New India Assurance Co. Ltd. v. Muthoot Bankers (Calicut) Regd. Firm

## **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 24[TH] 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 24[TH] 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 24[th] day of March, 2022** ## **J U D G M E N T** ## **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 & C.O.131 of 2015 6 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 & C.O.131 of 2015 7 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 & C.O.131 of 2015 8 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 & C.O.131 of 2015 9 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 & C.O.131 of 2015 10 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 & C.O.131 of 2015 11 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 & C.O.131 of 2015 12 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 & C.O.131 of 2015 13 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 & C.O.131 of 2015 14 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 & C.O.131 of 2015 15 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 & C.O.131 of 2015 16 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 & C.O.131 of 2015 17 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 & C.O.131 of 2015 18 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 & C.O.131 of 2015 19 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 & C.O.131 of 2015 20 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 & C.O.131 of 2015 21 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 & C.O.131 of 2015 22 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 & C.O.131 of 2015 23 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 & C.O.131 of 2015 24 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 & C.O.131 of 2015 25 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 & C.O.131 of 2015 26 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 & C.O.131 of 2015 27 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 & C.O.131 of 2015 28 _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 & C.O.131 of 2015 29 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 & C.O.131 of 2015 30 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 & C.O.131 of 2015 31 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 & C.O.131 of 2015 32 **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.** YKB