Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2009(1) CPR 477
RAJASTHAN STATE CONSUMER DISPUTES REDRESSAL COMMISSION, JAIPUR
Sunil Kumar Garg, President and Mr. T.P. Gupta, Member
Rigid Global (India) —Complainant
versus
IFFCO Tokio General Insurance
Co. Ltd. & Ors. —Opp. Parties
Complaint No. 9 of 2006
Decided on 20.8.2007

Advocates:
Counsel for the Parties:
For the Complainant:Mr. V.N. Bohra, Advocate.
For the Opp. Party:Mr. P.K. Seth, Advocate.

IMPORTANT POINT
A principal is liable for the agent’s fraud acting within the scope of his authority, whether the fraud is committed for the benefit of the principal or for the benefit of the agent.

Headnote:Consumer Protection Act, 1986—Sections 12 and 17—Insurance Claim—Trade Protector Policy was taken covering five different locations—Loss occurred in one location due to heavy rains—Claim repudiated and resisted on ground that location of loss was in corporated by fabrication and policy had not been issued for said location—Cover note issued by the agent of O.P. mentioned four locations and sheet attached to it mentioned fifth location in question—Policy also included fifth location at the bottom—Plea that complainant got that fifth location added and included in collusion and connivance with agent or its employees—Heavy burden was on O.P. Insurance Co. to prove that a collusion and connivance had taken place—Whether insurance company could be held liable for act or fraud or misrepresentation done by its agent—Agent was having authority to issue cover note and he acted within scope of his authority—A principal is liable for agent’s fraud acting within scope of his authority, whether fraud was committed for benefit of principal or for benefit of agent—Insurance Company was liable to compensate complainant—Surveyor had assessed loss at Rs. 17,69,260/- and O.P. directed to pay that amount with interest at 9% p.a. from date of repudiation of claim. (Paras 11 to 16, 27 and 31 to 35)
       (ii) Consumer Protection Act, 1986—Section 2(1)(d)—Trade Protector Policy—Claim for loss of article in business place—Policy may be was taken for commercial purposes, complainant claim compensation for loss under policy was a consumer. (Para 4)
       Result: Complaint allowed.

ORDER

Sunil Kumar Garg, President—This complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act of 1986”) has been filed by the complainant against the opposite party, which are three in number, on 5.5.2006 with the prayer that the opposite party be directed to make the payment of Rs. 36,78,729.00 to the complainant.

2. The case of the complainant as put forward by him in the complaint is as follows:

The complainant-M/s. Rigid Global (India) is dealing in the office -furniture exclusively of imported quality having its offices-cum-godown at different locations and its head office is situated at Jaipur and the business is being carried out through Mr. Subash Vasvani, who is Principal Officer as well as duly constituted attorney for handling all sort of business activities.

The opposite party No.1 is an Insurance Company having its head office at New Delhi and also having one of the branches at Jaipur (opposite party No.2) and also having one of the agents/brokers at Jaipur (opposite party No.3).

The case of the complainant is that the complainant had taken insurance policy from the opposite party No.1 Insurance Company known as “Trade Protector Policy’ for a sum of Rs. 75,00,000 for the period from 25.7.2005 to 24.7.2006 for insuring the furnitures kept at following different five locations in India:

“(i) H-18l Malviya Nagar Industrial Area, Jaipur.

(ii) 843/1 Ghitorni Mehrauli-Gurgaon Road, New Delhi.

(iii) 17, 4th Block, 80 ft. Road, Koramangala, Bangalore.

(iv) 3 Town Centre, Saki Naka, Andheri Kurla Road, Andheri East, Mumbai-59.

(v) Building No.16, Licence Premises No.3, Ground Floor, Shree Compound, Kooper Bhiwandi.”

The further case of the complainant is that opposite party No.3 after taking premium from the complainant had issued a cover note along with proposal form sheet dated 23.7.2005 (Annex. A/lA from pages 22 to 25 of complaint} and in pursuance of that cover note Annex. A/lA, the opposite party No.1 Insurance Company had issued the Trade Protector Policy (Annex. A/1B from pages 26 to 32 of complaint) bearing No. 47020187 on 1.8.2005 in favour of the complainant for the period from 25.7.2005 to 24.7.2006 and for the five places as mentioned above and the sum insured was Rs. 75 lacs.

The further case of the complainant is that on 26.7.2005 there was unpredicted heavy rain in Mumbai and nearby areas, as a result of which, the godown situated at building No.16 licence premises No. 3, ground floor, Shree Compound, Kooper Bhiwandi (location No.5 in the policy in question) was fully drowned in flood water and the entire furnitures of the complainant stored in that godown were damaged and information about the said damages was given by the complainant to the opposite party No. 1-Insurance Company and upon this, the opposite party No. 1—Insurance Company had appointed Parimal R. Shah and Company, Mumbai as surveyor to assess the loss, who inspected the site so many times and the loss suffered by the complainant was shown to him. Thereafter, a claim was preferred by the complainant before the opposite party No. l-Insurance Company, but that claim was repudiated by the opposite party No.1 through letter dated 30.3.2006 (Annex. A/8 at page 52 of complaint) in the following manner:

“…..With reference to your captioned claim, we wish to inform you that the insurance policy which was granted to you for the period 25th July, 2005 to 24th July, 2006 as a renewal of the earlier Policy of Bajaj Allianz for the period 25th July 2004 to 24th July, 2005 provided coverage for property stored at only 4 locations at Jaipur, Mumbai, Bangalore and New Delhi.

The alleged damages suffered by you were in respect of property located at Building No. 16, Premises No.3, Ground Floor, Shree Arihant Compound, Vill. Kooper, Bhiwandi, which was not insured under the aforesaid policy on the date of loss. Accordingly, we regret to state that the claim is not tenable under the policy and we are closing o

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2009(1) CPR 477RAJASTHAN STATE CONSUMER DISPUTES REDRESSAL COMMISSION, JAIPURSunil Kumar Garg, President and Mr. T.P. Gupta, MemberRigid Global (India) —Complainant versusIFFCO Tokio General Insurance Co. Ltd. & Ors. —Opp. PartiesComplaint No. 9 of 2006Decided on 20.8.2007

IMPORTANT POINTA principal is liable for the agent’s fraud acting within the scope of his authority, whether the fraud is committed for the benefit of the principal or for the benefit of the agent.

2009(1) CPR 477
RAJASTHAN STATE CONSUMER DISPUTES REDRESSAL COMMISSION, JAIPUR
Sunil Kumar Garg, President and Mr. T.P. Gupta, Member
Rigid Global (India) —Complainant
versus
IFFCO Tokio General Insurance
Co. Ltd. & Ors. —Opp. Parties
Complaint No. 9 of 2006
Decided on 20.8.2007

IMPORTANT POINT
A principal is liable for the agent’s fraud acting within the scope of his authority, whether the fraud is committed for the benefit of the principal or for the benefit of the agent.