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2019 Supreme(Mad) 1309
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. VAIDYANATHAN, J.
M/s. Tarapore & Co., Dhun Building, Chennai, Rep. by its Partner, N. Radhakrishnan - Appellant
Versus
United India Insurance Company Limited, Rep. by Senior Divisional Manager, Anna Salai - Respondent
C.S.(Comm. Div.) No. 440 of 2012
Decided On : 10-06-2019
For the Plaintiff :R. Murari, Senior Counsel for M/s. Aditi, K.K. Muralitharan, Advocates.
For the Defendant :Ramachandran for M/s. Nageswaran & Navichania, Advocates.
Headnote:
Civil Procedure Code,1908 - Order VII Rule 1 - Original Side - Order IV Rule 1 - Contract Act,1872 - Section 28 - Companies Act, 2013 - Section 2(72) - Partnership Act - Section 69(2) - Limitation Act - Article 44(b) - Miscellaneous and Special Type of Vehicles Package Policy - Insurance Policy - Claim of Compensation - Company is into business of execution of large civil and engineering construction work for Government and Private Organizations for last eight decades and Company was awarded a contract by M/s Tata Steel Limited for certain engineering works to be carried out at Tata Steel Complex at Jamshedpur - For purpose of execution of said work Company had purchased a Tata Hitachi Heavy Duty Crane bearing Chassis from M/s. Telco Construction Co Ltd Jamshedpur for - It was submitted by Company that Company had clearly mentioned in proposal of insurance that Crane was proposed to be deployed inside premises of Tata Steel Ltd in Jamshedpur and accordingly Defendant had issued an Insurance Policy with title Miscellaneous and Special Type of Vehicles Package Policy in year with coverage of accidental damage to Crane and other incidents set out therein - It was also submitted that Insurance Policy was also periodically renewed and Company had paid premium every now and then for renewed policy as stipulated by Defendant - It was case of Company that Defendant was well aware of fact that Crane was going to be deployed within Tata Steel Company at Jamshedpur and in that regard there were exchange of several communications between Company and Defendant - Alleged accident had taken place and claim of Company was repudiated by Defendant - Plaintiff should have initiated action within period of months from date of accident/repudiation as per Condition as claim was also not a subject matter of any pending action or arbitration during period of months from date of occurrence or disclaimer and therefore Company had no right whatsoever to make such a claim - Whether Company is a registered Partnership Firm or not need not be gone into at this stage as admittedly Crane was not in operation at own premise of Company and Company having violated terms and conditions of Insurance Policy is not entitled to any relief - Is it not responsibility of Company to establish same before Law Court by way of oral and documentary evidence? - It was reiterated in Written Arguments that since Plaint was filed beyond prescribed period under Contract claim is barred by limitation - Moreover suit is bad for non-joinder of necessary parties as Banker of Plaintiff is not a party to suit proceedings - Company is bound by terms and conditions of Policy attached therein and upon a detailed assessment and evaluation of claim in connection with Policy claim of Company was repudiated as early as claim is against Clause IMT - Held, It is a well settled position in law that while reading contents of commercial documents intention of parties has to be taken into consideration - It is also well settled that apart from recitals main agreement itself also has to be taken into consideration - Perusal of Recitals will indicate that Recitals narrate circumstances under which earlier agreements viz Master Debt Recast Agreement Preference Share Subscription Agreement and Loan Purchase Agreement were entered into between parties and if Recital is read in its proper perspective it would indicate that present agreement was executed for purpose of securing entire loan of Kingfisher Airlines Limited which was to be purchased by Plaintiff - UBHL under Loan Purchase Agreement - It cannot be forgotten that Loan Purchase Agreement makes clear distinction between pledged shares and equity shares for purpose of securing existing loan - Clauses provided for top-up of pledged shares - At same time equity shares - CCPS also is secured by clauses and Plaintiff - UBHL was under an obligation to cover short-fall if any on sale of equity shares - Non-Disposal Agreement therefore covers both pledged shares as well as short-fall on sale of equity shares - CPPS since Recital speaks about fulfillment of all obligations of Plaintiff - UBHL under Loan Purchase Agreement - Clear that Crane was insured with Defendant with an assurance that it would be used in own premises in order to avoid payment of higher premium as usage of Crane at third party premises would fetch an exorbitant premium and Company had also availed benefit of discount based on such assurance and after accident and on repudiation of claim by Defendant Company cannot be permitted to make a huge hue and cry more particularly when it was own admission of their own witnesses to effect that no prior intimation was given to Insurance Company regarding operation of Crane in address other than one mentioned in Policy - Though there was an exception in IMT when service of vehicle is absolute for a machine to fight a fire it was not case of Company that Crane was moved to third party place for said purpose whereas it was damaged while loading pipelines - Company being a reputed Firm in India must have maintained a register in order track details of such important communications documents correspondences etc and failure to do so instills doubts in minds of this Court to accept said submission - Suit Dismissed
(Prayer: Plaint filed under Order IV Rule 1 of the O.S. Rules read with Order VII Rule 1 of C.P.C., seeking a) to direct the Defendant to pay the Plaintiff a sum of Rs.1,08,04,597/- together with further interest at 18% p.a. on the Principal Sum of Rs.70,15,972/- from the date of suit till the date of realization and b) to direct the Defendant to pay the cost of the suit.)
This Civil Suit has been filed by the Plaintiff for a direction to the Defendant to pay the Plaintiff a sum of Rs.1,08,04,597/- together with further interest at 18% p.a. on the Principal Sum of Rs.70,15,972/- from the date of suit till the date of realization, with further direction to the Defendant to pay the cost of the suit.
The case in nutshell is as follows:
2. The Plaintiff-Company (hereinafter referred to as 'the Company') is into the business of execution of large civil and engineering construction work for Government and Private Organizations for the last eight decades and the Company was awarded a contract by M/s. Tata Steel Limited for certain engineering works to be carried out at the Tata Steel Complex at Jamshedpur. For the purpose of execution of the said work, the Company had purchased a Tata Hitachi Heavy Duty Crane (in short 'the Crane'), bearing Sl.No.H1-50-045-0020 (Engine No.25214013, Chassis No.HI-50-045-0020) from M/s. Telco Construction Co. Ltd., Jamshedpur on 17.07.1999 for Rs.3,01,80,509/-;
2.1. It was submitted by the Company that the Company had clearly mentioned in the proposal of insurance that the Crane was proposed to be deployed inside the premises of Tata Steel Ltd., in Jamshedpur and accordingly, the Defendant had issued an Insurance Policy with the title “Miscellaneous and Special Type of Vehicles Package Policy” in the year 1999 with the coverage of accidental damage to the Crane and other incidents set out therein. It was also submitted that the Insurance Policy was also periodically renewed and the Company had paid the premium every now and then for the renewed policy as stipulated by the Defendant. It was the case of the Company that the Defendant was well aware of the fact that the Crane was going to be deployed within the Tata Steel Company at Jamshedpur and in that regard, there were exchange of several communications between the Company and the Defendant;
2.2. It was the further case of the Company that while so, on 14.06.2007, the Crane met with an accident in the job site and the Company immediately addressed a letter to the Defendant for a spot survey, for which, the Defendant had requested the Company to submit the estimate of repairs and the inspection was done by a Surveyor, namely, Mr. Pramod Yadav. The Company had also submitted a claim for an amount of Rs.70,15,972.38 along with all the supporting documents;
2.3. It was the grievance of the Company that though the Office of the Defendant had further done a re-inspection of the Crane at the site, thereafter, there was no response from the Defendant to the claim made under the Insurance Policy, despite sending two reminders to the Defendant on 07.02.2009 and 20.04.2009, requesting for early settlement of their insurance claim. When such a claim was made by the Company in respect of an Excavator in 1990, the work order was issued and the claim was settled by the Office of the Defendant based on the Note of Agreement of the Surveyor of the Defendant and the Plaintiff. It was stated that the Defendant was duly appraised of the fact that the Driver of the Company was authorized to drive a Heavy goods vehicle anywhere in India and at the time of accident, he was no longer in service;
2.4. It was the further grievance of the Company that to the shock and surprise of the Company, the Defendant had mischievously sent a predated letter to the Company in response to the Company's letter dated 05.04.2011, stating that since the accident had taken place outside the office premises of the Company, the claim of the Company was rejected in terms of Indian Motor Tariff
