2018 (8) TMI 1910 - SC - Indian Laws

Insurance claim - claim taken on re-instatement basis - rejection of grant of claim on the ground that insurer has failed to comply with the mandate of Clause 6 of the general conditions of the policy - whether the respondent (insurer) had waived the condition relating to delay in intimation by appointing a surveyor? HELD THAT - It is well established position that waiver is an intentional relinquishment of a right. It must involve conscious abandonment of an existing legal right advantage benefit claim or privilege which except for such a waiver a party could have enjoyed. It is an agreement not to assert a right. To invoke the principle of waiver the person who is said to have waived must be fully informed as to his rights and with full knowledge about the same he intentionally abandons them. The appointment of a surveyor by the respondent after receipt of intimation of the loss from the appellant in the context of the present insurance policy coupled with the 2000 Regulations and in particular an express stand taken in the repudiation letter dated 18th February 2005 sent by the respondent to the appellant after consideration of the surveyor s report it cannot be construed to be a case of waiver on the part of the respondent - The fact remains that the respondent had appointed a surveyor to enquire into the entire matter and submit its report. The surveyor expressly recommended that the claim was not payable on account of the infringement of Clause 6 of the general conditions of the policy. The conclusion of the Commission that the respondent (insurer) had not waived the condition relating to delay stipulated in Clause 6 of the general conditions of the policy by appointing a surveyor is upheld - appeal dismissed.

Summary

Issues Involved:
1. Delay in intimation of loss.
2. Waiver of policy conditions by the insurer.
3. Deficiency in service and unfair trade practices.
4. Applicability of previous case law.

Issue-wise Detailed Analysis:

1. Delay in Intimation of Loss:
The appellant filed a complaint asserting that it had taken an insurance policy from the respondent for its building, plant, and machinery. Due to torrential rains and floods, the factory premises were damaged on 4th August 2004. However, the intimation of the loss was given to the respondent after a gap of 3 months and 25 days, on 30th November 2004. The respondent rejected the claim on the grounds that the appellant failed to comply with Clause 6 of the general conditions of the policy, which required immediate notice of loss and submission of requisite particulars within a stipulated period.

2. Waiver of Policy Conditions by the Insurer:
The appellant contended that the respondent waived the condition relating to delay by appointing a surveyor. The Commission and the Supreme Court examined whether the insurer's act of appointing a surveyor constituted a waiver of the policy condition regarding timely intimation. The Commission referred to the decision in Oriental Insurance Co. Ltd. vs. Parvesh Chander Chadha and concluded that there was no intentional and conscious relinquishment by the insurer of its right to reject the claim due to delayed intimation. The Supreme Court agreed, emphasizing that waiver must involve a conscious abandonment of a legal right, which was not evident in this case.

3. Deficiency in Service and Unfair Trade Practices:
The appellant sought a declaration that the respondent was guilty of deficiency in service and unfair trade practices, and requested reimbursement for the loss caused by the floods. The Commission dismissed the complaint, stating that the appellant contravened Clause 6 of the insurance policy by failing to provide immediate intimation of the loss and requisite particulars within the stipulated period. The Supreme Court upheld this decision, noting that the appellant failed to fulfill the threshold stipulation contained in Clause 6, which was essential for a valid claim.

4. Applicability of Previous Case Law:
The appellant relied on the decision in Galada Power and Telecommunication Ltd. vs. United India Insurance Co. Ltd., arguing that the insurer waived its right to reject the claim by appointing a surveyor. The Supreme Court distinguished this case, noting that the issue in Galada was whether the insurance cover itself had extinguished by efflux of time, whereas the present case involved a violation of a specific policy condition. The Court also referred to the Insurance Surveyors and Loss Assessors (Licensing, Professional Requirements and Code of Conduct) Regulations, 2000, which mandate the appointment of a surveyor upon receipt of intimation about the loss. The Court concluded that the appointment of a surveyor did not constitute a waiver of the condition relating to delay in intimation.

Conclusion:
The Supreme Court upheld the Commission's decision that the respondent insurer had not waived the condition relating to delay stipulated in Clause 6 of the general conditions of the policy by appointing a surveyor. The appeals were dismissed with no order as to costs.