Andhra Pradesh High Court
Judges : B.S.RAIKOTE
N.Jaya Krishna - Appellant
Versus
UNITED INDIA INSURANCE CO - Respondent
Decided On : 09-30-94
INSURANCE - POLICY - RENEWAL - PREMIUM PAYMENT - DISPUTE - WRIT PETITION - MAINTAINABILITY - INSURANCE ACT, 1938, SECTION 64-VB - INTERPRETATION - COURT'S JURISDICTION.
Fact of the Case:
Petitioner's theatre was insured with the respondent insurance company. On 21-5-1991, the theatre was looted and burnt down during a state-wide arson and looting incident. Petitioner claimed compensation from the insurance company, which sent its officials to investigate the claim. The officials' report, dated 12-11-1991, was favorable to the petitioner. However, the insurance company submitted another report, dated 25-3-1994, denying the claim. Petitioner filed a writ petition seeking a direction to the insurance company to settle the claim.
Finding of the Court:
The court held that the writ petition was not maintainable. The dispute between the petitioner and the insurance company was contractual in nature and involved an enquiry into disputed questions of fact. Such disputes could not be adjudicated in writ jurisdiction. The court also held that the petitioner had an alternative remedy by way of a suit before a civil court.
Issues: 1. Whether the writ petition was maintainable? 2. Whether the insurance company was liable to pay compensation to the petitioner?
Ratio Decidendi: 1. A writ petition is not maintainable to enforce a contractual right which involves an enquiry into disputed questions of fact. 2. The liability of an insurance company to pay compensation under an insurance policy is a contractual liability and must be determined by a civil court.
Final Decision: The writ petition was dismissed at the admission stage. The court held that the petitioner had an alternative remedy by way of a suit before a civil court.
( 1 ) THIS Writ Petition is filed for the following relief:"to issue an appropriate writ, order or directions, directing the respondent to settle and pay the amount covered by policies nos. 050705/11/10013/00001/90 (From c. Policy) as renewed on 18-5-1991 together with interest at the rate of 18 percent per annum until 18-8-1994 forthwith in accordance with its statutory duty under the Insurance Act, 1938 (note to board has filed in the Madras High Court) in a sealed cover that was opened pass such further or other orders as it may deem fit and proper".
( 2 ) THE petitioner claims to be the sole proprietor of the firm J. K. Traders which owns ramakrishna 70 M. M. threatre in the N. T. R estate, J. N. Road, Hyderabad. It is the contention of of the petitioner that the said property was insured for a total sum of Rs. 90 lakhs for the year 1990-91 with the respondent - Insurance company. The original policy period was 2-4-1990 to 2-4-1991 containing three policies of Fire, Plates and Glasses and Machinery break down. The policies were insured at United insurance Company Limited, Annoor Branch, nizamabad district. It is further contended that even before 2-4-1991 three claims amounting to Rs. 2. 50 lakhs are pending with the Respondent- Company for settlement. With regard to the comprehensive Policy Nos. 050705/11/10013/00001/90 (Form C policy) correspondence was going on in the month of april, 1991 between the petitioner and the respondent regarding certain adjustment of the premium amounts. It is submitted that the petitioner drawn a cheque for a sum of Rs. 80,046/- towards the premium amount of the policies and posted it under certificate of posting along with the covering letter to the respondent. Meanwhile on 21-5-1991 when the national leader Sri Rajiv Gandhi was assasinated at Madras, there was a state wide arson and looting of the properties belonging to the persons of the opposite parties and in that arson and looting, petitioner s theatre was also looted and burnt down causing a total destruction and loss to the petitioner. The Collector and District Magistrate, Hyderabad, after due enquiry certified that the petitioner s firm sustained a loss of Rs. 1. 57 crores (vide page 80 of material papers ). It is further submitted that the government of Andhra Pradesh appointed a commission by G. O. Ms. No. 511, G. A. D. dated 12-8-1991 consisting of a single member, namely, Sri Justice M. R. A. Ansari, Retd. Chief Justice of Jammu and Kashmir to enquire into that incident and the report of the said Commission is at page 46 of the material papers. According to the said report, during that violence, looting and arson, destruction of the property occured due to the attack on the private properties belonging to the members of the opposite parties in the State including the Telugu Desam Party, even though there was no provocation by the members of opposite parties. It is further contended by the petitioner that petitioner has sustained heavy loss and the threatre in question was insured with the Respondent - United India Insurance company, Limited and it is legally bound to make good for the same in terms of the policy the petitioner has taken from the respondent. According to the petitioner, immediately after the incident of arson, looting and destruction of property on 21-5-1991, the petitioner has informed the Respondent - Insurance Company of heavy loss and damages sustained by the firm and requested them to settle the claim so as to make good the loss sustained by him according to the insurance policy. It is submitted by the petitioner that the respondent - Insurance company sent its officials to investigate into the facts relating to the claim made by the petitioner. Petitioner further contends that according to the report submitted by the officials of the Insurance Company, which is at page 85 of the material papers, it is clear that the petitioner had duly renewed the policy as required by law by sending the
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