DURGA RICE And GENERAL MILLS. vs National Insurance Co.

PETITIONER was the complainant before the District Forum where it had filed a complaint alleging deficiency on the part of the respondent, Insurance Company.

BRIEF facts of the case are that the petitioner/complainant had an Open Marine Loss Insurance Policy for Rs. 10 lakhs and then asked for additional limit on 5th Februaty, 1996 vide its cheque dated 3.2.96. One consignment despatched by a Truck vide Declaration No. 129 valued at Rs. 1,15,846.50p was lost as the truck fell into water. On a claim preferred for the loss, it was repudiated by the Insurance Company on the ground that - one, there was no limit available from the original policy and two, that there was no insurance cover for additional limit for the loss suffered on 4.2.1996 as additional limit was sought on 5.2.1996 after the date of loss, whereas the claim of complainant is as that they were orally assured of the extension of limit of policy cover as per past practice, on 3.2.1996, hence cheque was issued on 3.2.1996. Even thougt it was sent on 5.2.1996, but as per past practice, Insurance was valid-hence loss was covered and repudiation is unjustified. It is in these circumstances that a complaint came to be filed by the petitioner/complainant before the District Forum, who after hearing the parties allowed the complaint and directed the respondent Company to pay the amount of the lost consignment alongwith interest @ 18% p.a. and cost of Rs. 500/-. On an appeal filed by the respondent, the State Commission allowed the appeal and set aside the order passed by the District Forum - hence this Revision Petition. We heard the parties at length and perused the material on record. Basic facts of the case are not disputed hence not being reproduced. We need to go into only two points on the subject of controversy before us. One as per terms of the policy what was the status of policy cover on the day of loss of consignment despatched vide Declaration No.121 and secondly whether the petitioner had a valid cover under the additional limits sought by him?

On the first point, there can hardly be any dispute that as per Declaration of the despatches made by the petitioner, which are on record as on 3.2.1996, the complainant had an unutilised limit of Rs. 27,939.50p only which stood exhausted after despatch/Declaration No. 127 - value of this despatched being Rs. 2,41,958.50p. Position under law is that, this despatch was covered only to the extent of Rs. 27,939.50 p only i.e. the balance limit available with the petitioner from the over-all marine insurance cover. After this dispatch, any subsequent dispatches including goods dispatched through Declaration No. 129, i.e. the dispatch in question before us - was clearly beyond the insurance cover - hence not covered by the Insurance Policy issued by the respondent Company. With regard to the second point, we are quite clear that admittedly goods were sent and Declaration No.129 was made on 3.2.1996 for which a cheque was issued on 3.2.1996 but sent/received by the Insurance Company as per the document shown to us, which bears the signature of one Jaswant Singh, an employee of the petitioner, shows this cheque having been handed over only on 5.2.1996. Admittedly the loss occurred on 4.2.1996. As per Section 64VB of the Insurance Act, Policy is valid from the date or receipt of the cheque, which admittedly was sent/received on 5.2.1996. Petitioner has failed to show us any proof by way of evidence that there indeed was any oral discussion of extension of the financial limits of the existing/issued policy by further Rs. 10 lakhs especially when this fact has been denied by the respondent. This aspect should have been proved by the appellant with some evidence. This has not been done in the absence of which we are in no position to accept this plea of the petitioner. Learned Counsel of the petitioner also wishes to rely upon the judgment of Bombay High Court, AIR 1935 Bombay 236, Ocean Accidents & Guarantee Corp. Co. Ltd. v. O.K. Patkar. Ratio of this judgment is that normally insurance cover does not come into effect till the premium has been paid.... but, even in cases where there is such a stipulation, it is competent for an insurer to waive this condition and goes on to lay down that such waiver may be established either by the evidence of and express agreement or may be inferred from the surrounding circumstances of the case. In our view the petitioner has failed to prove either of the above, in any manner. In the light of above, we see no ground to interfere in the well reasoned order of the state Commission. This Revision Petition is devoid of merits-, hence dismissed. No order as to costs. Revision Petition dismissed.