Case: United India Insurance Company Ltd Vs. Kantika Colour Lab

to undertake such repair work on account of the high cost involved in the same especially when the repair may not exclude the possibility of any future complications arising in the working of the machines. The witness also referred to manufacturers letter dated 7th January, 1999 informing the insured about the price of Noritsu QSS-1923 Printer Process and QSF-V50 Film Processor after deducting the value of the optional accessories. According to the witness the price of Printer Process QSS-1923 works out to Singapore $ 62,100. The witness asserted that M/s Satyam Equipment Services Ltd. were appointed as authorized sales representatives during early 1996 but since their services were not found to be satisfactory the agreement between the parties was terminated. He has further stated that respondent no.2- company had not trained any engineer to repair the Printer Process QSS-1923. 17. Not much has been extracted from the witness in cross-examination who has stuck to his version that the machine is not at all repairable, and that the cost of getting the machine repaired in Japan would be much more than the cost of a new machine.18. Two aspects stand out from the above evidence. Firstly, it is clear that the damage has been caused only to the printer model QSS-1923 and not to the film processor QSF-V50 which was found to be in working condition and about which there was only an apprehension and no more that its working may run into difficulty in future. We, however, see no real basis for such an apprehension. In any case in the absence of proved damage affecting the performance of the machine, it is difficult to assume that the film processor was also damaged either wholly or in part so as to call any repair or replacement of the said machine.19. Contracts of Insurance are generally in the nature of contracts of indemnity. Except in the case of contracts of Life Insurance, personal accident and sickness or contracts of contingency insurance, all other contracts of insurance entitle the assured for the reimbursement of actual loss that is proved to have been suffered by him. The happening of the event against which insurance cover has been taken does not by itself entitle the assured to claim the amount stipulated in the policy. It is only upon proof of the actual loss, that the assured can claim reimbursement of the loss to the extent it is established, not exceeding the amount stipulated in the contract of Insurance which signifies the outer limit of the insurance companys liability. The amount mentioned in the policy does not signify that the insurance company guarantees payment of the said amount regardless of the actual loss suffered by the insured. The law on the subject in this country is no different from that prevalent in England; which has been summed up in Halsburys Laws of England - 4th Edition in the following words: "The happening of the event does not of itself entitle the assured to payment of the sum stipulated in the policy; the event must, in fact, result in a pecuniary loss to the assured, who then becomes entitled to be indemnified subject to the limitations of his contract. He cannot recover more than the sum insured for that sum is all that he has stipulated for by his premiums and it fixes the maximum liability of the insurers. Even with in that limit, however, he cannot recover more than what he establishes to be the actual amount of his loss. The contract being one of indemnity only, he can recover the actual amount of his loss and no more, whatever may have been his estimate of what his loss would be likely to be, and whatever the premiums he may have paid, calculated on the basis of that estimate." 20. The other aspect that is established is that printer model QSS-1923 has been extensively damaged and the manufacturing company has no arrangement in this country for carrying out the repairs to the damaged machine. The Insurance Companys version that M/s Satyam Equipment Services Ltd. undertakes the repairs does not appear to us to be acceptable specially when the manufacturing companys authorized representatives has in no uncertain terms denied the competence of the M/s Satyam Equipment Services Ltd. to undertake any such repairs. Such being the position, the National Commission was, in our opinion, justified in holding that the printer processor model QSS-1923 being extensively damaged requires complete replacement.21. The question, however, is as to what is the cost of such replacement. Shri Taposh Dev, has referred to letter dated 7th January 1999 addressed by the manufacturing company to the insured M/s Kantiak Colour Lab and stated that the price of a brand new printer processor model QSS-1923, works out to Singapore $62100. We see no reason why the said amount can not be awarded to the insured by way of compensation for the damage caused to the machine. Besides the cost of the machines the insured would also be entitled to the customs duty component paid on the import of the said machine. From the Surveyors report submitted by Mr. P.M. Patel and Co. it is evident that the invoice value of the goods comprising the printer processor and the film processor was Singapore $ 104000 with an assessable value of Rs.27,36,292/-. A sum of Rs.21,32,776/- was on that value paid towards customs duty on the import of the said equipment. The duty payable on a machine valuing Singapore $ 62100 would, therefore, come to Rs.21,32,776X62100/104000=Rs.12,73,513.36.22. To sum up the total amount payable to the insured by way of compensation for the damage caused to the machine in question would work out to rupees equivalent of Singapore $ 62100 at the exchange rate prevalent as on the date of this judgment plus a custom duty component of Rs.12,73,513.36 rounded off to Rs.12,74,000/-. The sum total of the two figures would be payable with interest @ 10% p.a. for the period mentioned in the National Commissions order.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]16. We may at this stage refer to the deposition of Shri Taposh Dev, Senior Sales and Service Engineer of respondent no.2 the manufacturer of the machines in question. In the affidavit filed by the said witness it is, inter alia, stated that a thorough visual inspection of the machines in question was made by the engineers of respondent no.2 company and a report based on the said inspection submitted on 21st December, 1998. The witness on the basis of the said inspection report stated that Noritsuprinter process was subjected to a strong impact from the sides during transit from Mumbai to Hardwar resulting in severe damage, especially to the Paper Processor & Dryer Section thereof. The mechanical alignment and the optical accessories also had been badly affected. The witness also stated that it was not economical to undertake such repair work on account of the high cost involved in the same especially when the repair may not exclude the possibility of any future complications arising in the working of the machines. The witness also referred to manufacturers letter dated 7th January, 1999 informing the insured about the price of NoritsuPrinter Process andFilm Processor after deducting the value of the optional accessories. According to the witness the price of Printer Processworks out to Singapore $ 62,100. The witness asserted that M/s Satyam Equipment Services Ltd. were appointed as authorized sales representatives during early 1996 but since their services were not found to be satisfactory the agreement between the parties was terminated. He has further stated that respondent no.2Not much has been extracted from the witness inwho has stuck to his version that the machine is not at all repairable, and that the cost of getting the machine repaired in Japan would be much more than the cost of a new machine.18. Two aspects stand out from the above evidence. Firstly, it is clear that the damage has been caused only to the printer modeland not to the film processorwhich was found to be in working condition and about which there was only an apprehension and no more that its working may run into difficulty in future. We, however, see no real basis for such an apprehension. In any case in the absence of proved damage affecting the performance of the machine, it is difficult to assume that the film processor was also damaged either wholly or in part so as to call any repair or replacement of the said machine.19. Contracts of Insurance are generally in the nature of contracts of indemnity. Except in the case of contracts of Life Insurance, personal accident and sickness or contracts of contingency insurance, all other contracts of insurance entitle the assured for the reimbursement of actual loss that is proved to have been suffered by him. The happening of the event against which insurance cover has been taken does not by itself entitle the assured to claim the amount stipulated in the policy. It is only upon proof of the actual loss, that the assured can claim reimbursement of the loss to the extent it is established, not exceeding the amount stipulated in the contract of Insurance which signifies the outer limit of the insurance companys liability. The amount mentioned in the policy does not signify that the insurance company guarantees payment of the said amount regardless of the actual loss suffered by the insured.The other aspect that is established is that printer modelhas been extensively damaged and the manufacturing company has no arrangement in this country for carrying out the repairs to the damaged machine. The Insurance Companys version that M/s Satyam Equipment Services Ltd. undertakes the repairs does not appear to us to be acceptable specially when the manufacturing companys authorized representatives has in no uncertain terms denied the competence of the M/s Satyam Equipment Services Ltd. to undertake any such repairs. Such being the position, the National Commission was, in our opinion, justified in holding that the printer processor modelbeing extensively damaged requires complete replacement.21. The question, however, is as to what is the cost of such replacement. Shri Taposh Dev, has referred to letter dated 7th January 1999 addressed by the manufacturing company to the insured M/s Kantiak Colour Lab and stated that the price of a brand new printer processor modelworks out to Singapore $62100. We see no reason why the said amount can not be awarded to the insured by way of compensation for the damage caused to the machine. Besides the cost of the machines the insured would also be entitled to the customs duty component paid on the import of the said machine. From the Surveyors report submitted by Mr. P.M. Patel and Co. it is evident that the invoice value of the goods comprising the printer processor and the film processor was Singapore $ 104000 with an assessable value of Rs.A sum of Rs.21,32,776/was on that value paid towards customs duty on the import of the said equipment. The duty payable on a machine valuing Singapore $ 62100 would, therefore, come to Rs.21,32,776X62100/104000=Rs.12,73,513.36.22. To sum up the total amount payable to the insured by way of compensation for the damage caused to the machine in question would work out to rupees equivalent of Singapore $ 62100 at the exchange rate prevalent as on the date of this judgment plus a custom duty component of Rs.12,73,513.36 rounded off to Rs.The sum total of the two figures would be payable with interest @ 10% p.a. for the period mentioned in the National Commissions order.