New India Assurance Company Limited, appellant herein, was the opposite party No.1 before the State Commission.

          Facts of the case are:--- the complainant/respondent No.1 had obtained shopkeeper’s policy from respondent No.2 – Central Bank of India – for a sum of Rs.10 Lacs in respect of the stock at his business premises which were hypothecated with the respondent Bank.  A fire broke out in the business premises of the complainant on 13.12.1999

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causing extensive loss to the premises as also to the stock.  On a claim being lodged, the petitioner appointed a Surveyor who assessed the net loss at Rs.6,47,000/-.  The claim submitted through respondent Bank was repudiated by the appellant on the ground that the fire took place at the residence-cum-godown located at 7^th Line, Itarsi which was not the insured location.  According to the Insurance Company, the godown insured was located near Jay Stambh and not at 7^th Line, Itarsi. 

Parties led their evidence.  After taking into consideration the evidence led by the parties, State Commission allowed the complaint and directed the appellant to pay a sum of Rs.6,47,000/- assessed by the Surveyor to the Complainant along with interest @ 9% p.a. from the date of filing of the complaint i.e. 27.11.2000 till payment.  costs of Rs.2,000/- were also awarded.

Aggrieved by this, the Insurance Company has filed the present appeal.

We have gone through the address given in the policy and the report of the Surveyor which clearly establishes that the insured place was different than the place where the fire took place.  It is well

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established by now that the Insurance Company would not be liable to compensate the loss which occurred at a place other than the insured premises.  Under the circumstances, the Insurance Company cannot be held liable to compensate the complainant.

It is not in dispute that it is the Central Bank which had been taking the policy on behalf of the insured from 1996 onwards.  The complainant had given correct address but the Bank in the proposal form, wrongly mentioned the address of the respondent to be at            7^th Line near Jai Stambh, Itarsi.  The Bank in its letter date 18.3.2000 addressed to the Insurance Company (Annexure-12) has admitted that the address mentioned in the proposal form and consequently being mentioned in the policy had been on account of some typographical or other mistake on the part of the Bank.  Relevant contents of the letter read as under:

“As is reported and claimed by us that fire took place on 13.12.1999 at the godown-cum-residence in 7^th Line, Itarsi, we had submitted the claim form to a loss of Rs.10.17 Lacs for the electronic goods and M/s Anant Electronics, Itarsi. 

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       We have sanctioned our cash credit limit of Rs.8.00 lacs to M/s Anant Electronics and the goods were under our hypothecation arrangement.  According to Bank’s

practice, goods were insured under policy No.4845140203389 for Rs.10.00 Lacs.  Inadvertently/erroneously, the policy issued was SKI policy and bearing the address of their showroom-cum-office at Jai Stambh, Itarsi.  Though, it was crystal clear that whenever Banker insures the goods, it is for entire stock of electronic goods of the dealer.  The party has suffered an approximate loss of more than Rs.10.00 lacs and hence, as a Banker, our account may also turn to be sticky and NPA (Non-Performing Asset).  Though, the stock was fully insured and the premium was already paid, due to some typographical errors in the claim the claim should not be delayed/declined.

       Central Bank of India, Itarsi is giving ample business to M/s New India Assurance Co. Ltd., every year.  Moreover, in future also, we will consider giving more business if such peculiar cases are considered sympathetically and in the interest of our account holders i.e. borrowers.

       In the office routine, we do come across such typographical and other mistakes/errors.  But                 our  purpose  is  always  to  give  better  service  to  our

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customers and the same for the insurance companies so as to create goodwill amongst the business community.

       As a banker, we had explained all about the fire and its relative claims lodged by us, now it is requested that in the light of the above mentioned facts, the claim be settled at the earliest with the maximum amount.”

It clearly shows that it was the Bank which was at fault in giving the wrong address.  In the complaint, complainant had prayed for grant of compensation jointly and severally against the appellant as well as the Central Bank which was the opposite party before the State Commission.  The State Commission has erred in absolving the Bank of its liability.  Once the fact of fire having taken place is proved and the quantum of loss established by the Surveyor, the complainant is required/has to be compensated of the loss suffered by him.  It is either the Insurance Company or the Bank which is responsible for mentioning the wrong address of the business premises to compensate the Complainant of the loss suffered by him.  In the present case, we have absolved the Insurance Company of its liability to pay the compensation, as the place of insurance was different than the place where the fire has taken place.  This mistake occurred due to the fault which the Bank has admitted in its letter reproduced above.  Since the loss happened due to the mistake committed by the Bank we hold the Bank liable to compensate the Complainant/insured of the loss suffered by him. 

At this stage, counsel for the respondent Bank contends that it was also for the Insurance Company to verify the stocks and had they done it they would have known the correct address.  We do not find any substance in this submission.  It is the Bank who was taking the policy on behalf of the Complainant since 1996.  The policy was supplied to the Bank and at least, at that time, the Bank should have verified that the address given in the proposal form and the insurance policy was not the correct address.  The Bank cannot be absolved of its liability to compensate the Complainant on this account.  Accordingly, we allow the appeal of the Insurance Company and held the Central Bank of India responsible for the loss caused to the complainant/insured and to compensate the Complainant for the loss suffered by him.

While admitting this appeal, operation of the impugned order was stayed subject to the appellant’s depositing the entire amount awarded by the State Commission with the State Commission within a period of six weeks from the date of passing of the order and it was left open to the complainant to withdraw the same by furnishing an adequate security to the satisfaction of Registrar o the State Commission.

Counsel for the appellant has brought to our notice that the appellant had deposited the sum of Rs.9,13,508/- including interest calculated upto the date of deposit before the State Commission.  In case, the complainant has withdrawn the said amount, then the bank is directed to pay the sum of Rs.9,13,508/- to the Insurance Company within a period of eight weeks from today, failing which the amount shall carry interest @ 9% p.a. from the date of deposit till the date of realization.  In cdase, the respondent/complainant has not withdrawn the amount, then the respondent/complainant would be entitled to withdraw the same.

            First appeal is disposed of in above terms.