K.M.Mehta, J. - (1.) Oriental Insurance Co. Ltd., appellant (original defendant) has filed this appeal against judgment and decree dated 17.8.2001 passed by the learned City Civil Judge, Ahmedabad in Civil Suit No. 3769 of 1990. Learned Judge by her impugned judgment held that the suit filed by Gujarat State Warehousing Corporation, plaintiff, be decreed and appellant-defendant insurance company shall pay a sum of Rs. 43,471.20 with interest at the rate 12 per cent per annum from the date of the suit till the recovery to the plaintiff and also costs to the plaintiff.
(2.) The facts giving rise to this application are as under: 2.1. Plaintiff is a statutory Corporation established with an object of providing scientific godown facilities to the private and public sector at competitive rates and it has various such centres all over the State of Gujarat. It has godowns in Ahmedabad and godown at Balaji Estate No. 17 was used for storing fertilizer bags of Gujarat State Fertilizer Co. Ltd., Vadodara (for short 'GSFC'), the loss of which is the subject-matter of the present appeal. 2.2. The defendant insurance company issued a policy, namely, fidelity insurance policy covering the period from 1.4.1987 to 31.3.1988 agreeing to indemnify the plaintiff Corporation against the risk subject to the limit of Rs. 15,00,000 from 1.4.1987 covering the risk under fidelity. 2.3. From the record it appears that on 4.1.1988 during the course of physical verification at godown No. 17 at Narol, it was noticed that 354 bags of fertilizers belonging to GSFC were missing out of the total number of 36906 bags and the said fact was notified to the defendant in the letter dated 19.1.1988 and 29.1.1988. As the defendant refused to make the payment of the claim made by plaintiff of the loss suffered of Rs. 43,471.20, plaintiff filed suit for declaration as well as recovery. 2.4. Oriental Insurance Co. Ltd: filed the written statement at Exh. 15 and contended, inter alia, stating that the suit of the plaintiff is not legal and proper. It was further stated that the plaintiff is required to give notice in writing to the defendant within 14 days of the discovery of any fact in respect of which the claim may arise as per condition No. 1 of the fidelity (floating) insurance policy and then 3 months after such a notice, full details of the claims with the proof needs to be furnished to the company. In the event of the failure, no claim can be sought for. It was further contended that there is no right of recovery when plaintiff failed to adopt to the said condition No. 2. As no particular person has been identified of having committed embezzlement or fraud so much so that police also could not lay its hands on any of the accused, filing a summary before the metropolitan court, no charges can be said to have been proved. According to the defendant, no precaution has been taken by the plaintiff company and since there is a breach of policy of fidelity, the suit needs to the dismissed. 2.5. The learned Judge by her impugned judgment and decree, after considering the evidence on record, came to the conclusion that the plaintiff proved the loss of 354 bags due to infidelity of its employees and the defendant failed to prove that the plaintiff breached the terms of policy as averred and ultimately the suit of the plaintiff was decreed in favour of the plaintiff.
(3.) Mr. K.K. Nair, learned advocate for the appellant had invited my attention to the policy of the insurance company in this behalf. He has invited my attention to proviso (ii) of main policy on page 1 and also condition No. 1 attached to the said policy and condition No. 9 which is behind the Schedule of the policy. Proviso (ii) reads thus: "(ii) The insured shall have no right of recovery against the company until each defaulting employee has been identified by name. Condition No. 1 - The employer shall within fourteen days of any act on the part of any one of the employees or any matter in respect of which a claim may arise or might have arisen give notice in writing to the issuing office of the company accompanied by all available particulars and within three months after such notice the employer shall deliver to the company full details of his claim and shall furnish proof of the correctness of such claim. Condition No. 9 - The due observance and fulfilment of the terms, provisions, conditions and endorsements of this policy insofar as they relate to anything to be done or complied with by the employer and the truth of the statements and answers in the said proposal shall be conditions precedent to any liability of the insurer to make any payments under this guarantee.";