The main legal point established in the judgment is the entitlement of the plaintiff to the total policy amount of Rs.1,30,000 as damages from the 1st defendant/Insurance Company and the modification of the rate of interest awarded by the trial Court.

JUDGMENT :

VENUTHURUMALLI GOPALA KRISHNA RAO, J.

1. Aggrieved against the judgment and decree dated 06-11-2002 in O.S. No. 18 of 1996 passed by the Principal Senior Civil Judge, Eluru, West Godavari District, the 1st defendant/Insurance Company filed the appeal and the cross-objections are filed by the plaintiff challenging the rate of interest of 6% per annum awarded by the trial Court from the date of suit till the date of realization. The 2nd respondent herein is the 2nd defendant/bank in the said suit.

2. The parties will hereinafter be referred to as arrayed before the trial Court.

3. The brief averments in the plaint are as follows:

(a) The plaintiff as a proprietary concern carrying on tobacco industries from 1984 onwards in the premises bearing Door No. 16B-2-2, Thangellamudi, belongs to one Razia Begum. During the year 1987, one Srilakshmi, plaintiff’s mother, purchased a vacant site of 268 square yards situated in Kandrikagudem. The plaintiff’s sister also purchased another extent of 536 square yards to the east of the plot of the plaintiff’s mother. Both the sites are continues as one block. The plaintiff’s mother gifted the site with tiled shed therein to the plaintiff in the year 1983. The plaintiff also took on lease the sites and sheds therein belong to his sister Prameela Devi and shifted his business in 1988 to the new premises. The said two plots being continues bearing Door Nos.1-333 and 1-333.

(b) The plaintiff used to avail open cash credit facility from the 2nd defendant/Bank from 1984 onwards and the loan limit was enhanced from time to time and ultimately enhanced to Rs.1,30,000/-in the year 1993.

(c) The cash credit facility was extended to the plaintiff by the 2nd defendant against the hypothecation of the stock in trade kept in the premises of the plaintiff. As per the guidelines of the Reserve Bank of India, the 2nd defendant/Bank insured the stock and paid the premium giving due credit to the account of the plaintiff. Accordingly, the 2nd defendant/Bank on behalf of the plaintiff obtained the insurance policy from the 1st defendant/Insurance Company for the period from 12-12-1992 to 11-12-1993 for a sum of Rs.1,30,000/- and the premium was paid by the Bank. On 23-4-1993 around 12.45 Noon, there was a fire accident in the plaintiff’s new premises due to electrical short-circuit and the entire stock was burnt. The plaintiff informed the same to both the Bank and Insurance Company. After the fire accident, the 1st defendant’s Surveyor also visited the premises and estimated the loss. The Field Officer of the Bank also visited the premises and took note of the fact that the entire tobacco stock was reduced into ashes. When the plaintiff made a claim, he was informed through letter dated 27-4-1993 by the 1st defendant that his claim was repudiated on the ground that the door number mentioned in the proposal form is at variance with the door number of the premises where the fire accident took place.

(d) Further, the Bank as well as Insurance Company is quite aware of his shifting of old premises in the year 1993. The correspondence between the plaintiff and the 2nd defendant itself discloses that he is carrying on business with Door Nos.1-333 and 1-333/1. The 1st defendant/Insurance Company with a dishonest intention, taking advantage of the wrongly noted door number by the 2nd defendant in the proposal, it repudiated his claim. He never made any fraudulent misrepresentation or suppressed any material fact from the knowledge of the Insurance Company and it has only dishonestly declined and repudiated the claim. Even the 2nd defendant/Bank is liable to compensate the plaintiff in damages estimated to Rs.1,30,000/- along with interest at 15.5% per annum. Therefore, the plaintiff was constrained to file the suit against both the defendants.

4. The 1st defendant/Insurance Company filed a written statement contending that their staff inspected the hypothecated stock of the plaintiff, but the insurer agent has not veri