LexM/S. KRISHNA FOOD & BAKING INDUSTRY P. LTD. versus M/S. NEW INDIA ASSURANCE CO. LTD. & ANR.
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>----- [2008) 15 S.C.R. 668 A M/S. KRISHNA FOOD & BAKING INDUSTRY P. LTD. )..... v . . M/S. NEW ·INDIA ASSURANCE CO. LTD. & ANR. · (Civil Appeal No. 7515 of 2001) B NOVEMBER 1, 2008 [C.K; THAKKER AND D.K. JAIN, JJ.] Consumer Protection Act, 1986 - s. 23 - Insurance f y :. policy against terrorism and fire - Units engaged in c manufacturing bakery products in Srinagar - Suspension of operation of units, following casualty by terrorist attack - Chairman migrated to Delhi - Thereafter, units set on fire in terrorist attack - Damage to plant, machinery, stocks and raw materials in the units - Insurance claim - Partly allowed by D National· Commission - On appeal, held: Complainants established their claims - Units could not do business and produce goods because of terrorism - Thus, National Commission not justified in reducing any amount on the gro£Jnd that certain stocks and. raw materials were unfit for E human consumption - However, it was right in rejecting the plea as regard pilferage by intruders and staff members as no material was produced in support thereof - Complainants entitled to compensation towards building, plant, machinery and electricity fittings, raw materials and stocks - As insurance F policies assigned in favour of Bank, Insurance company to pay the entire amount to Bank directly. i Insurance Act, 1938 - s. 38 - Transfer of Property Act, 1882 - ss. 130 and 135 - Insurance policies assigned in favour of Bank by complainant - Insurance claim - .G Entitlement of Bank - Held: When decree is passed in favour of complainants, bank is entitled to said amount - Bank not required to file suit in a competent court of law and obtain a >-- decree in its favour - Bank is entitled to the amount directly from the Insurance Company. H 668 .. ( KRISHNA FOOD & BAKING INDUSTRY P. LTD. v. NEW 669 INDIA ASSURANCE CO. LTD. & ANR. Two units-KB Company and KF Mill were A manufacturing bakery items in Srinagar. RK was the Chairman of the Company and the main partner of the Mill. The son of the complainant-chairman was killed in terrorist attack. Subsequently, operations of both the units were suspended. The Chairman of the Company left 8 Srinagar and went to Delhi. The 'watch and ward staff' were looking after the premises, stocks and raw materials lying in the units. It is the complainant's case that certain terrorists attacked the Company as well as the Mill and set them on fire. The building, plant, machinery and C electricity fittings were substantially damaged; and the raw materials and the stocks lying in the units were either destroyed or substantially damaged. The complainants had obtained three separate insurance policies covering several acts including terrorism and fire. In view thereof, 0 the complainants requested the Insurance Company to get the survey done but no action was taken. The complainants got the survey done through the surveyors and demanded certain amount. However, the Insurance Company did not make payment. The complainants filed complaints before the National Commission. It raised the E claim; however, the Insurance Company repudiated it. After a long time, the Insurance Company got the survey done. The surveyors observed that substantial damage was not caused to building, plant, machinery and electricity fittings and as regard raw-materials and stocks, F the stocks had become unfit for hum.an consumption; and there was pilferage of stocks and raw materials by intruders as well as by staff members of the Company and Mill, thus, the complainants were not entitled to the amount claimed. G With regard to the stocks kept in the godown of the Mill, covered by policy no. 1131190000249, the complainants raised a claim for Rs.37,78,618/-. The National Commission held that the complainants were H - 670 SUPREME COURT Rl;PORTS [2008]. 15 S.C.R. A entitled to Rs.5, 18,619/- as recommended by the Surveyors of the Insurance Company. With regard to the raw material, covered by policy ·no. 1131190000312, the complainants claimed _Rs.25,58, 798/~. The Nation~I Commission held that the complainants were entitled to 8 Rs.4,53, 122/- as per the Surveyors Report at instance of the Insurance Company. The claim of building, plant, machinery and electricity fittings, was covered by policy No.11.31190000313. It was for Rs. 53 lakhs. The National· Commission held that the complainant's were ~ntitled to C Rs.31,373/- as as
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