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Showing contexts for: sum insured in Ms. Oriental Insurance Company Limited vs M/S.Monotech Systems Ltd on 25 January, 2021Matching Fragments
11. The records were examined and the oral submissions of both sides were considered carefully. Upon perusal of the Award, I find that the findings with regard to under-insurance are based on a reasonable interpretation of clause 10 of the General Conditions of the Floater Policy as also the Floater Clause. In this regard, it should be borne in mind that the Floater Policy was drafted by the Petitioner/Insurance Company and, therefore, any ambiguity should be resolved in favour of the insured and not the insurer by applying the interpretive rule of contra proferentem, as held by the Hon'ble Supreme Court, in the context of an insurance contract, in paragraphs 9-13 of Industrial Promotion and Investment Corporation of Orissa Ltd. v. New India Assurance Company Ltd. (2016) 15 SCC 315. With specific reference to clause 10, as correctly contended by the learned senior counsel for the Respondent, the said clause would not be rendered otiose if it is interpreted as being applicable on a location-specific basis as regards the Floater Policy subject to the condition that it would be applied to all the locations wherein the contingency occurs and this is precisely how the Arbitral Tribunal ______________ https://www.mhc.tn.gov.in/judis/ Page No 3 of 53 interpreted it. Another important facet is that the Floater Policy does not stipulate that the sum insured should be apportioned across the 17 locations, proportionately, on the basis of the value of machinery at each location. In the absence of such stipulation, can such a term as to apportionment be implied? In my view, implying such term would be contrary to the Floater Clause, which indicates that a higher premium is paid for the Floater Policy, and more importantly, that the sum insured (SI) would be available in aggregate for one, more or all locations. In addition, the test of business efficacy, which is a test of necessity, is also not satisfied in this case because the Floater Policy is, undoubtedly, workable without implying such term. The judgments of the Hon'ble Supreme Court in Nabha Power Ltd. v. Punjab State Power Corporation Ltd. (2018) 11 SCC 508 and Adani Power (Mundra) Ltd. v. Gujarat Electricity Regulatory Commission 2019 SCC Online SC 819 may be referred to in this context. Therefore, the findings of the Arbitral Tribunal, in this regard, are not liable to be interfered with.
“……. If the property hereby insured shall at the breaking out of any fire or at the commencement of any destruction of or damage to the property by any other peril hereby insured against be collectively of greater value than the sum insured thereon, then the insured shall be considered as being his own insurer for the difference and shall bear a rateable proportion of the loss accordingly……..” The arbitral tribunal by a majority concluded that there was no justification in deducting any amount towards “under insurance”.
Respondent.
Revised Claim #
Amount of the - - 7,00,72,943.00 7,00,72,943.00
respondent
Exclusion of
the value * * **
towards Dead 2,43,00,526.00 2,43,00,526.00 - 2,25,52,222.00
Stock by the
Respondent.
8,07,13,210.00 - - -
Gross Assessed
Loss 4,57,72,417.00 - 6,44,52,189.00 -
Depreciation * * **
1,33,03,708.00 1,33,03,708.00 1,69,07,955.00 1,33,03,708.00
Market Value 3,24,68,709.00 - - -
Value after
Depreciation - - 4,75,44,234.00 -
* #
Salvage 71,43,115.98 84,85,104.00 47,54,423.00 70,07,294.00
Net-Adjusted/
Assessed Loss 2,53,25,593.00 - 4,27,89,811.00 -
Value at Risk at
Ambattur - - 12,62,87,890.00 -
Location
Adjusted Loss 2,07,66,986.00 - - -
#
Less 5% Excess 10,38,349.91 - - 35,03,647.00
Available Sum
Insured (Stmt- - - 12,64,66,696.00 -
1)
______________
https://www.mhc.tn.gov.in/judis/
Page No 25 of 53
Heads Calculation as Amount Minority View Majority View
per the sought to be of Partly Agreeing with
Surveyor. denied by the Agreeing with the
Appellant the respondent respondent
Ratio of Sum
Insured to VAR - - 1.00 -
Under
Insurance in %
(Stmt -2) - - 0.00 -
Under- * *
insurance 43,17,048.00 43,17,048.00 Nil 43,17,048.00
Amount at
18%
Adjusted Loss 1,97,28,636.96 - 4,27,89,811.00 -
Policy Excess - 21,39,491.00 -
Sub Total 5,04,06,386 - 4,06,50,320.00 4,08,82,566.00
Less Amount #
Paid by the 1,86,83,227.00 - 1,86,83,227.00 1,86,83,227.00
Appellant
Total 6,77,47,624.00 5,04, 06,386.00 2,19,67,093.00 4,08,82,566.00
* Disallowance
60. It was the case of the appellant that there was an “under insurance” by 18% by the respondent when compared to the total value of the stocks of Rs.23 Crores in all the 17 godowns.
61. In this connection, reference was made to Clause 10 of the General Condition to the Policy which reads as under:
“If the property hereby insured shall at the breaking out of any fire or at the commencement of any destruction of or damage to the property by any other peril hereby insured against be collectively greater value than the sum insured thereon, then the Insured shall be considered as being his own insurer for the difference and shall bear a rateable proportion of loss accordingly.”