Decided on July 02,2008

Lanco Rani Joint Venture Appellant


D.APPA RAO, J. - (1.) THIS is a complaint filed under Section 17 of Consumer Protection Act against the Insurance Company claiming Rs. 28,52,679 covered under the policy with interest and costs.
(2.) THE case of the complainant in brief is that it is a partnership firm. It entered into a contract with R2 M/s. National Highway Authority of India for construction of four lining at National Highway No. 31 in the State of Bihar. As per the terms it had to take jointly an insurance policy along with R2 to cover the risk of construction work, and accordingly took a policy valid from 18.9.2001 to 17.9.2004. The premium was to be paid in quarterly instalments. While so, in the month of July, 2002 there were unprecedented rains resulting in devastating floods causing extensive damage at work site resulting in huge loss of granular sub -base material and damage to the embankment constructed by the complainant. It has lodged a claim on 27.7.2002 for Rs. 70 lakhs. On that M/s. S. K. Mazumdhar a licensed Surveyor was appointed who conducted preliminary and final survey assessed the loss at Rs. 28,52,679. Despite several letters it did not settle the claim and ultimately repudiated on the ground that the cheque issued for payment of the premium was dishonoured and that the premium was due on 18.6.2002. In fact the said fact was not brought to its notice. It was only after a lapse of 32 months such a plea was taken. When verified, it came to know that all the cheques were encashed. The repudiation was unjust, and therefore it claimed the amount assessed by the Surveyor with interest and costs.
(3.) R 1 Insurance Company resisted the case. It alleged that the complainant is not a consumer and is not entitled to invoke the provisions of the Consumer Protection in view of the admitted status of the complainant and the nature of business in which it is involved and the policy for which it was taken. The claim stands forfeited 3 months after repudiation. The claim was repudiated for non -compliance of statutory provisions of Section 64VB of Insurance Act as there was non -payment of instalment amount. Therefore it cannot be said that there was deficiency in service. The policy was obtained on behalf of the complainant under the A/c of M/s. Lanco Rani Joint Venture as the contract work was a joint venture. The complainant firm did not pay the instalment due on 18.6.2002 before the due date. Three cheques issued for Rs. 1,42,807, Rs. 1,42,808 and Rs. 3,33,115 on 2.7.2002, 3.7.2002 and 25.7.2002 respectively were realized subsequent to the floods. The second cheque dated 3.7.2002 was dishonoured by the banker. It was brought to the notice of the complainant. Thereupon at its request it was again presented and was realized on 30.7.2002 after the damage had occurred. The Surveyors after conducting the survey assessed the net loss at Rs. 28,52,679. Since the premium was not paid within time and in violation of Section 64VB of the Insurance Act the claim was repudiated. Earlier C.D. No. 46/2005 filed before this Commission in respect of subsequent claims, they were in question before the National Commission in F.A No. 320/2007 Therefore, it prayed for dismissal of the complaint with costs. The points that arise for consideration are: (i) Whether the complainant is entitled to any amount covered under the policy? If so, to what amount? (ii) Whether there was any violation of Section 64 -VB of the Insurance Act and therefore not entitled to any amount? (iii) To what relief?;

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