That during the validity period of policy i.e., on 17.10.2009 fire broke out in the factory premises resulting into loss of material, stock, and machinery of the value of Rs.
The surveyor appointed by the insurance company observed/assessed as such the loss on reinstatement value basis at Rs.
The State Commission vide order dated 10.11.2014 relying upon the surveyor report and the loss assessed by the surveyor on the basis of the reinstatement value awarded a sum of Rs. 29,17,500/- together with 9% interest from the date of repudiation letter dated 28.10.2010.
By the impugned judgment and order, the NCDRC has allowed the said appeal and has modified the order passed by the State Commission awarding Rs. 29,17,500/- i.e., awarding depreciated value and not the reinstatement value, the original complainant has preferred the present appeal. Shri Jay Savla, learned Senior Advocate appearing on behalf of the appellant herein – original complainant has vehemently submitted that the impugned judgment and order passed by the NCDRC awarding depreciated value and not the reinstatement value is just contrary to Clause 9 of Section 2 of the insurance policy. It is submitted that as the company has not reinstated the property, the clause itself was not applicable. 2 It is submitted that as rightly observed by the NCDRC that the goods insured were to be replaced on “as is basis” i.e., if the machinery is an old machinery, it is to be replaced by an old machinery and therefore, as the actual reinstatement has not been done by the complainant or by the insurance company and the money is to be paid to the insured on reinstatement basis, one has to find out the value of the machinery on replacement basis i.e., the value of the old machinery, which can be calculated only through deducting the value of depreciation from the current value of the machinery.
Also Read: https://newslaw.in/case-type/civil/acquisition-of-land-and-deemed-lapse-under-the-act-2013/
The short question which is posed for consideration of this Court is whether in the facts and circumstances of the case and on true interpretation of relevant clause of insurance policy, in case of damage of the plant and machinery due to fire, the complainant shall be entitled to the reinstatement value or the depreciated value? If the Company so elect to reinstate or replace any property the insured shall at his own expense furnish the Company with such plans, specifications, measurements, quantities and such other particulars as the Company may require, and no acts done or caused to be done, by the Company with a view to reinstatement or replacement shall be deemed an election by the Company to reinstate or replace. However, in any case the company is unable to reinstate or repair the property insured, because of any municipal or other regulations in force affecting the alignment of streets or the construction of buildings or OTHERWISE, in that case, the company shall be liable to pay such sum as would be requisite to reinstate or repair such property if the same could lawfully be reinstated to its former condition.
Therefore, as per second part of Clause 9 of Section 2 of the policy, the complainant shall be entitled to the reinstatement value and not the depreciated value.
The impugned judgment and order passed by the NCDRC awarding the depreciated value and not the reinstatement value is unsustainable for the reasons stated hereinabove.
Also Read: https://newslaw.in/case-type/civil/taxation-of-engineering-design-drawings-goods-or-services/
SHAH)…………………………………J.
Case Title: M/S OSWAL PLASTIC INDUSTRIES Vs. MANAGER LEGAL DEPTT N.A.I.C.O LTD (2023 INSC 30)
Case Number: C.A. No.-000083-000083 / 2023
