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

2. The sequence of facts may be noticed first. Vikram Greentech (I) Ltd. came to be incorporated in 1993 with an object of setting up a floriculture project in the State of Maharashtra. In 1995, the company started negotiations with the respondent (hereinafter referred to as `Insurance Company) for a comprehensive floriculture insurance policy. On January 18,1996, the company (hereinafter referred to as `insured) submitted a proposal to the Insurance Company for a comprehensive floriculture insurance of poly-house (Rs.1.25 crore), irrigation system (Rs.25 lakh), cost of cultivation of flowers (Rs.25 lakh) and input cost from first flowering to the harvest (Rs.25 lakh). The Insurance Company issued a comprehensive Floriculture Insurance Policy (`Policy, in short) on January 23,1996, period of insurance being from January 18,1996 to January 17,1997 and charged premium of Rs.2,31,000/-. On May 23,1996, according to the insured there was a severe storm/cyclone, which damaged the floriculture extensively and substantial damage was caused to the roofs and walls of the poly-houses. On June 18/19,1996, there was another storm/cyclone. As a result of which the floriculture project of the insured and the poly clothes and the roofs as well as walls of the poly-houses were extensively damaged; certain poly-houses even collapsed completely. For the loss suffered in the first storm/cyclone, a claim for Rs.31,17,140/- was submitted by the insured with the Insurance Company. The insured submitted another claim for Rs.38,97,906/- in respect of loss suffered due to second storm/cyclone that occurred on June 18/19,1996.3. The Insurance Company appointed M/s Standard Surveyors Private Limited as their Surveyors for assessing the loss claimed by the insured. The Surveyors submitted their report on October 24,1996 and assessed the loss suffered by the insured at Rs. 28,85,243/- in respect of the first storm. On October 28,1996, the Surveyors submitted its second report in respect of the second storm/cyclone and assessed the loss at Rs.34,81,214/-.4. On November 28,1996, the Insurance Company informed the Surveyors that their report included loss to poly- houses Nos. 7, 8A and 8B whereas the policy covered only poly-houses 1 to 6. The Surveyors were, accordingly, asked to reassess the loss.5. On December 19,1996, the Surveyors gave their clarification to the Insurance Company that all the poly-houses were covered under the policy and their assessment was correct and fair.6. The Insurance Company, then, appointed M/s Jupiter Claim Consultants as investigators for verification of the claim. The insured was also asked to furnish necessary documents to the said investigators. The investigators are said to have submitted their report on September 12,1997 stating therein that they were not able to submit their certification as regard the cost of poly-houses Nos. 1 to 6 and other related matters categorically for sum insured and claim thereof.7. On November 6,1997, the Surveyors submitted their addendum to the earlier report dated October 24,1996 with regard to the first storm and reduced the assessment of loss to Rs.4,77,355/-. The Surveyors submitted another addendum on February 16,1998 to the report dated October 28,1996 with regard to the second storm and reduced the assessment of loss to Rs.95,443/-.8. The insured then approached the National Commission alleging therein deficiency of service by the Insurance Company in not settling the claim and sought direction to the Insurance Company to settle the claim of the insured in full and pay interest on due amount.9. The Insurance Company contested the claim and set up the plea that the claim on account of damages to poly- houses 7, 8A and 8B was not admissible as these poly-houses were not covered under the policy. As regards the poly- houses nos. 1 to 6, the Insurance Company admitted that the policy covered those poly-houses. They stated before the National Commission that insured has already been informed that the loss finally assessed by the Surveyors is to the tune of Rs.4,77,355/- in respect of first storm and Rs.95,443/- on account of loss caused by second storm.10. A rejoinder came to be filed by the insured and it was stated therein that at the relevant point of time, the size of the farm was 6.3 hectares and the entire area was covered by the Insurance Company and it was not limited to the area to 2.8 hectares as contended by the Insurance Company.11. The National Commission heard the arguments of both the parties and held that at the time of taking policy only six poly-houses were in existence and there was no evidence or proof to substantiate that the insurance was covered for poly- houses 7, 8A and 8B. The National Commission recorded the admitted position that poly-houses 7, 8A and 8B were not in existence at the time of taking insurance policy. The National Commission held that the policy clearly mentioned the number of poly-houses as "six" and in view thereof the complainant is entitled to an amount of Rs.5,72,798/- on account of damages to these poly-houses (nos.1-6) during the storm/cyclone that hit on May 23,1996 and June 18/19,1996 alongwith interest @ 12% from the date of the first Surveyors report i.e. November 6,1997 upto the date of payment, failing which the rate of interest shall be @ 18% per annum.12. Aggrieved by the dismissal of the complaint with regard to the claim for loss to poly-houses 7, 8A and 8B, the insured, as stated, is in appeal.

Court's reasoning:
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.