Insurable interest is not restricted to ownership of the whole property, and the ownership issue is not relevant for settling the claim when there is no rival claimant to the insurance amount payable and when the insured's brother had not left behind any legal heir.

1. This appeal is directed against the judgment/order of the State Consumer Protection Commission (for brief "the Commission") allowing the respondents complaint and directing the appellant to pay him Rs.2, 87, 775 with 12 % interest.

2. The respondent had lodged a complaint with the Commission claiming that he owned a residential house in Degam Nagbal, Tehsil Shopian which he had insured with the Appellant Company on 25th March, 1997 under an insurance policy which was valid till 24th May, 1998. He was a migrant and while he was in Jammu he learnt about this house having been destroyed in fire. So he, accordingly, lodged a claim before the Appellant Company which was not settled for one reason or the other and also on the objection that the house in question was jointly owned by him and his brother, Omkar Nath. His further case in the complaint was that his brother had died on 16th March, 1993 and he had taken his daughter in adoption. Moreover, he had taken the insurance policy much after in 1997and that there was no claim from any legal heir of his brother as he had not left behind one.

3. This complaint was resisted by the Appellant Company on several grounds and, primarily, on the plea that the respondent had failed to disclose the material fact of half of the house being owned by his brother, Omkar Nath, while taking the insurance policy. Therefore, it was to be deemed that he had insured only half of the building and not the full and that he would be entitled only to half of the loss assessed.

4. The other objections taken by the Appellant Company are not material for our purpose and no reference is required to be made to these.

5. The Commission, on this, took the view that the respondent had insurable interest in the property and that his claim could not be denied on the basis that he had not full ownership of the house. Since the Appellant Company accepted the premium of insurance cover of the whole property, it could not dispute that the respondent was not the sole owner.

6. It was on this premise that the Commission allowed the respondents claim and directed the Appellant Company to pay him Rs.2, 87, 775 with 12 % interest.

The Commission held as under:

"...We have given deep thought to these arguments and have examined section 2 of the Insurance Act. Section 2 lays stress only on insurable interest. According to this section it is not necessary that the insured should be wholly and solely owner of the house. It is not restricted to the ownership of the whole house but it is restricted, according to section 2, only to insurable interest. Insured must have some interest for the preservation of the property which he is going to insure with the Company. In the present case admittedly the claimant is the owner of the half of the property. So it can definitely be said that he has got insurable interest in the property. The claim cannot be denied on the basis that the claimant is not the full owner of the house. It is exercise in futility on behalf of Insurance Company to open the Pandora box at the time of accepting the claim whether insured was sole owner of the property or not. They have accepted the premium of insurance cover of the whole property. They cannot, later on, dispute that the claimant is not the sole owner...".

7. The appellant is questioning this judgment/order passed by the Commission. Its counsel, Mrs. Zainab Watali, submits that a contract of insurance was a contract of faith and since the respondent had failed to furnish the requisite information and had failed to disclose the material particulars about the ownership of the house, which he was sharing with his brother, the insurance contract became voidable and so was the insurance policy vitiated. She referred to some provisions of the Contract Act to suggest that such a contract, which was tainted by misrepresentation, mis-description and non-disclosure becomes voidable which would have the consequence of discharging the Appellant Company of it