NATIONAL INSURANCE CO. LTD. Vs. PATTU AGENCIES

JUDGEMENT

(1.) The first respondent in the appeal, M/s.Pattu Agencies, Kowdiar, Thiruvananthapuram, filed O.S.No.716 of 1993 against the appellants and the second respondent for realisation of a sum of Rs.15 lakhs covered by the fire insurance policy taken by the first respondent/plaintiff from the National Insurance Company Ltd. (appellant No.1). There was also a prayer for realisation of interest at 12% per annum from defendants 1 and 2. Alternatively, it was prayed that in case the court finds that defendants 1 and 2 are not liable for the plaint claim, the plaintiff may be allowed to recover and realise plaint amount with interest from the third defendant Central Bank of India. The trial court decreed the suit in part for realisation of an amount of Rs.11 lakhs in favour of the first respondent/plaintiff from the appellants (defendants 1 and 2) with interest at 6% per annum from the date of suit till realisation with proportionate costs. Defendants 1 and 2 challenged the judgment and decree of the trial court in this appeal.

(2.) Hereinafter the parties are referred to as per their rank in the trial court.

(3.) The case of the plaintiff is that M/s.Pattu Agencies, which is a proprietary concern, is engaged in the business as distributors of stationery and crockery items. Originally, the plaintiff was carrying on business in building T.C.4/1821 at Pandit's Colony, Kowdiar, Thiruvananthapuram till 1984. The business was being carried on with the financial assistance of the Central Bank of India, Rishimangalam Branch, the third defendant in the suit. The stock of goods of the plaintiff was insured with the third defendant and the policy was being renewed regularly. In 1984, the business premises of the plaintiff was shifted to T.C.4/1680 at Mummy's Colony (Iran compound), Kowdiar, Thiruvananthapuram. The change of address was duly informed to the third defendant and the third defendant promptly conveyed the change of address to the New India Assurance Company Ltd., who was the then insurer. Subsequently, the insurance policy was taken from the National Insurance Company Ltd. for the period from 25.3.1988 to 24.3.1989 and the stock-in-trade was insured with the first defendant for a sum of Rs.15 lakhs. While the insurance policy was in force, the premises where the goods of the plaintiff were kept, caught fire on account of lightning on the night of 13th/14th of April, 1988. As a result of the fire accident, the entire stock was destroyed and the plaintiff sustained loss of Rs.15 lakhs. The third defendant preferred a claim before the second defendant, Senior Divisional Manager of the first defendant, for disbursement of the insurance amount. Defendants 1 and 2 appointed surveyors to assess the damages caused to the stock in trade. However, the surveyors rejected claim of the plaintiff by letter dated 3.3.1989. Though no reasons were stated for rejection of the claim, the plaintiff was given to understand that it was because of the difference in door number of the building stated in the policy (clerical mistake crept in the policy). According to the plaintiff, in the earlier correspondence with defendants 1 and 2 and Government Departments, the fire affected location in the business premises has been correctly mentioned, but the claim was illegally rejected. The value of the stock as on 7.4.1988 was valued at Rs.16,06,907/- as per the statement furnished by the plaintiff to the third defendant Bank. However, the plaintiff limited the claim to Rs.15 lakhs, the amount covered by the policy. In spite of making repeated demands and issuance of a suit notice, defendants 1 and 2 did not disburse the policy claim. No reply notice was also sent by them. The insurance with the first defendant Company was effected through the third defendant Bank and the Bank, being custodian of the policy of insurance, was authorised to collect the amount covered by the policy as per the relevant clause appended to the policy. The plaintiff contended that in case defendants 1 and 2 are not found liable for the plaint claim, the plaintiff is entitled to recover the entire amount from the third defendant Bank.