National Consumer Disputes Redressal
M/S. Orient Clothing Company Pvt Ltd vs M/S. Bajaj Allianz General Insurance ... on 13 July, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 26 OF 2008 1. M/S. ORIENT CLOTHING COMPANY PVT LTD REGISTERED OFFICE 1E/15, JHANDEWALAN EXTENSION, NEW DELHI - 110055 ...........Complainant(s) Versus 1. M/S. BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD & ORS REGISTRERED OFFICE GE PLAZA, AIRPORT ROAD, YERWADA, PUNE - 411 006 2. M/S. BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD & ORS REGIONAL AND CORRESPONDENCE OFFICE,
C-31/32, 1ST FLOOR, OPPOSITE PVR PLAZA, CONNAUGHT PLACE NEW DELHI 3. M/S. CUNNINGHAM LINDSEY INTERNATIONAL PVT. LTD. 508, UDYOG VIHAR, PHASE - III, GURGAON - 122 001. HARYANA ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER
For the Complainant : Mr. Virender Ganda, Sr. Advocate with
Mr. S.K. Giri, Advocate For the Opp.Party : Mr. Ramesh Kumar, Advocate
Dated : 13 Jul 2015 ORDER
JUSTICE V.K. JAIN, PRESIDING MEMBER
1.The complainant company, which is engaged in the business of manufacturing, fabricating and processing of readymade garments, etc., obtained a Special Fire & Special Perils floater insurance policy for the period from 21-05-2005 to 20-05-2006, for a sum of Rs.9,00,00,000/- covering plots Nos.294, 298, 299 and 300, in addition to 20 processors. A fire broke out in the premises at plot No.749, Udyog Vihar, Phase-VI, Gurgaon on 02-11-2005, which according to the complainant belonged to one of its processors and the stock of the complainant kept in the aforesaid premises got burnt and destroyed. Intimation of the loss having been given to the insurance company, M/s. Cunnigham Lindsay International Pvt. Ltd. was appointed as the surveyor to inspect the aforesaid premises and assess the loss. The said surveyor, vide its letter dated 11-11-2005, informed the complainant that plot No.749, Udyog Vihar, Phase-VI, Gurgaon was not covered under the policy. On receipt of the said letter the complainant clarified that the aforesaid location was of one of its processors and, therefore, was covered under the insurance policy. Vide letter dated 03-06-2006 the insurance company informed the complainant that plot No.749 was not a specified location under the policy or its endorsement and the said location had not been specified by the complainant as its premises or a processor either at the time of issue of the policy or before the loss occurred. It was further stated that without prejudice to the foregoing they had instructed their surveyor to carry out a survey on a without prejudice basis. The surveyor vide its final report dated 31-08-2007 assessed the loss at Rs.1,23,25,972/- but qualified the said report with the following statements:
"1. FCCPL at Plot No.749 was not mentioned in the policy. The insured had installed their own machinery at FCCPL at Plot No.749. The company owned by same directors and is used for tax purposes yet the insured insisted that the FCCPL is a processor for them, taking advantage of the four unnamed processor in the policy.
2. This report is issued and assessment done on the presumption that FCCPL at plot No.749 is covered.
3. In our view, any location can be added by the insured as processor in the four unnamed locations in the insurance policy. We are of the opinion that the insured would have similarly insisted for plot No.296 & 528/529 had they been affected.
4. We have repeatedly argued with the insured that for plot No.749, there appears to be no intention of the insured for taking the insurance otherwise it would have been explicitly declared in the policy. This is because, being sister concern, the work was sure to follow FCCPL unlike other vendors. This is also brought about by the fact that FCCPL was doing the largest share of Insured's work. Insured had declined to see reason in the above logic."
2. The claim lodged by the complainant was rejected by the insurance company vide its letter dated 27-11-2007 stating inter alia as under:
"The policy issued to you was subject to a Floater Clause which determines an insurer's liability for the subject matter insured provided that the premises at which the subject matter insured is situated is specifically listed in the policy. The benefit of indemnity under a Floater Clause is not available to unspecified locations.
You did not specify location 749 on the proposal form that you completed and signed on 18th May 2005. Accordingly, the policy schedule and the endorsement issued to you on 21st May 2005 do not specify location 749. The cover under the policy does not extend to stock at unspecified locations. Clearly, as location 749 is unspecified the policy would not engage."
3. Being aggrieved from the rejection of its claim the complainant is before this Commission seeking the following reliefs:
(a) direct and order the opposite party to pay and settle the claim as assessed by the surveyor at Rs.1,23,25,972/- along with an interest @18% per annum w.e.f.2nd November 2005 i.e. the date of loss until the actual date of payment to the complainant;
(b) direct and order the opposite party to pay Rs.50,00,000/- as damages for business loss and harassment;
(c) direct and order the opposite party to pay Rs.10,00,000/- as compensation for harassment and mental agony; and
(d) direct and order the opposite party to pay Rs.1,00,000/- as the cost of litigation and expenses, etc..
4. It is stated in the reply filed by the insurance company that the complainant had approached them for issuance of a fire policy with floater clause in respect of its own premises at plots Nos.294, 298, 299 and 300, Phase-VI, Udyog Vihar, Gurgaon plus 20 independent processors whom they were supplying materials for fabrication of the garments. At the time of submitting the proposal the complainant furnished the list of only 16 processors, as against 20 processors proposed to be covered by the said policy. The insurance company accordingly issued a policy mentioning the locations covered as per annexure attached thereto, the said annexure being the list of 16 processors furnished by the complainant. The complainant, with ulterior motive, did not attach the copy of the annexure to the copy of the insurance policy filed by it. It is further stated in the reply that as per the terms & conditions of the Standard Fire and Special Perils policy formulated by the Tariff Advisory Committee, constituted under the Insurance Act, 1938, which are binding on all the insurance companies in India, floater policy can be issued for stocks at specified locations only and the insurance at unspecified locations is not allowed. It is pointed out that as per the floater clause to be attached to every Standard Fire and Special Perils policy, the insurance is available for specified locations, in consideration of floater extra charged over and above the policy rate. The said clause also requires the insured to communicate any change of address of the locations to the insurance company. According to the insurance company the endorsement dated 21-05-2005 covering plots Nos.294, 298, 299 and 300 and 20 processors was issued strictly as per the proposal dated 18-05-2005 submitted by the complainant, which was required to disclose the full address of the specified locations in order to avail the floater cover for such locations. The complainant, however, disclosed the names and addresses of only 16 locations. The insurance company has also claimed that unit at plot No.749 was not an independent processor but was the premises of the complainant itself. It is stated in this regard that the aforesaid plot was owned by a sister concern of the complainant which had also taken an independent insurance cover in respect of the said plots. It is also pointed out that in the report lodged with the police, Mr. Siddharth Dhingra, a director of the complainant company had referred to plot No.749 as the premises of the complainant.
5. The primary issue which arises for our consideration in this case is as to whether the complainant was required to disclose the location of all the 20 processors for which the insurance cover was taken under the floater clause attached to the policy as is claimed by the insurance company or it could seek reimbursement in respect of any location of its any processor so long in case the goods damaged or destroyed in the fire belonged to the complainant.
6. The floater policy, which forms part of Indian Fire Tariff, to the extent it is relevant, provides that floater policies can be issued to cover stocks kept at various locations under one sum insured but unspecified locations shall not be allowed. Therefore, it is not permissible for an insurance company to issue an insurance policy in respect of unspecified locations i.e. the locations which are not brought to its knowledge by the insured.
The floater clause which was attached to the insurance policy issued to the complainant to the extent it is relevant reads as under:
"In consideration of Floater Extra charged over and above the policy rate the S.I. in aggregate under the policy is available for any one, more, or all locations as specified in respect of movable property."
It would, thus, be seen that though an insurance policy could cover more than one location the said locations have to be specified before the benefit of the insurance can be claimed.
The insurance certificate inter alia reads as under:
"Comments: Locations Covered - As per the annexure attached herewith."
It would, thus, be seen that the said policy covered only those locations which were mentioned in the annexure attached thereto. A perusal of the aforesaid annexure would show that it specified only 16 locations, though the complainant could have specified as many as 20 locations. Plot No.749 was not amongst the locations specified in the annexure to the insurance certificate. It is quite evident from a perusal of the floater policy, floater clause attached to the policy issued to the complainant as well as locations specified in the annexure attached to the insurance certificate that plot No.749 was not one of the locations covered by the floater policy issued to the complainant. If the complainant wanted to cover the aforesaid location it ought to have informed the insurance company accordingly, before the stock kept at the aforesaid location allegedly got damaged or destroyed. That having not been done I have no hesitation in holding that the stock of the complainant kept at plot No.749 was not covered under the insurance policy taken by it.
7. I cannot accept the contention that it was not necessary for the insured to disclose the location of its processors to the insurance company. The insurance at an unspecified location, in my view, cannot even be conceived of. If the complainant wanted to cover its goods kept at plot No.749 against fire, etc., it ought to have informed the insurance company accordingly and only then it would have been entitled to reimbursement for the damage sustained on account of the fire at the said location. In fact the requirement of disclosing the locations to the insurer is also evident from the fact that the complainant itself had disclosed 16 locations to the insurer, at the time of taking the policy. If I accept the contention that the insured is not required to disclose the location to the insurance company, that may result in a situation where an insured keeping its goods at a large number of locations seeks to take benefit of the insurance in the event of loss at any of the said locations, even though it may have taken insurance cover for a lesser number of locations. In other words, if I accept this contention, in a case where the insured is keeping its goods say at 50 locations and it obtains insurance cover for 20 locations, it may in the event of loss by fire at any of its locations claim benefit of insurance despite the fact that the insurance cover was taken by it for 20 locations and not for all the 50 locations. Moreover, such an interpretation will also enable the insured to claim benefit of insurance even in respect of locations where it was not keeping its goods at the time of taking the insurance policy and which were never brought to the knowledge of the insurer. Such an interpretation, in my view, would not only be unreasonable but also illogical and absurd. I am of the opinion that in a floater policy the benefit of insurance can be claimed by the insured only in respect of loss at those locations which are disclosed to the insurance company before the loss actually occurs. Since the plot No.749 was not one of the locations disclosed to the insurance company either at the time of taking policy or at any time thereafter, the complainant is not entitled to reimbursement of the damage suffered by it on account of fire which took place at the aforesaid location. The complaint, therefore, is liable to be rejected.
8. The learned counsel for the complainant has referred to the decisions in Lakshmi Insurance Co. Ltd. Vs. Bibi Padma Wati & Bibi Padma Wati Vs. Lakshmi Insurance Co. Ltd., AIR 1961 P&H 253; General Assurance Society Ltd. Vs. Chadumull Jain & Anr., AIR 1966 SC 1644; Smt. Shasi Gupta Vs. Life Insurance Corporation of India & Anr., AIR 1995 SC 136; United India Insurance Co. Ltd. Vs. Pushpalaya Printers, AIR 2004 SC 1700 and United India Insurance Co. Ltd. Vs. Great Eastern Shipping Co. Ltd., AIR 2007 SC 2556. I, however, find that none of these judgments applies to the issue involved in this case. In none of these judgments it has been held that in a floater policy, the insured need not disclose the location of the premises for which insurance cover is sought from the insurance company.
7. For the reasons stated hereinabove, the complaint is hereby dismissed. No order as to costs.
......................J V.K. JAIN PRESIDING MEMBER