BINANI ZINC INDUSTRIES LTD. REP. BY ITS MANAGING DIRECTOR Vs. NEW INDIA ASSURANCE CO.LTD.
LAWS(KERCDRC)-2010-7-9
KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Decided on July 30,2010

Binani Zinc Industries Ltd. Rep. By Its Managing Director Appellant
VERSUS
NEW INDIA ASSURANCE CO.LTD. Respondents

JUDGEMENT

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 amount of 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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