1.      Heard Mr. Shreyas Shrivastava, Advocate, for the complainant and Mr. Pradeep Gaur, Advocate, for the opposite party.

2.      M/s. A.K. Rubber (the Insured) has filed above complaint, for directing Oriental Insurance Company Limited (the Insurer) to pay (i) Rs.22814988/- with interest @14% per annum from 06.04.2014 till the date of payment, as the insurance claim, (ii) Rs.25/- lacs, as compensation for mental agony and harassment, (iii) Rs.5/- lacs as litigation costs; and (iv) any other relief which is deemed fit and proper in the facts and circumstances of the case.

3.      The facts as stated in the complaint and emerged from the documents attached with it are as follows:- 

(a)     M/s. A.K. Rubber (the Insured) was a partnership firm, registered under Indian Partnership Act, 1932 and engaged in manufacture and sale of rubber crumb, powder from waste rubber/rubber scrap and similar products. Initially the Insured started its operation at 169/92, Dabhel Cooperative Industrial Estate, Daman, in the year 2005, later on, it was sold on 06.12.2012. The Insured purchased Plot No.6, SR No.527/3, Paikee-1, Gulshan Industrial Estate, Fansa, Sarigam, Tal Umbergaon, district Valsad, on 24.02.2011 and shifted its factory at this place, in January, 2012. The Insured availed financial facilities including ‘Cash Credit Limits’ and ‘Term Loan’ from Oriental Bank of Commerce, Somnath, Daman Branch, from its inception and continued after its shifting to Valsad. Oriental Bank of Commerce also acts as an agent of Oriental Insurance Company Limited.

(b)     Oriental Insurance Company Limited (the opposite party) (the insurer) was a public insurance company and engaged in the business of providing insurance services. The Insured obtained insurance policies on Stock, Building and Plant & Machinery from the Insurer i.e. (i) Standard Fire and Special Perils Policy No.171803/11/2012/69 for the period of 09.06.2011 to 08.06.2012, for sum insured of Rs.2.50/-, for location at S.No.168/92, Dabhel Cooperative Industrial Estate, Daman, (ii) Standard Fire and Special Perils Policy No.171803/11/2012/364, for the period of 09.02.2012 to 08.02.2013, for sum insured of Rs.3/- crores, for the location at Plot No.6, Gulshan Industrial Estate, Sarigam, Tal Umbergaon, district Valsad, (iii) Standard Fire and Special Perils Policy No.171803/11/2013/174 for period of 05.10.2012 to 04.10.2013, for sum insured of Rs.5.29/- crores, for location at S.No.168/92, Dabhel Cooperative Industrial Estate, Daman and (iv) Standard Fire and Special Perils Policy No.171803/11/2014/235 for period of 09.10.2013 to 08.10.2014, for sum insured of Rs.5.29/- crores, for  location at S.No.168/92, Dabhel Cooperative Industrial Estate, Daman. Oriental Bank of Commerce also acts as an agent of Oriental Insurance Company Limited, as such, these policies were obtained by Oriental Bank of Commerce, debiting the amount of premium in the account of the Insured and also kept with it.  

(c)     After shifting the factory at Plot No.6, Gulshan Industrial Estate, Sarigam, Tal Umbergaon, district Valsad, Policy No.171803/11/2012/364, was obtained for this location for the period of 09.02.2012 to 08.02.2013. During continuance of this policy, Oriental Bank of Commerce inadvertently obtained Policy No.171803/11/2013/174 for period of 05.10.2012 to 04.10.2013, for sum insured of Rs.5.29/- crores, for location at S.No.168/92, Dabhel Cooperative Industrial Estate, Daman. But while sending premium for Policy No.171803/11/2014/235, Oriental Bank of Commerce sent a letter dated 09.10.2013, for issue of renewal policy for the location at Plot No.6, Gulshan Industrial Estate, Sarigam, Tal Umbergaon, district Valsad. However, Oriental Insurance Company committed mistake and mentioned, location at S.No.168/92, Dabhel Cooperative Industrial Estate, Daman, in Policy No.171803/11/2014/235. The policies used to be kept by the Oriental Bank of Commerce as such this mistake could be noticed by the Insured.  

(d)     On 16.02.2014 around 11:20 hours, one workman of the Insured, noticed that there was fire into grinder machine No.1, in Nylon Section. The workers tried to douse the fire with fire extinguishers but it soon took devastating nature and became uncontrolled. They immediately informed Fire Service Station Sarigam, Vapi, Daman and Silvassa about the fire incident on telephone, from where, several fire tenders were deputed on the spot, which doused the fire till 14:00 hours. On the complaint of the Insured, incident was registered in General Diary vide entry No.12/2014 at Bhilad Police Station, who after investigation did not find any foul play and submitted final report for closer of case.

(d)     The Insured informed the Insurer about fire incident on 16.02.2014. The Insurer appointed Mack Insurance Surveyor & Loss Assessor (P) Ltd., New Delhi as the surveyor on 17.02.2014. The surveyor inspected the premises on 18.02.2014, took photographs, prepared inventory and recorded statements of the witnesses. He asked for segregation burnt/damaged stock, item-wise and the documents from the Insured for physical verification. The surveyor did physical verification of burnt/damaged stock, plant & machinery and building during 21.02.2014 to 01.03.2014 and verification of record during 18.03.2014 to 20.03.2014. The surveyor submitted his Interim Report dated 05.04.2014, recommending for on account payment of Rs.one crore.

(e)     The Insurer however, did not make any payment and appointed Manoj Kumar Dixit, Insurance Claims Investigator, Valsad on 02.06.2014, for investigation of the reason of fire. The investigator, after investigation submitted his report dated 06.08.2014, mentioning that there was no foul play. From police report and FSL report, it was proved that the fire was initiated due to electric short circuit. The surveyor submitted Final Survey Report dated 09.09.2014, assessing Net Loss to Rs.22814988.47. However, the Insurer vide letter dated 11.04.2017, repudiated the claim, on the ground that the policy was voidable for violation of Clause-3 of the General Condition. The Insured gave legal notice dated 26.05.2017, for settlement of the claim for the amount as assessed by the surveyor with interest. In spite of service of notice, the Insurer did not respond. Then this complaint was filed on 15.09.2017, alleging deficiency in service.

4.      The opposite party filed its written reply on 04.01.2018 and contested the case.  In the written reply, the material facts have not been denied. The opposite party stated that the Insured shifted its factory from Dabhel (Daman) to Sarigam (Umbergaon) in January, 2012. Insurance Policy No.69 was obtained when the factory was situated at Dabhel (Daman) for the period 09.06.2012 to 08.06.2012. After shifting the factory in January, 2012, Insured did not inform the Insurer about shifting of the location. The Insured obtained Policy No.364 for the factory located at Sarigam (Umbergaon), for the period of 09.02.2012 to 08.02.2013. After expiry of this policy, it was never renewed by the Insured. In fact, Policy No.69 was renewed vide Policy No.174 for the period of 05.10.2012 to 04.10.2013 and thereafter it was again renewed through Policy No.235 for the period 09.10.2013 to 08.10.2014.  These policies i.e. Policy No.69, Policy No.174 and Policy No.235 relate to the factory located at Dabhel (Daman).  As such, on the date of incident i.e. on 16.02.2014, there was no policy in respect of the factory located at Sarigam (Umbergaon). Even the request of Oriental Bank of Commerce for the change of address at the time of renewal of Policy No.174 was accepted, it was of no consequence because the said policy is purported to cover assets which were non-existent. The complainant has made allegation against Oriental Bank of Commerce which was not impleaded as the opposite party in the complaint. There is defect of non-joinder of necessary party in the complaint.  The competent authority after considering the entire material available on the record as well as interim survey report dated 05.04.2014 and final survey report dated 09.09.2014 came to the conclusion that on the date of incident there is no valid policy of the location of the incident. Therefore, claim was repudiated vide letter dated 11.04.2017.  There is no illegality in it.  The opposite party has not committed any deficiency in service. 

5.      The complainants filed rejoinder reply on 22.05.2018, affidavit of evidence and affidavit of admission denial of the document of Amrit Pal Singh Popli.  The opposite party filed affidavit of evidence of Vipin Kumar, Chief Manager.  Both the parties have filed their short synopsis of arguments.

6.      We have considered the arguments of the counsel for the parties and examined the record.  The repudiation letter dated 11.04.2017 invoked Condition No.1 of General Condition of the policy for repudiating the claim, on the finding that the factory was shifted in January, 2012 from Dabhel (Daman) to Sarigam (Umbergaon); at that time Policy No.69, which was effective for the factory located at Dabhel (Daman), but the Insured did not request for change of address from Dabhel (Daman) to Sarigam (Umbergaon). The Oriental Bank of Commerce submitted fresh proposal and new Policy No.364 was issued for the period of 09.02.2012 to 08.02.2013 for the location at Sarigam (Umbergaon). This policy was not renewed.  The Policy No.69 ought to have been cancelled, but it was was renewed vide Policy No.174 and thereafter again vide Policy No.234 which was effective from 09.10.2013 to 08.10.2014. The request of banker for change of location at the time of renewal of Policy No.174, even if considered is not of consequence because the said property is purported to cover assets which were non-existent.

7.      Clause -1 and Clause-3 of General Conditions of Standard Fire and Special Perils Policy are quoted below:-

“1. THIS POLICY shall be voidable in the event of mis-representation, mis-description or non-disclosure of any material particular.

3. Under any of the following circumstances the insurance ceases to attach as regards the property affected unless the Insured, before the occurrence of any loss or damage, obtains the sanction of the Company signified by endorsement upon the policy by or on behalf of the Company:-

a) If the trade or manufacture carried on be altered, or if the nature of the occupation of or other circumstances affecting the building insured or containing the insured property be changed in such a way as to increase the risk of loss or damage by Insured Perils.

b) If the interest in the property passes from the insured otherwise than by will or operation of law.”

 8.     These clauses have no application in the present. In the present case, the previous policies i.e. Policy No.69 expired on 08.06.2012, Policy No.364 expired on 08.02.2013 and Policy No.174 expired on 04.10.2013.  While sending the premium for Policy no.235, Oriental Bank of Commerce wrote a letter to the Insurer for issuing the said policy for the location at Sarigam (Umbergaon).  This fact is not denied by the Insurer in its written reply. The Insurer has given reply under Right to Information Act, 2005 to the Insured in which it was admitted that letter was received to the Insurer, but through an oversight, our branch has not changed the address of new location as desired by Oriental Bank of Commerce and underwrite to renewal as per previous year’s policy details. This anomaly occurred on our parts through oversight only, but we surprised that the Insured as well as the banker has not seen the policy details between the date of issue of renewal of policy and date of loss and not approached to correct location of risk.

9.      Once it is admitted that the Insured/bank has requested for issue of policy covering the risk of new location i.e. Sarigam (Umbergaon) and the office of Insurer has committed mistake and issued policy for the location at Dabhel (Daman) then, it was mistake committed on the part of the Insurer and the Insured cannot be penalised for it.  The Insured has duly performed its duty and has applied for issue of the policy in respect of correct location. Repudiation letter is based upon irrelevant consideration. There is no dispute in respect of assessment of loss by the surveyor. The counsel for the complainant has relied upon the judgment of Supreme Court in Chiarman, Life Insurance Corpn. and Ors. Vs. Rajiv Kumar Bhasker, (2005) 6 SCC 188 has held that the fact of agent the principal will be liable.  In Gurmel Singh Vs. Branch Manager, National Insurance Co. Ltd., 2022 LiveLaw (SC) 506 has been held that the repudiation cannot be based on flimsy ground.  The counsel for the complainant has further relied on New India Assurance Co. Ltd. Vs. M/s. New Padma Enterprises & Ors., First Appeal No.45 of 2015, decided on 06.02.2019 (NC).

10.    Regulation-9 of The Insurance Regulatory and Development Authority (Protection of Policyholder’s Interest) Regulations, 2002, required to settle the claim within six of the report of the claim. If the claim is not settled within six months, then the Insurer is liable to pay interest @2% above the market rate. 

ORDER

          In the result, the complaint succeeds and is allowed.  The opposite party is directed to pay the insurance claim of Rs.22814988/- as assessed by the surveyor in the final survey report dated 09.09.2014 with interest @9% per annum from 16.08.2014 till the date of payment, within a period of two months from the date of this judgment.