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2012 Supreme(Del) 1618
High Court of Delhi
ANIL KUMAR
M/s. Jalpac India Ltd.
versus
United India Insurance Company Limited
W.P.(C) No. 7525 OF 2005
Decided on : 02-07-2012
For the Petitioner:Rajiv Tyagi & Ajay Kumar, Advocates.
For the Respondent:A.K. De & Devabrata Kumar, Advocates.
The judgment established the principle of insurable interest and rejected the contention of a wagering contract, emphasizing the liability of the respondent under the Marine Insurance Act, 1963.
Headnote:
Marine Insurance - Partial Repudiation of Claim - Marine Insurance Act, 1963 - Sections 10, 34, 80 - Double Insurance - Insurable Interest
Fact of the Case:
The petitioner, a limited company, purchased a vacuum metallizer from a foreign seller and insured it under a marine cargo policy. The machinery was damaged during transit, and the petitioner raised a claim for Rs. 32,45,758. The respondent partially repudiated the claim, citing double insurance and limited liability.
Finding of the Court:
The court found that the petitioner had paid the entire sale consideration to the seller before raising the claim, establishing insurable interest. The court rejected the respondent's contention of a wagering contract and lack of insurable interest. The court held the respondent liable to pay Rs. 25,85,706 to the petitioner and allowed the petitioner to pursue the disputed amount through appropriate proceedings.
Issues: Dispute over the partial repudiation of the insurance claim, applicability of double insurance, insurable interest, and liability of the respondent.
Ratio Decidendi: The court held that the petitioner had insurable interest and rejected the respondent's contention of a wagering contract. The court found the respondent liable to pay the petitioner Rs. 25,85,706 and allowed the petitioner to pursue the disputed amount through appropriate proceedings.
Final Decision: The court partly allowed the writ petition, quashed the partial repudiation of the claim, and directed the respondent to pay Rs. 25,85,706 to the petitioner. The petitioner was also awarded simple interest and costs. The petitioner was allowed to pursue the disputed amount through appropriate proceedings.
ANIL KUMAR, J.
1. The petitioner has sought quashing of the letter No. DO:XXIV:GA:485:04 dated 7th October, 2004 issued by the respondent, partially repudiating the claim of the petitioner under the Marine Policy No.042400/21/03/00111 and has also sought directions to the respondent, to forthwith settle the claim of the petitioner as per the petitioner’s letter of claim dated 23rd February, 2004 and direct the respondent to pay the amount due to the petitioner.
2. The petitioner is a limited company, engaged in the manufacture and sale of metalized and coated films and papers. On 13th May, 2002 the petitioner agreed to purchase one vacuum metallizer (Machinery) from M/s Valmet General Limited, England for a total value of GBP 644,575. The consideration was payable in installments duly covered under irrevocable bank guarantees/letter of credit. Twenty per cent of the value of the machinery was paid by the petitioner as down payment, after which 12 installments of GBP 25,783 were paid by 5th June, 2006 and 8 more installments were payable for GBP 25,783 till 25th May, 2008. According to the petitioner he stood in the capacity of a borrower qua the State Bank of India and has discharged all his liabilities towards the foreign seller.
3. The machinery purchased by the petitioner was to be installed at the petitioner's Plant at Haldwani and in order to ensure, secured and safe delivery, the petitioner took a marine cargo (Specific Voyage Policy) bearing Policy No. 042400/21/03/00111 dated 23rd July, 2003 for a total assured sum of Rs.5,50,91,864/- from the respondent against any loss/damage occurring to the machinery during transit from Port to Haldwani. The petitioner paid the insurance premium of Rs. 1,24,949/- on 23rd July, 2003. The premium of Rs.1,24,949/- had been paid and another premium had been paid on the same machinery for another insurance policy, namely, Storage cum Erection Insurance Policy. According to the petitioner a total sum of Rs. 2,88,343/- was paid as premium on the Marine Cargo (Specific Voyage policy) and the Storage cum Erection Insurance Policy.
4. The machinery had arrived at Mumbai Port on 5th August, 2003 in good condition, which was duly established on inspection by the Insurance Surveyors of M/s A.S. Sheikh and Company. The inspection report dated 5th August, 2003 of M/s Sheikh and Company has been produced as Annexure P-2 by the petitioner. The survey of the boxes of the machinery did not reveal any damage to the machinery except that four of the boxes were lying in the open whereas two other boxes were at the appropriate place.
5. The machinery was delivered at the petitioner's warehouse at Haldwani on 11th August, 2003. However, on opening the packed cases, it transpired that the machinery had got damaged during the course of transit from Mumbai Port to Haldwani. Both the diffusion pumps of the vacuum metallizer had cracked and the elbow of one of the pumps had bent and was damaged beyond repair. Consequently, on 14th August, 2003 the Divisional Manager of the respondent was informed about the damage and also sought for conducting a survey for assessment of loss estimated at Rs. 50 lakhs. .
6. The respondent, also deputed a Surveyor, namely Mr. J.C. Joshi, who made a survey and gave a preliminary survey report dated 16th August, 2003 and estimated the loss at Rs.50 lakhs. Thereafter, the petitioner, lodged a claim by letter dated 23rd February, 2004 for the replacement of the damaged machinery valued at Rs. 32,45,758/- plus Custom Duty. Subsequently, the respondent appointed another Insurance Surveyor and Loss Assessor, M/s. V.K. Kharbanda & Associates, to assess the petitioner’s claim for the loss or damage caused due to road or rail transit. The said loss assessor by its report dated 10th March, 2004 assessed the loss at Rs. 17,52,592/- taking into account the Custom Duty of 5% excluding the cost of nozzle assembly valued at Rs. 7,60,052/-by the petitioner, as it was not determine
