NEW INDIA ASSURANCE CO. LTD vs RAMAN NAYYAR AND ANR

This revision petition has been filed by the petitioner against the order dated 05-11-2007 passed by the Punjab State Consumer Disputes Redressal Commission, UT Chandigarh (in short, ''the State Commission'') in Appeal No. 835 of 2007 - New India Assurance Co. Ltd. Vs. Raman Nayar & Anr., by which while dismissing appeal, order of District Forum allowing complaint was upheld.

Brief facts of the case are that complainant/respondent no. 1 is the Proprietor of M/s Raman Brothers. He was running his business of readymade garments since 1988. The firm got the cash Credit Limit for a sum of Rs. 5 lakhs from State Bank of India/O.P.-2. Respondent No. 2, which was later on increased to Rs. 8 lakhs by Respondent No. 2. The O.P.-1/petitioner through its authorized Corporate Agent, Respondent No. 2 used to insure all the stocks/furniture/fixture etc. of the aforesaid firm and the premium was being debited in the account of the firm and credited in the account of O.P.-1. Earlier the complainant used to run his business as a tenant in Shop No. 601, Kucha No. 8, Field Ganj, Ludhiana and this address was incorporated in the policy prior to October, 2004. However, the complainant shifted his business to Shop No. 651, Kucha No. 7, Prem Nagar, Field Ganj, Ludhiana in June, 2004 and its intimation was given to Respondent No. 2. The complainant got his business premises insured for the period from 29-10-2004 to 28-10-2005 through Respondent No. 2 from O.P.-1.

Unfortunately, on 30-12-2004, there was a sudden fire in the shop of the complainant due to some electric short circuiting. Fire brigade was requisitioned and the fire was got extinguished. In the fire incident, the goods/stocks/furniture/fixture, etc. of the complainant was damaged. Since these articles were duly insured with the O.P.-1, therefore, complainant lodged the claim for an amount of Rs. 8 lakhs. However, the claim was repudiated by the O.P.-1 vide letter dated 23-11-2005 on the plea that the property bearing Shop No. 651, Kucha No. 7, Prem Nagar, Field Ganj, Ludhiana was not covered by the Insurance Policy. Alleging deficiency on the part of opposite parties, complainant filed complaint before District Forum. Opposite Party No. 1 resisted complaint and submitted that the business premises of the complainant firm comprising shop no. 601, Kucha No. 1, Field Ganj, Ludhiana only was insured and since the premises i.e. shop no. 651, Kucha No. 7, Prem Nagar, Field Ganj, Ludhianan was not insured, therefore the O.P. no. 1 is not liable to recompensate the complainant for the damage caused to his property in the fire incident which took place on 30-12-2004. However, surveyor M/s J. Lal and Company was appointed on 05.01.2005. The surveyor had called for the record of the claimant, but the complainant had failed to provide the same. Denying any deficiency on their part prayed for dismissal of complaint. Opposite Party No. 2 resisted complaint and submitted that as per instructions of the complainant goods were duly got insured by the opposite party no. 2 from Opposite Party No. 1 and denied that opposite party no. 2 has tied up with opposite party no. 1 for the purpose of insurance. It was further denied that they had any knowledge of shifting goods by the complainant to other shop and prayed for dismissal of complaint. Learned District Forum after hearing both the parties allowed complaint and directed opposite party no. 1 to pay amount assessed by surveyor with 9% p.a. interest. Appeal filed by opposite party no. 1 was dismissed by learned State Commission vide impugned order with cost of Rs.10,000/- against which this revision petition has been filed.

Heard learned counsel for the parties and perused record.

Learned counsel for the petitioner submitted that inspite of no proof of insurance coverage of the shop where fire took place, learned District Forum committed error in allowing complaint and learned State Commission further committed error in dismissing appeal, hence revision petition be allowed and impugned order be set aside. On the other hand, learned counsel for respondent no. 1 submitted that as insurance was obtained by opposite party no. 2 as agent of petitioner, order passed by learned State Commission is in accordance with law, hence revision petition be dismissed. Learned counsel for R-2 submitted that order passed by learned State Commission is in accordance with law, hence revision petition be dismissed.

It is not disputed that opposite party no. 2 obtained insurance coverage of complainant shop no. 601 from opposite party no. 1 for a period of one year from 29-10-2004 to 28-10-2005. It is also not disputed that complainant shifted to shop no. 651 in June, 2004. It is also not disputed that fire took place on 30-12-2004 and loss was caused to stocks in shop no. 651.

The core question to be decided is whether insurance company is liable for loss caused at shop no. 651 which was not insured. Learned counsel for the petitioner has placed reliance on judgment of this Commission in II (1995) CPJ 135 (National Commission) - S. Rathinavelu Vs. The New India Assurance Co. Ltd. & Ors. ; First Appeal No. 272 of 2010 - Shri Subhash Chand Jain Vs. M/s United India Insurance Co. Ltd. & Anr. and 2010 (I) CPR 65 (National Commission) - Oriental Insurance Co. Ltd. & Anr. Vs. M/s R.P. Automobiles & Oils & Anr. , in which it was held that if there has been any change in the location, complainant is obliged to communicate change of location and proper acknowledgement to the insurance company and on receipt of change of address it is to be incorporated by separate endorsement in the insurance policy till then no risk is assumed in respect of new location. Perusal of aforesaid judgment makes it clear that as shop no. 651 was not endorsed in insurance policy prima-facie insurance company was not liable to reimburse the loss but as this policy was obtained by opposite party no. 2 as corporate agent of opposite party no. 1, opposite party no. 1 is liable for any mistake committed by opposite party no. 2 in intimating about change of location from shop no. 601 to shop no. 651. Learned counsel for respondent no. 1 has placed reliance on judgment of this Commission in 2012 (I) CPC 82 (National Commission) - ICICI Prudential Life Insurance Co. Ltd. Vs. Gurmeet Singh & Anr. , in which it was held that if insurer has trusted the agent who had earlier obtained the policy document for him the conduct of insurance company resorting to such clauses to frustrate the claim of the insured cannot be sustained and on the basis of concurrent findings of Fora below revision petition was dismissed. In 2011 (1) CPC 655 (National Commission) - Oriental Insurance Co. Ltd. & Anr. Vs. Satbir Singh it was held that insurance company becomes liable for acts of omission and commission of its agent. In the light of aforesaid judgments it becomes clear that opposite party no. 1 was liable for acts of omissions of opposite party no. 2, who was working as corporate agent of opposite party no. 1.

Learned District Forum and learned State Commission has at length dealt with and observed that opposite party no. 2 was acting as corporate agent of opposite party no.1. Perusal of record reveals that opposite party no. 2 was working as corporate agent. Complainant has specifically pleaded in Para 3 of complaint that opposite party no. 2 has become authorized corporate agent of opposite party no. 1 and opposite party no. 1 has not denied this fact specifically in reply to Para No. 3 and admitted that insurance policy was obtained by opposite party no. 2 on behalf of complainant after payment of premium. Letter dated 28-09-2005 written by opposite party no. 2 to opposite party no. 1 makes it clear that complainant intimated to opposite party no. 2 about change of shop from shop no. 601 to 651 but by oversight opposite party no. 2 omitted to advice opposite party no. 1 about change of address which was shifted in June, 2004 even before obtaining insurance policy for the relevant period. Opposite party no. 2 in reply to revision petition submitted that address of business premises was inadvertently mentioned as shop no. 601 in the insurance policy and it is further proved that complainant was having only one shop no. 651 at the time of incident and he was not having earlier shop no. 601 which was rented premises. In reply to revision petition opposite party no. 2 submitted that opposite party no. 2 before incident of fire intimated to opposite party no. 1 about shifting of shop to new address.

Surveyor in report dated 26-10-2005 observed that opposite party no. 2 was corporate agent of opposite party no. 1 and due to over sight omitted to advice insurance company about change of address of complainant which makes it crystal clear that opposite party no. 2 acting as corporate agent of opposite party no. 1 obtained policy for the complainant and by inadvertence mentioned wrong address of shop and for this mistake complainant cannot suffer and complainant is entitled to receive compensation for loss caused to him and Fora below has not committed any error in allowing complaint.

I do not find any illegality, irregularity or jurisdictional error in the impugned order and revision petition is liable to be dismissed except to the extent of deletion of cost imposed by State Commission while dismissing appeal. At the same time petitioner is also given liberty to recover awarded amount from opposite party no. 2 on account of whose mistake wrong shop no. of complainant was mentioned in the policy.

Consequently, revision petition filed by the petitioner is partly allowed and order dated 05-11-2007 passed by learned State Commission in Appeal No. 835 of 2007 - New India Assurance Co. Ltd. Vs. Raman Nayar & Anr. is partly modified and order imposing cost of Rs.10,000/- is set aside and petitioner is given liberty to recover awarded amount from opposite party no. 2. Parties to bear their own costs.