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TAMIL NADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI
R. Subbiah, President and Dr. S.M. Latha Maheswari, Member
Branch Manager, M/s. United
India Insurance Co. Ltd. – Appellant
versus
M.P. Mohandass – Respondent
F.A. No.298 of 2019
(Against the Order, dated 20.08.2019 of the DCDRC, Chennai (North), in C.C. No.58 of 2018)
Decided on 4.2.2022

Counsel for the Parties:
For the Appellant:M/s. Nageswaran and Narichania, Advocates
For the Respondent:Mr. M.P. Mohandass, Advocate

IMPORTANT POINTS
(1) Voidable policy – when the complainant himself, by his own acts, rendered the Policy absolutely voidable, cannot be allowed to succeed on the ground of delay in repudiation having regard to the specific counter-claim that the complainant contributed for such delay by belatedly submitting the documents required by the Surveyor.
(2) Void policy – A mere delay cannot be a premium to validate the Policy, which had already become void.

Headnote:
Consumer Protection Act, 1986 – S.15 [Consumer Protection Act, 2019 – S.41] – Services – Insurance – Fire Accident – Repudiation of Claim – Appeal Against order of District Commission whereby Insurance Company was directed to pay the claim amount – Whether the District Forum, before fastening the liability upon the Insurer on the main ground of delayed repudiation, in the light of various documents marked, the crucial points viz., change in proprietorship as well as change in nature of business and storage of hazardous goods in the Unit contrary to the policy conditions & warranty – District Forum miserably deviated itself by refraining from delving into the core issues as pointed out above and, in a way, dragged itself to pointlessly dive into the issue of ownership of the Property so as to record the ultimate findings against the Insurance Company – The sole reason given by the District Forum to hold against the Insurer for deficiency in service is that the repudiation letter/Ex.A18, dated 09.03.2018, is highly belated – Although, as per the Insurance Regulatory and Development Authority, repudiation cannot be made after a long time, the considered view of State Commission, having regard to the peculiar facts and circumstances of the present case, such technical reason is not hefty enough to dilute the outweighing factor viz., clear breach of the Warranty as well as policy condition Nos.1 and 3, rendering the policy itself void because of clear instances of mis-representation, mis-description and non-disclosure of material particulars, as adverted to above – Therefore, when the complainant himself, by his own acts, rendered the Policy absolutely voidable, cannot be allowed to succeed on the ground of delay in repudiation having regard to the specific counter-claim that the complainant contributed for such delay by belatedly submitting the documents required by the Surveyor – Thus, at any rate, in a case of this nature, mere delay cannot be a premium to validate the Policy, which had already become void – Therefore, Appeal is allowed and the impugned Order is set aside. [Paras 10, 11].
Held: To put it otherwise, running a manufacturing unit after insuring the place as Godown and storage of hazardous goods there-at, when the policy coverage is not for “hazardous goods” and “manufacturing unit”, are clear instances of breaching the policy conditions/warranty that can never be justified for the reason of delay in repudiation.
Result: Appeal allowed.

ORDER

R. Subbiah, President.—Aggrieved by the Order, dated 20.08.2019, passed by the District Consumer Disputes Redressal Forum, Chennai (North), in partly allowing C.C. No.58 of 2018, in favour of the respondent herein/complainant/insured, by directing the appellant herein/Opposite Party/Insurance Company to pay Rs.2,79,000/- towards the claim amount, Rs.30,000/- towards compensation for mental agony and Rs.5,000/- towards costs, the Insurance Company has come up with the present First Appeal before this Commission.

2. For the sake of convenience, the parties shall be referred to herein, as per their nomenclature before the District Forum.

3. The case of the complainant, as projected in the complaint before the District Forum, in brief, is as follows:-

The complainant had started a Wooden Manufacturing Unit in the year 1982, at No.67, Tiny Sector, Guindy Industrial Estate, Ekkaduthangal, Chennai-600032. The Unit under the area consisting of 2000 sq. ft. of Industrial Shed in the land measuring about 2400 sq. ft., was covered by brick walls on all sides, leaving the main entrance and side open. For developing the manufacturing activity, the Unit thereafter was transferred in the name of Mrs. M. Jayanthi, wife of the complainant. Subsequently, along with manufacture of wooden furniture, a new trade of Injection Moulded Plastic Items came to be pursued in the Unit. Such modification in the nature of business was after an order, dated 09.08.2010, from the Small Industries Development Corporation (hereinafter referred to as the SIDCO). The complainant had insured the said Unit with the Opposite Party by obtaining a Standard Fire and Special Perils Policy (hereinafter referred to as SFSP Policy), dated 14.03.2012, with validity from 14.03.2012 to 13.03.2013, vide Policy No.010503/11/11/11/00000281.

While so, on 29.02.2012 at about 10.15 P.M., the complainant was informed by a neighbour that his Unit was under fire. Before they could reach the premises, the entire Unit with machinery was destroyed by fire, whereupon, the incident was timely informed to the Opposite Party on 30.10.2012 and to other authorities including the SIDCO, TNEB and Corporation of Chennai. The Manager of the Opposite Party, while informing the complainant that one Mr. Kothandaraman was appointed as Surveyor to present a Report, instructed the complainant to fix an independent Surveyor on his own, since a Report by such Surveyor would be necessary for further verification. Accordingly, the complainant engaged an expert Engineer/Mr. Poornachandran, who visited the premises on 30.10.2012 and presented a Report, dated 31.10.2012, estimating the total loss as Rs.15,51,155/-.

The Surveyor appointed by the Opposite Party had sought for certain documents from the complainant and those documents were also furnished. After the incident, the complainant had put up a new shed for manufacturing purpose and the same was insured by him with the Opposite Party under SFSP Policies, covering the period between 14.02.2014 and 28.09.2017.

Since there was considerable delay on the part of the Surveyor in giving the Report, by letter, dated 29.01.2018, the complainant insisted upon the Opposite Party to settle the claim amount at the earliest, however, there was no reply at all by the Opposite Party. The matter was pending from October, 2012, and the lull on the part of the Opposite Party exhibited utter slackness, hence, the complainant issued a legal notice, dated 23.02.2018, calling upon them to settle the claim amount/compensation. While so, by letter dated 09.03.2018, the Opposite Party repudiated the claim by stating among other things that the property in question was transferred in the name of the complainant’s wife on 09.08.2010 itself by the SIDCO, however, the policy was taken in the name of the complainant, thereby, there is no insurable interest to the complainant. Aggrieved by such repudiation, the complainant approached the District Consumer Forum, Chennai No

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