Back
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
R.C. Jain, Presiding Member and S.K. Naik, Member
HIMACHAL PRADESH STATE FOREST CORPORATION LTD. - Appellant
Versus
NATIONAL INSURANCE CO. LTD. - Respondent
Original Petition No. 118 of 2003
Decided on : 24-04-2012
Mr. Naresh Kumar Sharma, Advocate, for the Appellant; Mr. Pankaj Bala Verma, Advocate, for the Respondent
The main legal point established in the judgment is that an insurance company cannot deduct any amount towards deficient premium from the assessed loss without justification.
Headnote:
Insurance Claim - Deficiency in Service - Companies Act - [Companies Act, 1956, Section 2(17), Section 166] - The court discussed the insurance policy, the assessment of loss, and the liability of the insurance company. It highlighted the calculation of premium, the nature of the policy, and the legitimacy of the demand for additional premium. The court held that the insurance company was not justified in deducting any amount towards the deficient premium from the assessed loss and directed the company to pay the balance amount along with interest.
Fact of the Case:
The complainant sought an insurance claim for the loss caused by a fire at their timber depot. The insurance company resisted the claim, citing the demand for additional premium and service charges.
Finding of the Court:
The court found that the insurance company was not justified in deducting any amount towards the deficient premium from the assessed loss and directed the company to pay the balance amount along with interest.
Issues: The issues revolved around the legitimacy of the demand for additional premium, the assessment of loss, and the liability of the insurance company.
Ratio Decidendi: The court held that the insurance company was not justified in deducting any amount towards the deficient premium from the assessed loss and directed the company to pay the balance amount along with interest.
Final Decision: The court partly allowed the complaint and directed the insurance company to pay the balance sum along with interest and also awarded interest on the assessed amount from the date of assessment.
ORDER
R.C. Jain, Presiding Member (Oral)- Alleging deficiency in service on the part of the opposite party/Insurance Company, the HP. State Forest Corporation Limited, a public limited company incorporated under the Companies Act, has filed the present complaint seeking a direction to the opposite party/Insurance Company to pay insurance claim of Rs. 22,26,800 and also to pay interest amounting to Rs. 27,61,232 calculated @ 24% per annum.
2. In nutshell, the case of the complainant is that in order to cover the risk of their timber and other fuel wood they had taken an insurance policy bearing No. 421205/3300003/93-94 dated 31.10.1993 for a period from 31.10.1993 to 30.10.1994 in the sum of Rs. 7,49,51,602 covering the loss/damage by fire, lightening, explosion/implosion and flood, etc., to their stocks of timber and fuel wood at various locations, by paying a premium of Rs. 7,04,030. During the currency of the said insurance, a fire broke out at Jhaulla Timber Depot in the intervening night of 18.11.1993 and 19.11.1993 thereby destroying the stocks of timber stacked for roping down timber from the forest to road side depot, as a result of which, the complainant suffered a loss to the extent of Rs. 22,26,800. An FIR No. 135/93 dated 19.11.1993 was lodged at Police Station, Tissa and copy of the same was forwarded to the opposite party/Insurance Company and the concerned higher authorities were also informed. Insurance Company appointed a first surveyor Mr. Preet Sharma for assessment of loss caused to the stock of wood of the complainant and he visited the site of loss. However, later the Insurance Company appointed M/s. Purisons, Surveyors and loss assessors, who after taking into account all the relevant factors, assessed the net loss at Rs. 17,08,607 and recommended the payment of the said amount subject to the liability of the Insurance Company going by the terms and conditions of the policy. It would appear that despite the surveyor having assessed the loss, the opposite party sat over the matter and did not settle the claim. Accordingly the complaint was filed.
3. On being noticed, the opposite party/Insurance Company resisted the complaint and filed a detailed reply to the complaint raising preliminary objections about the maintainability of the complaint because the requisite permission was not obtained from the Cabinet Secretariat as matter was between the two Corporations of the Government could be settled through a Committee of Secretaries. On merits, the factum of issuance of the insurance policy as also the factum of peril and loss and damage to the stock of timber on the alleged date and place is not disputed. It is also not disputed that the Purisons Surveyors has assessed the total net loss at Rs. 17,08,607 but the liability to pay the said amount is denied on the premise that the complainant was requested to pay a sum of Rs. 4,60,477 plus service charges towards the extra premium before the disbursement of the assessed amount but the complainant vide letter dated 6.3.1998 declined to pay the same for the reasons that the premium was calculated by the company and not by the complainant. It was also pleaded that in the earlier policy also taken by the complainant from the United India Insurance Company, it had not demanded any floating charges and had settled the fire claim in respect of the fire, which took place at Bharmour by making the payment of the insurance claim. It is stated that the opposite party had always been ready and willing to pay a sum of Rs. 12,01,161 to the complainant after deducting a sum of Rs. 5,07,446 towards the deficient premium and service charge. It is denied that the opposite party is liable to pay any further amount.
4. In the rejoinder, the complainant has controverted the objections and pleas raised by the Insurance Company in its reply and have generally reiterated the averments made in the complaint. It is denied that the opposite party/Insurance Company had demanded any additional
