1989 Supreme(Gau) 52

GAUHATI HIGH COURT
S.K.Homchaudhuri, J.
Oriental Fire and General Insurance Company Ltd., Divisional Officer, Gauhati -Appellant
Versus
Dotco, Badarpur, Cachar -Respondent
First Appeal No. 53 of 1977
Decided On : 31-03-1989

In case of total destruction of insured property, the onus is on the insurer to establish that the total property was not destroyed.

Headnote:

INSURANCE - FIRE INSURANCE - CLAIM FOR TOTAL DESTRUCTION OF INSURED PROPERTY - ONUS ON INSURER TO ESTABLISH THAT TOTAL PROPERTY WAS NOT DESTROYED - INTEREST ON DECRETAL AMOUNT - AWARD OF INTEREST @ 12% PER ANNUM FROM THE DATE OF INSTITUTION OF SUIT TO THE DATE OF PAYMENT OF DECRETAL AMOUNT DUE TO INFLATION AND FALL OF RUPEE VALUE.

Fact of the Case:

Plaintiff's shop and insured goods were completely gutted by an accidental fire. The insurer initially offered a settlement amount, but later disputed the claim and refused to pay the full insured sum. The plaintiff filed a suit for recovery of the insured money.

Finding of the Court:

The court held that the onus was on the insurer to establish that the total property was not destroyed, as the plaintiff had established that the entire insured goods were gutted by fire. The court also awarded interest on the decretal amount at the rate of 12% per annum from the date of institution of the suit to the date of payment of the decretal amount, considering the inflation and fall of rupee value during the pendency of the litigation.

Issues: 1. Whether the plaintiff had a cause of action? 2. Whether the suit was maintainable in its present form? 3. Whether the suit was bad for estoppel, acquiescence, and waiver? 4. Whether the court had jurisdiction to try the suit? 5. Whether the plaintiff's claim was just, proper, and legal? 6. Whether the plaintiff had delivered claims in terms of the policy, and if not, whether the suit was maintainable? 7. Whether all benefits under the policy should forfeit in view of the conditions of the policy? 8. Whether the claim of the plaintiff was barred by law of limitation and by the conditions of the policy? 9. To what relief, if any, the plaintiffs were entitled?

Ratio Decidendi: 1. The court held that the plaintiff had a cause of action as the insurer had refused to pay the full insured sum despite the plaintiff establishing the total destruction of the insured goods. 2. The court held that the suit was maintainable in its present form as the plaintiff had complied with the conditions of the policy and had provided sufficient evidence of the loss. 3. The court held that the suit was not bad for estoppel, acquiescence, and waiver as the plaintiff had not made any misrepresentations or concealed any material facts from the insurer. 4. The court held that it had jurisdiction to try the suit as the cause of action arose within its jurisdiction. 5. The court held that the plaintiff's claim was just, proper, and legal as the plaintiff had suffered a genuine loss due to the accidental fire. 6. The court held that the plaintiff had delivered claims in terms of the policy and that the suit was maintainable. 7. The court held that all benefits under the policy should not forfeit as the plaintiff had not breached any of the conditions of the policy. 8. The court held that the claim of the plaintiff was not barred by law of limitation or by the conditions of the policy. 9. The court held that the plaintiff was entitled to the full insured sum, interest on the decretal amount at the rate of 12% per annum from the date of institution of the suit to the date of payment of the decretal amount, and costs.

Final Decision: The court dismissed the appeal filed by the insurer and allowed the cross-objection filed by the plaintiff to the extent of awarding interest at the rate of 12% per annum on the decretal amount from the date of institution of the suit to the date of payment of the decretal amount.