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Bling on display in night has no insurance cover

A weekly selection of key court orders

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M J Antony
Leaving jewellery in the display window of a shop and outside the safe in the shop during night might not be covered by the insurance policy. If there is burglary, the insurer would not be liable to compensate the jeweller. The National Consumer Commission, in the case United India Insurance vs Orient Treasures Ltd, had ruled that the insurance company was liable to pay compensation for burglary in the shop as the policy covered all jewellery. However, on appeal, the Supreme Court last week reversed the order and absolved the insurer from liability. According to the policy terms, window display of articles at night was not insured nor stock kept out of safe after business hours. If the jeweller wanted the articles to be indemnified, he should have removed them from the display window and kept all items in the safe. "If the insured person pays additional premium to secure more safety and coverage of their goods, it is permissible for them to do so. In this case, the insured did not pay any additional premium…It is for the parties (insurer/insured) to decide as to what type of insurance they intend to do to secure safety of the goods," the judgment clarified.
 
Overloading no bar to claim damages
The Supreme Court has held that the mere fact of carrying more passengers than the permitted seating capacity in a goods vehicle by the insured person did not amount to a fundamental breach of the terms of the policy and the insurance company would still be liable to pay damages. In this case, Lakshmi Chand vs Reliance General Insurance, six passengers were travelling in a goods vehicle whereas only one along with the driver was allowed. It met with an accident caused by the rash driving of another vehicle. The owner of the first vehicle demanded money to repair the vehicle. The insurer denied it on the ground that the vehicle had violated the policy conditions. The Haryana and National Consumer Commissions accepted the view of the insurance company. Reversing their rulings, the Supreme Court stated that the burden to prove breach of condition was on the insurance company and in this case, it had not proved that the accident occurred due to overloading.

Defunct company to pay back wages
The Supreme Court has directed a defunct company to pay its workers back wages till it closed, along with retrenchment compensation and gratuity within three months. The company in this case, Narendra & Co vs Workmen, became non-functional in 1995. The workers moved the labour court, which asked the employer to pay 50 per cent of the wages and reinstate them. The company moved the Karnataka High Court that ordered payment up to 1995. However, the division bench of the same court asked the company to pay 50 per cent of the wage up to 1999. The company moved the Supreme Court and showed evidence that it was not functioning since 1995. Partly allowing the appeal, it directed the firm to pay 50 per cent back wages only up to 1995, along with other benefits like retrenchment compensation and gratuity.

SC regrets sharp rise in false affidavits
Filing false affidavits in court has become endemic, according to the Supreme Court. In its judgment last week, Sciemed Overseas Inc vs BOC India Ltd, the court observed that "a global search of cases pertaining to the filing of a false affidavit indicates that the number of such cases that are reported has shown an alarming increase in the last 15 years as compared to the number of such cases prior to that. This is illustrative of the malaise that is slowly but surely creeping in. This 'trend' is certainly an unhealthy one that should be strongly discouraged, well before the filing of false affidavits gets to be treated as a routine and normal affair." In this case, the Jharkhand High Court imposed costs of Rs 10 lakh on a bidder for installing equipment for supply of gases to Rajendra Institute of Medical Sciences, Ranchi. At one stage, the bidder claimed that the work was almost complete and he should not be ousted. However, the high court verified through a commissioner who found that the work was not near completion. So the high court imposed costs on the firm and asked it to pay it to the legal services authority. That order was upheld by the Supreme Court.

Legal heirs must get compensation
When there is a suit for compensation, all legal heirs of the dead person must be made parties. It can be done even at a belated stage, the Supreme Court stated in the case, Kajom Kumari vs Union of India. If the court decides that compensation must be paid, all the heirs must get the benefit; some of them cannot be left out. The Supreme Court asked the high court to join all heirs as parties and proceed on merits of the case.

PSU indicted for prolonging litigation
The Delhi High Court has severely criticised public sector Brahmaputra Valley Fertiliser Corporation for raising issues merely to "prolong the agony of its private contracting firm on highly technical grounds." The work order was of 2002 vintage and the corporation gave a final acceptance certificate in 2007. However, full dues were not released on the ground that the firm had not produced a no-objection certificate from the sales tax authorities. The court found that the tax authorities had issued a certificate clearing the firm of tax dues. However, the PSU wanted arbitration on the issue. The court stated that there was no dispute for arbitration and it has the power to end the litigation. Even after eight years, the dues were withheld "on meaningless technical issues." The court asked the government company to pay Fenner India Ltd the full payment with 12 per cent interest and costs.

EIL appeal against award dismissed
The Delhi High Court has dismissed the appeal of Engineers India Ltd challenging the award of the arbitrator in its dispute with Tema India Ltd. The latter firm contracted to supply equipment to EIL within 17 months. But, it was delayed due to Lok Sabha and state elections in 2009 as workers went for political activities. The unforeseen situation was beyond the control of the firm, it was submitted. The arbitrator did not accept the argument. The high court also noted that EIL had not shown that it had suffered any loss on account of the delay, which was vital for claiming any compensation. The arbitrator passed his award in favour of EIL going beyond the scope of the arbitration, the judgment said.

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First Published: Jan 17 2016 | 9:29 PM IST

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