National Insurance Co. Ltd. Vs. Venketshwera Distributor Chatta Bazar rep. by its Managing Partner R. Satish Kumar and The Manager State Bank of Hyderabad (Decided on 11.04.2011)

Consumer - Repudiation of Insurance Claim - Challenged - Respondent no. 1 took insurance policy from the Appellant (Insurance Company) in respect of the stock in the shop of Respondent no. 1 - Subsequently, Respondent no. 1 shifted his business from impugned shop to new shop at another place - Due to heavy rains the new shop were filled with water and stock of the Respondent no. 1 was damaged and became useless - Respondent no. 1 filed a claim for compensation - Appellant repudiated said claim of Respondent no. 1 on the ground that there was flagrant violation of the terms of the insurance policy as Respondent no. 1 was under obligation to inform about the date of the intended change of the premises and to obtain proper endorsement on the insurance policy which could permit continuation of the liability by the Appellant - State Commission held that the repudiation of the claim by the Appellant was invalid and improper and Respondent no. 1 was entitled to the amount of insured sum alongwith due interest and costs - Whether Respondent no. 1 was entitled to the insured amount?

Held, Respondent no. 1 gave mere intimation to the Appellant regarding shifting of the impugned shop to new address - There was no valid acceptance of such offer by the Appellant - There was no opportunity for the Appellant to examine whether the business place in new shop was safe enough to continue the insurance cover - Respondent no. 1 could not have assumed acceptance of his proposal without obtaining the necessary endorsement allowing change of the premises by the Appellant - Hence, the compensation ought not to have been granted to the Respondent no. 1 when there was no valid contract subsisting between the Appellant and Respondent no. 1 - Impugned judgment unsustainable - Petition allowed.