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2004 (3) CPR 117 (NC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
M.B. Shah, President and Mrs. Rajyalakshmi Rao, Member
Soya Udyog Ltd.—Appellant
versus
M/s. United India Insurance Co. Ltd.—Respondent
First Appeal No. 105 to 107 of 2000 and FA No. 120 & 121 of 2000
Decided on 8-9-2004
Counsel for the parties:
For the Appellant : NEMO.
For the Respondent:Mr. K.L. Nandwani, Advocate.
Headnote:Consumer Protection Act, 1986 — Sections 12 and 17 — Insurance Act, 1958 — Section 64-UB —Repudiation of claim on sole ground that premium was not received “in advance” — State Commi-ssion upheld the view — Appeal — Marine Insurance policy taken for deli-very of soya extraction — Policy covered the transit risk from warehouse to warehouse — Premium for policy was given by cheque dt. 21-3-1991 — Goods were despatched under railway receipt dt. 20-3-1991 — Policy was issued on 25-3-1991 — Delivery taken on 26-3-1991 was short by 139.97 metric tonnes — Duration of policy was from the time goods were despatched from warehouse — Could policy be said void because goods left the warehouse before pay-
ment of premium ? No — No justifiable ground for Insurance Co. to repudiate
the claim — Appellant held entitled to compensation as assessed by sur-
veyors with interest at 6% p.a. from
date of survayor’s report till date of payment.
Held: The next question which requires consideration is what is the effect of Sec. 64-UB, which, inter alia, pro-vides that no insurer shall assume any risk in respect of insurance business until the premium payable is received by him. In the present case, undisputedly the cheque for premium was paid before the issuance of the policy and before the goods reached the destination. Further, after the goods reached destination it was unloaded in the presence of the Surveyor. The only question is what is the effect of Term No. 5 which provides duration of the policy of insurance. The duration of the policy is from the time the goods leave the warehouse and/or at the place named in the policy for commencement of transit and continues during ordinary course of transit until delivery to the final warehouse at the destination named in the policy. Can it be said that policy was void, because goods left the warehouse before payment of premium? In our view, it will be difficult to accept the said contention, because, in any case, from 21-3-1991, i.e. the date of acceptance of premium the insurance contract came into existence. From that day, at least, insurance coverage would begin. May be that movement of the goods from warehouse to the railway station might not be covered. We make it clear that in these cases that question is not required to be decided, and, therefore, we have made only an observation. But, at least, coverage of risk would start from 21st March, 1991. In this view of the matter, it is apparent that there was no justi-fiable ground for the Insurance Company to repudiate the claim solely on the ground that duration of risk mentioned in the condition No. 5 of the insurance policy provides that it is from warehouse to its destination. Duration is the term of the insurance policy, but that would
not vitiate the concluded contract.(Para 20)
Result: Appeal allowed.
M.B. Shah, President — The short question involved in these Appeals is whether the Insurance Company can repudiate a claim, even after receipt of premium and issuance of policies, on the sole ground that the premium was not received by it in advance as provided in Sec. 64-UB of the Insurance Act, 1958. It is contended by the Insurance Company that the premium was accepted by the officers of the Insurance Company inadver-tently without powers, in violation of the provisions of Section 64-UB , and hence, the contract of insurance is void. That contention of the Insurance Company was accepted by the State Commission.
2. It is the contention of the Comp-lainant/Appellant in all the appeals, that it is a private limited company, engaged in manufacture of soya oil and cake. It took marine insurance policies for safe delivery of soya extraction from Shujalpur to Wind Mill (Jam Nagar). The consign-ment reached the destination, but in all the cases there was short delivery. Hence, it has submitted transit insu-rance claims under marine insurance policies. Those Claims were repudiated by the Insurance Company on the ground that premiums paid cheques were not received in advance as required by
Sec. 64UB of the Insurance Act, 1958 (hereinafter referred to as the Act). It was contended by the Complainant that the said repudiation was illegal and the cheques were accepted, policies were issued before movement of the railway racks. The claims were repudiated after a period approximately 3 year of the occurrence of peril.
3. Hence, complaints were filed before the Madhya Pradesh State Consu-mer Disputes Redressal Commission, Bhopal. These complaints were dismissed by order dated 23.3.2000. Against those judgments and orders these appeals are filed.
4. These are five appeals. In all these appeals, parties are same facts are similar, but the only differences among them are the sum insured, the amount of premium paid, the different dates on which the bookings were done and the different dates on which the goods were despat-
ched by railway racks, the dates on
which the goods reached the destination, etc. All these details are mention
ed tabular form which are, appeal wise, as under:
F.A. Order Sum Premium Ch. No. Ch. Recd. Policy RR dt. Booking Rack Cosign-
No. of insured (in Rs.) Date of By the Was Done Despa- ment
State (in Rs.) issue Insurance Issued on On -ched Reached
Commi- Company On Destination
ssion
105/00 OC 34/95 58,61,227 25.756 675507 21.3.91 25.3.91 21.3.91 17/18.3.91 21.3.91 23.3.91
on at 9.55
21.3.91
106/00 OC 33/95 50,69,232 22.274 5448406 20.12.90 20.12.90 19.12.90 18/19.12.90 22.12.91 25.12.90
on at 21.45
20.12.90
107/00 OC 32/95 41,00,525 18.119 5448582 19.3.91 22.3.91 18.3.91 17/18.3.91 19.3.91 23.3.91
on at 3.40
18.3.91
120/00 OC 31/95 61,32,000 26.994 7597930 1.4.91 1.4.91 29.3.91 29.3.91 31.3.91 Between
on at 10.20 8.4.91 & 30.3.91 18.4.1991
121/00 OC 35/95 54,65,250 24,015 5448538 19.2.91 19.2.91 18.2.91 15/16.2.91 19.2.91 24.3.91
on 19.2.91 at 9.55
5. Since, as mentioned above, in all these appeals parties are same and facts are similar, we will decide First Appeal No. 105 of 2000 and apply the same decision to the other appeals.
First Appeal No. 105 of 2000
6. In this appeal the sum insured is Rs.58,81,227/- for which the Insu-rance Company has issued policy dated 25.3.1991. The risk covered is from warehouse to warehouse. The railway receipts have been issued on 21.3.1991 and the wagon was booked around 17/18th March, 1991. Therefore, the goods left the warehouse on 18/19th March, 1991 and the premium was paid by cheque dated 21st March, 1991. The amount was accepted by the officers of the Insurance Company on 21.3.1991.
7. Admittedly, the policy issued in the aforesaid case was to cover the transit risk from warehouse to warehouse as stated in Column 5 for the duration, which reads as under;
“5. This insurance attaches from the time the goods leave the warehouse
