In Brief
An appellant held jute stock mortgaged to a bank and insured with a national insurer. After requesting an increase in insurance cover from Rs. 20 lakhs to Rs. 25 lakhs by letter dated 1 July 1985, the company did not formally acknowledge the change but accepted enhanced premiums. A fire occurred, and an umpire awarded Rs. 24,15,520.72 based on cost price plus 10 per cent, holding the policy had been impliedly accepted and amended through the company's conduct. The trial judge and High Court set aside the award, holding insurance policies can only be amended in writing. The Supreme Court allowed the appeal, holding estoppel by conduct applies: the company's silence and encashment of enhanced premiums estopped it from denying the increased cover. The umpire's award, being a possible view on the facts with no legal misconduct, was upheld.
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