A.P. Sahi, President

The present complaint has been filed alleging deficiency in service as against the OP-1 Insurance Company on the ground that the claim of indemnification of the loss suffered by the complainant due to a burglary in the premises has been erroneously repudiated on 11.10.2013.

2. The matter was heard on 08.10.2025 when we had passed the following order:

Heard Advocate Chacko, learned counsel for the Complainant and Ms. Seema Gupta, learned counsel for OP-2 Bank. Learned counsel or the Complainant has advanced submissions contending that the repudiation letter dated 11.10.2013 spells non-compliance of certain terms and conditions of the policy which is incorrect and has urged that keeping in view the nature of the burglary and the arrangements made for securing the premises, the manner in which the goods moved out, establish the loss and consequently, the repudiation is invalid.

The repudiation letter dated 11.10.2013 has been filed as Annexure P-26 and with the aid of learned counsel, we have gone through the same and prima facie we find that the repudiation is based on the observations made therein particularly with regard to an allegation of the Complainant not having duly observed the reasonable precautions that were to be deployed for the purpose of keeping the premises safe and secure apart from the other reasons mentioned in the repudiation letter. While perusing the same, we find that Clause no. 5.2 mentions about the security system or aid as specified in the proposal to be maintained. From the records, we find that the proposal form is not on record and therefore, the same would be necessary for the purpose of adjudicating the present controversy.

Learned senior counsel Mr. Kaushik, appearing for the Insurance Company submits that the Insurance Company will make available the proposal form for a perusal during the hearing of this case and he is therefore, granted four weeks' time to file the proposal form or any other such document which may be necessary in support of the repudiation letter that may be brought on record. An advance copy of the same be served to the learned counsel for the Complainant as well as to the learned counsel for the Bank.

The affidavits be exchanged between the parties.

It will not be necessary for the Bank to file any affidavit keeping in view the nature of the controversy that emerges on the pleadings of the case at this stage.

Let the matter be listed on 18.12.2025.

3. Since the proposal form was not on record, we had directed learned counsel for the OP to make available the same.

4. However, adjournments were sought to enable the production of the proposal form, but Mr. Kaushik, learned senior counsel for the Insurance Company, on 12.03.2026, informed the Commission that in spite of best efforts, the original proposal form could not be traced out as it is a very old matter, and instead he relied on a blank proforma of the proposal form currently in vogue, which he submits reflects on the nature of the information that is to be tendered along with the proposal form. We shall refer to it later on, but on the aforesaid statement of the learned counsel, we passed the following order on 12.03.2026:

Learned Senior Counsel Mr. Naresh Kaushik appearing for the Insurance Company, states that in spite of best efforts the original proposal form has not been made available, yet a proforma which is utilized for the purpose of such insurance is available. He however submits that he will make another attempt.

Today learned counsel for the complainant Ms. Deepa Chacko has appeared online and she states that the matter may be adjourned on account of some technical issues in her office.

Accordingly, let the matter be listed on 16.07.2026.

5. An adjournment was sought on behalf of the Insurance Company, whereafter the matter was heard finally on 07.09.2026.

6. Learned counsel for the complainant invited the attention of the Bench to the policy schedule filed along with the complaint.

7. The subject matter of the risk covered as per the policy was for stocks of all types of switches and railway track parts and their related stock stored or lying at the given address of the factory situate at Village Mundlan, Teh. Gohan, District Sonipat, Haryana. It may be pointed out that there were two policies, one was a Burglar Policy and the other was a Fire Policy. The complainant industry manufactures railway switches, plates and other ancillary parts for the railways. The present dispute relates to a burglary, which is alleged to have been reported to the police through an FIR lodged on 07.05.2013. The same is an information tendered before the police by Mr. Ram Kumar Patwa, the Manager of the Petitioner Industry, stating therein that a large number of items that were stocked inside the factory have been stolen by forcibly making a passage through a pit of 1.30 feet breadth. Several items were also stated to have been left by the burglars outside the premises and the burglary was committed by some unknown person. The same was also reported in several newspapers. Claim was made before the Insurance Company on 11.05.2013 and the same is extracted hereinunder:





The details were also provided with certain bills and receipts.

8. The Insurance Company appointed a Surveyor, namely M/s Ajay Mahajan to conduct the survey and a survey report is stated to have been tendered by the Surveyor to the Insurance Company dated 04.09.2013. A copy whereof has been filed as Annexure R5 to the reply of the Insurance Company. The same is extracted hereinunder:





















9. The observations made by the Surveyor narrate about the incompetency of the security guards as well as negligence of the insured in safeguarding the premises. The burglary, according to the Surveyor, had been continuing for the past two or three months, and therefore the Surveyor observed that the insured had not taken reasonable steps to safeguard the insured premises against the insured risks. He referred to condition no. 5.3, and opined that the insured had violated the said conditions and consequently the cover granted under the policy stood suspended. The relevant observations have already been extracted hereinabove.

10. The Insurance Company, after having accessed the report and also the documents on record, arrived at the same conclusion and repudiated the claim on 11.10.2013. The letter of repudiation is extracted hereinunder:







11. It is questioning the correctness of the said repudiation and alleging deficiency in service against the Insurance Company that the present complaint has been filed. Learned counsel for the complainant invited the attention of the Bench to the newspaper reports and also to the fact that the theft had taken place from all over the factory. Admittedly, the factory on the date of lodging of the FIR already stood closed for almost four months. The allegation was of the theft of scrap stolen through the holes that had been created in the side walls of the premises allegedly by the burglars, thereby facilitating the passage of several items.

12. The statement of the security guards, Mr. Shyam Lal and Mr. Prem Singh, one of whom was a day duty guard and the other a night guard, was also recorded. The statement of Shyam Lal, who was the day watchman, is extracted hereinunder:

                   I, Sham Lal S/o Rulia is the resident of V.Gamri, The Gohana, Distt. Sonepat, I am working as watchman in semcon track industry since June, 2010, on dated 7-5-2013 I was performing my duty during day hours, in the after noon at about 2 P.M. one boy whose name was Sanjay reached at the gate and stated that some raw material of the factory has been spreaded in the field, I rushed to the spot and noticed that there are iron plates have been spreaded into the field hither to tither, I immediately given the said intimation to the owners, late-on on round I noticed that at four places the wall has been broken by making the holes and in the said holes bricks have been filled and iron plates have been spreaded a lot. Sanjay also told to me as some women have stolen the said iron plates. All the above facts are true.

                   Signature English

                   Sham Lal S/o Rulia Ram,

                   r/o Gamri, The Gohana (Sonepat)

13. Similarly, the statement of the night watchman, Mr. Prem Singh, is extracted hereinunder:

                   I, Prem Singh S/o Dalip Singh is the resident of V.Mundlana, The Gohana, Distt. Sonepat, I am working in semcon industry since 2011, on dated 6-5-2013 I was on duty, during night hours, during day hours I received a telephonic call from the company that a theft has been committed in the company, I visited during day hours and noticed that at some places holes have been created in the wall and some items have been spreaded hither to hither, because there was no light on that day, I stated all these facts which are true and correct as per spot inspection.

                   Sincerely Yours-

                   Prem Singh S/o Dalip Singh,

                   r/o V. Mundlana, The Gohana, Distt. Sonepat.

                   (Signature in English)

14. The statement of some neighbours namely Zile Singh, Jasbir Lathwal and Sanjay alias Sunny were also recorded, where they stated that they had witnessed some women picking up certain items outside the Company gate and on suspicion, they had raised hue and cry whereafter the matter was reported to the police.

15. Learned counsel for the complainant urged that the entire stocks of the items, including those which were stolen, stood documented and had been filed. It is urged that the assessment made by the Surveyor with regard to the extent of loss is not based on a correct calculation and hence the repudiation of the claim on the basis of the said surveyor report is not acceptable.

16. Learned Counsel has therefore urged that the complaint deserves to be allowed.

17. Written submissions have been filed on 15.07.2019, vide Diary No. 28621, on behalf of the complainant, where it is alleged that the terms and conditions of the policy were never supplied, and therefore the applicability of the provisions as relied on by the Insurance Company does not arise. It is also urged that the copy of the survey report was not furnished to the complainant, and the same is not discretionary as under the IRDA Protection of Policyholders' Interests Regulations 2002, the Survey report has to be provided, which was admittedly not done. It is urged that the police report was promptly lodged, and since the police tendered a no-trace report, the claim had to be entertained and awarded on the presumption of a burglary having been committed.

18. It is also urged by learned counsel for the complainant that all documents were provided to the Surveyor, details whereof have been pleaded in the complaint.

19. It is therefore urged that the terms and conditions of the policy not having been supplied and the survey report not provided for was itself a deficiency.

20. It is then urged that the surveyor has incorrectly approached the problem by commenting that even if the claim would be tenable, the same would be a burglary committed on the first occasion, which could have been treated to be a violent entry. The subsequent stealing of the items through the same hole or stealthily would not constitute burglary, is an incorrect approach adopted by the Insurance Surveyor.

21. Learned Senior counsel, Mr. Kaushik, on behalf of the OP-1 Insurance Company has however urged that the complainant has failed to satisfy the test of deficiency, and in the absence of any proof or evidence of deficit on the part of the Insurance Company, the complaint is not maintainable.

22. He then submits that burglary was being committed at leisure, with no steps having been taken to prevent the same. The statements and the manner in which the guards have responded to the inquiries itself indicate that a free approach had been given to the intruders. He submits that the surveyor has carried out an extensive survey and has rightly reported negligence on the part of the insured and the incompetency of the security guards. In the absence of any effective security arrangement at all, the burglary was practically allowed to be facilitated, with only one guard being employed at a time.

23. He points out that the burglary was committed through several holes, and therefore to presume that the same was not even noticed for three to four months is clearly speculative. The amount of the claim indicates a huge loss, and therefore it is not imaginable that the complainant or his employees would sit quiet when this burglary was continuing for three to four months.

24. He further submits that when the admitted case is that the factory premises was lying unused for three to four months, the same was also a vulnerable circumstance to presume burglary. Thus adequate and reasonable care to protect his premises was not taken, and no material has been placed on record, even in the complaint to satisfy the same. Learned counsel submits that the terms and conditions were a part of the policy, and the same stands recited in the schedule itself that the terms and conditions form part of the policy. The complainant never raised any grievance about the terms and conditions not being supplied.

25. Mr. Kaushik submits that the surveyor's report has been filed along with the reply, and there is nothing in the rejoinder filed by the complainant or in the evidence affidavit so as to contradict the findings recorded by the Surveyor, particularly with regard to the inadequacy of the security arrangements. Even if it is presumed that there were no factory workers for some period, the office staff and the factory manager were visiting in the presence of security guards. He submits that the presence of just one security guard at a time was itself an inadequate arrangement and therefore the terms of the policy contained in condition no. 5.3 has been clearly breached. There is no explanation on behalf of the complainant regarding this inadequacy of the security arrangements or any appropriate explanation by the guards as per their statement, extracted hereinabove. He therefore submits that this is a clear case where the complainant was clearly negligent in maintaining the security arrangements and consequently this was a clear breach of the terms of the policy. Mr. Mahajan has cited the following decisions in support of his submissions:

                   i. Ravneet Singh Bagga vs. KLM Royal Dutch Airlines & Ors., 1999 (37) ALR 813

                   ii. Oriental Insurance Co. Ltd. vs. Sony Cheriyan, AIR 1999 SC 3252

                   iii. Bangalore Development Authority vs. Syndicate Bank, AIR 2007 SC 2198

                   iv. Ghaziabad Development Authority vs. Union of India, AIR 2007 SC 2198

                   v. Wipro Ltd. vs. Toppers Multimedia (P) Ltd. & Ors., 2010 (2) CPC 177

                   vi. Sri Venkateswara Syndicate vs. Oriental Insurance Co. Ltd., 2009 (3) CPC 281

                   vii. New India Assurance Co. Ltd. vs. Kamal Nayan, 2006 (2) CPC 641

                   viii. National Insurance Co. Ltd. vs. Sardar Gurmit Singh, 2004 (2) CPC 188

                   ix. United India Insurance Co. Ltd. vs. Harchand Rai Chandan Lal, (2004) CPJ 15 SC

26. He also points out that the report of the Surveyor, unless proved to be uncreditworthy, deserves acceptance. He submits that, as already indicated above, there is no material so as to even remotely counter the report of the Surveyor.

27. We have considered the submissions raised and we have perused the documents, particularly the Surveyor's report as also the letter of repudiation and the pleadings of the parties.

28. We find that the factory premises, even though surrounded by a boundary wall, from the manner in which four holes were found in the side walls of the premises, could not have gone unnoticed for three to four months. There is no explanation in the statements of the guards or even for that matter in the pleadings on behalf of the complainant as to why the existence of these holes went unnoticed, that too even for three to four months. We are therefore unable to accept the arguments on behalf of the complainant in the absence of any such explanation worth consideration. The burglary was committed, and if there were guards deputed, then it is not understood as to how within an enclosed premises such a burglary continued for three to four months and went unnoticed. This is absolutely unusual and therefore unacceptable.

29. The contention that the policy conditions were not supplied does not get proved by a mere allegation. The policy terms and conditions were part of it, as indicated therein.

30. The survey report has been supported by the affidavit of the Insurance Company officials, and the same could not be dislodged through the rejoinder filed on behalf of the complainant. The terms and conditions of the policy, therefore, were clearly breached, as on facts it was appropriately assessed that the security arrangements were inadequate. There is no valid reason to disagree with the said assessment made by the Surveyor or with the conclusions drawn in the letter of repudiation of the OP.

31. The non-availability of the proposal form does not, however, in any way, come to the advantage of the complainant, as the complainant has failed to provide any satisfactory reason for the inadequacy of the security arrangements. The performa of the proposal form does not spell out any specific form of security required to protect the premises but that by itself cannot be a ground for the insured to deploy only one security guard at a time which on the given facts has proved to be inadequate as the burglary and the consequential alleged theft continued unnoticed for months together. The conclusion drawn by the surveyor, as also by the Insurance Company while repudiating the claim therefore does not suffer from any perversity so as to render them uncreditworthy. The probabilities of inadequate security arrangements is clearly visible.

32. There is one more aspect which needs emphasis, that such a huge stock, the claim whereof has been made could not have been possibly moved out unnoticed as alleged by the complainant. The theft has been committed from all over the factory premises and consequently, the OP-1 Insurance Company has made a correct assessment on the basis of the observations made by the Surveyor. The said inferences have not been rebutted or contradicted successfully by any other material by the complainant.

33. In the absence of any material so as to construe any deficiency against the Insurance Company or unfair trade practice, we find no merit in the complaint, which is accordingly rejected.