NATIONAL
CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
Jamnadas Madhavji International
Ltd.,
Administrative Office at:
Tanna House, Ground Floor
11, Nathalal Parekh Marg,
Mumbai-400 001
Registered Office at Jamnagar. … Complainant
1. The
New India Assurance Co. Ltd.,
Registered
office at:
87,
Mahatma Gandhi Road, Fort,
Mumbai-400001
Regional
Office at
New
India Bhavan,
2nd
Floor, 34/38, Bank Street,
Fort,
Mumbai-400 023
Divisional
Office at
D.O.
No.112800, 315/316
Vyapar
Bhavan, 49, P.D' Mello Road,
Masjid
Bunder (E),
Mumbai-400
009.
2. M/s.
D. Himatlal & Co,
a
Partnership Firm,
Insurance
Brokers, Consultants,
Claim
Settlers
315-316,
Vyapar Bhavan,
P.D'Mello
Road,
Mumbai-400
009. … Opposite Parties
BEFORE :
HON’BLE MR. JUSTICE
M.B. SHAH, PRESIDENT
HOON’BLE
MRS. RAJYALAKSHMI RAO, MEMBER
For the Complainant : Mr.
M.N. Krishnamani, Sr. Advocate and
Mr.
Soumyajit Pani, Advocate with him
for
Mr. Subhrojyoti Borthakur, Advocate
For the Opp.Party No.1: Mr. Sanjiv Sharma, Advocate.
For the Opp. Party No.2: Mr. Praful Khandhar, Partner of the
Opposite Party No.2
In this case, the Insurance Company issued the policy four months after
receipt of premium and one month after the occurrence of the peril, despite the
letter issued by the Complainant specifically mentioning the places of coverage.
Surprisingly, the policy so issued, after the occurrence of the peril, was not
containing the address of the godown where the stock was damaged due to
cyclone. That godown was covered by the
previous two insurance policies and this is a case of renewal of the earlier
insurance policy. Further, the terms of
the insurance policy were inaccurate and
vague. Despite this, the Insurance Company has repudiated the claim on the
ground that the area where the damage took place was not covered by the terms
of the policy. It is to be stated that
there is no dispute with regard to assessment of loss by the surveyor at
Rs.18,11,400/-.
This
Complaint is filed against the New India
Assurance Co. Ltd. (hereinafter referred to as ‘the Insurance Company’) –
Opposite Party No.1 and its Agent,
namely, M/s. D. Himatlal & Co., Opposite Party No.2, claiming reimbursement of a sum of Rs.18,11,396/- with interest @ 18% per annum from 9.9.1998 till the date of payment, and
compensation of Rs.3 lakhs, with costs and other reliefs.
Contention of the Complainant:
It is the say of
the Complainant that it was obtaining fire and flood insurance
policy in form ‘C'
from the Insurance Company since 29th March, 1996, insuring
the Complainant’s buildings, machinery,
stocks in the godowns at various places, particularly, mentioned in the schedule
attached to the policy dated 29.3.96. The insurance cover was for a sum
of Rs.3,13,53,000/- for a period of one
year, i.e. 29.3.1996 to 28.3.1997, and the Complainant had paid a sum of Rs.1,22,093/- as premium.
The said policy was renewed on
the same
terms and conditions for a further period of one year from 29th
March, 1997 to 28th March,
1998. The insurance cover was for a sum
of Rs.13 Crores for which the Complainant paid a sum of Rs.4,77,678/- as premium. It is the
contention of the Complainant that by the said policy the insurance cover was
also continued for the premises at Gem
Nuts & Produce Export Co. P. Ltd. at Bedeshwar, Jamnagar.
Thereafter, the
Complainant by its letter dated 27th March, 1998, requested
the Opposite Party No.2 namely, M/s. D. Himatlal & Co. (Agent of the Insurance Co.) to renew the insurance policies for a further
period of one year, i.e. for the year 1998-99.
The request for renewal of the
policy was for the sum of Rs.13.45
Crores. The said letter stated that “Description for policy No.11/111801/00734 is
as per statement attached”. The attached
statement mentioned godowns at various premises including the two godowns at Jamnagar, i.e.
Mill and Godown at Badeshwar and Gem Nuts & Produce Exports Co. Pvt. Ltd.,
Bedeshwar, Jamnagar. The insurance cover sought was for building, machinery and
stocks at Jamnagar for the sum of Rs.5.50 Crores. In the said letter the Complainant
requested for insurance cover at three
locations at Jamnagar i.e. (i) mill at Bedeshwar, Jamnagar, (ii) godown at
Bedwshar Jamnagar and (iii) godown at
Gem Nuts & Produce Exports Co. Pvt. Ltd. – Bedeshwar, Jamnagar.
Thereafter, by
another letter of the same date, i.e. 27th March, 1998, addressed by
the Complainant to Opposite Party No.2
(Agent), stating that one more
address had to be added in connection with
renewal of the policy to be issued by
the Insurance Company, i.e. Agro Export Ltd., Plot No.5,6,7,8,9,10,11,12,18
& 19, Dhichda, Jamnagar.
By
letter dated 8.5.98, while acknowledging receipt of premium of Rs.4,19,374/-
for renewal of the fire policy expiring on 28th March, 1998, for the
various locations stated therein, the Insurance Company informed the
Complainant that the policy document was under preparation and the same would
be sent to the Complainant shortly.
Thereafter, by
letter dated 9th June, 1998 the Insurance Company required from the
Complainant the details of the
address of godowns at various locations,
mentioned in the said letter. In the said letter, the Insurance Company has
specifically mentioned the locations of Jamnagar (Bedeshwar) and Dhichida.
It
is to be stated that on 9th June, 1998 a heavy cyclone struck the coast of Gujarat due to
which heavy damage was caused to the building, machinery and stock of the
complainants lying at godowns in
Bedeshwar, Jamnagar and Dhichda.
By letter dated
10.6.98 the Opposite Party No.2 was
informed that stocks worth Rs.79,11,699/- were lying at various godowns at
Jamngar and Dhichada and the estimated total loss was in the range of Rs.50 lakh.
Thereafter, the
Insurance Company by letter dated 11.6.98 addressed to the Complainant acknowledged the receipt
of the Complainant’s notice of intimation of loss. The Insurance Company also informed the Complainant that M/s. C.P. Mehta & Company were appointed as surveyors to assess the
loss and that the Complainant should take
all necessary steps for
minimizing the loss including salvaging operation. It is not disputed that as per the insurance policy location of the
godown, mills at Bedeshwar, Jamnagar
and Agro Export Ltd., Dhichda,
Jamnagar are specifically mentioned covering risk of Rs.5.50 Crore and Rs.30
lakh respectively. It is to be stated that the said policy was given to the
Complainant on 10th July,
1998 i.e. after one month of the
incident. Immediately, the Complainant wrote letter dated 13th
July, 1998 to the Opposite Party
No.2 pointing out that the policy issued by the Insurance Company
contains several discrepancies and hence it required rectifications. One of the discrepancies was that the godown at Gem Nuts & Produce Exports Co. P. Ltd. was not included in the
schedule, although the agent was instructed to insure the stock
at the said premises vide complainant’s
letter dated 27th March, 1998.
Further, it was pointed out that it was simplicitor renewal of the previous policy.
Thereafter, the
Insurance Company by their letter dated
10th September,
1998 pointed out to the Complainant that on perusal of the
interim survey report it was observed that they have charged less premium for insurance
effected at Jamnagar, Bedwshwar for a sum of Rs.5.50 Crore as they had not
charged floater excess of 25% and as the godown in Complainant’s factory at
Bedeshwar was of second class construction, hence,
a higher premium was attracted.
Therefore, they called upon the Complainant to make additional premium of Rs.4,34,350/-. By the said letter the Insurance Company also
informed the Complainant that an on account
payment of Rs.7,51,000/- was
sanctioned.
Thereafter,
the Surveyors by their letter dated 23rd November, 1998 addressed to
the Complainant assessed the loss of stocks at M/s. Gem Nuts & Produce
Exports Co. P. Ltd., Bedeshwar at Rs.18,11,396/- and requested the
Complainant to confirm its acceptance by
signing an extra copy of the said letter.
It is the say of the complainant that the Complainant accepted the assessment by signing the duplicate copy of the said letter. The letter is produced at Annexure ‘O' to the complaint.
Further by
letter dated 9th March, 1999
the Insurance Company forwarded a voucher for the sum of Rs.16,35,137/- in
respect of the claim under the policy
and requested the Complainant to return the voucher duly signed. Immediately by
letter dated 10/12th March, 1999 the Complainant informed the Insurance Company and to the Opposite Party No.2 that Complainant was
surprised to receive the claim voucher of Rs.16,35,137/- against the Complainant’s claim of Rs.39 lakh. It was pointed out that the
Complainant’s claim in respect of the stocks lying at M/s. Gem Nuts & Produce Exports Co. P. Ltd. had been omitted. It was also stated that while renewing the
policy the Complainant had instructed
the Opposite Parties to cover the stock lying at M/s. Gem Nuts
& Produce P. Ltd. However, when the policy was received on 10th
July, 1998 it was noticed that the premises at Gem Nuts & Produce Exports Co. Ltd. had been
omitted. Therefore, the Complainant
immediately called upon the Opposite Parties to rectify the said mistake.
It is the say of
the Complainant that the Complainant was obtaining insurance cover from
the Opposite Party No.1 for the last
three years and the premises at Gem Nuts
& Produce Exports Co. P. Ltd. was
always insured. The Complainant further
pointed out that it is the practice of the Complainant to keep all stocks of the Complainant’s Company fully
insured. And that on many occasions insurance coverage exceed the value of the
stock. For the policy in question the
insurance was taken out for a sum of Rs.13.85 Crore yet the stock was less. Further the Complainant questioned the
Insurance Company’s right to deduct Rs.5,.03,493/- towards additional
premium. At the same time, the Complainant informed that the claim voucher signed by the Bank was accepted as part payment of
the claim and the same was forwarded to
the Insurance Company. That letter which
is dated 10th March, 1999, is
produced at Anneuxre-R to the complaint wherein
the Complainant interalia stated
as under:
“Lastly, we noticed from your letter that you have recovered
Rs.5,03,493/- from our claim payable towards the premium charges, which is
really surprising for us because we have always
paid your premium charges as demanded at time renewal or enhancement of policies. We are sure we have not defaulted at any
occasion and your deduction is not
justified. Please check your records
and elaborate on non-payment of your premium charges since as per our record
nothing is payable to you towards premium charges.
Hence, we request
please look into our matter in the light
our above mentioned facts and settle our balance of about Rs.18
lacs. Claim voucher and bank letter is
already forwarded to you for part claim of Rs.16,35,137”
Letter dated 11th
March giving the working of the claim, is as under:
No. Location Amount of Claim
1) Bedeshwar, Jamnagar
Rs.20, 38,915/-
(2) Agro & Export Ltd.,
Dhichada Rs. 3,37,340/-
_____________
Rs.23, 76,255/-
Less :
Excess (10% of the Claim
amt. orRs.3,00,000/- whichever
is less) Rs. 2,37,625/-
_____________
Rs.21, 38,630/-
Less :
Difference of premium
for prior
3 Years net.
Rs. 2,61,250/-
_____________
Rs.18, 77,380/-
Less : Difference of premium
for
current year policy period
at
affected location Rs.
1,22,436/-
____________
Rs.17, 54,944/-
Less :
Difference of premium
for current year at other location
in the policy Rs.
1,08,287/-
______________
Rs.16, 46,657/-
Less :
Extra premium on account of
Restoration
of sum insured Rs. 11,520/-
_____________
______________
Again the Complainant informed on 31st
March, 1999 to the Divisional Manager of the Insurance Company stating that it
was regretable that nothing was
heard from the Insurance Company with regard to the balance claim and that the financing bank was
pressing hard for early settlement of its dues. It was also pointed out that before the complainant decides on renewing existing insurance policies, it
was expected that balance claim would be
settled at the earliest.
Thereafter, the Opposite Party No.2 informed the Divisional Manager of the Insurance Company that all the claims
of the Complainant be settled at the
earliest. The Opposite Party No.2 also
pointed out that charging of excess premium was not justified on the basis of the calculations
stated therein. Thereafter, on 10th
January, 2000, Opposite Party No.2 wrote another letter to the Insurance
Company for settlement of the claim
which reads as under:
“(1) JMIL and their sister companies are our
client (NIA)
since last four years.
(2)
JMIL is one of the oldest company in giving average
premium of Rs.15,00,000/- approx, and the agri produce
market for probably 150 years old and having highest reputation in India and
abroad with company like Nestle, Cadbury, Hershey’s, Snicker, Mars, Wether’s
and many large corporations in European and American market. It is also Govt. Trading house for many
years.
(3) Gem Nut location is their own
property and they have been covering
this location since last four years continuously.
(4) On March 27 at the time of renewal of the policy,
Insured’s letter was very specific about covering Gem Nut location.
(5) At time of
renewal (i.e.) March,98, Insured desired to go for special declaration
policy. Accordingly separate forms for
fire, flood and special declaration were filled in where it is very clearly
shown as Gem Nut location to be covered.
(6) For April and May 1998, Insured
has submitted stock statement as per the rule for Declaration Policy wherein
Gem Nut location is appearing for both months where as cyclone was on 9th
June, 1998. This is the best proof one
can have. If they had no intention to
cover, “Gem Nut” location would not have appeared for the month of April and
May, 1998.
(7) Mr. N.S. Vishwe’s letter is very clear admitting mistake and
inadvertently omission of the said location.”
Finally, on
24.11.2000 the Divisional Manager of the Insurance Company informed the
Complainant that the location where the
factory, namely, M/s. Gem Nuts
& Produce Export Co. P. Ltd. at Bedeshwar, Jamnagar was not covered under the insurance policy in question and
hence the claim was repudiated. Hence, this complaint.
Contentions of the Insurance Co.:
By written version filed on 22.11.2002 it is not denied that in the previous two policies premises at Gem Nuts & Produce Export Co. P. Ltd was
covered by the insurance policy. The Insurance Company contended that the
Complainant had not requested for
renewal of the insurance policy on the
terms as those of previous two years policies.
At the same time, it is admitted as under:
“It is, however, not denied that the aforesaid premises
at Gem Nuts & Produce Export Co. P. Ltd. was included in the previous two
years policies. However, it is submitted
that previous two years policies were floater policies whereas the policy in
question i.e. from 29.3.1998 to 28.3.1999, out of which the present claim is
alleged to have arisen, is without
floater condition. It is further
submitted that if more than one location
is to be covered by the insured in single sum insured, then the insured has to pay the
floater extra, as per the tariff regulations as is evident from the previous
years’ policies annexed with the complaint as Annexure A & B where 25%
floater extra was charged where more than one location was covered in single
sum insured”.
Secondly, it is contended
that Complainant’s intention
in not including the location at
Gem Nuts & Produce Export Co. P. Ltd. in the schedule of the policy can also be gathered from not raising any objection to the letter dated 8.5.1998
written by the Insurance Company to the
Complainant, wherein all locations
covered under the
policy were mentioned till the
loss on 9.6.1998.
Findings:
The only controversy in this complaint is-
whether the godown at Gem Nuts & Produce Export Co. P. Ltd., Bedeshwar,
Jamnagar is covered under the insurance
policy in question?
Admittedly,
due to the cyclone Complainant suffered loss at Gem Nuts & Produce Export
Co. P. Ltd., Bedeshwar. The surveyor has assessed the loss at Rs.18,11,400/-
(rounded). For this, there is no
dispute.
Renewal of the Insurance Policy:
For this purpose, firstly it is to be stated that there is no dispute that for
the polices which were taken for
previous two years godown at Gem Nuts & Produce Export Co. P.
Ltd. Bedeshwar, Jamnagar, was
covered. In support of this, copy of the
insurance for the period 29th March, 1996 to 28th
March, 1997 and 29th March,
1997 to 28th March 1998 are
produced on record. This is also not
denied by the Insurance Company.
Secondly, by
letter dated 27th March, 1998, the Complainant informed the Opposite
Party No.2 to renew the policies for
a further period of one year as
per the details given therein. For the
Mill & Godown, Bedeshwar, Jam Nagar and
for the Godown of Gem Nuts & Produce Exports Co. Pvt. Ltd.,
Bedeshwar, Jamnagar, the insured amount
stated therein was Rs.5.50 Crore. We are not concerned with the details of the mill and godwons at other
places, hence they are not narrated.
Thereafter, on the same date i.e.
27.3.1998 a Fax message was sent to the Opposite Par No.2 to include in the schedule of policy Agro Exports Ltd.. Dhichada, Jamnagar stating “It is all godowns where same
commodities as JMIL’s factory/godowns may be stored”
Apart from the aforesaid specific letter to the Opposite Party No.2, on 8.5.98, N.S. Vishwe on behalf of the Insurance Company informed the Complainant that “We acknowledge with thanks your remittance of Rs.4,19,374/- vide Cheque No: 937393 dtd : 25/3/98 for renewal of your Fire Insurance Policy covering various locations in India on declaration basis”. The total sum insured was Rs.13.85 Crore. This would mean that it was pure and simple case of renewal of the policy with a slight difference in the sum insured. In the said letter dated 8.5.98 the Complainant was informed about the renewal of the fire policy expiring on 28th March, 1998 for the various locations stated therein. The relevant part is as under:
Re:
Renewal of Fire Policy No.11/111801/00734
expiring 28.3.1998
for various locations
in India.
“We acknowledge with thanks your remittance of
Rs.4,19,374/- vide Cheque No: 937393 dtd : 25/3/98 for renewal of your Fire
Insurance Policy covering various locations in India on declaration basis.
We have now to state that we are holding your interest
duly covered against risk of Fire, Lightening, Explosion/Implosion, impact by
any Rail/Road/Vehicle/ or animal, Riot, Strike, Malicious and Terrorist Damage
etc. of your properties at various location as per details given below for a
period of One Year w.e.f. 29.3.98.
No. LOCATION SUM INSURED
(A)JAMNAGAR:
(1) BEDESHWAR : Rs.5,50,00,000.00
(2) AGRO EXPORT
DHICHDA : Rs. 30,00,000.00
(3)
SIDHPUR : Rs.1,00,00,000.00
(B) COCHIN : Rs.2,50,00,000.00
(C)
DELHI:
(1) NARELA ROAD, DELHI : Rs.1,80,00,000.00
(2) ALIPUR : Rs. 70,00,000.00
(D) MULHI JETHA
(MUMBAI) : Rs. 30,00,000.00
(E) BHIWANDI : Rs.1,00,00,000.00
(F) AHMEDABAD : Rs. 75,00,000.00
TOTAL SUM INSURED : Rs.13,85,00,000.00
Our policy document Bearing No. 11/111801/00517 is under preparation and same shall be sent to you shortly. The policy shall be issued in the name of Syndicate Bank (Homji St. Branch) and State Bank Of India(Overseas Branch) and A/c yourselves.”
This would also
indicate that whatever was stated by the Complainant by letter dated 27th March, 1998 for
renewal of the policy was accepted by the Insurance Company. It is true that at Bedeshwar, Jamnagar there
two godowns namely (i) Mill Godown and the other (ii) Gem Nuts & Produce
Export Co. P. Ltd. But at the same time
for the said two godowns insurance cover was sought for a sum of Rs.5.50 Crore and the
same has been accepted by the Insurance Company by stating Jamnagar, Bedeshwar
– Rs.5.50 Crore. By not mentioning two
different places of godown in the same
area would not mean that insurance cover was
only for one godown and not for
the second godown. The Complainant has sought insurance cover for two godowns
and insurance cover was for a sum
of Rs.5.50 Crore and the same was
accepted without any modification by letter dated 8.5.98.
Further for the renewal of
the policies as per settled law if there is some mistake committed by the officer of the Insurance
Company at the time of issuance of renewed policy, the Insurance Company cannot
take advantage of its own wrong and the contract remains on the same terms and
conditions. In the case of Biman
Krishna Bose vs. United India Insurance Co. Ltd. – (2001) 6 SCC 477, the Apex
Court in similar set of circumstances observed as under:
“5 . A renewal of an insurance policy
means repetition of the original policy. When renewed, the policy is extended
and the renewed policy in identical terms from a different date of its
expiration comes into force. In common parlance, by renewal, the old policy
is revived and it is sort of a substitution of obligations under the old policy
unless such policy provides otherwise. It may be that on renewal, a new
contract comes into being, but the said contract is on the same terms and
conditions as that of the original policy.
….”
Thirdly, it is
to be stated that the insurance policy
was issued only on 10th July, 1998 i.e. after more than four months after receipt of
premium and after one month of the date of the
peril. In such case, if there is
mistake in not mentioning godown where
the damage has taken place, that would not mean that the Complainant
should suffer. It was the mistake on the
part of the concerned Officer of the Insurance Company. Principle of good faith
(uberrima fides) is also applicable to the Insurance Company. It cannot take advantage of its own mistake.
In the case of United India Insurance Co. Ltd. v. M.K.J. Corpn., (1996) 6
SCC 428 , (p.431), it is held that:
“6. It is a fundamental principle of Insurance
law that utmost good faith must be observed by the contracting parties. Good
faith forbids either party from concealing (non-disclosure) what he privately
knows, to draw the other into a bargain, from his ignorance of that fact and
his believing the contrary. Just as the insured has a duty to disclose,
“similarly, it is the duty of the insurers and their agents to disclose all
material facts within their knowledge, since obligation of good faith
applies to them equally with the assured”.
Similarly, in M/s.Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd., (2000) 2 SCC 734. Apex Court held that:
“8. It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties know. The insured has a duty to disclose and similarly it is the duty of the Insurance Company and its agents to disclose all material facts in their knowledge since obligation of good faith applies to both equally”.
Further,
there are other mistakes in policy which was issued in July, 1998. It is to be
stated that the insurance cover was
sought for a sum of Rs.13.45 Crores whereas the
insurance policy issued by the Insurance Company provides insurance
cover for Rs.13.85 Crores. On receipt of
the aforesaid policy, the Complainant
had drawn the attention of the
Opposite Party No.2 by letter dated
13th July, 1998 with regard to the mistakes committed by the Insurance Company in mentioning various
addresses and also not mentioning the
address of Gem Nuts & Produce Export
Co. P. Ltd. It was also stated that the
total sum sought to be insured was Rs.13.45
Crores whereas the policy
mentioned that the risk covered was for a sum of Rs.13.85 Crores. Hence,
information was given to correct the policy accordingly. This would establish beyond doubt that the
insurance policy as agreed was not prepared by the Officers of the Insurance
Co.
Further, the
Administrative Officer Mr. N.S. Vishwe
of the Insurance Co. has specifically intimated by letter dated 10th
September, 1998, after receipt of the Survey report, that the Insurance Company charged premium for fire rate at 2.50% and
for flood rate at 0.75% for the stock at the factory in Jamnagar, Bedeshwar as
shown in item No.1 in the schedule, but the location was having a godown of
Class-II construction inside it and therefore, the rate of
premium would be 3.10% and flood rate of 1.25% becomes chargeable.
This is clear
from the above mentioned letter dated 10.9.98 which is produced by the
Complainant as Annexure-N and the relevant part thereof is reproduced hereunder:
“From the observation as brought out in Interim Survey
Report, we have to state as under:
We have charged a fire rate at 2.50% and flood rate at 0.75%
for your stock at your factory in Jamnagar, Bedeshwar as shown in the item No.
1 as shown in the schedule attached to the abovementioned Policy. However, it is observed from the Survey Report that the said location was also having
a godown of Class II construction inside it and therefore the rate of 3.10% and
flood rate of 1.25% becomes chargeable as it being the class II construction as
per Surveyor’s opinion. This fact was
not disclosed to us in your proposal form which we received through M/s. D.
Himatlal and Co.
Similarly, as per the provisions of the fire tariff since
the location was occupied as Mill/Factory and as storage of godown of stock, a
25% floater extra has to be charged as per tariff.
The above things therefore become violative and as per claim
settling guidelines of the Company. We
have to charge 3 years premium @ 3.10% + 25% for fire and 1.25% + 25%
floater on a total sum insured of Rs.5.50 Crores and a difference of premium
worked out above and actually charged has to be recovered from the amount
of claim and post loss rectification endorsement has to be passed
immediately to set right the policy and to protect any future claims if it
comes on the policy. ……
In view of the observation as narrated above, we have to
charge an extra premium of Rs.4,34,350/- and same has to be deducted from “on
account” payment of the claim which is sanctioned by the Management. You can
either claim the full amount of Rs.7,51,000/- as “on account” payment
sanctioned by Mnagement and as recommended by the Surveyor and pay a premium of
Rs.4,34,350/- by Cheque.
Please note that post-loss rectification endorsement has
to be passed to set right the policy rating as per the observation of the
Surveyor and that will help you immediately from the future date and shall help
to recover the losses in full which shall be admissible as per the coverage of
the fire policy for future event.”
After charging this floater rate, extra premium, it hardly lies in the mouth of the Insurance Company to contend that the location at Gem Nuts & Produce Export Co. P. Ltd. at Bedeshwar, Jamnagar was not covered by the insurance policy. Further, in its letter the Insurance Company nowhere contended that godown was not covered.
It is to be
stated that D. Himatlal & Co., was
joined as Party-Respondent. Learned Counsel Mr.Sharma, appearing on
behalf of the Insurance Company
vehemently contended that D.Himatlal & Co.
were not the authorized agent of the Insurance Co. Therefore, Opposite Party No.2 was directed to remain present. The Opposite Party No.2 filed reply and also
produced on record for our perusal the relevant documents establishing that he
was the authorized Agent of the Insurance Company for years
together. Even the Insurance
Regulatory Development Authority (IRDA) has granted license to the Opposite
Party No.2. In this view of the
matter, the contention
raised by the counsel for the Insurance Co. is frivolous having no
substance and deserves to be rejected
without any further consideration.
Further, D.
Himatlal & Co., Agent of the Opposite Party No.1 in its letter dated 10th January, 2000 addressed to
the A.G.M. of the Insurance Co. stated that
“Mr. N.S. Vishwe’s letter is very clear admitting mistake and
inadvertently omission of the said location”. He has further submitted that at
the time of the renewal of the policy, the godown of Gem Nuts & Produce at
Bedeshwar was covered.
Hence,
we hold that there is apparent deficiency in service on the part of the officer
of the Insurance Company in not bifurcating the godowns at Bedeshwar, Jamnagar,
by simply mentioning that for the godowns at Bedeshwar, insurance cover was for
Rs.5.50 Crores without specifically mentioning the two godowns.
In view of the above discussion, the Insurance Company is directed to pay the amount of Rs.18,11,400/- (rounded) as assessed by the surveyor (the said assessment is not disputed by either of the parties). However, for the loss suffered by the Complainant on account of non-settlement of claim for years together the Insurance Company is required to pay the said amount with interest. For the rate of interest, learned Counsel for the Complainant pointed out that the Complainant is entitled to have reimbursement with interest at the rate of 18% p.a., because the Complainant was required to pay interest to the banks for the loan taken by it. He further submitted that the Complainant is entitled to have compensation and costs of litigation, as prayed for.
For the loss due to the interest, in United India Insurance Co. Ltd. Vs. M.K.J. Corporation (1996) 6 SCC 428, the Apex Court has specifically observed that in common parlance, when the insured is deprived of the right to enjoy his money or invest the money in business, necessarily the loss has to be compensated by way of payment of interest by the Insurance Company.
Considering the findings recorded above, in our view it would be a fit case for directing the Insurance Company to pay the amount as assessed by the surveyor with interest at the rate of 12% p.a. However, the prayer for award of further compensation is rejected.
In the result
the complaint is allowed. The Insurance
Company is directed to pay the said
amount of Rs.18,11, 400/- (rounded) as
assessed by the surveyor (the said assessment is not disputed by either of the
parties) with interest @ 12% per annum from 1st January, 1999 ( i.e.
after six months from the date of the
occurrence of the peril). The Insurance
Company is directed to pay a sum of Rs.20,000/- as cost of litigation.
Sd/-
……………………………………….J.
(
M.B. SHAH)
PRESIDENT
Sd/-
…………………………………………
(RAJYALAKSHMI RAO)
MEMBER