Summary
After a warehouse fire, the insured sought payment under its domestic fire policy despite recovery under its parent’s global stock-throughput cover. The Court held that the global cover was a marine policy extending to warehouse risks, activating the domestic policy’s exclusion. No mandatory local-insurance requirement displaced that result. The policies did not support separating manufacturing loss from profit as claimed, and the recovery already exceeded the loss claimed domestically.
Issues
- Whether the stock-throughput policy was marine insurance despite the loss occurring in a warehouse.
- Whether a legal obligation to insure locally made the domestic insurer primarily liable.
- Whether the insured could recover further for the same loss after the global insurer’s payment.
Provisions considered
- Sections 2(d), 2(e), 3 and 4, Marine Insurance Act, 1963Applied the definitions and express extension of marine cover to land and warehouse risks in classifying the global policy. (¶¶ 18-19, 28-32)
- Section 2(13A), Insurance Act, 1938Considered the broad statutory definition of marine insurance business, including transit and associated warehouse risks. (¶¶ 20, 28-32)
- Section 25, General Insurance Business (Nationalisation) Act, 1972Distinguished a restriction on taking insurance with foreign insurers without permission from a positive duty to obtain the domestic cover claimed here; the overseas parent’s global policy was not prohibited on these facts. (¶¶ 21, 37-42)
Held
- The global policy’s express terms covered marine, voyage, transit and warehouse risks, including retail locations. The relevant consideration was the nature of the cover, rather than whether the fire occurred at sea. It was a marine policy for the purpose of Condition 4 of the domestic fire policy. (¶¶ 18-20, 28-36)
- The admitted-insurance difference clause required a legally or otherwise binding obligation to insure locally. No specific legislation compelled the insured to obtain the domestic policy in question. Section 25’s prohibition did not itself impose that duty and did not apply to the overseas parent’s global cover in these circumstances. The Commission’s contrary application of Clause 47 was erroneous. (¶ 37-42)
- On the policy terms and the actual global payment, Condition 4 excluded the domestic insurer’s liability. The insured’s argument that the global policy covered profit while the domestic policy covered manufacturing cost was unsupported by the policies. This was a construction of the overlapping covers and claim here, not a prohibition on holding multiple policies. (¶¶ 33-36, 43-45, 49-51)
- Double insurance is not itself unlawful, but indemnity against the specified property loss cannot provide a profit through repeated recovery of that loss. The insured had claimed Rs.12.2 crore domestically and received more than Rs.19 crore through Allianz; the additional claim could not be sustained on this record. (¶ 45-51)
Result
Insurer’s appeal allowed. The National Commission’s order set aside and the insured’s complaint dismissed.