.131 of 2015 4
SRI.GEORGE CHERIAN (SR.)
ADV SMT.K.S.SANTHI
THIS CROSS OBJECTION/CROSS APPEAL HAVING COME UP
FOR ADMISSION ON 24.03.2022, ALONG WITH RFA.730/2014,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
RFA No.730 of 2014
& C.O.131 of 2015 5
P.B.SURESH KUMAR & C.S.SUDHA, JJ.
-----------------------------------------------
R.F.A. No.730 of 2014
&
Cross Objection No.131 of 2015
-----------------------------------------------
Dated this the 24th day of March, 2022
JUDGMENT
P.B.Suresh Kumar, J.
This appeal is directed against the decree and
judgment dated 21.07.2014 in O.S.No.394 of 2003 on the file of
the First Additional Sub Court, Kozhikode. The appellants are
defendants 1 and 2 in the suit.
2. The suit was one for realisation of money. The
plaintiff is a registered partnership engaged in money lending
business. The first defendant has issued to the plaintiff a
burglary policy covering the business premises of the plaintiff
at Kozhikode for the period from 01.04.1998 to 31.03.1999. The
second defendant is an officer of the first defendant. A burglary
took place at the insured premises on the night of 13.10.1998,
and the plaintiff lost gold ornaments weighing 20,887 grams
RFA No.730 of 2014
and currency notes amounting to Rs.1,92,376/-. The gold
ornaments and the currency lost in the burglary were kept in
the strong room in the premises. The keys of the strong room
at the relevant time were in the locked drawer of the table of
the Manager of the plaintiff in his cabin and the miscreants
have secured the same by breaking open the drawer of the
table. The claim of the plaintiff for insurance of the gold
ornaments and currency lost was repudiated by the first
defendant on the ground that the plaintiff has committed
breach of the condition in the policy that the keys of the strong
room shall not be left in the premises out of business hours
unless the premises is occupied by the insured or any other
authorised employee of the insured.
3. The plaintiff does not dispute the fact that the
policy was issued subject to the condition that the keys of the
strong room shall not be left in the premises out of business
hours unless the premises is occupied by the insured or any
other authorised employee of the insured. However, according
to them, there was no breach of the said condition since the
RFA No.730 of 2014
same does not contemplate that somebody should stay in the
premises round the clock and that the requirement of the policy
is only that the premises shall be in the possession of the
insured. It is stated by the plaintiff that even otherwise, there is
no breach of the said condition in as much as the security
officer of the plaintiff used to stay in the premises out of
business hours. The plaintiff does not also dispute the fact that
the security officer was not in the premises on the relevant day.
According to them, the temporary absence of the security
officer from the premises would not amount to violation of the
condition in the policy. The suit was, therefore, filed for
realisation of Rs.1,04,78,680/-, comprising of Rs.85,63,670/-
being the value of the lost gold at the rate of Rs.410/- per gram,
Rs.17,12,734/- being the making charges of the lost ornaments,
Rs.1,92,376/- being the value of the lost currency, Rs.9,900/-
being the expenses incurred for repairing the premises. The
plaintiff also claimed interest for Rs.1,04,78,680/- at the rate of
12% for the period from 14.10.1998 to 06.11.2003 amounting
to Rs.63,69,889/-. The total plaint claim was therefore
RFA No.730 of 2014
Rs.1,68,48,569/-.
4. The defendants contested the suit mainly on
the ground on which they repudiated the claim, namely, that
the plaintiff has committed breach of the condition in the policy
that the keys of the strong room shall not be left in the
premises out of business hours unless the premises is occupied
by the insured or any other authorised employee of the insured.
5. During the pendency of the suit, the plaint was
amended and the plaint claim was raised to Rs.4,45,00,000/- on
the ground that what was claimed in the suit was only the value
of the gold as on the date of burglary together with the making
charges and that they are entitled to the replacement value of
the gold ornaments.
6. A written statement was filed by the
defendants to the amended plaint also, disputing the very basis
of the enhanced claim.
7. A partner of the plaintiff gave evidence as PW1.
Three other witnesses were also examined on the side of the
plaintiff as PW2 to PW4. Exts.A1 to A30 were the documents
RFA No.730 of 2014
proved by the plaintiff. There was no oral evidence on the side
of the defendants. The defendants, however, proved Exts.B1 to
B5 documents through the witnesses of the plaintiff. Among
them, Ext.B2 is the policy of insurance.
8. The court below took the view that insofar as
the defendants do not dispute that the burglary took place in
the premises, the claim cannot be rejected on the ground of
breach of a policy condition. The court however found that the
plaintiff is entitled to only a sum of Rs.1,51,35,835/- as against
their claim of Rs.4,45,00,000/-. Accordingly, the suit was
decreed permitting the plaintiff to realise from the defendants
the said amount with interest at the rate of 12% from the date
of the suit till the date of decree and thereafter with interest at
the rate of 6% till realisation. The defendants are aggrieved by
the decision of the court below.
9. Heard the learned Senior Counsel for the
defendants as also the learned Senior Counsel for the plaintiff.
10. The learned Senior Counsel for the defendants
submitted that special condition No.2 in the policy being that
RFA No.730 of 2014
the keys of the strong room shall not be left in the premises out
of business hours unless the premises is occupied by the
insured or any other authorised employee of the insured, the
court below ought to have non-suited the plaintiff in as much as
it was admitted by the plaintiff that the keys of the strong room
were kept in the premises itself which was not occupied on the
fateful day either by the plaintiff or any of their authorised
employee. In the context of the case put forward by the plaintiff
that special condition No.2 in the policy does not contemplate
that somebody should stay in the premises round the clock and
that at any rate, the temporary absence of the security officer
from the premises does not amount to violation of the said
condition, the learned counsel has made elaborate submissions
on the principles to be followed while interpreting conditions in
insurance policies. We are not referring to the detailed
submissions made by the learned counsel for the present as we
would be dealing with the same elaborately a short while later
in this judgment. It would suffice to say for the present that the
essence of the submissions made by the learned counsel was
RFA No.730 of 2014
that the conditions in the policies like the instant one are to be
interpreted strictly and in the event of their breach, the insurer
will not be liable under the policy. It was pointed out by the
learned counsel that the security officer of the plaintiff is a
retired Superintendent of Police and the insured premises is a
commercial space without any facility for anybody to stay there
on a permanent basis. According to the learned counsel, it is
only to get over the special condition No.2 in the policy that the
plaintiff has put forward a case that their security officer used
to stay in the insured premises and the evidence on record
would demonstrate that the said case is false. It was also
pointed out by the learned counsel that the assets and liabilities
of the plaintiff have been taken over by a public limited
company during the pendency of the suit and the business
carried on by the plaintiff was being carried on thereafter by
the said company. According to the learned counsel, the
plaintiff was therefore not entitled to pursue the suit thereafter
and the court below ought to have dismissed the suit on that
sole ground. The learned counsel has assailed the impugned
RFA No.730 of 2014
judgment also on the ground that the same does not indicate as
to how the court below has arrived at the figure of
Rs.1,51,35,835/-. It was pointed out by the learned counsel that
a close reading of the impugned judgment would show that the
learned Judge has not accepted the claim made by the plaintiff
for making charges of the gold ornaments as also the basis on
which the original plaint claim was enhanced. According to the
learned counsel, the figure Rs.1,51,35,835/- appears to have
been arrived at by the court below by deducting the making
charges of the gold ornaments claimed from the original claim.
The submission of the learned counsel was therefore that if the
amount is one arrived at on that basis, then interest for the
period prior to the suit should have been reworked on the
amount found due and not on the amount claimed. Similarly, it
was argued by the learned counsel that at any rate, the court
below ought not have granted pendente lite interest and future
interest on Rs.1,51,35,835/- and that pendente lite and future
interest should have been granted only on the amount found
due. It was also argued by the learned counsel that there was
RFA No.730 of 2014
no justification for granting costs to the plaintiff as claimed and
insofar as the suit was decreed only in part, the costs should
have been proportionate to the decree granted to the plaintiff.
11. The learned Senior Counsel for the plaintiff did
not endorse the view of the court below that the claim cannot
be rejected on the ground of breach of policy condition when
the defendants do not dispute the burglary. On the other hand,
the learned counsel contended that there was no breach of
special condition No.2 in the policy. The learned counsel
elaborated the said submission pointing out that in the absence
of any definition for the word "occupied" in the condition in the
policy, the word shall be attributed its ordinary meaning.
Placing reliance on the meaning given to the word "occupied" in
various dictionaries, it was submitted by the learned counsel
that the word "occupied" shall be understood only to mean that
somebody should be in possession of the premises. Placing
reliance on the King's Bench decision in Simmonds v. Cockell,
[1920] 1 K.B. 843, the learned counsel has also contended that
at any rate, the temporary absence of the security officer of the
RFA No.730 of 2014
plaintiff from the premises does not amount to violation of the
special condition No.2. It was also argued by the learned
counsel that the fact that the divisional office of the first
defendant has recommended the claim of the plaintiff and the
fact that there was substantial delay on the part of the head
office of the first defendant to take a final decision in the matter
would demonstrate that there was some ambiguity in
understanding the application of special condition No.2 in the
policy and in such a scenario, it was obligatory on the part of
the first defendant to interpret the said condition in favour of
the plaintiff applying the doctrine of contra proferentem. The
learned counsel has relied on the decision of the Apex Court in
General Assurance Society Ltd. v. Chandumull Jain, AIR
1966 SC 1644, in support of the said proposition. It was also
argued by the learned counsel that even assuming that two
constructions are possible as regards the application of the
condition in the case on hand, the first defendant is bound to
accept a construction beneficial to the plaintiff which is
consistent with the purpose for which the policy was taken, viz,
RFA No.730 of 2014
to cover the risk on the happening of the insured peril. The
learned counsel has relied on the decision of the Apex Court in
Sangrur Sales Corporation v. United India Insurance
Company Ltd. and another, (2020) 16 SCC 292, in support of
the said proposition. As regards the arguments advanced by
the learned counsel for the defendants concerning the case put
forward by the plaintiff that their security officer used to stay in
the insured premises, the learned counsel submitted that the
said fact has been found to be true by the surveyors appointed
by the first defendant, and the findings rendered by the
surveyors in this regard cannot be lightly brushed aside in the
light of Section 64UM of the Insurance Act, 1938.
12. We have perused the materials on record and
gave a thoughtful consideration to the elaborate submissions
made by the learned counsel for the parties on either side.
13. The sheet anchor of the submissions made by
the learned counsel for the defendants being the violation of
special condition No.2 in the policy, before considering the
sustainability or otherwise of the various submissions made by
RFA No.730 of 2014
the learned counsel for the parties, it is necessary to refer to
the general principles governing interpretation of the conditions
in insurance policies.
14. It is trite that an insurance policy being a
document representing a contract, in terms of which the insurer
undertakes to compensate the loss suffered by the insured, the
terms of the contract have to be strictly construed to determine
the extent of the liability of the insurer [See Oriental
Insurance Co. Ltd. v. Sony Cheriyan, (1999) 6 SCC 451].
Like any other contract, it is open to the parties to an insurance
contract to make any stipulation a condition in the policy in
order to protect their interests. Going by the practice prevailing,
often conditions are imposed to reduce the risk of the insurer.
The conditions imposed with the view to reduce the risk of the
insurer being conditions which have a direct bearing on the
premium collected from the insured, the same are to be
scrupulously complied with. If the condition relates to a matter
that arises after the formation of the contract, they must be
fulfilled, or otherwise the policy would be inoperative from the
RFA No.730 of 2014
date of the breach. In order to ascertain as to what would
constitute breach of a condition, it is necessary to consider not
only the precise language in which the condition is framed and
the circumstances to which it is intended to apply, but also the
act which the assured has in fact done or left undone. Where
the condition is general in its terms and does not enter into
precise and detailed specification of what is required, a
reasonably substantial compliance with it is sufficient, but, if
the condition goes into details, the details must be literally
fulfilled, even if the failure to fulfill the condition is due to
circumstances beyond the control of the assured [See General
Principles of Insurance Law by E.R.Hardy Ivamy Fourth
Edition at pages 302 and 303]. A policy of insurance being a
document designed to fulfill a commercial purpose, it is
presumed to be made with due regard to the well recognised
commercial habits and practices. In the event of a dispute as to
the interpretation of a term in the policy, the function of the
Court is only to interpret what the parties have in fact said in
the contract and not to speculate as to what they may have
RFA No.730 of 2014
intended. What the parties have in fact said is comprised in the
words they have used and the interpretation should be to
ascertain the meaning of the words used. If the words are clear,
precise and unambiguous, the same has to be given effect to,
however unreasonable the result may be. The words used must
prima facie be construed in their plain, ordinary, popular
meaning, rather than their strictly precise, etymological,
philosophic, or scientific meaning. Where two constructions are
possible, the one which tends to defeat the intention to make
the provision practically illusory is liable to be rejected [See
Halsbury's Laws of England, Fourth Edition at pages 67 and
69].
15. In Central Bank of India v. Hartford Fire
Insurance Co., AIR 1965 SC 1288, the Apex Court has held in
the context of interpreting a clause in a policy of insurance that
if the words used are clear, there is very little that the court has
to do and it must give effect to the plain meaning of the words,
however it may dislike the result. Similarly it was held by the
Apex Court in General Assurance Society Ltd. that in
RFA No.730 of 2014
interpreting documents relating to a contract of insurance, the
duty of the Court is to interpret the words in which the contract
is expressed by the parties, because it is not for the Court to
make a new contract, however reasonable, if the parties have
not made it themselves.
16. Having thus understood the principles, let us
now consider the question whether the plaintiff has committed
breach of special condition No.2 in Ext.B2 policy of insurance.
The operative clause of Ext.B2 policy reads thus :
"OPERATIVE CLAUSE
The Company hereby agrees subject to terms, conditions
and exclusions herein contained or endorsed or otherwise
expressed hereon to indemnify the Insured to the extent of
intrinsic value of:
(a) Any loss of or damage to property or any part thereof whilst
contained in the premises described in the schedule hereto due
to Burglary or House breaking (theft following upon an actual
forcible and violent entry of and/or exit from the premises) and
Hold-up.
(b) Damage caused to the premises to be made good by the
Insured resulting from burglary and / or house breaking or any
attempt thereat any time during the period of insurance.
Provided always that the liability of the Company shall in
no case exceed the sum insured stated against each item or
Total Sum Insured stated in the Schedule".
RFA No.730 of 2014
As evident from the operative clause in the policy, the
indemnity in terms of the policy was subject to the conditions
contained in the policy. The policy being one intended to cover
burglary or house breaking, that too, in a business premises
where there exists a strong room and safes inside the strong
room, as noted, one of the conditions subject to which the
policy was issued was that the keys of the strong room shall not
be left on the premises out of business hours unless the
premises are occupied by the insured or any other authorised
employee of the insured. It was also stipulated in the condition
that if the premises are occupied by the insured or any other
authorised employee of the insured, the keys of the strong
room shall not be deposited in the vicinity of the strong room,
but shall be in a secure place out of the vicinity of the strong
room. The relevant part of special condition No.2 in Ext.B2
policy of insurance allegedly breached by the plaintiff reads
thus :
"The keys of the Safe or Strong Room shall not be left on the
premises out of business hours unless the premises are occupied
by the insured or any other authorised employee of the insured
RFA No.730 of 2014
in which case such keys if left on the premises shall be deposited
in a secure place not in the vicinity in the safe or strong room."
The condition aforesaid has two limbs, of which the first limb is
that the keys of the strong room shall not be left in the
premises out of business hours, unless the premises are
occupied by the insured or any other authorised employee of
the insured. In other words, if only the premises are occupied
by the insured or any of his authorised employee, the keys of
the strong room shall be retained in the premises, or otherwise,
the keys of the strong room shall be kept outside the premises
out of business hours. The second limb of the condition is that if
the premises are occupied by the insured himself or any of his
authorised employee and if the keys are retained in the
premises, the same shall be deposited in a secure place out of
the vicinity of the strong room. The first defendant has no case
that the keys of the strong room were left by the insured in the
insured premises itself in the vicinity of the strong room or that
it was not deposited in a secure place. The case of the first
defendant is only that insofar as the insured premises was not
RFA No.730 of 2014
occupied either by the plaintiff or by any of their authorised
employee, the keys of the strong room ought not have been
kept in the premises and therefore, there is breach of the
condition aforesaid. The case of the plaintiff, on the other hand,
is that the premises was occupied by an authorised employee
of the plaintiff and therefore there is no breach of the condition.
As noted, the plaintiff admits that their authorised employee
was not in the premises on the fateful day. According to them,
insofar as the authorised employee of the plaintiff used to stay
in the premises out of business hours, the absence of the
employee in the premises on a day or two being temporary
would not amount to breach of the condition. As noted, the
stipulation is that the authorised employee of the insured shall
occupy the premises out of business hours. The pointed
questions, therefore, are whether an arrangement in the
aforesaid nature would satisfy the requirement of occupation by
the employee of the insured stipulated in the condition and if
so, whether the absence of such an employee for a day or two
would amount to breach of the condition.
RFA No.730 of 2014
17. The answer to the questions aforesaid would
depend on the interpretation of the word "occupied" contained
in the policy. The word occupation has a variety of meanings.
Black's Law Dictionary defines the word 'occupation' thus :
"The act, state, or condition of holding possessing, or
residing in or on something: actual possession, residence,
or tenancy, esp. of a dwelling or land. In this sense, the
term denotes whatever acts are done on the land to
manifest a claim of exclusive control and to indicate to the
public that the actor has appropriated the land. Hence,
erecting and maintaining a substantial enclosure around a
tract of land usu. constitutes occupancy of the whole tract."
As already indicated, the task of the court is to ascertain from
the words used in the condition as to what the parties agreed
to, in terms of the said stipulation. As noted, the stipulation is
that the keys of the strong room shall not be left in the
premises out of business hours. In other words, the condition
relates to the manner in which keys of the strong room are to
be kept, if the keys are to be retained in the premises itself out
of business hours. The word "occupied" contained in the
condition needs to be understood therefore, keeping in mind
that the condition in which the said word is used is one that
RFA No.730 of 2014
relates to the manner in which keys of the strong room are to
be kept, if the keys are to be retained in the premises itself out
of business hours. As the insured is presumed to be in
possession of the premises even out of business hours, the
word "occupied" used in the condition cannot be understood in
its broader sense of a condition of holding possession of the
premises. At the same time, the word cannot be understood in
a very narrow sense of physical presence of the insured or any
one of his authorised employee, for in that event, it was
inappropriate to use the word "occupied" in the condition. What
then is the agreement?
18. The condition in the case on hand is not a
general condition. It is a special condition which stipulates that
the keys of the strong room shall not be left in the insured
premises out of business hours if the insured or any of his
authorised employee is not occupying the premises. In other
words, it was obligatory on the part of the plaintiff to strictly
and literally comply with the condition, especially when it has a
direct bearing on the liability of the insured. If one construes
RFA No.730 of 2014
the word "occupied" in the background of the circumstances to
which the condition is intended to apply, it could be seen that
the word "occupied" means that the insured or an authorized
employee of the insured shall be available in the premises out
of business hours as well, like a situation where the insured is
doing business in a portion of the premises used by him for his
residence or a situation where the insured is doing business in a
portion of the premises used by his authorised employee for
residence, etc. and not a situation where a mere security
arrangement is made by the insured, like what is claimed to
have been made by the plaintiff. We take this view also for the
reason that if what is agreed between the parties is only a mere
security arrangement in an exclusive commercial premises,
there is absolutely no reason to use the word "occupy" in the
condition. Needless to say, the security arrangement claimed to
have been made by the plaintiff would not amount to
occupation of the premises by authorised employee as provided
for in special condition No.2 in the policy.
19. Even assuming but not accepting that the
RFA No.730 of 2014
security arrangement made by the plaintiff in the case on hand
would amount to occupation of the premises as provided for in
special condition No.2 in the policy, we are unable to accept the
case of the plaintiff that the absence of the security personnel
in the insured premises for a day or two, would not amount to
breach of the policy condition. The reason is that a policy of
insurance being a document designed to fulfil a commercial
purpose, it is presumed to be made with due regard to the well
recognised commercial habits and practices, and in order to
ascertain as to what would constitute breach of a condition, it is
necessary to consider the circumstances to which it is intended
to apply as also the act which the assured has in fact done or
left undone. Viewed in this perspective, the condition in the
policy being one stipulated to reduce the risk of burglary,
acceptance of an interpretation to the condition as put forward
by the plaintiff would make the condition illusory. We are
fortified in the said view by the decision of Queen's Bench
Division in Roberts v. Eagles Star Insurance Co. Ltd.,
[1960] 1 Lloyd's Rep. 615. That was a case involving a
RFA No.730 of 2014
condition in a burglary policy that a burglar alarm shall be put
into full and proper operation out of business hours. The
burglary took place out of business hours. It was held that the
assured could not recover loss because he had not put the
alarm into operation before he left the premises.
20. In Simmonds, the policy issued contained a
clause namely "Warranted that the said premises are always
occupied". During a temporary absence of some hours of the
assured and his wife on a sunday, the premises were broken
into and some of the contents were stolen. In an action on the
policy, the court held that the warranty did not mean that the
premises should be continuously occupied as a residence and
that the assured was, therefore, entitled to recover the loss on
the policy. According to us, the meaning attributed to the word
"occupied" in that case cannot have any application to the facts
of the present case, for the policy involved in the case was one
issued in respect of a residential-cum-business premises.
21. Of course, where there is ambiguity in the
policy, the court would apply the doctrine of contra
RFA No.730 of 2014
proferentem, namely that since it is obligation of the insurer to
ensure precision and clarity in the terms of the policy, if the
policy failed to do so, the ambiguity will be resolved by
adopting the construction favorable to the insured. This rule
becomes operative only where the words are truly ambiguous,
for it is a rule for resolving ambiguity and it cannot be invoked
where the words used are free from ambiguity in the sense
that, fairly and reasonably construed, they admit of only one
meaning [See Halsbury's laws of England, Fourth Edition at
page 70]. In the case on hand, a fair and reasonable
construction of the condition in the policy would not lead to any
ambiguity and the doctrine of contra proferentem has no
application. For the aforesaid reason, the argument advanced
by the learned counsel for the plaintiff based on the decision of
the Apex Court in Sangrur Sales Corporation should also fail.
22. As noted, even while contending that it is not
necessary for somebody to stay in the premises out of business
hours for compliance of special condition No.2 attached to the
policy, it was maintained by the plaintiff that their security
RFA No.730 of 2014
officer used to stay in the insured premises during night hours
and the same, at any rate, would amount to compliance of the
policy condition. It has come out that the security officer of the
plaintiff is a person retired from the service of the State
Government in the rank of Superintendent of Police. He was
examined by the plaintiff on their side as PW3. It has come out
from the evidence of PW3 that he is a person residing at
Thiruvananthapuram. The scene mahazar prepared by the
police in the case registered in connection with the burglary
would indicate that the premises is not one intended to enable
anyone to stay there during night hours. No facilities are
provided for anyone to stay there during night. The scene
mahazar also indicates that entry to the premises is secured by
a rolling shutter having facility only to lock from outside. On a
query from the court, the explanation offered by the learned
Senior Counsel for the plaintiff was that there are two sofas in
the premises and he used to sleep in the sofas. True, PW3 has
stated in his evidence that he used to reside in the insured
premises during night hours. Having regard to the totality of the
RFA No.730 of 2014
facts and circumstances of the case, we are unable to accept
the said evidence, for we cannot believe that an officer retired
from the State Service in the rank of Superintendent of Police
and who is settled in Thiruvananthapuram would stay in a
commercial space on a permanent basis. The case set out by
the plaintiff that PW3 would stay in the insured premises after
the business hours cannot be accepted also for the reason that
PW3 has deposed in his evidence that his duty time was 9.30
a.m. to 5.30 p.m., and if the duty time of PW3 was as deposed
by him, even if he used to stay in the premises during night
hours, such a person cannot be regarded as an authorised
employee of the insured for the purpose of compliance of the
condition aforesaid.
23. Ext.B4 is the final report prepared by the
surveyors appointed by the first defendant in relation to the
claim of the plaintiff. In Ext.B4 report, the surveyors have
observed as follows :
"The security officer always spends the night in that
premises. However that night he could not turn up as he
was reportedly held up elsewhere ."
RFA No.730 of 2014
The learned Senior Counsel for the plaintiff argued that the
surveyors who submitted Ext.B4 final report being those
appointed under Section 64UM of the Insurance Act, the same
is to be given due importance and one should have sufficient
grounds not to agree with the conclusion arrived at by them,
especially when reports by the surveyors are being submitted
after due and thorough investigation. The learned counsel has
also relied on the decision of the Apex Court in Sri
Venkateswara Syndicate v. Oriental Insurance Co. Ltd.,
(2009) 8 SCC 507, in support of the said contention. We do not
find any merit in this argument. Merely for the reason that the
surveyors are appointed in terms of the provisions contained in
Section 64UM of the Insurance Act, it cannot be argued that the
reports are to be accepted. Having regard to the scheme of the
Insurance Act, it is true that the reports of the surveyors are to
be given due importance and one should have sufficient
grounds not to agree with it. But, the same would not be an
impediment for us to render a finding contrary to the conclusion
arrived at by the surveyors [See Khatema Fibres Ltd. v.
RFA No.730 of 2014
New India Assurance Company Ltd, 2021 SCC OnLine SC
818 and New India Assurance Co. Ltd. v. Pradeep Kumar,
(2009) 7 SCC 787].
24. Insofar as it is found that the plaintiff has
committed breach of special condition No.2 in the policy of
insurance, it is unnecessary to go into the remaining
contentions raised by the learned counsel for the defendants.
For the very same reason, it appears unnecessary to us to deal
with the submissions made by the learned Senior Counsel for
the plaintiff on the cross objection.
In the result, the appeal is allowed, the impugned
judgment and decree are set aside and the suit is dismissed.
The cross objection filed by the respondent is also dismissed.
Having regard to the peculiar facts of this case, the parties are
directed to bear their respective costs.
Sd/-
P.B.SURESH KUMAR, JUDGE.
Sd/-
C.S.SUDHA, JUDGE.
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