JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)

The complainant company obtained an Industrial All Risk Policy in the period from 01.04.2013 to 31.03.2014, in respect of material damage and business interruption.  The insurance policy was issued by OP-1—Cholamandalam MS General Insurance Co. Ltd. but the risk purported to have been insured by three other insurers namely, ICICI Lombard General Insurance Co. Ltd., Reliance General Insurance Co. Ltd. and Universal Sompo General Insurance Co. Ltd.  The share of Universal Sompo General Insurance Co. Ltd. was 5% and the premium payable to it Rs.1,78,558.25.  The said policy had been issued on the basis of a letter dated 29.03.2014 written by the complainant to OP-1 which contained a schedule of the co-insurers.  The said schedule reads as under:

    Item No.4 of the aforesaid schedule pertains to the risk subject matter of this consumer complaint.

2. A fire broke out in the premises of the complainant on 22.04.2014, resulting in huge loss to the complainant company.  A claim in terms of the insurance policy was lodged by the complainant with OP-1.  On the basis of the assessment made by the surveyor appointed by it, OP-1 paid 95% of the assessed amount to the complainant which agreed to recover a balance 5% of the assessed amount from OP-2—Universal Sompo General Insurance Co. Ltd. while executing the discharge voucher in favour of OP-1.  Since OP-2—Universal Sompo General Insurance Co. Ltd. refused to pay the balance 5% of the assessed amount, the complainant is before this Commission seeking recovery of that amount with interest etc.

3. The complaint has been resisted by OP-1 which had admitted the issuance of the policy as well as receipt of the premium of the complainant.  The loss suffered by the complainant as well as the assessment made by the surveyor has also not been disputed.  The case of the OP-1 is that since OP-2—Universal Sompo General Insurance Co. Ltd. was also a co-insurer to the extent of covering 5% of the risk, the balance 5% of the assessed amount is required to be paid by the said co-insurer and not by   OP-1.

4. The case of OP-2—Universal Sompo General Insurance Co. Ltd., on the other hand, is that it had never agreed to become a co-insurer in respect of the risk which was covered under the insurance policy issued by OP-1.  This is also the case of OP-2 that the premium which was credited to its account for the settlement period in the quarter from 01.03.2015 to 31.05.2015 was reversed in the settlement of the next quarter.  It is also the case of OP-2 that in terms of the co-insurer agreement dated 20.02.2009, the OP-1 being the lead insurer was required to obtain written instructions from OP-2 and the said written instructions having not been obtained, they are not liable to make any payment to the complainant.

5. It is an admitted position that for the previous year, OP-2—Universal Sompo General Insurance Co. Ltd. was also a co-insurer to the extent of 5% of the coverage under an insurance policy issued by OP-1.  Vide e-mail dated 29.03.2014 the broker M/s. Prudent Insurance Brokers Pvt. Ltd., through whom the policy in question was taken by the complainant, forwarded a copy of the letter of the complainant dated 29.03.2014 to all the insurers including Universal Sompo General Insurance Co. Ltd..  There was no response to the aforesaid e-mail dated 29.03.2014.  On receipt of e-mail including the copy of the letter of the complainant dated 29.03.2014, OP-2 Universal Sompo General Insurance Co. Ltd. came to know that the complainant was seeking an insurance policy wherein OP-1 was to be the lead insurer and the share of the Universal Sompo General Insurance Co. Ltd. in the risk to be insured under the said policy was to be 5%.  There was no reply e-mail or a letter sent by Universal Sompo General Insurance Co. Ltd. either to the broker or to the complainant or OP-1 stating therein that they were not agreeable to become a co-insurer in the said policy.  Though OP-2 has placed on record a letter dated 15.04.2014 purporting to have been sent by them to OP-1 with copies to the complainant and the broker, the case of the complainant and OP-1 is that the said letter was received by them only on 05.09.2014.  No evidence has been led by OP-2 to prove the service of the aforesaid letter either on the complainant or on OP-1 soon after 15.04.2014 or even at any point of time thereafter before the loss happened on 22.04.2014.  It, therefore, appears that the aforesaid letter dated 15.04.2014 has been pre-dated by OP-2 Universal Sompo General Insurance Co. Ltd. in order to make out a case of having refused to participate in the insurance cover granted to the complainant.  Therefore, I have no hesitation in holding that the aforesaid letter was not sent by Universal Sompo General Insurance Co. Ltd. at any point of time before the loss took place.  Hence, nothing really turns on the said letter.  If OP-2 was not agreeable to become a co-insurer to the extent of 5%, in terms of the letter of the complainant dated 29.03.2014, it ought to have sent a letter or an e-mail immediately after 29.03.2014 to the complainant and   OP-1, expressing its unwillingness to become a co-insurer in the policy which the complainant had sought from OP-1 as the lead insurer.  The inevitable finding, therefore, is OP-2 Universal Sompo General Insurance Co. Ltd. had agreed to become a co-insurer to the extent of covering the risk 5% of the sum insured.

6. As far as failure of OP-1 to obtain written instructions from OP-2 is concerned that in my opinion would not in any manner effect the right of the complainant to recover 5% of the assessed amount from OP-2 the said company it being one of the co-insurers.  If OP-2 has a grievance against OP-1 on account of OP-1 having issued the insurance policy on its behalf without obtaining the written instructions in terms of the co-insurer agreement, OP-2 can avail such remedy as may be open to it in law against OP-1 but it will have to pay the balance amount to the complainant, since the said balance amount does not exceed 5% of the assessment made by the lead insurer.

7. For the reasons stated hereinabove, the Consumer Complaint is disposed of with the following directions:

(i) OP-2—Universal Sompo General Insurance Co. Ltd. shall pay a sum of Rs.1,16,29,248/- to the complainant along with interest on that amount @ 9% p.a. with effect from the date of last payment made by OP No.1 to the complainant, till the date of payment.

(ii) OP-2 shall be entitled to avail such remedy as may be open to it in law against OP-1 on account of OP-1 having allegedly not obtained written instructions of the co-insurer agreement before issuing the insurance policy on its behalf to the complainant.

(iii) There shall be no order as to costs.