RAMESH FLOWERS LTD Vs. NATIONAL INSURANCE CO LTD

JUDGEMENT

(1.) This is a complaint filed against. the insurer and the Tamil Nadu Mercantile Bank Ltd., who is also the beneficiary under the policy, in question and has, therefore, been impleaded as co-respondent. The complainant is a joint-venture Company in which a German Company holds 51% of total equity shares. It is alleged that the complainant is a pioneer in the field of business of, inter alia, processing of dried flowers, leaves, pods, dried mushroom etc. used for floral arrangements and exporting the same to various countries such as Germany, France, Holland, Itally, Japan, USA, Taiwan, Hong-kong, Srilanka etc. It has a factory located at A-62 (A), Sipcot Industrial Complex, Therku Veerapandiapuram PO, Tuticorin - 628 003 (hereinafter referred to as the Factory). It has also godowns and processing units in the around Tuticorin. Respondent No. 2, M/s. Tamil Nadu Mercantile Bank Ltd., is only a proforma party and on relief was sought against it. It has been made a proforma party as the insured goods in respect whereof the claim was wade were hypothecated with the said Bank on account whereof the insurance policies were in the name of both the Bank as well the complainant. It is stated that at all material times all stock of finished goods, semi-finished goods and raw- material located in the complainant's factory and processing units of the complainant have stood hypothecated to the said Bank by way of security for repayment of various loans. The stock in Question, were finished products, semi- finished products, raw-materials which were insured with the opposite party No. 1 under the Fire Insurance Policy No. 501205/11/13/ 2100040/ 95 for a period of one year commencing from 5th May, 1995. The total sum insured was Rs. 4,60,00,000/-. The factory and the list of godowns are also set out in the policy. The value of the insured goods was enhanced to Rs. 5,10,00,000/- vide Endorsement No. 501205/ 11/13/E.025/95 which was further enhanced to Rs. 5,60,00,000/- w.e.f. 31.1.1996 vide Endorsement No. 501205/11/13/E.057/95.

(2.) On 25.12.1995 the godown of the complainant covered by the said policy caught fire and the alleged to have been completely gutted and destroyed. The said fire was extinguished by the fire brigade only in the afternoon of the following day i.e., 26.12.1995. On that day an FIR in respect thereof was also lodged with the police and a claim was submitted to the opposite party No. 1, who appointed M/s. Mehta Padamsey, Surveyor Pvt. Ltd., Madras, who carried out the survey of the damage caused by the said fire. The cause of fire w attributed to the bursting of crackers by the locals who were celebrating Christmas. The Insurance Company despite submission of the estimate by the Surveyors had maintained silence and did not reject or accept the claim of the claimants. As a result thereof the complainant on or about 23rd December, 1997 lodged a complaint claiming a sum of Rs. 8,89,119.46 for the aforesaid loss.

(3.) The complainant also claimed interest at the rate of 18% per annum on the said amount from the date of lodgment of the claim till the filing of the complaint, Rs. 25,00,000/ - as damages and a further Rs. 25,00,000/- compensation for the mental harassment. Notice of this complaint was served on the opposite parties. The opposite party No. 1 i.e., the National Insurance Co. Ltd." filed its reply. In the reply, the Insurance Company had taken up the plea that it had vide its letter dated 24.6.1998 which was during the pendency of the present complaint, offered to the complainant a sum of Rs. 21,94,848/- minus Rs. 12,27,800/- towards the additional premium- payable by the complainants for higher risk rating necessary under the Policy No. 40/95. This offer was rejected by the complainant.