Case: Vikram Greentech (I) Ltd.  Vs. New India Assurance Co. Ltd

proposal form is a commercial document and being an integral part of policy, reference to proposal form may not only be appropriate but rather essential. However, the surveyors report cannot be taken aid of nor can it furnish the basis for construction of a policy. Such outside aid for construction of insurance policy is impermissible. 17. That the insured submitted proposal to the Insurance Company for comprehensive floriculture insurance on January 18,1996 is not in dispute. The insured furnished particulars for the following components which were to be covered: "A)Polyhouse1234TotalValue of(Rs. in Crores)(1)Steel structure0.25(2)Fabrication0.15(3)Plastic Grippers0.10(4)Plastic & Fittings charges0.505)Cost of constr. For polyhouses, Gutters & other accessories0.251.25(B)Irrigation System (Capacities value and specifications for the following)In lakhs(1)Plasto make system15.00(2)Agricon Associates (Valves & Pipes)00.50(3)Fitting charges00.50(4)Reservoir04.00ELECTRIC MOTOR(1)Electric Motor, 15 HP 3 nos., 2 HP 20 Nos., 20 HP 1no. with pumps, pipes & valves.01.00(2)D.G. set, 2 nos., POWERICA (Kirloskar), 140 KVA & 1.25 KVA Transformer, Starters MCL -CTCL & others access04.0025.00(C)Details of flowers planted in Green house orOpen Cultivation:Green House Cultivation(i)No. of Green Houses:6 Polyhouses(ii)Area under Green Houses:2.8 hectares(iii)Area under Open Cultivation:No(D)Details of Flowers plants under cultivation(i)Total area under Floriculture:2.8 hectares(ii)Survey/Gat/Hissa No.:163, 158, 157, 156 148, 149, 147, 164(iii)Name of the flower plants:Dutch Roses under cultivation(iv)Variety:Vivaldi,Texas, Konfetti, First Red, Vanilla, Kiss, Tiamo, Lambada(v)No. of flowers:195500(vi)Distance between flower plants:14 cm.(vii)Expected date of harvest Input cost (From planting to first flowering i.e. 4 months):September 1995:Rs. 25 lacs(ix)Cost of saplings:Rs. 70 per plant(E)Cost of cultivation for flowers:25 lacs.(i)No of flowers:19,55,500.00(ii)Input cost from first flowering to harvest25 lacs.(iii)Area under Open Cultivation:No” 18. Based on the said proposal, the Insurance Company issued comprehensive floriculture insurance policy on January 23, 1996 The schedule attached to the said insurance policy is thus: `SCHEDULE Insured:M/s. VIKRAM GREENTECH (i) Ltd. Plot No. 99, Sector 24, Rigdi-Pradhikaran PUNE- 411 044 (Name and address) Policy No.:47/221200/00940 Insured at:Surat Proposal Date:18th January, 1996 Name of the Crop offered for insurance:Floriculture Period of Insurance:18/01/96 to 17/01/97 Address of the Site of the proposal to be Insured:Village : Sanghise, Near Kamshet Railway Station Tal.: Maval, District: PUNE Total sum Insured:Rs. 2 crore Total Premium:Rs. 2,20,000/- + 11,000/- (s.o.) INVENTORY OF THE PROPERTY INSURED (Section I & II) Description of the item with sum Insured DetailsRs.ExcessRs.RateRs.PremiumRs. IPOLYHOUSE: (a)Steel Structure25,00,000/- (b)Fabrication15,00,000/- (c)Gripper10,00,000/- (d)Plastic Fitting Charges50,00,000/- (e)Cutter (f)Plastic25,00,000/- 1,25,00,000/- IIIRRIGATION : A (a)Plasto Make System15,00,000/- (b)Agricon Associates (Valves & Pipes)50,000/- (c)Fitting Charges50,000/- (d)Reservoir4,00,000/- IIIELECTRIC MOTOR (a)Electric Motor HP (b)Starter-MCL-CICL1,00,000/- (c)Other Assessories, DG set 2 nos., and Transformers 4,00,000/- 19. That the aforesaid policy covered the insured for the loss and and/or damage caused by storm/hailstorm/cyclone over the insured area is not in dispute. The Insurance Company under the policy also agreed that the sum insured would be equal to the costs of placement of the insured property by new property of the same kind and same capacity; in other words replacement cost. 20. Although, Mr.Vijay Hansaria, learned senior counsel for the insured strenuously submitted that the Proposal Form did not specify the number of poly-houses and, therefore, all poly-houses including 7, 8A and 8B were covered under the policy as they were in existence at the time of calamity that occurred on May 23,1996 and June 18/19,1996, we are afraid, the submission of the senior counsel does not merit acceptance. Admittedly, at the time, the policy was taken ( i.e. proposal made on January 18,1996 and insurance policy issued on January 23,1996), poly-houses 1 to 6 were in existence and poly-houses 7, 8A and 8B were not in existence. These poly-houses (7, 8A and 8B) were completed in March 1996. Moreover it is not correct to say that the Proposal Form does not specify the number of poly-houses. It does. It clearly mentions six poly-houses. It is true that six poly-houses are mentioned in Clause(C) of the Proposal Form which is with regard to green house cultivation but what is mentioned in respect of poly-houses in Clause(C) is necessarily referable to the number of poly-houses in Clause(A) of the Proposal Form as well.21. The learned senior counsel for the insured submitted that the entire material for poly-houses 7, 8A and 8B had already been received at the time of making proposal and issuance of insurance policy and the intention was also to cover the material lying at the site for erection of poly-houses. In this regard, the learned senior counsel sought to refer to the correspondence between the parties and the Surveyors reports dated October 24,1996 and October 28,1996. He would submit that cost of six constructed poly-houses on the date of making proposal was around Rs.65-70 lakhs and for the insurance cover of these six poly-houses, the insured would not have valued their cost at Rs.1.25 crores and paid premium of Rs.2,31,000/-. 22. A careful consideration of the Proposal Form that sets out the particulars of the components which were to be covered and the inventory of the property insured (Sections I and II), mentioned in the policy leaves no manner of doubt that what was insured was existing poly-houses on the date of the issuance of policy. It is clear from the proposal and the policy. The two documents admit of no ambiguity and it is clear that six poly-houses covering an area of 2.8 hectares was covered by the policy. It may be mentioned that Clauses (C)(ii), (D)(i) and (ii) of the Proposal Form mentions Survey/Gat/Hissa no.163, 158,157,156,148,149,147 and 164 and total area 2.6 hectares. It is on this area that six poly-houses were existing on the date the proposal was made and policy issued. These six poly- houses were only covered by the policy. 23. The National Commission concluded thus: " ..... we are unable to accept the contention of the complainant that only houses 7,8A or 8B were covered under the Insurance Policy in question especially when admittedly, they were non-existent on the date, the policy was taken and policy clearly mentioned the number of poly houses as "Six". In our view the complainant has failed to prove a case based on the material on record......"

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

Explanation:
0[ds]19. That the aforesaid policy covered the insured for the loss and and/or damage caused by storm/hailstorm/cyclone over the insured area is not in dispute. The Insurance Company under the policy also agreed that the sum insured would be equal to the costs of placement of the insured property by new property of the same kind and same capacity; in other words replacement cost.Although, Mr.Vijay Hansaria, learned senior counsel for the insured strenuously submitted that the Proposal Form did not specify the number ofand, therefore, allincluding 7, 8A and 8B were covered under the policy as they were in existence at the time of calamity that occurred on May 23,1996 and June 18/19,1996, we are afraid, the submission of the senior counsel does not merit acceptance. Admittedly, at the time, the policy was taken ( i.e. proposal made on January 18,1996 and insurance policy issued on January 23,1996),1 to 6 were in existence and7, 8A and 8B were not in existence. These(7, 8A and 8B) were completed in March 1996. Moreover it is not correct to say that the Proposal Form does not specify the number ofIt does. It clearly mentions sixIt is true that sixare mentioned in Clause(C) of the Proposal Form which is with regard to green house cultivation but what is mentioned in respect ofin Clause(C) is necessarily referable to the number ofin Clause(A) of the Proposal Form as well.A careful consideration of the Proposal Form that sets out the particulars of the components which were to be covered and the inventory of the property insured (Sections I and II), mentioned in the policy leaves no manner of doubt that what was insured was existingon the date of the issuance of policy. It is clear from the proposal and the policy. The two documents admit of no ambiguity and it is clear that sixcovering an area of 2.8 hectares was covered by the policy. It may be mentioned that Clauses (C)(ii), (D)(i) and (ii) of the Proposal Form mentions Survey/Gat/Hissa no.163, 158,157,156,148,149,147 and 164 and total area 2.6 hectares. It is on this area that sixwere existing on the date the proposal was made and policy issued. These six polyhouses were only covered by the policy.