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TAMIL NADU STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, MADRAS
Hon’ble Thiru Justice S.A. Kader, President &
Dr. Tmt. Ramani Mathuranayagam, Member
THE COROMANDEL
ENGINEERING COMPANY LTD.—Complainant
versus
NATIONAL INSURANCE CO. LTD.—Opp. Party
O.P. No. 212 of 1993—Decided on 29.12.1993
For the Complainant :Tr. C.A. Sundaram, Advocate.
For the Opp. Party :M/s. Nageswaran & Narichania, Advocates.
1. The absence of a valid insurance contract due to late payment of premiums precludes the complainant from being considered a consumer under the Consumer Protection Act. 2. A claim for refund of premium is subject to a three-year limitation period under Article 113 of the Limitation Act.
Headnote:
CONSUMER PROTECTION ACT - SECTION 17, 12 - INSURANCE ACT - SECTION 64 VB - REFUND OF PREMIUM - NO SUBSISTING CONTRACT OF INSURANCE - CLAIM NOT MAINTAINABLE - LIMITATION ACT - ARTICLE 113 - CLAIM BARRED BY TIME.
Fact of the Case:
The complainant, an engineering contractor, took two workmen's compensation policies from the opposite party. The first policy was for the period from 1.4.85 to 31.3.86, and the second was for the period from 1.4.86 to 31.3.87. The complainant paid the premiums for both policies after the expiry of the policy periods. The opposite party rejected the claims made under the policies on the ground of violation of Section 64 VB of the Insurance Act, which prohibits insurers from assuming any risk in India unless the premium is received or guaranteed to be paid within the prescribed time. The complainant filed a complaint before the Consumer Protection Commission seeking a refund of the premiums paid, with interest.
Finding of the Court:
The Consumer Protection Commission held that there was no concluded contract of insurance between the complainant and the opposite party since the premiums were paid after the expiry of the policy periods. Therefore, the complainant was not a consumer within the meaning of the Consumer Protection Act and could not maintain a complaint before the Commission. The Commission also held that the claim for refund of the premium was barred by limitation since it was filed more than three years after the date of payment of the premiums.
Issues: 1. Whether the claim is maintainable? 2. Whether the claim is barred by time?
Ratio Decidendi: 1. A concluded contract of insurance requires the payment of premium within the prescribed time as per Section 64 VB of the Insurance Act. In this case, the premiums were paid after the expiry of the policy periods, resulting in no valid insurance contract. 2. The claim for refund of premium falls under Article 113 of the Limitation Act, with a limitation period of three years from the date of payment. Since the claim was filed more than three years after the payment of premiums, it was barred by limitation.
Final Decision: The complaint was dismissed as not maintainable and barred by limitation.
Mr. Justice S.A. Kader, President—This is a complaint under Section 17 read with Section 12 of the Consumer Protection Act.
2. The complainant is a company of Engineering Contractors. It has taken several workmen’s compensation policy from the Opposite Party to meet the claims of compensation made by the workers. Policy No. 500200/8600085 E/ 85/015/85 was renewed for the period from 1.4.85 to 31.3.86. The total premium was Rs. 2,92,239/which was paid in two instalments. The first instalment of Rs. 2,18,318/- was paid on 28.7.86 and the balance of Rs. 73,849/- was paid on 16.6.87. The complainant preferred three accident claims (1) in respect of an accident to a worker by name Ravichandran on 23.1.86 for Rs. 26,564/- (2) in respect of an accident which took place on 20.12.85 in which one Sunil Holder was injured for Rs. 20,000/- and (3) in respect of a fatal accident that took place on 27.1.86 in which one Durai died for Rs. 46,772/-. The claims were rejected by the opposite party for alleged violation of Section 64 VB of the Insurance Act. The complainant, therefore, claims refund of the premium of Rs. 2,92,239/- with interest at 21% p.a. totalling Rs. 5,72,788/-.
3. The complainant has taken another policy No. 500200/8600085-E85007/86(R) which was renewed for the period from 1.4.86 to 31.3.87 and the premium of Rs. 1,81,582/-was paid on 16.6.87 (wrongly mentioned in the complaint as dated 16.6.84). Three claims were made under this policy.
(1) An accident which took place on 7.4.86 in which one Varan Krishnaiah died for Rs. 50,000/-
(2) An accident which took place on 26.9.86 in which one Raju was injured for a sum of Rs. 16,385/-.
(3) An accident which took place on 21.3.87 in respect of one Kapil Chaudhary for Rs. 6,074/-.
These claims were also rejected by the Opposite Party, on the ground of violation of Section 64 VB of the Insurance Act. The Opposite Party is, therefore, bound to refund the premium of Rs. 1,81,582/- with interest at 21% p.a. totalling Rs. 3,55,900/-. The complaint is, therefore, filed to recover both these amounts totalling Rs. 9,28,688/-.
4.The claims is resisted by the Opposite Party. It is contended that there is no subsisting contract of insurance and that if the amount paid by the complainant by way of premium should be refunded with interest. It is a simple claim for recovery of money which has to file in a competent Court of civil jurisdiction and not before this Commission as the complainant is not a consumer. It is admitted that the first policy premium was paid in two instalments on 28.7.86 and 16.6.87 after the expiry of the period of insurance, which was from 1.4.85 to 31.3.86. The first claim under that policy in respect of accident which took place on 23.1.86 was received only on 20.6.86, certain particulars were called for and were not furnished. In respect of the second accident which took place on 20.12.85, the intimation was given to the Opposite Party only on 27.1.87. The particulars called for were not furnished. In respect of the third accident, the claim was rejected for non-compliance of the provision of Section 64 VB of the Insurance Act.
5. In the second policy covering the period from 1.4.86 to 31.3.87 the premium of Rs. 1,81,582/- was paid on 16.6.87 and not on 16.6.84 as stated in the complaint which is after the period of expiry. In respect of the first claim under this policy, the particulars called for were not furnished. In respect of the second accident which took place on 26.9.86 the Opposite Party was informed only on 7.4.88 and particulars were also not furnished. The third claim was repudiated for violation of Section 64 VB of the Insurance Act. In any event, there was no deficiency of service of negligence and the claim must fail.
6. Exhs. Al to A11 and Bl to B13 are marked by consent. Mr. A. Neelakantan, Law Officers of the complainant company has filed a proof affidavit. Mr. S. Ponraj, Senior Divisional Officer has filed a proof affidavit on behalf of the Oppos
