Calcutta High Court
S. L. Packaging Private Limited vs The Oriental Insurance Company Limited ... on 25 March, 2025
Author: Amrita Sinha
Bench: Amrita Sinha
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
Original Side
Present :- Hon'ble Justice Amrita Sinha
WPO 1702 of 2023
S. L. Packaging Private Limited
Vs.
The Oriental Insurance Company Limited & Anr.
For the writ petitioner :- Mr. Mainak Bose, Sr. Adv.
Mr. Satadeep Bhattacharyya, Adv.
Mr. Rabindra Kr. Mitra, Adv.
Mr. Aasish Choudhury, Adv.
Mrs. Uma Bagree, Adv.
For respondent no. 1 :- Mr. Abhimanyu Shaudilya, Adv.
Ms. S. Paul, Adv.
Ms. Nandita Guha, Adv.
For respondent no. 2 :- Mr. Pradeep Kumar, Adv.
Mrs. Urmila Chakraborty, Adv.
Heard on :- 07.03.2025 & 18.03.2025
Judgment on :- 25.03.2025
Amrita Sinha, J.:-
1. The repudiation of the claim of the petitioner for the loss suffered on
account of fire despite having a valid insurance policy, is impugned in
the instant writ petition. The claim of the petitioner has been
disallowed on account of mismatch of the address of the insured.
2. The petitioner is engaged in the business of manufacturing and sale of
jute and cotton bags. It has various manufacturing units at diverse
locations. One of such units is located in village Muragacha, North 24
Parganas. To protect and secure the unit from contingencies the
petitioner obtained a Standard Fire and Special Perils insurance policy
for the period 19th January, 2019 to 18th January, 2020. The policy
stood renewed from time to time and the same was lastly renewed till
24th January, 2022.
3. The claim of the petitioner on account of the loss and damages
suffered on account of the super cyclone Amphan in the year 2020 in
respect of the Muragacha unit was allowed by the insurance company.
4. On 19th August, 2021 a fire gutted the factory premises at Muragacha.
A claim was lodged before the insurance company. The insurance
company engaged surveyors to inspect and assess the loss suffered on
account of the fire and a final report was submitted by the insurance
surveyor in April, 2022 assessing the loss at Rs. 2,75,59,104/-. The
report mentions that though the policy recorded the address of the
unit as Muragacha, Nadia but the fire had actually broken out at
Muragacha, North 24 Parganas.
5. The insurance company held that as the unit at Muragacha, Nadia
was not covered under the insurance policy, the claim of the petitioner
cannot be allowed. The petitioner immediately objected to the same
and it is then that it came to the knowledge of the petitioner for the
first time that at the time of the last renewal of the policy, the address
of the petitioner's unit at Muragacha was wrongly mentioned at Nadia
instead of North 24 Parganas.
6. It has been submitted that the petitioner does not have any unit at
Nadia. There is no place called Muragacha in the district of Nadia. The
petitioner was not responsible for the wrong recording of the address
of the unit of the petitioner. The respondent no. 2, being the agent of
the petitioner no. 1 is responsible for the wrong recording of address
and the claim of the petitioner ought not to fail because of the error on
the part of the agent of the respondent no. 1.
7. The error, not attributable to the petitioner, rather attributed to the
respondent no. 2, ought not to be the ground for refusal of the claim of
the petitioner.
8. Prayer has been made to direct the insurance company to pay off the
loss amount as assessed.
9. Learned advocate representing the respondent no. 1 contends that as
the address of the unit which got damaged because of fire is not
mentioned in the insurance policy, accordingly, the prayer of the
petitioner cannot be allowed. It has been submitted that the petitioner
ought to have rectified the mismatch at the time of signing the policy
document and should have corrected the error, as alleged. The
insurance company is not bound to pay any sum on account of loss
suffered in respect of an unit not covered by the policy. Reference has
been made to the general rules and regulations of the insurance policy
wherein it has been clearly mentioned that policy in respect of any
unspecified location shall not be allowed.
10. It has been submitted that it is not the obligation of the company to
explore the matters of miscommunication or mistake between the
petitioner and its broker being the respondent no. 2. The claim has
been repudiated only because of the mismatch of the risk location and
the location of the fire accident. The insurance company is bound to
pay only in respect of claims, address of which is mentioned in the
policy.
11. The respondent no. 1 further submits that not mentioning proper
address in the policy has to be treated as wrongful submission of
information and liable to be dealt with in terms and conditions of the
insurance contract.
12. The respondent no. 2 being the agent of the respondent no. 1 submits
that the deletion of the proper location of the subject unit and
incorporation of the new location was an error and the same was
identified only after the claim was lodged. The agent who was handling
the petitioner's portfolio resigned from service of the respondent no. 2
in the year 2021.
13. It has been submitted that the respondent no. 1 ought not to have
acted so mechanically at the time of renewal of policy. The petitioner
no. 1 ought to have properly verified the address at the time of renewal
of the policy. The respondent no. 1 ought not to have rejected the
claim of the petitioner on hyper technical ground. The respondent no.
2 supports the claim of the petitioner.
14. I have heard the submissions made on behalf of both the parties.
15. It is admitted that the petitioner initially obtained the policy in the
year 2019 and thereafter renewed the same from time to time. The
insurance claim is valid for a period of one year unless renewed. The
address of the unit of the petitioner was correctly recorded at the time
of initiation of the policy. At the time of last renewal of the policy in the
year 2021 one of the addresses of the units of the petitioner was
recorded erroneously. As luck would have it fire broke out in the unit
whose address was wrongly recorded. But coincidently it is the same
unit which got damaged during the cyclone Amphan and the claim
was allowed by the insurance company.
16. After fire broke out the surveyor engaged by the insurance company
visited the site and assessed the loss suffered. It was then detected
that the address of the unit was incorrectly recorded in the policy. The
respondents have not come out with a case that no loss has been
suffered by the petitioner. On the contrary, the loss suffered by the
petitioner had been quantified by the surveyor.
17. It is also not the case of the respondents that there was any request
from the petitioner for change of the address of any of the units of the
petitioner. In the absence of a request for change of address, the policy
was supposed to be renewed in respect of the address which was
initially mentioned at the time of start of the policy. The respondent
no. 2 being the authorized agent of the respondent no. 1 has admitted
that one of its employees committed an error by incorporating a wrong
address. The same was not at all deliberate or intentional. The said
employee had resigned from service long back.
18. It appears that the insurance company also did not scrutinize the
details of the petitioner at the time of renewal of the policy. Had the
error been detected at the time of renewal, both the parties would have
been saved the trouble of approaching the Court for adjudication of
the legal complication which cropped up of from such an inadvertent
clerical error. Had the surveyor of the insurance company not been
able to identify the location or site of the accident, then the ground of
rejection of the claim on account of mismatch of location could have
been accepted.
19. No case has been made out by the respondent no. 1 that there is a
separate unit of the petitioner at Nadia or there is a place by the name
of Muragacha in Nadia. It is nobody's case that the petitioner has
deliberately incorporated the address of Nadia and intends to obtain
relief in respect of a unit which suffered loss in North 24 Parganas.
The petitioner will no way be benefitted or will gain any advantage of
recording a wrong address in the insurance policy. On the contrary,
the petitioner will be at complete loss if any error is detected in the
policy and there is every possibility that the claim may be rejected as
has been done in this case.
20. The respondent no. 1 being an entity under Article 12 of the
Constitution of India ought not to act in such a rigid and hyper
technical manner. No case of mala fide has been made out by the
respondents. It is a clear case where an error has been used as an
alibi to repudiate the claim of the insured. The said error ought to
have been rectified after proper verification and the petitioner should
not have been compelled to approach the Court for relief. Minor
clerical errors are liable to be corrected the moment it is noticed so
that no injustice is caused to a deserving party.
21. To err is human. The mistake is a curable one and is liable to be
rectified immediately without any further delay. As the loss suffered by
the petitioner has been duly assessed and quantified, accordingly, the
authority ought to take steps to release the said amount at the earliest
but positively within a period of eight weeks from the date of
communication of this judgment. The communication made by the
company rejecting the claim of the petitioner stands set aside.
22. The writ petition stands allowed.
23. No costs.
24. Urgent certified photocopy of this judgment, if applied for, be supplied
to the parties or their advocates on record expeditiously on compliance
of usual legal formalities.
(Amrita Sinha, J.)
