M/S.Sri Maruthi Polymers vs. M/S.United INDIA Insurance Co. LTD.

Facts

The petitioner, M/s. Sri Maruthi Polymers, a manufacturing unit, filed a writ petition challenging an order dated 02.08.2019 passed by the first respondent, United India Insurance Co. Ltd. The petitioner sought quashing of this order and direction for payment of compensation due to a fire accident on 27.05.2018. The petitioner's business stocks, valued at over Rs. 59 lakhs, were destroyed in the fire. The insurer denied coverage, stating the fire policy listed the address as a 'Godown' at 15-2-10, Perumal Kovil Street, B.Meenakshipuram, Bodinayakanur, whereas the accident occurred at premises bearing Door.No.412-E, Theni Main Road, Meenavilakku, Annaikarapatty Village, Bodinayakanur. The petitioner contended that the premises at Meenalvilakku was their godown/factory and that the Tamilnadu Mercantile Bank, which facilitated the insurance, had acknowledged an error in the address provided in the policy.

Held

The Court acknowledged that the blame might lie more with the officials of Tamilnadu Mercantile Bank, who were aware of the petitioner storing polybags at the Meenalvilakku premises, even if it was primarily a residential building. However, the Court was not in a position to definitively conclude that the Insurance Company had to bear the consequences of the bank's omission. The Court also noted that the petitioner bore some responsibility for not diligently ensuring the correct particulars were reflected in the insurance policy, despite being a long-standing customer. Given the presence of significant factual disputes arising from contractual obligations, the Court held that the petitioner should pursue remedies before the jurisdictional Civil Court or the State Consumer Commission. The writ petition was dismissed, leaving open the petitioner's rights to pursue alternative legal avenues.

Key Issues

1. Whether the first respondent (Insurance Company) is liable to pay compensation for the fire accident that occurred on 27.05.2018, despite the discrepancy in the insured address, considering the alleged role of the Tamilnadu Mercantile Bank in facilitating the insurance and the petitioner's contention that the Meenalvilakku premises was their godown/factory. Petitioner's arguments: The petitioner argued that the Tamilnadu Mercantile Bank acted as an agent for the Insurance Company, and therefore, any mistake made by the bank should be borne by the principal (Insurance Company). They asserted that the Meenalvilakku premises was consistently used as a godown and factory, and the bank officials were aware of this, having visited the premises and reviewed monthly stock statements. They relied on a letter from the bank acknowledging an inadvertent error in insuring the customer's office address instead of the godown/factory address. The petitioner sought direction for the insurer to settle the claim. Revenue/State's arguments (Insurance Company and Tamilnadu Mercantile Bank): The respondents contended that the petitioner ought to have provided the correct address in contractual transactions. They argued that the writ petition was misconceived and that the petitioner should be relegated to an alternative forum. The Insurance Company highlighted that the policy covered a building occupied as a residence, and the circumstances might render the policy voidable.