BINANI ZINC INDUSTRIES LTD. REP. BY ITS MANAGING DIRECTOR Vs. NEW INDIA ASSURANCE CO.LTD.
KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Binani Zinc Industries Ltd. Rep. By Its Managing Director
NEW INDIA ASSURANCE CO.LTD.
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M.V.VISWANATHAN, JUDICIAL MEMBER -
(1.) THE complaint filed under
Section 17 of the CP Act.
The case of the complainant is as follows:
The complainant is a company engaged in the business of
manufacture and sale of zinc ingots and other chemicals. The complainant
requested various insurance companies including the opposite party
Insurance Company for submitting quotations for the insurance premium for
covering the risks by letter dated 7.11.2000. The opposite party
submitted a quotation incorporating the premium payable for the contract
of insurance. After various discussions and clarifications the
complainant accepted the quotation submitted by the opposite party and
effected payment of Rs.45,00,228 towards premium for the policy. The
premium was paid by demand draft and the same was encashed by the
opposite party/Insurance Company. But, the opposite party failed to issue
the policy as per the contract. By the letter dated 25.4.2001, the
opposite party made a demand for a further amount of Rs.2,17, 902 on the
ground that the said amount was required to regularize the policy as per
Tariff Advisory Committee Directives. The complainant paid the said
amount also by way of demand draft which was enchased by the opposite
party. Subsequently, another letter dated 7.6.2001 was received demanding
additional premium of Rs. 12,92,311 for issuing the policy. The
complainant by their letter dated 12.6.2001, specifically informed the
opposite party that the above action demanding further amount towards
premium amounts to breach of contract and thereby denied the liability to
pay the additional premium. The opposite party was also directed to issue
the policy. But, the opposite party issued a letter dated 18.6.2001
stating that if the balance premium is not received by 5.7.2001 they will
cancel the policy with effect from 6.7.2001. The opposite party by their
letter dated 6.7.2001 cancelled the policy by appropriating an amount of
Rs.15,40,675 and refunded Rs 29,59,553. It was stated that the said
Rs. 15,40,675 is appropriated towards the proportionate premium
that was payable for 96 days during which the policy was in existence.
The aforesaid action of the opposite party would amount to breach of
contract and deficiency in service. The opposite party has also committed
unfair trade practice. They have no right to retain a sum of Rs.
15,40,675 by computing premium at Rs.57,36,998. The opposite party had not issued any policy of insurance and hence they are not entitled to
deduct any amount. The complainant had to incur further expenditure of
Rs. 8,49,530 for taking another policy. But; the complainant admits the
said claim for compensation at Rs. 4,59,325. Thus, the complainant
claimed a total of Rs. 20,00,000 with future interest at the rate of 24%
per annum and costs of proceedings.
(2.) THE opposite party New India Assurance Company Ltd. entered appearance and filed written version denying the alleged deficiency of
service and unfair trade practice. They contended that the insurance
coverage given to the complainant under Industrial All Risks Policy (IAR
Policy), which was held to be operative till 5.7.2001 was cancelled on
6.7.2001 for non -remittance of the balance premium demanded in accordance with the relevant instructions issued by the statutory authority the
Tariff Advisory Committee. The opposite party was entitled to appropriate
the pro -rata premium for the insurance coverage given for 96 days in
respect of the properties for a total sum insured of more than Rs.304
crores. The complainant has not suffered any loss or damage because of
the aforesaid action on the part of the opposite party. The opposite
party submitted the quotation subject to the control exercised by the
Tariff Advisory Committee and that the same was also specified in the
letter issued by the opposite party to the complainant. The policy was
issued to the complainant covering the risk with the policy bearing
No.760702/11/01/00080 ''Standard Fire and Special Perils Policy. The
opposite party was constrained to cancel the policy because of the
failure of the complainant to pay the balance premium which was reworked
at Rs. 12,68,536. The policy was cancelled on expiry of the notice period
of 15 days. The claim for refund of Rs. 15,40,675 is unsustainable as the
opposite party can very well retain the said amount as pro -rata premium
for the assured coverage for 96 days. The claim for compensation of Rs.
8,49,530 is also legally unsustainable, Thus, the opposite party prayed for dismissal of the complaint with costs.
(3.) THE points that arise for consideration are:
1. Whether there was any deficiency of service or unfair trade practice in retaining/deducting sum of Rs.15,40,675 by the opposite party/Insurance Company was of pro -rata premium for the alleged insurance coverage given for 96 days?
2. Whether the opposite party New India Assurance Company Ltd. had issued any policy insuring the property of the complainant as contended by the opposite parties?
3. Whether the claim for refund of Rs.15,40,675 is legally sustainable?
4. Whether the complainant is entitled to get compensation of Rs. 4,59,325 as claimed in the complaint?
5. What order as to relief and costs?
The evidence in this case consists of Exs.A1 to A13 and R1 to R11. No oral evidence was adduced from either side. The Assistant Vice
President (finance) of the complainant filed proof affidavit in support
of the case of the complainant/company. The Senior Divisional Manager of
the opposite party/Insurance Company filed proof affidavit in support of
the contentions of the opposite party.;
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