M/S. ADANI POWER MAHARASHTRA LIMITED & ANR vs ORIENTAL INSURANCE CO. LTD. & ANR

On 20-05-2010, the complainant No.2-Adani Power Ltd. obtained an insurance policy from the opposite party, in respect of various construction equipment/machinery on its power project in Mundra, District Kutch of Gujarat. Vide endorsement dated 13-12-2010, effective from 29-10-2010, it was agreed and declared between the insured and the insurer that four cranes had been shifted from Adani Power Ltd., Mundra to Adani Power Maharashtra Ltd, Tirora, Maharashtra and the said four cranes stood covered under Adani Power Maharashtra Ltd. location at Tirora. However, even before the aforesaid endorsement crane No.1121 which was one of the equipment insured under the policy, had been sold by the complainant No.2 to complainant No.1 and only thereafter it was transferred to the location of complainant No.1 at Tirora. On 10-12-2010 crane No.1121 toppled down at Tirora Thermal Power Project of complainant No.1 and got damaged. On intimation being given to the insurance company a surveyor was appointed by the insurance company. Later on a second surveyor was appointed by the insurance company. The surveyor assessed the loss to the complainant at Rs.81,26,860/-, which was not acceptable to the complainant. The claim, however, came to be repudiated by the insurance company vide its letter dated 16-07-2013, on the ground that the (i) policy issued to complainant No.2 was for a specific location i.e. Mundra and did not have a floater clause which would insure the damage at another location, (ii) the crane in question had been sold by complainant No.2 to complainant No.1 much before the loss happened and, therefore, the insured had no insurable interest in the equipment, on the date of the loss and (iii) the complainant No.1, which is a separate legal entity had not obtained any insurance policy to cover the risk to crane in question and it was not entitled to make a claim under the policy issued to complainant No.2. Being aggrieved from the

repudiation of the claim, both the Adani Power Ltd. and Adani Power Maharashtra Ltd. are before us by way of this complaint.

It is not in dispute that there is no contract of insurance between the complainant No.1-Adani Power Maharashtra Ltd. and the opposite party Oriental Insurance Co. Ltd.. Though Adani Power Maharashtra Ltd. may be a group company or a subsidiary of complainant No.2-Adanai Power Ltd, it is a separate legal entity, having been independently incorporated under the provision of the Companies Act. Therefore, complainant No.1 is not entitled to any reimbursement from the opposite party in respect of any damage to the equipment and machinery including cranes owned by it. No benefit of the insurance policy taken by complainant No.2, therefore, can accrue to complainant No.1.

Admittedly, the original policy taken by complainant No.2-Adani Power Ltd. was restricted to one location i.e. Mundra in Gujarat and the equipment at other locations were not covered under the said policy. By way of a subsequent endorsement the scope of the insurance policy was extended to the equipment which, as per the endorsement, was shifted to the site of complainant No.1-Adani Power Maharashtra Ltd.. A perusal of the aforesaid endorsement would show that it came to be issued only on 13-12-2010 though it was made effective from 29-10-2010, meaning thereby that it covered the equipment only with effect from 29-10-2010. It is however, an admitted case of the parties that the equipment in question had already been sold by complainant No.2-Adani Power Ltd. to complainant No.1-Adani Power Maharashtra Ltd. sometime in June 2010. Therefore, on the date the aforesaid endorsement was obtained by Adani Power Ltd., the ownership of the equipment in question vested in complainant No.1 and not in complainant No.2. Therefore, complainant No.2-Adani Power Ltd. had no insurable interest in the equipment in question on that date. Having sold it to Adani Power Maharashtra Ltd. in June 2010, Adani Power Ltd. was left with no insurable interest in the equipment in question and, therefore, any insurance policy taken by Adani Power Ltd. would be of no benefit to the said company. In fact, had Tirora been one of the locations mentioned in the original policy taken by Adani Power Ltd. even then, it would not be entitled to any reimbursement from the insurance company on account of the damage to the equipment which it had already sold before the said damage was caused. It is only complainant No.1-Adani Power Maharashtra Ltd. which had an insurable interest in the equipment in question after June 2010, but no insurance policy for the aforesaid equipment was taken by Adani Power Maharashtra Ltd. from the opposite party.

The complainant No.2-Adani Power Ltd. did not specifically inform the opposite party at any point of time that it had sold the equipment in question to complainant No.1-Adani Power Maharashtra Ltd.. The intimation given to the insurance company was that the said equipment had been shifted/transferred from the site of complainant No.2-Adani Power Ltd. at Mundra to the site of complainant No.1-Adani Power Maharashtra Ltd. at Tirora. The said information does not convey the change in the ownership of the equipment to the insurance company. No request was made either by complainant No.2 or by complainant No.1 to the insurance company to transfer the insurance policy, to the extent it pertained to the equipment in question, from the name of complainant No.2-Adani Power Ltd. to the name of complainant No.1-Adani Power Maharashtra Ltd.. Though the change of ownership of the equipment was never intimated by the complainants to the insurance company, even if the knowledge of the change in the ownership of the equipment is presumed from the facts and circumstances of the case, as is contended by the complainants, that would be of no benefit to the complainants since neither the insurance company ever transferred the insurance policy from the name of Adani Power Ltd. to Adani Power Maharashtra Ltd., nor did the complainants insist on such transfer.

It was contended on behalf of the complainants that shifting of the subject equipment was covered under a marine policy issued in the name of complainant No.1-Adani Power Maharashtra Ltd., Tirora. The aforesaid marine insurance policy in the name of the complainant No.1, in our view would have no bearing on the issue involved in this complaint since, neither the change in the ownership was brought to the knowledge of the insurance company nor would the knowledge of such change render the insurance company liable to compensate either of the complainants. As far as complainant No.1-Adani Power Maharashtra Ltd. is concerned it has no privity of contract with the insurance company, as far as damage to the equipment at its site is concerned and, therefore, it cannot claim any reimbursement from the opposite party. As far as complainant No.2-Adani power Ltd. is concerned, having sold the equipment in question in June 2010 it was left with no insurable interest in the said equipment and, therefore, loss if any, on account of the damage to the equipment was suffered by Adani Power Maharashtra Ltd. and not by Adani Power Ltd.. The complainants have only themselves to blame for a situation where neither of them can recover compensation from the insurance company since, for the reasons best known to them, they did not request the insurance company to transfer the insurance policy, to the extent it pertained to equipment in question, from Adani Power Ltd. to Adani Power Maharashtra Ltd..

For the reasons stated hereinabove, we find no merit in the complaint and the same is hereby dismissed.