JUSTICE V.K.JAIN (ORAL)

          A Standard Fire & Special Perils Policy in the name of one Gangaprasad Hariprasad Jani was obtained in the year 1985, in respect of the building No. 1456 to 1464/1 HK Bhavan, Reid Road, Ahmedabad where a hotel was being run.  The policy was last renewed for a period of one year w.e.f. 26.03.2007.  Sh. Gangaprasad Hariprasad Jani had expired in the year 1997 but despite that the policy continued to be got renewed in the name of the deceased.  The building in respect of which the policy had been obtained collapsed on 03.02.2008 and a claim for reimbursement in terms of the insurance policy was lodged by the legal representatives of late Sh. Gangaprasad Hariprasad Jani who claimed to be owners of the building.  M/s C.P. Mehta & Co. were appointed as the surveyors to assess the loss but the claim was repudiated vide letter dated 06.05.2009 which to the extent it is relevant reads as under:-

“This has reference to your above mentioned Fire Claim.

In this regard, we have taken opinion of our Surveyor M/s CP, Mehta. As per his survey report, the building was collapsed because of construction work being processed at that time in the adjoining bldg. which is much deeper than the insured premises. Thus, the foundation work of the Insured premises weakened and collapsed.

Under the circumstances, the claim is not admissible as per policy terms and conditions which please note.”

2.      A consumer complaint was filed by an HuF namely Gangaprasad Hariprasad Jani HuF through its Karta Mayuresh Prasad Jani and other coparceners.  The complaint was resisted by the insurer which claimed that the complainants had no insurable interest in the policy and the policy had become void, on account of death of Sh. Gangaprasad Hariprasad Jani in the year 1997.  It was also the case of the insurer that the insured building having collapsed on account of digging in the adjoining building the insurer was not liable to give any reimbursement  for the loss to the building.  It was pointed out that the digging of foundation in the adjoining building was upto 20 feet whereas the foundation in the insured building had been dug up only upto 15 ft. 

3.      The State Commission having dismissed the consumer complaint the complainants are before this Commission by way of this appeal. 

4.      The primary issue involved in this appeal is as to whether there was legally valid contact of insurance between the appellant and the respondents on the date the building collapsed.  It is an admitted position that initially the insurance policy had been obtained in the name of Mr. Gangaprasad Hariprasad Jani when he was alive.  The case of the complainants is that the policy was obtained by Sh. Gangaprasad Hariprasad Jani on behalf of HuF, he being the karta of HuF.  However, there is no indication in the policy which would show that the insurance cover was taken by an HuF representd by late Sh. Gangaprasad Hariprasad Jani and was not taken by the deceased in his individual capacity.  Late Sh. Gangaprasad Hariprasad Jani was a businessman and owned the building in which the hotel was being run.  If he was also the karta of a HuF as is claimed by the complainants/appellants he would be knowing the  distinction between an individual and an HuF.  Had Sh. Gangaprasad Hariprasad Jani intended to take an insurance cover on behalf of an HuF, he would have stated so in the proposal submitted for the first time and in that case the policy would have been issued in the name of the HuF and not in the individual name of late Sh. Gangaprasad Hariprasad Jani.  Moreover, there is no evidence of the insurance premium having been paid from the funds of the HuF, so long as Mr. Gangaprasad Hariprasad Jani was alive. 

5.      Had the insurance policy been obtained on behalf of an HuF, the person who became karta of HuF on the death of Sh. Gangaprasad Hariprasad Jani would have informed the insurer accordingly and would have requested the insurer either to issue the policy in the name of the HuF or in his individual name for and on behalf of HuF.  There is no evidence or even allegation of such a course of action having been adopted by the karta or any coparceners of the alleged HuF after the death of  Sh. Gangaprasad Hariprasad Jani. As noted earlier Sh. Gangaprasad Hariprasad Jani expired in the year 1997.  The insurance policy had already been renewed for about 10 years before he died.  At no stage anyone  asked the insurer to issue the renewed policy in the name of the HuF.  After the death of Sh. Gangaprasad Hariprasad Jani the policy continued to be got renewed in his name for about 10 years.  No attempt was made to obtain the renewed policy in the name of HuF.  Therefore, there is no escape from the conclusion that the policy was obtained by late Sh. Gangaprasad Hariprasad Jani in his individual capacity and not as the karta of an HuF. 

6.      It is submitted by the Ld. Counsel for the complainants that by operation of law, the complainants became transferee of the policy and, therefore, they are entitled to reimbursement in terms of the said policy.  Reliance by the Ld. Counsel is placed upon clause 3(c) of the terms of the policy which reads as under:-

“3. Under any of the following circumstances the insuracne 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          ----

b          ----

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

7.      In my opinion, the above-referred clause would apply only in a case where the policy when issued is legally valid and the interest in the property, subject matter of the insurance cover, passes from the insured to other persons either by will or by operation of law.  However, in the present case the contract of insurance  taken after the death of late Sh. Gangaprasad Hariprasad Jani, was void ab initio and of nullity in law, the same having been obtained in the name of a dead person.  Even at the time insurance policy was got renewed w.e.f. 26.03.2007 it was a void contract, the insured having already died about 10 years ago.  It was the duty of the legal heirs of late Sh. Gangaprasad Hariprasad Jani to get the insurance policy transferred in their name by intimating the death of Sh. Gangaprasad Hariprasad Jani to the insurer and asking for substituting their names in place of the name of the deceased.  That, however, was not done and the insurance policies even after 1997 when late Sh. Gangaprasad Hariprasad Jani died continued to be obtained in the name of a dead person.  Though, this was a case of renewal of the policy on a year-to-year basis, each renewed policy constituted a separate contract of insurance.  Therefore, every renewal obtained after the death of Sh. Gangaprasad Hariprasad Jani was void and non-est in the eyes of law.  No benefit under such a legally void contract of insurance would be admissible to the complainants even if they happened to be legal heirs of late Sh. Gangaprasad Hariprasad Jani.

8.      For the reasons stated hereinabove, I find no reason to interfere with the view taken by the State Commission.  The appeal being devoid of any merit is hereby dismissed with no orders as to costs.