VIRMANI REFRIGERATION And COLD STORAGE PVT. LTD. vs NEW INDIA ASSURANCE CO. LTD.

THIS complaint/petition emanates from insurance claim preferred by the petitioner with the respondent company against policy No. 1512208600 dated 8.7.1996 valid upto 10.7.1997. The petitioner insured the property E-2, Jhandewalan Extension, New Delhi comprising godowns and offices against fire for an amount of Rs. 7,40,000/-. Unfortunately a fire broke out on 1.6.1987 engulfing the entire property in question and as a result extensive damage was caused to the building, furniture, fixtures, fittings, electricity and sanitary system. The respondent appointed M/s. N.T. Kothari and Company, Insurance Surveyors and Loss Assessors as Surveyors. During the course of investigation it was found that M/s. Anatraj Agencies (Pvt.) Ltd. claimed themselves to be occupant of 60% of the building representing that they have insured said portion with another Insurance Company namely National Insurance Company Limited but their claim after scrutiny by the National Insurance Company Limited was rejected.

AFTER perusing the documents and the proof provided by the complainant/petitioner during the course of investigation the Surveyor assessed the loss suffered by the petitioner at Rs. 3,85,687/- after deducting 76.72% for under insurance, since the property was insured only for Rs. 7,40,000/-. However, the amount claimed in the claim form did not find favour with the respondent. The respondent ordered for fresh investigation, which was commenced on 2.3.1988 and completed by 1.9.1992. The respondent offered to pay a sum of Rs. 44,767/- for total settlement of the claim under policy. Feeling dissatisfied with the offer the petitioner served a notice upon the respondent calling upon them to pay the insurance claim of Rs. 3,85,687/- along with interest @ 24% p.a. and thus the complainant claimed a total sum of Rs. 5,24,534.32 p. inclusive of interest of Rs. 1,38,847.32 p.

While rejecting the claim of Rs. 3,85,687/- of the complainant, the respondent took the plea that during investigation it was discovered that 60% of the property was given to M/s. Anantraj Agencies (Pvt.) Ltd. under various agreements whereas only 40% property remained with the petitioner and, therefore, the petitioner was found to be entitled only to 40% of the assessed loss. Apart from raising bogey of special conditions of the insurance policy contained in Section 1(d) that the insurable interest of the complainant was only 40% it was alleged that the complainant did not disclose the fact while seeking the insurance namely that a Printing Press was in operation on the first floor with electric power and the complainant did not disclose at the time of taking insurance that 60% of the area was in the possession of M/s. Anantraj Agencies (Pvt.) Ltd. To further justify its offer of Rs. 44,767/- respondent placed reliance upon the Deed of Consent executed between the complainant and M/s. Anantraj Agencies (Pvt.) Ltd. Relevant Clause 4 provides as under: "That in consideration of the liabilities undertaken by the Builder/Promotor, the co-owners have agreed to allot 60% of the total built up area to the Builder/Promotor and 40% of the total built up area will be retained by the co-owners. The co-owners and the Builder/Promotor may dispose of their respective shares in any such manner as they deem fit. The respective area allocated by to the Builder/Promotor and the co-owners have been roughly demarcated vertically to the plan annexed hereto at "A". The area which will be allocated to the Builder/Promotor and the Co-owners will be exactly demarcated in the plan which will be annexed to the proper agreement."

THE parties filed affidavits by way of evidence. In support of its claim the petitioner filed and proved the following documents : 1. Copy of Resolution passed by the petitioner Company dated 12.1.994 authorising its directors to file the petition (Ex. P11) 2. True photostat copy of the insurance policy No. 15122 08600 dated 8.7.1986 (Ex. P. 12-18). 3. True copy of the FIR dated 1.6.1987 lodged with the police about breaking out of fire (Ex. P. 19-20). 4. Letter dated 2.6.1987 of intimation to the respondent about breaking out of the fire while invoking the fire policy (Ex. P. 2). 5. Statement of loss assessment prepared by M/s. N.H. Kothari and Co., Surveyors appointed by the respondent (Ex. P. 22). 6. Letter dated 23.10.1987 issued by the petitioner accepting the assessment of loss at Rs. 3,85,687/- (Ex. P. 23). 7. True copy of the fire claim from date 14.11.1987 on the basis of loss assessment lodged with the respondent (Ex. P. 24). 8. Copy of letter dated 14.11.1987 covering the claim form (Ex. P 25). 9. Copy of letter dated 1.9.1992 offering to pay Rs. 44,767/- in settlement of the claim (Ex. P. 28-29). 10. Copy of letter dated 12.10.1992 addressed to Shri K.J. Reddy, Special Secretary, Ministry of Finance protesting the under payment of claim (Ex. P. 28-29). 11. Copy of letter dated 30.12.1992 addressed to the respondent (Ex. P. 30). 12. Copy of letter dated 20.9.1993 addressed to Shri J.K. Verma, Ministry of Finance (Ex. P. 31). 13. Copy of letter dated 1.12.1993 issued by the respondent re-offering the payment of Rs. 44,767/- (Ex. P. 33-34). 14. Copy of notice dated 14.1.1994 got issued by the petitioner through Advocate (Ex. P. 35-37). 15. Postal Registration Receipt (Ex. P 38). 16. Postal A.D. Card (Ex. P. 39).

As against this, respondent produced the following documents. (1) Deed of consent (Ex. 1) executed between the complainant and M/s. Anantraj Agencies (Pvt.) Ltd. (Ex. Ann. A). (2) Another agreement dated 11.9.1981 to the effect that 60% of the area of the property in question placed at the disposal of M/s. Anantraj Agencies (Pvt.) Ltd. i.e., the Builders and Promotors (Ex. Ann. C).

WHILE refuting contention of the Counsel for the respondent that the insurable interest of the complainant was only to the extent of 40% whereas the remaining 60% of the property was in occupation of M/s. Anantraj Agencies (Pvt.) Ltd., Builders and Promotors and they also insured their interest with different Insurance Company, the learned Counsel for the complainant has contended that the building in question was insured in the year 1986 whereas Deed of Consent was executed in September, 1980 and by the said Deed the property was proposed to be constructed and developed by the respondent company whereafter 60% portion will be vested with M/s. Anantraj Agencies. It is further contended that the said Deed was never acted upon as no construction/development was carried out by the Builder and during this period all the obligations attached to the ownership of the property were cast upon by the claimant still the Insurance Company found that they were entitled to 40% claim in the building on account of having parted interest in the property to the extent of 60% in favour of M/s. Anantraj Agencies. It is contended that since the complainant had been in possession of the entire property its insurable interest was to be in respect of the entire property. It is also contended that M/s. Anantraj Agencies (Pvt.) Ltd. might have insured their goods/equipments lying in the building and since they had never been in occupation of 60% of the building their claim was rejected by the Insurance Company vis-a-vis the building. The plea raised by the complainant at first instance is that since property in question was incomplete and question of 60% share of the property having been in occupation of M/s. Anantraj Agencies (Pvt.) Ltd. did not arise. Counsel for the respondent has in this regard placed reliance on an application moved by the parties in Civil Suit No. 601 of 1984 having agreed to sell the property to M/s. Anantraj Agencies. This application was moved in the year 1988 in a suit for enforcement of agreement and the application was for construction of the property in question. One of the terms of the said application was that the complainant was presently carrying on business of warehousing in 40% portion of the building, all charges due from the customers upto the date of handing over possession shall be made by him and thereafter the respondent shall be dealing directly with the customers. Dispute being raised by the respondent is of a civil nature and has, therefore, civil remedy. Once a party insures the building the ownership of which vests in him he has insurable interest in the whole building. In this case the complainant had only entered into a Deed of Consent that after completion of the building M/s. Anantraj Agencies will be entitled to have 60% share in their capacity as builders/promoters. It does not mean that by virtue of this Deed the insurable interest of the complainant was to the extent of 40%. While receiving the premium the Insurance Company had assessed the insurance amount and, therefore, to say at the end of the day that insurable interest of the complainant was to the extent of 40% is difficult to accept.

EVEN if we assume that M/s. Anantraj Agencies (Pvt.) Ltd. had an interest over 60% share after completion of the building it was only on account of their being builders and promotors and since the dispute arose, between the parties as to the non-completion of the building by M/s. Anantraj Agencies (Pvt.) Ltd., the question of M/s. Anantraj Agencies having insured their 60% insurable interest vis-a-vis building in question with another Insurance Company did not arise. Perhaps was this the reason that the claim of M/s. Anantraj Agencies (Pvt.) Ltd. preferred with the Insurance Company, was not accepted. May be that they might have insured their material and equipments with the Insurance Company but 60% portion of the building area could not have been insured by M/s. Anantraj Agencies (Pvt.) Ltd. as at the relevant time the building in question was not complete. On the contrary the complainant at much later point of time had insured the entire building for a sum of Rs. 7,40,000/- against fire and any other eventualities. The Surveyor appointed by the respondent assessed the loss at Rs. 3,85,687/-. Merely because the Deed of Consent was executed between the parties did not mean that insurable interest of the complainant was reduced to 40%. The Deed of Consent between the owner of the property and the Builder/Promotor was entirely with regard to construction and completion of the building and in no way was connected with the insurable amount or the insurance of the property in question. Had it been a dispute of the kind that the complainant has passed insurable interest to M/s. Anantraj Agencies (Pvt.) Ltd. to the extent of 60% the question of the complainant and M/s. Anantraj Agencies having approached the Civil Court for enforcement of the obligations of the Deed of Consent would not have arisen. Thus this Deed was only in respect of the construction to be carried out by M/s. Anantraj Agencies.

ON the concept of insurable interest the Counsel for the respondent has placed reliance upon Gnana Sundaram v. Vulcan Insurance Co., AIR 1931 Rangoon 210, wherein it was held that insurable interest is not synonymous with legal interest as defined in Section 54 of Transfer of Property Act. There is no dispute with the above proposition of law. Here we are not dealing with the legal interest in the property in question. We are dealing with insurable interest so far as the complainant is concerned who got the entire properly insured for a particular sum against requisite premium. These proceedings are not for partition of the property. We are only concerned with the interest of the consumer and once a person insures the property or goods against a particular amount and the Insurance Company receives premium and the loss is got assessed by the Insurance Company by way of appointing of Surveyor it does not entitle the company to repudiate the claim. We do not intend to disregard the finding of the Surveyor who assessed the claim at Rs. 3,85,687/- against the insured amount of Rs. 7,40,000/- as the pleas and defences raised by the respondent were not at all relevant for deciding the claim of the claimant in question. If there was any dispute between the complainant and M/s. Anantraj Agencies it was with regard to the property in question. It was dispute of civil nature and in no way connected with the insurable interest of complainant.

So far as the contention of the Counsel that the complainant cancealed the factum of having entered into the Deed of Consent is concerned, it also holds water like in a sieve as this Deed of Consent had no relevance or relationship with the insurable interest of the complainant because it was a Deed vis-a-vis construction of the property by a Builder and Promotors and certain obligations were to be discharged by the parties for the limited purpose of construction of the property.

HAVING held up the matter in all its possible aspects we find that the claim of the complainant was wrongly repudiated by way of offering a paltry sum of Rs. 44,767/- against actual amount assessed by the Surveyor to the extent of Rs. 3,85,687/-. We allow the complaint and direct the respondent to pay a sum of Rs. 3,85,687/- with 9% interest p.a. from the date of filing the petition within one month. A copy of this order, as per the statutory requirements, be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to Record Room. Complaint allowed.