M/S.Krishna Food & Baking Industry ... vs M/S. New India Assurance Co. Ltd. & Anr

2. To appreciate the controversy raised in the present appeals, few relevant facts may be stated.

3. M/s Krishna Flour and Oil Mills (`Mill' for short) is a partnership firm while M/s Krishna Food and Baking Industry Pvt. Ltd. (`Company' for short) is a company registered under the Companies Act, 1956 as applicable to the State of Jammu & Kashmir. Both the units were located in Nawab Bazar, Srinagar, in the State of Jammu & Kashmir. Both were sister 4 concerns. Rajendra Kumar Sawhney was Chairman of the Company as also main partner of the Mill. The Company was dealing in manufacturing bread, biscuits, cakes and other bakery items. It is the case of the complainants that during the period of disturbances caused by militancy in early nineties of the last century, Mr. Praneet Sawhney, only son of Rajendra Kumar Sawhney was shot dead by the terrorists on March 27, 1990 in his office. Immediately thereafter, operations of both the units were suspended and the complainants had to migrate to Delhi. It was stated that there was `watch and ward staff' as also some other personnel who looked after the premises and stocks and raw materials lying in the units. It was also stated in the complaints that the complainants were able to transfer records from Srinagar to Delhi.

4. According to the complainants, they had obtained three separate insurance policies from M/s New India Assurance Co. Ltd. 5 (`Insurance Company' for short), the details of which are as under;

The Insurance Company, however, did not do anything in the matter for quite long time. The complainants got the survey done through their surveyors and demanded the amount to which they were entitled to. The Insurance Company, however, did not make payment which constrained the complainants to approach National Commission by filing three complaints being Complaint Nos. 194, 209 and 210 of 1994.

9. The National Commission went into the merits of the matter and held that the complainants were entitled to certain reliefs. With regard to stocks kept in the godown of the Mill, it observed that it was covered by policy No. 1131190000249. The policy was for an amount of Rs. forty lakhs and premium of Rs.5,814/- was paid. The claim put forward by the complainants was for Rs.37,78,618/-. According to the complainants, the stocks which were lying in the units were as under;

10. The National Commission held that surveyors of the complainants had prepared a report and submitted to the Insurance Company, but the claim was repudiated on the ground that there were no stock worth its while as there was pilferage since the units remained closed for about twenty months. It was also contended by the Insurance Company that the stock was not fit for human consumption. The final survey report at the instance of the Insurance Company recommended to settle the claim of the complainants at Rs.5,18,619/-. The figure was communicated by the Insurance Company to the complainants.

19. The National Commission considered the question and observed that the complaint relating to the said policy was required to be allowed in part. The Insurance Company was directed to make payment of Rs.31,373/- towards damage to building with interest at the rate of 12 per cent and the complaints were accordingly disposed of.

Policy No. Amount entitled to be awarded in favour of the appellant-insured 113119000249 Rs. 37,78,619/-

35. In view of the fact that the appeals filed by the complainants are allowed, the appeals filed by the Insurance Company must necessarily fail. Accordingly, the appeals filed by the Insurance Company are dismissed.

Section 135 - Assignment of rights under policy of insurance against fire Every assignee by endorsement or other writing, of a policy of insurance against fire, in whom the property in the subject insured shall be absolutely vested at the date of the assignment, shall have transferred and vested in him all rights of suit as if the contract contained in the policy had been made with himself.

41. In our opinion, the point is directly concluded by the above decision of this Court in Gujarat Maritime Board and the National Commission was not right in rejecting the claim of the Bank. The appeals of the Bank are, therefore, required to be allowed. 38

42. For the foregoing reasons, the appeals filed by the Insurance Company are ordered to be dismissed. The appeals filed by the complainants are required to be allowed to the extent indicated above with interest at the rate of 9 per cent per annum from the date of filing of complaints before the National Commission, i.e. from the date of payment. So far as Appeal concerning Policy No. 11319000249 relating to stocks is concerned, the complainants are entitled to get the entire amount of Rs.37,78,619/- since there is no appeal in respect of the said policy. Canara Bank is not concerned with the said policy. Grindlays Bank has not approached this Court and had supported the complainants before the National Commission. The two appeals of Canara Bank are in regard to two policies, 113190000312 and 113190000313, raw materials policy and plant policy. Both the appeals of Canara Bank are allowed and the Insurance Company is directed to make payment to Canara 39 Bank and not to the complainants in respect of the amount to be paid to the complainants.

43. All appeals are disposed of accordingly with no order as to costs.