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by Admin
07 May 2024 2:49 AM
Court Dismisses Appeal by Oriental Insurance Co. Ltd., Confirms Compensation and Interest Award for Cyclone Damages
The High Court of Andhra Pradesh at Amaravati has upheld the trial court’s judgment awarding compensation for cyclone damages to M/S Tamanna Kameswara Rao, represented by T. Rajarao. The appeal by The Oriental Insurance Co. Ltd. Was dismissed, affirming the award of Rs.1,01,091/- with 6% interest. Justice Venuthurumalli Gopala Krishna Rao delivered the judgment, emphasizing the validity of the surveyor’s report and the maintainability of the suit despite the arbitration clause.
The case stems from damages caused by a cyclone on May 9, 1990, affecting the stock stored at T. Rajarao’s rice mill, insured under a policy covering cyclone risk issued by The Oriental Insurance Co. Ltd. The trial court had partially decreed the suit for Rs.1,01,091/- with 6% interest from the date of filing the suit. The appellants challenged this decision, contending that the stock stored in the verandah was not covered by the policy and questioning the privity of contract for awarding interest.
The appellants argued the existence of an arbitration clause in the insurance policy, which should preclude the civil suit. However, the High Court found this contention unpersuasive as it was raised late at the trial stage and was not pressed in the appeal. The court held that the suit was maintainable and the arbitration clause did not restrict the proceedings.
The High Court confirmed the trial court’s reliance on the surveyor’s report, which estimated the damages in the mill area and verandah at Rs.1,01,091/-. The court noted that the defendants failed to disprove the surveyor’s assessment or establish that the policy excluded the verandah-stored stock. Justice Gopala Krishna Rao remarked, “The surveyor’s report, which was uncontested, serves as a credible basis for assessing the damages.”
Regarding the award of interest, the court rejected the appellants’ argument about the lack of privity of contract for interest. It upheld the trial court’s decision, deeming the 6% interest from the suit filing date to be reasonable and justified.
Justice Gopala Krishna Rao emphasized, “The validity of the surveyor’s assessment and the absence of any substantial evidence to the contrary affirm the trial court’s judgment. The interest awarded aligns with the principles of fairness and justice given the circumstances of the case.”
The High Court’s decision reinforces the judiciary’s role in upholding contractual obligations and providing fair compensation for insured losses. By dismissing the appeal, the court confirmed the lower court’s findings on insured damages and interest, setting a precedent for similar insurance disputes. Each party was ordered to bear its own costs, marking a significant resolution in this protracted legal battle.
Date of Decision: June 25, 2024
The Oriental Insurance Co. Ltd. & Another vs. M/S Tamanna Kameswara Rao