LexNATIONAL INSURANCE CO.LTD. versus M/S. ISHAR DAS MADAN LAL
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A NATIONAL INSURANCE CO.LTD. _.\ - v. MIS. ISHAR DAS MADAN LAL FEBRUARY 20, 2007 B [S.B. SINHA AND MARKANDEY KA TJU, JJ.] Insurance: -f. ~ ::.. Contract of Insurance-Exclusion clause-Interpretation a-nd c applicability of-Held: Wherever an exclusionary clause is contained in a policy, it is for the insurer to show that the case falls within the purview thereof---In case of ambiguity, the contract shall be construed in favour of the insured, D Insurance policy-Covering risk of loss by theft-Obtained by insured- jeweller in respect of jewellery-Policy contained express clause excluding applicability of insurance cover to theft by customer of jewellery "entrusted" to him by insured-Unknown customer stole jewellery from business premises of insured-Applicability of exclusion clause contained in the policy-Held, not applicable since there was no "entrustment" of jewellery by insured to E thP. customer who committed theft-Hence, loss in question covered by the policy--Penal Code, I860--ss. 378 & 405. Words and Phrases-"entrustment" and "customer"-Meaning of- Discussed. F Respondent carries on business in jewellery. He obtained insurance policy from Appellant-insurer inter alia covering the risk of loss by theft in respect of jewellery. The policy contained an express clause excluding the · applicability of insurance cover in case of loss by theft, inter alia, by a customer in respect of the property (jewellery) entrusted to him by Respondent- G insurer. An unknown customer entered the business premises of Respondent and stole 140 gms of jewellery. Respondent lodged claim in respect of the said loss. State Commission dismissed the claim holding that it was not covered .. by the insurance policy. High Court however held that the loss was covered ,... by the policy. H 1014 ..... NA TI ON AL INSURANCE CO. LTD."· ISHAR DAS MADAN LAL 1QJ5 The question which arose for consideration in the present appeal is A whether the said loss in question attracted the exclusion clause contained in insurance policy and hence was not covered by the policy. Dismissing the appeal, the Court HELD: 1. The view taken by the High Court is correct. (Para 23) B 2.1. There may be an express clause excluding the applicability of insurance cover. Wherever such exclusionary clause is contained in a policy, it would be for the insurer to show that the case falls within the purview thereof. In a case of ambiguity, the contract of insurance shall be construed in favour of the insured. (Para 8) (1018-D) C 2.2. Exclusion clause in the contract of insurance would be attracted only where the offences specified therein are committed by any of the persons mentioned therein. For defeating the claim of the respondent, it was, thus, obligatory on the part of the appellant to establish that the conditions D prescribed therein were satisfied. (Para 9) (1018-E) United India Insurance Co. Ltd. v. Pushpalaya Printers, [2004) 3 SCC 694;, Mis Peacock Plywood Pvt. Ltd. v. The Oriental Insurance Co. Ltd., (2006) 14 SCALE 300 and United India Insurance Co. Ltd. v. Kiran Combers & Spinners [2007) 1 sec 368, relied on. E 3.1. The word 'entrust' would imply giving responsibility to a person upon whom the owner has confidence. It envisages establishment of a relati&nship. When a custoiner enters into a jewellery shop, as of necessity, the owner or his agent must allow him to inspect the merchandise, the customer intends to purchase. For the said purpose possession in the legal F sense is not handed over. The owner or his agent does not lose complete cmitrol thereover. [Para 12) (1019-E) 3.2. The word 'customer' contained in said exclusion clause of the Insurance Policy must be read ejusdem generis. A customer contemplated thereunder must have to be one who would be a man of trust. If a customer is G n11t a man of trust or the property had not been entrusted to him, the exclusion clause would not apply. The customer who committed theft of jewellery was an unknown person. It was so categorically stated in the First Information Report. There was, thus, no occasion for the respondent to entrust the jewellery to him. [Para 13) [1019-F-G) H 1016 SUPREME COURT REPORTS [2007] 2 S.C.R. A 3J. Transfer of possession of goods Is a sine qua non for entrustment. The person must be handed over the possession of the property. Illustration (d) appended to Section 378 IPC envisages a situation of this nature. It b
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