Judicial Analysis Court Copy Headnote Facts Arguments Court observation

UNION TERRITORY CONSUMER DISPUTES
REDRESSAL COMMISSION, CHANDIGARH
Hon’ble Mr. Justice K.K. Srivastava, President;
Dr. P.K. Vasudeva & Mrs. Devinderjit Dhatt, Members
JAI PARABOLICS SPRINGS LTD.—Complainant
versus
NATIONAL INSURANCE CO. LTD. & ANR.—Respondents
Complaint No. 69 of 1999—Decided on 24.1.2001

Advocates:
Counsel for the Parties :
For the Complainant :Mr. Hemant Bassi, Advocate.
For the Respondents:Mr. R.M. Suri, Advocate.

The main legal point established in the judgment is that the insurance company must justify any deductions made from an insurance claim and that the terms and conditions of the insurance policy, as well as statutory guidelines, must be adhered to.

Headnote:
Consumer Protection Act - Insurance Claim - Section 2-C, Section 17 - The court discussed the insurance claim filed under the Consumer Protection Act, 1986 against the insurance company for non-release of the entire amount of loss incurred by the complainant on account of fire. The court analyzed the insurance policies, premium payments, and the deductions made by the insurance company. The key legal provisions discussed include the terms and conditions of the insurance policy, statutory guidelines of the Tariff Advisory Committee, and the justification for deductions made by the insurance company.
Fact of the Case:

The complainant filed a complaint against the insurance company for non-release of the entire amount of loss incurred due to fire. The insurance company had deducted an amount from the claim, alleging short payment of premium by the complainant. The court analyzed the insurance policies, premium payments, and the deductions made by the insurance company.
Finding of the Court:

The court found that the insurance company wrongly and erroneously deducted a sum of money from the claim, claiming it to be a short-charged premium. The court held that there was no merit in the preliminary objections raised by the insurance company and ruled in favor of the complainant, ordering the insurance company to refund the deducted amount with interest and costs.
Issues: The issues revolved around the non-release of the entire amount of loss incurred by the complainant, the alleged short payment of premium, and the justification for deductions made by the insurance company.
Ratio Decidendi: The court's decision was based on the analysis of the insurance policies, premium payments, and the lack of justification for the deductions made by the insurance company. The court ruled that the insurance company was liable to refund the deducted amount with interest and costs.
Final Decision: The complaint of the complainant was upheld, and the court ordered the insurance company to refund the deducted amount with interest at 12% per annum from the date of claim till the date of actual payment, along with costs quantified at Rs. 5,000.

ORDER

Dr. P.K. Vasudeva, Member—The complainant M/s. Jai Parabolics Springs Ltd., A-30(a), Phase 7, Industrial Area, S.A.S. Nagar, Mohali has filed this complaint under Section 2-C read with Section 17 of the Consumer Protection Act, 1986 (for short hereinafter referred to as the C.P. Act) against the opposite party No. 1 National Insurance Co. Ltd., New Fountain Chowk, Yamunanagar through its Branch Manager and opposite party No. 2 National Insurance Co. Ltd., Chro II, SCO 373-340, Sector 35, Chandigarh through its Regional Manager. The complainant Company was insured against fire by the opposite parties vide Policy No. 3300073/96 Cover Note No. 554235. The said policy was to cover the risk of Rs. 9 Crores and the policy became effective with effect from 7.3.1996 (Copy of Policy - Annexure C-2). The said policy was issued by the opposite parties after charging the entire amount of premium i.e. a sum of Rs. 3,90,522/- per annum which was paid to the opposite parties vide Cheque No. 952025 dated 8.3.1996 for the year 1996-97. In view of the expansion of the Company, the complainant further desired to have insurance risk cover to the tune of Rs. 15.5 Cores for which the Insurance Policy No. 3400002/96 dated 5.7.1996 with effect from 7.7.1996 in favour of the complainant-Company was issued against fire for a premium of Rs. 6,34,162/- per annum by the opposite parties. Out of Rs. 15.5 Crores, Rs. 2.5 Crores were for covering the risk of the building, and Rs. 13 Crores to cover the risk of machinery, against fire. The complainant paid the complete premium for the year 1996-97 on the said amount to the opposite parties vide Cheque No. 622976 dated 3.7.1996 which has been appended as Annexure C-3 with the complaint case. With these two policies, the entire risk was covered to the tune of Rs. 24.5 Crores against fire.

2. In the averments made in para 5 of the complaint, a fire broke out in the factory premises of the complainant on 22.9.1996 thereby resulting into heavy loss on account of the fire. After assessment, the complainant quantified the loss to the tune of Rs. 9,22,202/- and as such, the claim for the said amount was raised from the respondents vide letter dated 18.11.1996 (Annexure C-4). The respondents appointed a Surveyor to assess the damages/loss Caused to the complainants premises on account of the fire. The Surveyor assessed the loss to the tune of Rs. 7,78,250/- against loss of quenching oil, Rs. 95,456/- against other miscellaneous items and Rs. 10,580/- against hydraulic oil. Thus the Surveyor quantified the total loss due to fire at Rs. 8,93,286/-. However, the respondent No. 1 - Insurance Company sent a Cheque No. 919392 dated 6.3.1998 for an amount of Rs. 1,46,997/- (Annexure 4A) against the entire claim raised by the complainant and assessed by the Surveyor of the opposite parties.

3. Aggrieved against the non-release of the entire amount of loss incurred by the complainant on account of fire, the complainant represented his claim vide letter dated 16.3.1998 to the opposite parties (Annexure C-5). The main point in the representation was that no details of the amount of the said cheque was given with regard to the calculation despite the assessment of the losses by their own Surveyor. The opposite parties on 31.3.1998 sent the reply to the representation dated 16.3.1998 (Copy Annexure C-6). On perusal of the said letter, the complainant had alleged that the said deduction was totally uncalled for and were totally unreasonable and without any basis.

4. The complainant-Company again submitted a representation to the opposite parties dated 1.6.1998 which has been annexed as Annexure C-7 along with the complaint case for making the corrections. The opposite parties, it is averred in para 12 of the complaint that after accepting the merit in the grievance of the complainant appointed a new Surveyor to assess the loss afresh. The new Surveyor after the fresh assessment, quantified the losses on account of the fire suffer

Click Here to Read the rest of this document

Judicial Analysis