Polymat India P. LTD. vs National Insurance Co. LTD.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2004 Supreme(SC) 38

SUPREME COURT OF INDIA
B.N.Agrawal : A.K.Mathur
Polymat India P.Ltd And Another
Versus
National Insurance Co.Limitedand Another
Case No. : 4366 of 1999 (with c.a. no. 6063/1999)
Date of Decision : 1/12/04
Advocates Appeared: Raju Ramachandran : Vandana Mohata : Anusuya Sadhu : Pallavi Langer : Shiraz Contractor Patodia : Vishnu Mehra : B.K.Satija

Headnote:
A. Consumer Protection Act, 1986, Section 2(g) - Factories Act, 1948, Section 2(m) - Fire Insurance - Fire insurance policy in respect of factory premises - On a specific query in the policy that whether any goods are stored by appellant in open or in Kaccha shed, he replied in negative - Factory caught fire - Appellant/insured made a claim not only in respect of goods lying in covered area of factory premises but also those laying in open - Goods laying outside the plant or in open were not insured - Insured, held not entitled to claim of said goods- The order of the Commission directing the payment of 75% of the assessment made by the Surveyor of the goods which were lying Sthe Commission.[Paras 21 to 25]
B. Consumer Protection Act, 1986, Section 2(g) - Factories Act, 1948, Section 2(m)- Grant of Interest- As per the guidelines, the Insurance Company had to settle the claim within two months of the Surveyor's Report-The reason for delay explained- Since the fire took place on 13th January, 1993, Surveyor sent his report on November 9, 1993-Since there was some discrepancies the Insurance Company sought clarification from the surveyors which was replied on 22.4.94 - The Insurance Company after that took the decision and informed the claimant on 1.7.94 for approval of the claim for Rs. 20,23,899/- under both the polices. Therefore, levy of interest @ 18% by the Commission was not justified- Award of Costs of Rs. 10000/ also not justified( paras 28 to 31)

JUDGMENT

A.K. MATHUR, J.

Both the appeals arise against the order passed by the National Consumer Disputes Redressal Commission, New Delhi.

2. One Civil Appeal No. 4366/1999 is filed by the Polymat India Pvt. Ltd. and the other Civil Appeal No. 6063/1999 is filed by the National Insurance Company Ltd. & Ors. against the order passed by the National Consumer Disputes Redressal Commission, New Delhi on 27th May, 1999 in the Original Petition No. 204 of 1994.

3. Since both the appeals raise common question of law and arise out of the same order, they are disposed of by the common order.

4. Brief facts of the case are as under:

That the Original Petition was filed by the Complainant M/s Polymat India Pvt. Ltd. & Anr. as a consequence of its claim under 2 fire policies bearing No. 101600/3101669/0 in respect ofBuilding, machinery and accessories and furniture and other contents and the other bearing No. 101600/3101670/0 regarding stocks and used/burn lubricating oil and refined oil in its factory premises consequent upon a fire being repudiated by the Insurance Company, Opposite Party No. 1. The insured Polymat India Pvt. Ltd. is a factory measuring 251x 150 and is bounded by 7 high brick wall on South and Chain-link fencing on the North, East and West Sides. Inside the factory premises the Complainant had a shed measuring 101 x 41 constructed of brick wall with asbestos sheets louvers at upper and asbestos sheets roofing on tubular frame structure. Attached to the South side of the shed was a lean-to structure measuring about 85 x 25 and constructed of brick walls and roofing on tubular frame. The construction was divided into several rooms housing the office, quality control laboratory, workshop-cum-rest room and store room for tools and equipment. These rooms had their opening inside the shed. In the said factory a Dove-tail batch type acid and clay treatment process for refining the used/burnt lubricating oil was undertaken. The raw material for the process was the burnt and used lubricating oil which was received in barrels and stored in the open yard. Apart from that, oil was also brought in and unloaded into used oil pits. The finished product i.e. refined lubricating oil was either being loaded into oil tankers or being filled in drums. In the part of the plant which was in open the centrifugation, settling and decantation, dehydration, condensation of lighter volatile impurities, acid treatment and condensation of volatile matters were being conducted. The part of the operation which was carried on inside the shed were the less hazardous process like clay treatment and neutralization, filtration and centrifugation, oil blending etc. In that shed two Thermic Fluid Heaters, one oil fired boiler and one water softening plant were also installed. At the material time, all these plants and machinery and materials were covered by the two fire insurance policies. In the said policies the banker of the claimant was also one of the beneficiaries. The said two policies were of dated 19th and 20th March, 1992. It was alleged that in 1992 the bankers were changed by the Complainant from Grindlays Bank, Chowringhee Branch, Calcutta to Allahabad Bank, Camac Street Branch, Calcutta and all the fixed assets were mortgaged by the Complainant in favour of the West Bengal Financial Corporation to secure the loans received by the Complainant No. 1. All the fixed assets, stocks and stocks-in-process of the Complainant remained insured with the New India Assurance Co. upto 19th/20th March, 1992. But after the change of the bankers from Grindlays Bank to Allahabad Bank the Complainant also changed their insurer from the New India Assurance Co. Ltd. to National Insurance Co. Ltd.. It is also pointed out that the Development Officer of the National Insurance Co. Ltd. one Mr. Sandip Guha brought two proposal forms for fire insurance on or about 17th March, 1992 and got those signed by the Complainant in blank. He also took with him photocopies of the pr

Click Here to Read the rest of this document