ORIENTAL INSURANCE CO Vs. BAPA LAL AND CO.

JUDGEMENT

(1.) In this appeal, the Insurance Company has challenged the findings of the State Commission, Madras. In this case, the complainant/respondent which is a partnership firm engaged in the manufacture of gold jewellery and it conducted an exhibition-cum-sale in America and for that purpose, a large number of items of jewellery were taken to America. The said jewellery was covered by a Marine Insurance (Cargo) Policy issued by the appellant being policy No. 411100/9014/MC/325/92 dated 29.8.1991 for a sum of Rs. 87,89,480. In course of such exhibition-cum-sale, the complainant lost three items of precious jewellery listed at items No. 162, 107 and 89 of a total value of Rs. 8,47,367 on 22.9.1991 and 24.9.1991. The said three pieces were sold in the course of the exhibition but not delivered to the purchaser. Those were retained by the petitioner for exhibition in other cities of America. The complainant lodged a claim with the appellant who appointed a surveyor. But, the claim ultimately was repudiated by the appellant/insurer on the ground that the complainant had no insurable interest at the time of the loss, as it had already sold these jewels to the foreign buyers. The main contention is that the policy shall be issued to the complainant and in its capacity as the owner of the jewels, in question, which in transit and during the period of exhibition. The said three items had been sold to Dr. Durairaj on 20.9.1991 subject to the condition that the delivery shall be effected after the exhibition is over. It is the contention of the insurer that the property in the goods passed on to the purchaser when the alleged loss took place on 22.9.1991 and 24.9.1991. The counsel for the Insurance argued that the retention of the jewellery by the insured for exhibition is extraneous to the contract of insurance and it is contended that there is no insurable interest left in the goods at the time of loss occurred as they had already sold those. Before the State Commission, the complainant conceded that he was in the position of a bailee under Sec. 148 of the Indian Contract Act and had no obligation as a seller and had only right to receive consideration. The points for determination framed by the State Commission were :

(2.) Merely because the claim is repudiated could not be a ground by itself to non-suit the complainant by the insured. Therefore, it is not possible to accept the contention that the complaint was not maintainable because the claim had been repudiated after due application of mind. The conclusion cited by the State Commission is upheld.

(3.) Coming to the next question. The position of the complainant was that of a bailee under Sec. 148 of Contract Act has been conceded by the appellant. Insurable interest is understood to mean :