Auto Parts Maker Loses ₹28.33 Lakh Fire Claim After Stock Moved To Undeclared Warehouse Without Insurer Notice; P&H HC Upholds Denial

In brief

The question

1. Whether stock shifted to a warehouse not specified in the policy schedule remained covered under the Fire Floater Policy despite the insured’s failure to notify the insurer of the change.

The court held

The Court held that the stock at the undeclared warehouse was not covered by the policy, that the insurer had not waived its objection, and that no substantial question of law arose.

It also directed

It dismissed the regular second appeal, affirmed the judgments and decrees of both courts below, and disposed of any pending miscellaneous applications.

01Facts

Gabriel India Ltd. held a Fire Floater Policy covering finished-goods stock at locations specified in the policy schedule.

¶ 1–4

A fire damaged its stock at a Hyderabad warehouse whose address differed from the scheduled warehouse.

¶ 1–4

The insurer repudiated the claim, stating that the changed location had not been notified.

¶ 1–4

The trial court dismissed Gabriel India’s recovery suit, and the first appellate court affirmed. Gabriel India appealed under Section 100 of the Code of Civil Procedure, 1908 (CPC).

¶ 1–4, 8, 12

02Issues

i.1. Whether stock shifted to a warehouse not specified in the policy schedule remained covered under the Fire Floater Policy despite the insured’s failure to notify the insurer of the change.

¶ 8–12

ii.2. Whether the insurer’s appointment of a surveyor and processing of the claim amounted to waiver of its objection to coverage at the changed location.

¶ 16–22

iii.3. Whether the concurrent findings of the courts below raised a substantial question of law warranting interference under Section 100 CPC.

¶ 23–25

03Law Applied

Section 100 CPC confines a second appeal to substantial questions of law; concurrent factual findings may be disturbed where, for example, they are perverse, unsupported by evidence, or reached by ignoring material evidence or applying an erroneous legal principle (Hero Vinoth (Minor) v. Seshammal, (2006) 5 SCC 545).

¶ 24

An insurance contract is governed by its terms, and an insured cannot claim beyond the policy’s coverage; courts must construe the policy as written (General Assurance Society Ltd. v. Chandmull Jain, AIR 1966 SC 1644; Oriental Insurance Co. Ltd. v. Sony Cheriyan, (1999) 6 SCC 451; Export Credit Guarantee Corporation of India Ltd. v. M/s Garg Sons International, (2014) 1 SCC 686).

¶ 14

Waiver requires voluntary and intentional relinquishment of a known right and may be inferred from conduct inconsistent with continued assertion of that right (GALADA Power and Telecommunication Ltd. v. United India Insurance Co. Ltd., (2016) 14 SCC 161).

¶ 19, 22

Under the policy, Clause 13 excluded loss to property removed to a place other than the specified location, subject to an inapplicable exception; the Floater Clause required communication of changes to declared locations.

¶ 9–10

Provisions in the judgment · 1 · Linked ones open on LawLens

Code of Civil Procedure, 1908 Section 100

04Reasoning

The Court found that the fire occurred at a location distinct from the warehouse listed in the schedule, and Gabriel India produced no evidence that it had notified the insurer of the change before the fire.

¶ 12

Although the insured property was movable stock, the policy limited coverage to specified locations; the Floater Clause allowed the aggregate sum insured to operate across those declared locations, not at any location without notification.

¶ 11, 13, 15

The surveyor’s assessment and the insurer’s requests for documents were steps in investigating the claim and did not, without unequivocal conduct accepting the changed location, amend the policy or waive its terms.

¶ 16–17, 21

Unlike GALADA Power, the insurer expressly relied on the changed location in its repudiation letter, so it had not abandoned that ground.

¶ 19–22

The courts’ interpretation of the policy was supported by the evidence and disclosed no basis for interference under Section 100 CPC.

¶ 23–25

05Holding

The Court held that the stock at the undeclared warehouse was not covered by the policy, that the insurer had not waived its objection, and that no substantial question of law arose.

¶ 25–26

It dismissed the regular second appeal, affirmed the judgments and decrees of both courts below, and disposed of any pending miscellaneous applications.

¶ 25–26

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