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Judgment
V.K. Jain, J
The complainant company obtained a Floater Insurance Policy from the opposite party in respect of stock of goods related to garment manufacturing, furnished goods, semi-furnished goods, processed and other related material to trade, for the period from 16.5.2015 to 15.5.2016 for a sum assured of Rs.36.00 crores. The endorsement annexed to the policy read as under:
Loc No.
Loc Address
Location Description
Pin Code
State Name
District Name
Constr Class
EQ-Zone
1.
Khasra No. 146 to 151, 15 and New Khasra No. 265/2, 269 to 277, 286 to 289, Chandanholla, Mehrauli, New Delhi
Chandni Chowk
110006
Delhi
North Delhi
Non kutcha
II
2.
Khasra No. 942, New Delhi 74 and at Fabricators/Processors Premises
Chandni Chowk
110006
Delhi
North Delhi
Non kutcha
II
3.
J-1 Sector 63 Noida
Sector 4 Noida
201301
Uttar Pradesh
Gautam Buddha Nagar
Non kutcha
II
4.
C-205, Sector-63 Noida
Sector 4 Noida
201301
Uttar Pradesh
Gautam Buddha Nagar
Non kutcha
II
The insurer allegedly issued an endorsement dated 16.5.2015 amending the endorsement annexed to the policy. The case of the complainant is that the said endorsement dated 16.5.2015 was received by it on 20.2.2017.
The amended endorsement dated 16.5.2015 which the complainant denies having received from the insurer, to the extent it is relevant reads as under:
"Insured's request/reference date 16.5.2016 Number I
Endorsement caused :
Correction in address locations
Endorsement wording:
It is hereby agreed and declared that correction in location
Correct Location is
(1) Khasra No. 146 to 153, 153, Chandanhulla and New Khasra No. 265/2, 269 to 277, 286 to 289 Chandanhulla, Mehrauli, New Delhi
(2) Khasra no.942 Ansal Farm Satbari, Mehrauli, Fabricators / processors premises
(3) 3-1, Sector 63, Noida (UP)
(4) C-205, Sector 63, Noida UP
The mentioned policy
Other terms conditions and exceptions remain unaltered."
It would thus be seen that the item No. 2 of the locations given in the insurance policy was substituted so as to make it clear that the second location covered under the policy was at Khasra No. 942, Ansal Farm II Satbari, Mehrauli, which was the premises of the fabricator / processor. As a result, the insurance cover did not extend to unspecified premises of the fabricator / processors.
A fire broke out on 09.6.2015 in the factory of the M/s. Sai Gaexo Pvt. Ltd., alleged to be one of the fabricators and processor of the complainant, situated at E 101 Sector 63, Noida. The intimation having been given to the insurer, M/s. Cunningham Lindsey International Insurance Surveyors and Loss Assessors Pvt. Ltd., were appointed as the surveyors. The claim however was rejected vide letter dated 2.3.2017, which reads as under:
'Dear Sir,
This is with reference to your claim concerning fire loss at Sai Gaexo Pvt. Ltd., E-101, Sector-63, Noida, UP.We have examined your claim in the light of material on record and the survey report submitted by the surveyors Cunningham Lindsey International Insurance Surveyors and Loss Assessors Pvt. Ltd.,
On examination of claim, it is observed that you have taken SFSP Floater Policy No. 35500011153400000088 for the period of 16.5.2015 to 15.5.2016 covering stock of goods related to trade of garments and manufacturing, finished goods, at the locations mentioned in the policy which were as under:
Khasra No. 146 to 151, 153, Chandni Chowk & New Khasra No. 256/2, 269 to 277, 286 to 289 Chandanhulla, Mehrauli, New Delhi
Khasra No. 942, New Delhi Chandni Chowk 74 and at Fabricators / processors premises
J-1, Sector 63, Noida, Sector 4 Noida
C-205, Sector 63, Noida, Sector 4 Noida
The correction in the address locations were made with effect from 16.5.2015 vide endorsement no. 355000/11/15/34/82000011 dated 16.5.2015 which reads as under:
"It is hereby agreed and declared that correction in location / correct location is:
Khasra No. 146 to 151, 153, Chandanhulla & New Khasra No. 265/2,269 to 27, 286 to 289 Chandanhulla
Khasra No. 942, Ansal Farm Satbari, Mehrauli, Fabricators / Processors premises
J-1, Sector 63, Noida, UP
C-205, Sector 63, Noida, UP
Fire incident has taken place on 09.6.2015 at E-101, Sector - 63 Noida. Immediately on receiving on intimation, we appointed surveyors "Cunningham Lindsey International Insurance Surveyors & Loss Assessors Pvt. Ltd.
The surveyor has noted in their report that the loss has taken place at E-101, Sector 63 Noida, premises which was not covered under the policy. The surveyor has noted that the said premises belong to the company M/s. Sai Gaexo Pvt. Ltd. The surveyor has also noted that relation between the insured M/s. Laj Exports Ltd. and M/s. Sai Gaexo Pvt. Ltd. is of an associate. The surveyor has also noted the details of shareholding and directions of Laj Exports & M/s. Sai Gaexo Pvt. Ltd. as under:
..........."
Being aggrieved from the repudiation of the claim, the complainant is before this Commission.
Admittedly, the premises of M/s. Sai Gaexo Pvt. Ltd. was not one of the premises declared either in the original endorsement annexed to the policy or in the amended endorsement, which the complainant denies having received from the insurer. The question which arises for consideration is whether insurance cover was available to the complainant in respect of the stock kept at such premises of its fabricator / processor, which was not intimated or disclosed to the insurer.
This issue came up for consideration of this Commission in M/s Orient Clothing Company Ltd. Vs. M/s Bajaj Allianz General Insurance Co. Ltd. - Consumer Complaint No.26 of 2008 decided on 13.7.2015. In the aforesaid case, the complainant had obtained a floater policy covering four plots in addition to 20 processors. The complainant, however, had furnished the list of only 16 processors to the insurer at the time of submitting the proposal. A fire having broken out at a plot which the complainant claimed to be the plot of one its processors and the stock kept there having been destroyed, a claim for reimbursement of the loss was lodged by the insured. The claim, however, was not paid on the ground that the aforesaid plot was not a specified location. Being aggrieved from the stand taken by the insurer, the complainant approached this Commission by way of a consumer complaint. The complaint was resisted by the insurer which submitted that as per the terms and conditions of the Standard Fire and Special Perils Policy formulated by the Tariff Advisory Committed, constituted under the Insurance Act, 1938, which are binding on all the insurance companies in India, floater policy could be issued only for the stocks at specified locations and the insurance at unspecified locations was not allowed. Rejecting the complaint, this Commission inter-alia held as under:-
"5. The primary issue which arises for our consideration in this case is as to whether the complainant was required to disclose the location of all the 20 processors for which the insurance cover was taken under the floater clause attached to the policy as is claimed by the insurance company or it could seek reimbursement in respect of any location of its any processor so long in case the goods damaged or destroyed in the fire belonged to the complainant.
The floater policy, which forms part of Indian Fire Tariff, to the extent it is relevant, provides that floater policies can be issued to cover stocks kept at various locations under one sum insured but unspecified locations shall not be allowed. Therefore, it is not permissible for an insurance company to issue an insurance policy in respect of unspecified locations i.e. the locations which are not brought to its knowledge by the insured.
The floater clause which was attached to the insurance policy issued to the complainant to the extent it is relevant reads as under:
"In consideration of Floater Extra charged over and above the policy rate the S.I. in aggregate under the policy is available for any one, more, or all locations as specified in respect of movable property."
It would, thus, be seen that though an insurance policy could cover more than one location the said locations have to be specified before the benefit of the insurance can be claimed.
The insurance certificate inter alia reads as under:
"Comments: Locations Covered - As per the annexure attached herewith."
It would, thus, be seen that the said policy covered only those locations which were mentioned in the annexure attached thereto. A perusal of the aforesaid annexure would show that it specified only 16 locations, though the complainant could have specified as many as 20 locations. Plot No.749 was not amongst the locations specified in the annexure to the insurance certificate. It is quite evident from a perusal of the floater policy, floater clause attached to the policy issued to the complainant as well as locations specified in the annexure attached to the insurance certificate that plot No.749 was not one of the locations covered by the floater policy issued to the complainant. If the complainant wanted to cover the aforesaid location it ought to have informed the insurance company accordingly, before the stock kept at the aforesaid location allegedly got damaged or destroyed. That having not been done I have no hesitation in holding that the stock of the complainant kept at plot No.749 was not covered under the insurance policy taken by it.
I cannot accept the contention that it was not necessary for the insured to disclose the location of its processors to the insurance company. The insurance at an unspecified location, in my view, cannot even be conceived of. If the complainant wanted to cover its goods kept at plot No.749 against fire, etc., it ought to have informed the insurance company accordingly and only then it would have been entitled to reimbursement for the damage sustained on account of the fire at the said location. In fact the requirement of disclosing the locations to the insurer is also evident from the fact that the complainant itself had disclosed 16 locations to the insurer, at the time of taking the policy. If I accept the contention that the insured is not required to disclose the location to the insurance company, that may result in a situation where an insured keeping its goods at a large number of locations seeks to take benefit of the insurance in the event of loss at any of the said locations, even though it may have taken insurance cover for a lesser number of locations. In other words, if I accept this contention, in a case where the insured is keeping its goods say at 50 locations and it obtains insurance cover for 20 locations, it may in the event of loss by fire at any of its locations claim benefit of insurance despite the fact that the insurance cover was taken by it for 20 locations and not for all the 50 locations. Moreover, such an interpretation will also enable the insured to claim benefit of insurance even in respect of locations where it was not keeping its goods at the time of taking the insurance policy and which were never brought to the knowledge of the insurer. Such an interpretation, in my view, would not only be unreasonable but also illogical and absurd. I am of the opinion that in a floater policy the benefit of insurance can be claimed by the insured only in respect of loss at those locations which are disclosed to the insurance company before the loss actually occurs. Since the plot No.749 was not one of the locations disclosed to the insurance company either at the time of taking policy or at any time thereafter, the complainant is not entitled to reimbursement of the damage suffered by it on account of fire which took place at the aforesaid location. The complaint, therefore, is liable to be rejected."
An appeal was preferred by M/s. Orient Clothing Company Pvt. against the above referred decision. The said appeal being Civil Appeal No. 6151 of 2015 was dismissed by the Hon'ble Supreme Court vide its order dated 21.8.2015.
Since the complainant, in my opinion, was required to disclose the location of the processors in whose premises the stock was to be kept by it, in order to obtain insurance cover in respect of such a stock and even the insurer was not permitted in law to grant insurance cover in respect of unspecified location of a processor/ fabricator, no claim in respect of the loss of the stock kept in the premises of M/s. Sai Gaexo Pvt. Ltd. was admissible. If the complainant wanted to obtain an insurance cover in respect of the stock kept in the premises of M/s. Sai Gaexo Pvt. Ltd., it ought to have disclosed the particulars of the said premises to the insurer and got the said premises included amongst the locations in respect of which the insurance cover had been obtained.
For the reasons stated hereinabove, the complaint is hereby dismissed, with no order as to costs.