Research › Search › Judgment

J&K High Court · body

2002 DIGILAW 123 (JK)

Oriental Insurance Co. Ltd. v. Vikas Drug Pharma

2002-05-02

S.K.GUPTA, T.S.DOABIA

body2002
1. The complainant has been allowed a sum of Rs. 24,358/- Interest has also been allowed at the rate of 18% compensation to the extent of Rs. 10.000/- has also been allowed. It is this decision given by the State Commission which is subject matter of challenge in this appeal. 2. It is not in dispute that M/s Vikas Drug Pharma, complainant was insured with the appellant Insurance Company. It is also not in dispute that some loss did occur in the premises or the above concern. This was in a fire related incident. This claim was not settled to the satisfaction of the complainant. The complainant approached the State Commission. The State Commission has directed that the complainant should be compensated to the extent of Rs. 24,358/- and has also awarded other amounts in the matter noticed above. It is this view expressed by the State Commission which is under challenge in this appeal. 3. It is urged that the claim is barred by limitation. In support of this, it is urged that the appellant company repudiated the claim of the complainant It is accordingly submitted that the limitation for filing the claim would be one year. For this legal proposition reliance is being placed on a Division Bench judgment of this court reported as Rajinder Koul Vs. United Insurance Company Ltd. 2002 SLJ456. 4. In the afore-mentioned decision, it has been observed that if the claim is not lodged within a period of one year from the date of repudiation, then the claim would be barred by limitation. 5. There cannot be any dispute with the legal position as enunciated in the aforementioned Division Bench judgment. However, the question arises as to whether there was a valid reputation and what was the date of said repudiation. 6. Learned counsel for the appellant has placed reliance on the letter dated 28.3.1991. For facility of reference, this is reproduced below. "Re: Fire claim No. 10/88/0001/ 308/00000. Policy No.: 10/87/00045/308/00000. Your case was allotted to Mr. MM. Pardhani, Surveyor, since you did not give him any documentary evidence which could held him to arrive at a definite claim amount, he gave his report which was rather vague and not upto the mark. We then asked Mr. Om Puri to give his investigative second opinion. Policy No.: 10/87/00045/308/00000. Your case was allotted to Mr. MM. Pardhani, Surveyor, since you did not give him any documentary evidence which could held him to arrive at a definite claim amount, he gave his report which was rather vague and not upto the mark. We then asked Mr. Om Puri to give his investigative second opinion. We have now received the report of Puri who was recommended that only few packing material and raw-material items reportedly damaged by fire which too fall out of the scope of our policy. In view of what has been observed and recommended by Mr. Puri Surveyor we are enclosing the claim as "No Claim". Thanking you, Yours-faithfully, Sd/- Branch Manager 7. There is yet another letter dated 9.5.1991. As this is relevant, the contents of this letter are notice below: "Re. Non-Settlement of claim of your cleint Shri R.S L Srivastva under policy No. 10/87/00045/308/00000. We have received a copy of your notice originally addressed to our chair-man-cum-Managing Director. New Delhi S. No. PK/2407-08 Dt. 2nd May 1991. We are taking up the matter with our Div. Office Jammu and on hearing from them we will revert to you. In the mean time kindly bear with us. Thanking you and assuring you of our best and prompt services always. Yours faithfully, Sd/- Manager After hearing the learned counsel and having gone through the record on the file, we are of the opinion that had letter dated 28.3.1991 was the only letter written by the Insurance Company, something could have been said in favour of the appellant. A perusal of the letter dated 9.5.1991 however, makes it clear that the complainants request that the matter is required to be given a fresh look was entertained. He was assured that the matter is under their consideration. Petitioner was called upon to wait If this be the position then the claim of the appellant that the claim petition was barred by limitation is an argument, which cannot be accepted. 8. The merits of the controversy be examined. The argument put across is that only packing material and raw-material used for manufacturing of Drugs were said to have been gutted in fire, whereas the policy cover includes only the stocks in trade and stocks in process only. 9. 8. The merits of the controversy be examined. The argument put across is that only packing material and raw-material used for manufacturing of Drugs were said to have been gutted in fire, whereas the policy cover includes only the stocks in trade and stocks in process only. 9. There can be no dispute with the proposition that when loss is caused by fire, the Insurance cover is available. Again when loss is caused by fire to some other property, that would be also covered. 10. As mentioned at page 861 or Corpus Juris Secundum, Vol. 45, "The liability of an insurance company under a policy of fire insurance ordinarily is measured by the terms of the policy...within the usual terms of a policy, there must be an actual fire in the proper sense of that term, from which the loss or damage results..." At page 863, it has been observed that "In order that there may be recovery on a fire insurance policy, the fire must have been the proximate cause of the loss; or in other words such loss only can be recovered as is the proximate and immediate result of the fire as distinguished from a remote loss." At page 864, it has been further observed that ".... where fire is the efficient cause nearest the lost, insurer is liable, although the property is brought within the peril of the fire by some outside agency. Any loss resulting from an effort to put out a fire, or otherwise to save the property, whether by spoiling the goods or otherwise, directly or indirectly, is within the policy." The statement of law as noticed above makes it clear that unless and until there is a fire and the loss is caused thereby, a claim under a fire policy cannot be lodged. Some other losses which are caused on account of fire incident may also be covered. Some of these instances are given in the same volume. Some other losses which are caused on account of fire incident may also be covered. Some of these instances are given in the same volume. These are: "Damage by Removal; Where fire necessitates removal of goods, loss or damage caused thereby usually is covered by the policy." "Damage by Water; Damage by water used in a attempt to save property from fire generally is recoverable under the policy:" "Fall or Blowing up of Building; Loss incurred by the fall of a building as a result of a fire usually is recoverable under the policy, and loss from the destruction of building by civil authorities to prevent the spread of fire or disease ordinarily is recoverable." "Explosion; Damage from an explosion which is the direct result or incident of ... fire is a loss by fire for which the company is liable except to the extent that the insure is exempted from liability: We are of the opinion that the argument that packing material and raw-material was not covered cannot be accepted. This would also be part of the stock in trade. Thus there is no room to modify the main relief. However, with regard to interest, something is to be said in favour of the appellant. The rate of interest would be 12%. This would be payable w.e.f. the date the complaint was filed before the State Commission. The complainant would not become entitled to any further compensation of Rs. 10.000/-. However complainant would be entitled to costs. These are fixed at Rs. 5000/- In view of the above and modification made above this appeal is dismissed.