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United India Insurance Co. Ltd., Gujarat v/s HEXA Systems Pvt. Ltd., Gujarat & Another

    First Appeal No. 30 of 2011
    Decided On, 10 March 2022
    At, National Consumer Disputes Redressal Commission NCDRC
    By, MEMBER
    For the Appellant: Maibam N. Singh, Advocate. For the Respondents: R1, Varshal M. Pancholi, Advocate, R2, Nemo.

Judgment Text
1. The present Appeal is filed against the order dated 21.10.2010 passed by Gujarat State Consumer Disputes Redressal Commission (in short 'State Commission') in Consumer Complaint No. 26/2003.

2. Complainant No. 1/ Respondent No. 1 is a Company registered under the Companies Act, 1956, dealing in Computer and related equipment. Complainant No. 2/ Respondent No. 2 is a Nationalized Bank, who had hypothecated the goods of Complainant No. 1 and is a necessary and proper party in the present matter. Complainant No. 1 got the insurance of goods lying in the workshop renewed by the Opposite Party/Appellant from 20.07.1999 to 19.07.2000 and paid premium accordingly.

3. The case of Complainants is that due to heavy rain in Ahmedabad city on 13.07.2000, water got accumulated in the premises of Complainant No. 1and damaged the goods of Complainant No. 1. Complainant No. 1 informed the same to the Opposite Party on 17.07.2000. The Opposite Party thereafter appointed M/s Bhimani & Co. as Surveyor to assess the loss suffered by the Complainants. Complainant No. 1, vide letter dated 10.05.2001, showed its readiness in accepting the loss amount as assessed by the Surveyor. However, the Opposite Party, vide letter dated 09.07.2001, repudiated the claim of Complainant No. 1 stating that the Property in which the loss occurred was not covered by the Policy. The Opposite Party never took on record the new location of Complainant No. 1 even after efforts were made by personal visit and letters dated 05.10.2001, 05.06.2002, informing the Opposite Party that there has been a change in business premises of Complainant No. 1 in the year 1998. Aggrieved by the Opposite Party of not recording the change of place of business of Complainant No. 1 and repudiation of the claim, the Complainants approached the State Commission with the following prayer:

"a) Be pleased to award Rs. 8,71,851/- as actual loss agreed by the complainant according to survey report.

b) Be pleased to award 18% on Rs. 8,71,851/- from 19-07-2000 till the date of payment.

c) Be pleased to award Rs. 50,000/- for mental pain and harassment to complainant due to attitude of the opponent.

d) Be pleased to award Rs. 50,000/- as compensation for unreasonable delay in repudiating the claim by the opponent.

e) Be pleased to award by Rs. 20,000/- as the cost of this litigation.

f) Be pleased to grant any other relief/s which this Hon'ble Court deem fit."

4. The Opposite Party resisted the Complaint by filing Reply whereby it was averred that the Complainants were not liable to claim relief with respect to water inundation in the basement of the new premises on 12.07.2000. The Opposite Party submitted that Complainant No. 1 had never proposed to renew the Policy, rather the Opposite Party issued fresh Policy for the premises situated at 12, Panchgini Row House, Satellite Road, Jodhpur, Ahmedabad 380015, effective from 20.07.1999 to 19.07.2000. The Opposite Party contended that letter dated 21.03.1998 from Complainant No. 1 informing the Opposite Party about shifting of its office and workshop premises to a new building with effect from 05.02.1998, was a fake proof with rubber stamp of the Insurance Company, as the letter was sent by post though as per procedure followed by them, rubber stamp is affixed only on letters received personally. Moreover, the said letter neither bore the reference number of the Policy, nor mentioned the subject of informing change in business place. Further, even if the letter was considered for change of address effective from 12.06.1998 to 11.06.1999, the intimation would be effective from 12.06.1998 to 11.06.1999. In the fresh Fire Policy C type issued to Complainant No. 1 with effect from 20.07.1999, the address of the insured premises of Complainant No. 1 was mentioned as 12, Panchgini Row House, Satellite road, Jodhpur, Ahmedabad 380015. The Opposite Party submitted that the Complainant was aware of the fact that the Insurance Company had insured the old premises of Complainant No. 1 and it had never drawn attention of the Opposite Party/ Insurance Company that the old address has been wrongly mentioned for the new address in the new Policy. Moreover, the calculation of premium of the Fire Policy C type, as per the tariff structure of the Policy was based on the description of the building to be insured, which included extra premium charges, if the property proposed to be insured was having basement. There was, therefore, no deficiency in service, inaction or negligence on the part of Opposite Party. The Opposite Party repudiated the claim of Complainant No. 1, vide letter dated 09.07.2001, upon receipt of Survey Report that the loss to the affected premises was not covered under the Policy and the claim was not payable. The said clause (j) of the Policy reads as under:

"This insurance does not cover:

(j) Property insured if removed to any building or place other than in which it is herein stated to be insured to be insured except Machinery Y Equipments temporarily removed for repairs, cleaning renovation or other similar purposes for a period not exceeding 60 days."

5. The State Commission after hearing the Counsel for both the Parties and perusing the record, vide order dated 21.10.2010, partially allowed the Complaint in the following terms:

"1. Complaint of the complainant is partially sanctioned.

2. Opponents to pay to the complainant an amount of Rs. 8,05,565/- (Rupees eight lacs five thousand five hundred sixty five only) together with interest @ 9% from 09.07.2001, till payment.

3. Opponents to pay to the complainant an amount of Rs. 10,000/- being the costs of the complainant."

6. Aggrieved by the order of the State Commission dated 21.10.2010, the Appellants/Opposite Party preferred the present Appeal with the following prayer:-

"(a) set aside the impugned judgement and order dated 21.10.2010 passed by State Consumer Disputes Redressal Commission, Gujrat State, Ahmedabad in Complaint Case No.26 of 2003 titled as Hexa Systems Pvt. Ltd. & Anr. Vs. United India Insurance Company Ltd. and accepted the appeal.

(b) pass any other order which this Hon'ble National Commission may deems fit and proper in favour of the Appellant and against the Respondents."

7. Heard the Learned Counsel for the Parties and carefully perused the record. Learned Counsel for the Appellant/ Opposite Party submitted that Respondent No. 1 was earlier carrying on business from 12, Panchgini Row House, Satellite Road, Ahmedabad and the same was changed on 05.02.1998 to 1, Matheran Villa Row Houses, Near Satellite Police Station, Sattelite Road Ahmedabad - 380 015, Gujarat. It was admitted that Respondent No. 1 informed about the change in address, vide letter dated 21.03.1998, which was received on 25.03.1998. However, the letter only communicated the shifting of "Office and Workshop" of Hexa Systems Pvt. Ltd. to a new building without any old address, Policy number or the purpose of the letter. It was averred that the State Commission overlooked the fact that the incident of inundation had occurred in the premise which was not covered under the Policy. The Counsel for the Appellant also submitted that the State Commission ignored that no endorsement in the Policy or alteration was valid unless it was countersigned by an authorized official of the Appellant Insurance Company. Respondent No. 1 did not produce any proof of delivery of the said letter. Further, the renewed Insurance Policy for subsequent period starting from 20.07.1999 to 19.07.2000 obtained by Respondent No. 1 contained old address as insured premises. The Counsel submitted that it was the duty of Respondent No. 1 to intimate the Appellant about the change in location and get it duly endorsed by the Appellant. The address given at the time of renewal of the Policy is considered as the valid location under the insurance cover. In the claim, Respondent No. 1 had given the address of a different premises, which was not included in the Insurance Policy. The Appellant Insurance Company, therefore, repudiated the claim of Respondent No. 1 on the ground that the premises where the loss was had taken place was not covered under the Policy. The Counsel for the Appellant stated that the State Commission also overlooked the fact that unless the Appellant Insurance Company agreed to the change of Insured Premises by endorsement in the Policy document, the premises to which stock had been shifted and where the loss was occasioned due to inundation would not be covered. In support of the statement, he relied on the judgement of S.Rathinavelu v. The New India Assurance Co. Ltd. & Ors., 1995 CTJ 620 (CP)=II(1995) CPJ 135 (NC), whereby this Commission held as under:

"mere receipt of a request for change in address is not sufficient to make the policy applicable to the changed premises it is required to be incorporated in the policy by way of a separate endorsement and till then, no risk is assumed in respect of the new location. To make such endorsement in respect of new location is entirely in the discretion of the insurer."

The State Commission ignored the Survey Report which clearly stated that the location of the affected godown was not insured as per the Policy issued and held by the Insured.

8. Learned Counsel for the Respondent No. 1 submitted that they had informed the change in address to the Appellant, vide letter dated 21.03.1998, and the same was received by the Appellant on 25.03.1998. Further, the fact that the Appellant Insurance Company never asked for any proposal form before issuing the Policy for the period starting from 20.07.1999 to 19.07.. Respondent No. 1 submitted that this Commission, on 05.09.17, directed the Counsel for the Appellant to seek instruction as to whether before issuing the subject Policy any fresh proposal was obtained or it was renewed automatically? However, the Appellant had not filed any document with respect to the direction before this Commission. Respondent No. 1 averred that they had sent letter dated 21.03.1998 to the Appellant for change of address, which was also produced before the State Commission, bearing the stamp of Appellant Insurance Company. Respondent No. 1, therefore, submitted that the State Commission rightly held that the Appellant was duly informed of the change of address and the Appellant failed to issue the subject Policy without correction of the address.

9. The admitted facts of the case are that Respondent No. 1 got the workshop and business Hexa Systems Pvt. Ltd. insured by the Appellant Insurance Company, vide Fire Policy "C" bearing No. 60400/1/13/125/99 for Rs. 26,50,000/- for the period starting from 20.07.1999 to 19.07.2000 for which Respondent No. 1 paid a premium of Rs. 7,891/-. Respondent No. 1 hypothecated the goods with Respondent No. 2, Central Bank of India. On 13.07.2000, due to heavy rain in Ahmedabad, the premises of Respondent No. 1 at 1, Matheran Villa Row Houses, near Satellite Police Station, Satellite Road, Ahmedabad- 380015 got inundated. The present claim is with respect to the water inundation in the cellar/basement of the said premises of Respondent No. 1. The Appellant repudiated the claim of Respondent No. 1 stating that the premise was not covered under the Fire 'C' Policy taken by them.

10. The letter by Respondent No. 1 was received by the Appellant as recorded by the State Commission. After getting information, it was the duty of the Appellant Insurance Company to take necessary action for endorsement of the same in the Insurance Policy. The Appellants

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did not make any effort to collect further information from Respondent No. 1 after change in the address of the company was informed to them. The Appellant/ Opposite Party is therefore held liable for not making the necessary change in the address in the Policy and thereby deficient in service. In a similar case, National Insurance Co. Ltd. vs. Parivar Construction & Anr., II (2013) CPJ 154 (NC), this Commission observed as follows: "The basic issue involved in the present case is that the complainant claims that letter dated 15.9.2004 was duly sent to the Insurance Company and it was received in their office. The material on record before us also indicates that a stamp of the Insurance Company has been marked on a copy of this letter, indicating that the same was received in the office of the Insurance Company. Beyond this, it was the duty of the Insurance Company to take necessary action for making endorsement on the Policy, in accordance with rules, etc. on the subject. In case, they have not taken any action after receiving this letter, it can be presumed that the endorsement on the policy was made." 11. In the view of above, we find no infirmity or irregularity in the order given by the State Commission. The present Appeal stands dismissed with no order as to cost.