Karnataka Fisheries Development Co. Ltd.

vs
United India Insurance Co. Ltd.

By Aarushi Annapragada
 Facts
The petitioner (Karnataka Fisheries) took an insurance policy from the respondents
(United India Insurance) against the risk of money in transit including robbery, burglary,
house breaking etc. while the money was retained at the petitioner's premises in safe or
strong room.
An amount of Rs. 3,47,091 which was kept in the locker of the office of the petitioner
went missing.
The respondents refused to pay the claim amount. They contested the claim of the
petitioner mainly on the ground that there was violation of the terms and conditions of
the policy in question inasmuch as the money was not kept in a safe or strong room. They
also said that the petitioner had failed to prove the burglary and theft by using force in
order to open the locker where the money was kept.
 Issues
Whether the safe or strong room was broken up or money was
taken away by opening of the safe or strong room by a duplicate
key.
Whether the money stolen was kept in a 'safe' or 'strong room'
as provided in the policy.
 Rule
"THE Company hereby agrees subject to the terms, conditions and exclusions herein contained endorsed or otherwise
expressed hereon, to indemnify the insured against loss of money in transit, by the Insured or Insured's authorised employee
(s), occasioned by Robbery, Theft or any other fortuitous cause. Further the Company shall also indemnify loss of money by
Burglary, House-breaking, Robbery or Hold-up, whilst money is retained at insured's premises, in safe (s) or strong room, more
particularly described in the Schedule, provided always that the limit of the Company's liability for any one loss shall in no case
exceed the amount specified against the respective section in the said Schedule.
Definition:
Money shall mean and include Cash, Bank Drafts, Currency Notes, Treasury Notes, cheques, Postal orders and Current Postage
Stamps. Bank shall mean and include Bank of every description, Post Office, Government Treasury.
THE COMPANY SHALL NOT BE LIABLE IN RESPECT OF:
4. Loss occurring on the premises, after business hours, unless the money is in a locked safe or strong room.
7. Loss of money from safe or strong room following use of the key to the safe or strong room or any duplicate thereof
belonging to the insured, unless this has been obtained by threat or by violence."
 Analysis
The money was kept in the locker which is inside the steel cupboard. From the evidence it is
seen that no force was used to open the locker. Further, the cupboard was kept in the
chambers of the Manager. The door of the Manager Chamber was intact and it was in a locked
condition. That means a person who is in possession or a person who got access to the key of
the lock of the main door and cupboard might have taken away the money.
The policy contained an exclusion clause: "Loss of money from safe or strong room following
use of the key to the safe or strong room or any duplicate thereof belonging to the insured,
unless this has been obtained by threat or by violence."
Reading of the said exclusion clause it is clear that if the safe or strong room is opened by use
of key of the insured then the same is not covered.
 Analysis
The petitioner had no "safe" or "strong room" in terms of the conditions of the policy to
cover the claim and hence, the petitioner had not complied with the terms and conditions of
the insurance policy. The money was kept in the locker of the steel cupboard kept in the room
of the Executive Officer and was not kept in a strong room.
Regarding whether the ordinary steel cupboard having locker inside could construe "safe" with
reference to the present insurance policy, the court said that the expression "safe" mentioned in
the policy has to be construed by having reference to the requirement under such a policy.
When the expression "safe" is used as an alternative to the strong room in the policy, the safe
obviously cannot be taken to mean the cashier's box which is easily removable or one also
cannot go by the ordinary dictionary meaning of the word "safe" which would mean "a mettle
respectable for the preservation of the valuables".
 Analysis
As per the settled position of law the condition or the term in a particular document has to be
construed and understood with reference to the nature of document and the context in which
the term has been used.
When condition Nos.4 and 7 have expressly excluded the loss of money not kept in "safe or
strong room", the "safe" which was required to be provided in the office for keeping the
money has to be such as would constitute a suitable replacement for a "strong room".
No dictionary or artificial far fetched meaning to be given to the word "safe“. It has to be
interpreted and understood by inviting reference to the context in which the expression has
been used in the policy and also by understanding the meaning of this expression when it is
used in other similar policies or situations as well.
 Conclusion
The plea of the petitioner that the locker fixed inside the normal Godrej steel
cupboard is the same thing as a safe or a strong room referred to in the present
policy was not acceptable.
Hence, the petition was dismissed.