IMPORTANT POINTS
(1) Warehouse risks, combined with voyage and other marine risks, are considered as part of marine insurance policies in India.
(2) Contract of insurance is and always continues to be one for indemnity of defined loss, no more no less – In case of specific risks, such as those arising from loss due to fire, etc., insured cannot profit and take advantage by double insurance.

JUDGMENT :

S. RAVINDRA BHAT, J.

1. This appeal questions an order of the National Consumer Disputes Redressal Commission¹ [C.C. No. 213/2011, dated 01.08.2019] (hereinafter “NCDRC”) which allowed the insurance claim of Levi Strauss (India) Pvt. Ltd. (hereinafter “Levi/insured/respondent”). Prior to this order, United India Insurance Co. Ltd. (hereinafter “insurer/appellant”) had repudiated the policy issued to Levi.

Facts

2. The insurer issued to Levi a Standard Fire and Special Perils Policy (hereinafter “SFSP Policy”) for the period of 01.01.2007 to 31.12.2007. This policy covered Levi’s stocks while in storage for the sum of Rs. 30 crores. Levi obtained another SFSP Policy for the period of 01.01.2008 to 31.12.2008 on similar terms. Meanwhile, the parent company of Levi (i.e. Levi Strauss and Co.) had obtained a global policy from Allianz Global Corporate and Specialty (hereinafter “Allianz”) for the period of 01.05.2008 to 30.04.2009, covering stocks of all its subsidiaries, including Levi. The coverage through this stock throughout policy (hereinafter “STP Policy” or “foreign policy”) was for $10 million in any one vessel or conveyance, and $50 million in any one location. The parent company also got another “all risks” policy (hereinafter “AR Policy”) issued by Allianz for the same period i.e. from 01.05.2008 to 01.05.2009 covering the stocks of its subsidiaries throughout the world being commercial lines policy. The limit of liability of the AR Policy was up to $ 100 million.

3. During subsistence of all these policies, on 13.07.2008, a fire broke out in one of the warehouses containing Levi’s stocks. On 18.07.2008, Levi claimed Rs. 12.20 crores from the insurer. The claim form furnished to the insurer on that date valued extent of loss to be slightly higher at Rs. 12.5 crores. However, on the instructions of the global insurer of the parent company, the Surveyor & Loss Assessor Mr. K.P. Sen submitted a status report on 28.07.2008 provisionally assessing the loss at a higher figure of Rs. 14.30 crores. The insurer i.e. the appellant appointed its professional surveyor, Professional Surveyors and Loss Adjusters Pvt. Ltd., for an assessment. The surveyor submitted the final Survey Report dated 08.08.2009 assessing the net loss at Rs. 11.34 crores. The insurer’s report recommended that it was not liable for the claim in view of Condition No. 4 in the SFSP Policy due to the policies issued by Allianz.

4. After considering the materials including Survey Report and the conditions of the policies, the insurer repudiated Levi’s claim on 11.09.2009. The repudiation letter stated as follows:

“The affected stocks in the present claim, at the hands of the logistics provider would squarely fall within the scope of the aforesaid Marine cover, being in storage in the course of movement to retail locations.

Condition No. 4 of the Fire Policy issued by us reads as under:

“4. This insurance does not cover any loss or damage to property which, at the time of the happening of such loss or damage is insured by or would, but for the existence of this policy, be insured by any marine policy or policies except in respect of any excess beyond the amount which would have been payable under the marine policy or policies had this insurance not been effected.”

“The Fire Policy thus excludes liability for such loss payable under marine policy, had the Fire Policy not been effected.

In view of coverage under the Companies Insurance Policy being a marine cover, Condition No. 4 of the Fire Policy is attracted and you have to recover the loss from the marine policy.

In fact Clause 47 of the marine policy stipulates that “where the Assured.... Are obligated by legislation or otherwise to arrange insurance locality, they shall continue to have the full benefits of these insurance in respect to difference in perils insured....”

Therefore, Clause 47 rather than excluding liability in such cases of local Policy being available, agrees to pay where loss is not payable u