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High Court Of Delhi
HANUMAN INDUSTRIES - Appellant
Versus
NEW INDIA ASSURANCE COMPANY LIMITED - Respondent
Decided On : 07/19/1996
INSURANCE - ENHANCEMENT OF INSURANCE COVER - PAYMENT OF ADDITIONAL PREMIUM - ASSUMPTION OF RISK - INSURANCE ACT, 1938, SECTION 64-VB - INTERPRETATION - BURGLARY - LOSS COVERED BY INSURANCE POLICY.
Fact of the Case:
The plaintiff, a registered partnership firm, insured their stocks of finished and semi-finished goods and raw materials with the defendant insurance company through their bankers, the defendant bank. The plaintiff subsequently expanded their business to include the manufacture of C.P. Bathroom fittings, and the defendant bank informed the insurance company of this addition and requested an enhancement of the sum insured from Rs. 80,000 to Rs. 1,50,000. The defendant bank paid the additional premium of Rs. 134 for the enhanced sum assured by cheque on November 2, 1982. On the night of November 8/9, 1982, there was a burglary at the plaintiff's factory, and a number of brass raw materials were stolen. The plaintiff filed a claim with the insurance company, but the claim was rejected.
Finding of the Court:
The court found that the defendant insurance company had received the additional premium for the enhanced sum assured on November 2, 1982, and that the risk was assumed by the insurance company on that date, as per the provisions of Section 64-VB of the Insurance Act, 1938. The court also found that the burglary that occurred on the night of November 8/9, 1982, was covered by the insurance policy, as the limit of the assured amount had been raised to Rs. 1,50,000 on November 2, 1982.
Issues: 1. Whether the limit of insured amount was raised from Rs. 80,000.00 to Rs. 1,50,000.00 and the additional premium of Rs. 134.00 was not paid on 2.11.1982 by cheque dated 2.11.82 through defendant No. 2 bank? 2. Whether the loss by burglary which took place on 9.11.82 is not covered by the said insurance policy?
Ratio Decidendi: The court held that the insurance company was liable to pay the plaintiff the sum insured of Rs. 1,50,000, as the risk was assumed by the insurance company on November 2, 1982, when the additional premium was received, and the burglary that occurred on November 8/9, 1982, was covered by the insurance policy.
Final Decision: The court decreed the suit in favor of the plaintiff for an amount of Rs. 1,43,473.00 against the defendant insurance company, with pendente lite and future interest at the rate of 18% per annum from the date of institution of the suit till the date of realization, and with costs.
( 1 ) THE plaintiff is a registered partnership firm and is carrying on the business of motor parts Sanitary fittings tube well sockets, pipe sockets, pipes and pipe fittings. Initially the plaintiff was carrying on the business of manufacturing motor parts and in May, 1982, the plaintiff commenced all sorts of business of manufacture and production of C. P. Fancy Bathroom fittings etc. , for which brass scrap and other brass raw materials were stocked by the plaintiff in their factory at A-53, Noida, Ghaziabad.
( 2 ) THE plaintiff firm had insured their stocks of finished and semi-finished goods and raw materials pertaining to their business which were lying in their factory at the aforesaid premises with the New India Assurance Company Ltd. , being defendant No. 1 through their Bankers namely, defendant No. 2 bank under Insurance Policy No. 55160-05075 dated 26th March, 1982, for Rs. 80,000. 00.
( 3 ) AFTER the plaintiff started addition of their business of manufacture of C. P. Bathroom Fittings etc. , the defendant No. 2 bank vide their letter dated 5. 8. 1982, informed the defendant No. 1 that the plaintiff had also added the production of C. P. Fancy Bathroom fittings in their factory situated in their aforesaid factory and forwarded a copy of the plaintiff s letter dated 2. 7. 1982 to them requesting them to cover the above noted products in the policies noted therein.
( 4 ) THE defendant No. 2 bank within their authority also wrote to defendant No. 1 to enhance the sum insured from Rs. 80,000. 00 to Rs. 1. 50. 000. 00, and the latter enhanced the assured amount from Rs,80,000. 00 to Rs. 1,50,000. 00 vide Endorsement No. 1516031813 attached to the Insurance Policy No. 1516006312. The defendant No. 2 bank also paid the additional premium of Rs. 134. 00 for the enhanced sum assured as aforesaid by Cheque No. 955210 dated 2. 11. 1982 alctigwithcoveringletterdated2. 11. 1982 to the Agent/ Representative of defendant no. 1 namely, Shri O. P. Sharma, Development Officer of defendant No. 1 after obtaining his signature in token of acknowledging the. receipt thereof on the office copy of the aforesaid covering letter.
( 5 ) IN the aforesaid manner, it is averred in the plaint, the stock of brass, scrap, brass fittings and raw materials including brass borada lying in the plaintiffs aforesaid factory were duly insured under the said Insurance Policy and the assured sum was Rs. 1,50,000. 00 on 2. 11. 1982 against burglary, fire, etc. , and that there was a valid and subsisting contract of insurance between the plaintiff and defendant No. 1 under which defendant no. 1 was liable to pay to the plaintiff the assured sum of Rs. 1,50,000. 00 in case of loss by burglary or fire etc.
( 6 ) ON the night of 8th/9th November, 1982, there was a burglary in the plaintiff s aforesaid factory and number of brass raw material, Zasta (Zinc) etc. , were stolen by miscreants. The plaintiff immediately lodged F. I. R. at 2. 30 a. m. on 9. 11. 1982 with the local Police Station Noida under section 457/380 Indian Penal Code regarding the said burglary on 9. 11. 1982 and also informed the defendant No. 2 Bank personally at 10. 15 a. m. on 9. 11. 1982. The defendant No. 2 bank informed of the said burglary to defendant no. 1 on telephone and vide letter dated 9. 11. 1982, with a copy to the plaintiff requesting the defendant No. 1 to arrange for assessment of loss/damage that occurred by virtue of the said burglary fully covered under the aforesaid Assurance Policies.
( 7 ) THE defendant No. l deputed their surveyors who visited the plaintiff s factory on 12th November, 1982 and also checked the Stock register, cash book, ledger and invoices of raw materials maintained by the plaintiff and also verified the stock statements and the bills which were filed by the plaintiff with the bank, the defendant No. 1. However, by letter dated 17. 8. 1983, the defendant No. 1 rejected the plaintiffs claim without assigning any reason whereupon the pla
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