2010 Supreme(SC) 421

2010 (3) Supreme 733
SUPREME COURT OF INDIA
D.K. Jain and T.S. Thakur, JJ.
United India Insurance Company Ltd. — Appellant
versus
Kantika Colour Lab. & Ors. — Respondents
Civil Appeal No. 6337 of 2001
Decided on : 6-5-2010

IMPORTANT POINT
It is only upon proof of the actual loss, that the assured can claim reimbursement of the loss to the extent it is established, not exceeding the amount stipulated in the contract of Insurance which signifies outer limit of the insurance company’s liability. The amount mentioned in the policy does not signify that the insurance company guarantees payment of the said amount regardless of the actual loss suffered by the insured.

Headnote:Consumer Protection Act, 1986- Section 23- Appeals against order dated passed by National Commission, whereby Original Petition filed by respondent no.1 had been allowed and appellant-company held liable to pay to said respondent a sum of Rs.53 lakhs with interest @ 10% p.a. jointly and severally with the Carrier M/s Super Road Lines towards compensation for the damage which machines entrusted to the later suffered in the course of transportation from Mumbai to Hardwar- Plea of Insurance Company that National Commission proceeded on an erroneous assumption that the damage suffered by machine had rendered the same unusable hence a total loss as material available on record clearly established that it was only the printer process QSS- 1923 that was damaged and not the film processor QSF-V50- Respondent No.1- owner of machines had obtained from appellant Insurance Company a transit insurance policy for a sum of Rs.53 lakhs-Held amount mentioned in the policy does not signify that the insurance company guarantees payment of the said amount regardless of the actual loss suffered by the insured-Evidence on record that damage had been caused only to printer model QSS-1923 and not to film processor QSF-V50 which was found to be in working condition and about which there was only an apprehension and no more that its working may run into difficulty in future. - In any case in the absence of proved damage affecting performance of the machine, it was difficult to assume that film processor was also damaged either wholly or in part so as to call any repair or replacement of the said machine- Printer model QSS-1923 had been extensively damaged and manufacturing company had no arrangement in this country for carrying out the repairs to the damaged machine-National Commission was, hence justified in holding that printer processor model QSS-1923 being extensively damaged required complete replacement-Total amount payable to insured by way of compensation for damage caused to machine in question would work out to rupees equivalent of Singapore $ 62100 at the exchange rate prevalent as on the date of judgment plus a custom duty component of Rs.12,73,513.36 rounded off to Rs.12,74,000/-. The sum total of the two figures would be payable with interest @ 10% p.a. -Appeal allowed in part and to the extent that appellant-company and carrier held liable jointly and severally to pay said compensation. (Paras 18 to 25)

       Contracts of Insurance –Scope and ambit of-Contracts of Insurance are generally in the nature of contracts of indemnity- Except in the case of contracts of Life Insurance, personal accident and sickness or contracts of contingency insurance, all other contracts of insurance entitle the assured for the reimbursement of actual loss that is proved to have been suffered by him- The happening of the event against which insurance cover has been taken does not by itself entitle the assured to claim the amount stipulated in the policy. It is only upon proof of the actual loss, that the assured can claim reimbursement of the loss to the extent it is established, not exceeding the amount stipulated in the contract of Insurance which signifies outer limit of the insurance company’s liability- The amount mentioned in the policy does not signify that the insurance company guarantees payment of the said amount regardless of the actual loss suffered by the insured. (Para 19)

       Facts of the Case :

       Present Appeals have been filed against order passed by National Commission, whereby Original Petition filed by respondent no.1 had been allowed and appellant-company held liable to pay to said respondent a sum of Rs.53 lakhs with interest @ 10% p.a. jointly and severally with the Carrier M/s Super Road Lines towards compensation for the damage which machines entrusted to the later suffered in the course of transportation from Mumbai to Hardwar. Plea of Insurance Company that National Commission proceeded on an erroneous assumption that the damage suffered by machine had rendered the same unusable hence a total loss as material available on record clearly established that it was only the printer process QSS-1923 that was damaged and not the film processor QSF-V50. Respondent No.1- owner of machines had obtained from appellant Insurance Company a transit insurance policy for a sum of Rs.53 lakhs.

       Findings of the Court :

       Respondent No.1- owner of machines had obtained from appellant Insurance Company a transit insurance policy for a sum of Rs.53 lakhs.

       The Court held that the amount mentioned in the policy does not signify that the insurance company guarantees payment of the said amount regardless of the actual loss suffered by the insured. Evidence on record showed that damage had been caused only to printer model QSS-1923 and not to film processor QSF-V50 which was found to be in working condition and about which there was only an apprehension and no more that its working may run into difficulty in future. In any case in the absence of proved damage affecting performance of the machine, it was difficult to assume that film processor was also damaged either wholly or in part so as to call any repair or replacement of the said machine. Printer model QSS-1923 had been extensively damaged and manufacturing company had no arrangement in this country for carrying out the repairs to the damaged machine. National Commission was, hence justified in holding that printer processor model QSS-1923 being extensively damaged required complete Replacement.Total amount payable to insured by way of compensation for damage caused to machine in question would work out to rupees equivalent of Singapore $ 62100 at the exchange rate prevalent as on the date of judgment plus a custom duty component of Rs.12,73,513.36 rounded off to Rs.12,74,000/-. The sum total of the two figures would be payable with interest @ 10% p.a. Appeal was allowed in part and to the extent that appellant-company and carrier were held liable jointly and severally to pay said compensation.