State Consumer Disputes Redressal Commission
New India Assurance Co. Ltd. vs Shri Chandrashekhar Exports Pvt. Ltd. on 9 June, 2010
CONSUMER DISPUTES REDRESSAL COMMISSION CONSUMER DISPUTES REDRESSAL COMMISSION MAHARASHTRA STATE, MUMBAI FIRST APPEAL NO. 1598 OF 2007 Date of filing : 18/12/2007 IN CONSUMER COMPLAINT NO. 214 OF 2005 Date of order : 09/06/2010 DISTRICT CONSUMER FORUM : KOLHAPUR New India Assurance Co. Ltd. Divisional Office at 1036, E Rajaram Road, Kolhapur. Appellant/org. O.P. V/s. Shri Chandrashekhar Exports Pvt. Ltd. Office at 559/E, Vyapari Peth, Shahupuri, Kolhapur-416 001. Respondent/org. complainant Quorum : Shri P.N. Kashalkar, Honble Presiding Judicial Member
Mrs.S.P. Lale, Honble Member Appearance : Mr.M.M. Mahajan, Advocate for the appellant.
None for the respondent.
-: ORDER :-
Per Shri P.N. Kashalkar, Honble Presiding Judicial Member Being aggrieved by the judgement and award passed by District Consumer Forum in consumer complaint No.214/2005 whereby while allowing complaint partly, Forum below directed the O.P. to pay compensation for indemnity to the complainant of Rs.4,04,505.60 with interest @ 9% p.a. from 25/11/2004 till actual realization and also directed to pay Rs.1,000/- as cost, org. O.P./Insurance Company has filed this appeal challenging the said judgement and award dated 26/10/2007 taking strong exception to the award passed thereunder.
The facts to the extent material may be stated as under :-
The complainant is in export business. He sent goods to the different countries. He had purchased Marine Insurance Policy. Said policy was in force from 16/1/2004 to 15/01/2005. He had opened with the Insurance Company a Cash Deposit Account in which the complainant used to keep some lump sum amount and used to utilize said amount towards payment of premium for each consignment he would be sending outside the India.
Every time when he would send consignment of export to other country, he would send along with copy of Invoice, the declaration to the Insurance Company and in the declaration, he used to mention the value of Invoice as well as the amount of premium spent for that particular declaration. This was going on for 3-4 years. When on 13/05/2004 the complainant/Company had sent one export consignment as per usual Invoice and Declaration and copy of Declaration and Invoice was sent to the O.P./Insurance Company. Said consignment however got damaged due to heavy rain (which is a sort of flashy rain) and the consignment was totally damaged in the rain. He therefore, intimated the loss of consignment to the Insurance Company by lodging claim. The Insurance Company repudiated the claim on the ground that there was insufficient balance of premium in the Cash Deposit Account. Aggrieved by the repudiation of claim, consumer complaint was filed by the complainant/Company against the Insurance Company. While filing consumer complaint they had asked for damages of Rs.4,44,256/- with interest @ 18% p.a. and also claimed Rs.20,000/- as compensation by way of mental harassment.
O.P. filed written statement and denied the allegations made in the complaint. According to the O.P. complainant was to maintain Cash Deposit Account with it and from Cash Deposit Account, premium for every consignment was to be deducted but, when declaration No.41 was received, at that time Cash Deposit Account was not having sufficient amount to meet declaration No.41. Therefore, they had repudiated the claim on that ground itself. According to the O.P. when the declaration No.41 was received by them, at that time in the Cash Deposit Account, amount of Rs.1,769/- was lying as balance, whereas premium required for that Declaration or consignment was Rs.4,467/-. So, there was not adequate balance in the Cash Deposit Account of the complainant. The Insurance Company pleaded in the written statement that the claim involved in the Declaration No.41 was rightly repudiated by them. The Insurance Company therefore, pleaded that complaint should be dismissed since it was not guilty of deficiency in service by inaction.
Upon hearing the Learned Advocates and upon perusal of the documents and affidavits placed on record, Forum below held that the consignment under question with reference to Declaration No.41 was being sent to Taiwan via Nashik-Satana-Mumbai route. O.P. had issued insurance policy bearing No.151100/21/04/00027 giving cover of assured sum of Rs.20,61,532/-. The complainant was purchasing policy of this nature for the last 8 years and premium used to be deducted from Cash Deposit Account maintained by the complainant with the O.P./Insurance Company. Forum below found that complainant had deposited amount of Rs.15,000/- in the Cash Deposit Account and on 14/05/2004 when the consignment was being sent from Taloja to Taiwan, because of heavy rains, consignment got damaged when it was on the road from Satana to Mumbai and therefore, claim was rightly lodged by the complainant. Forum below observed that if at all there was no cash balance in the Cash Deposit Account of complainant on 14/05/2004 when Declaration No.41 was sent by the complainant to the Insurance Company, the Forum below was of the view that Insurance Company should have asked the complainant to pay the balance amount and then should have given insurance cover as per Declaration No.41 as per the insurance cover answering Declaration No.41. However, this was not done and therefore, Forum below was of the view that there was deficiency in service on the part of the Insurance Company and therefore, it allowed the complaint and directed the Insurance Company to pay Rs.4,04,505.60 with interest @ 9% p.a. to the complainant and also awarded cost of Rs.1,000/-. Aggrieved thereby the Insurance Company has filed this appeal.
None appeared for the respondent/org. complainant. Mr.Sameer Tambekar, Advocate had appeared for the respondent on 17/03/2010, but any how on last date and today he was not present in the Court. Therefore, we heard Mr.M.M. Mahajan, Advocate for the appellant/Insurance Company extensively. He has produced on record for our benefits the Declarations received from the respondent/complainant-Company. Declaration numbers are from 38 to 43. All are dated 14/05/2004. In fact as per Marine Insurance contract, the policy purchased by the complainant-Company, it was duty of the complainant-Company to dispatch within 7 days copy of Invoice as well as Declaration to it. But, it appears that complainant-Company took latitude and sent 7to8 Declarations only on 14/05/2004. Declaration No.41 was received by Insurance Company on 19/05/2004. In this Declaration amount of premium was Rs.4,467/-, but amount in balance on that day in the Cash Deposit Account was not enough to cover that premium amount. It was just Rs.1,769/-. So, balance in the Cash Deposit Account of the complainant was inadequate to meet the premium of Declaration No.41 and on this ground Insurance Company mentioned that the claim submitted against consignment was not admissible as Cash Deposit Account was having insufficient balance on that day. Letter dated 25/11/2004 was issued accordingly. Mr.Mahajan, Learned Advocate for the appellant brought to our notice the repudiation letter sent by the Insurance Company to the complainant. In the said repudiation letter dated 25/11/2004 it has been clearly mentioned that as per provisions of Cash Deposit Account allotted to you is having insufficient balance and as a consequence, consignment in question finds not adequately insured. So, claim preferred is not admissible. Learned Advocate Mr.Mahajan has produced on record the Cash Deposit Account and as per statement of this account, it is revealed that the Insurance Company is properly maintaining the account and deducting the premium amount as and when each Declaration is received by them. So, no fault can be found with the Insurance Company in repudiating this claim.
We are finding that the Insurance Company in the circumstances, has rightly repudiated the claim because on the day the consignment was sent and Declaration 41 was received by the Insurance Company, balance in the Cash Deposit Account in the name of complainant was not having requisite premium amount of Rs.4,467/-. In the circumstances, since this particular Declaration was not having requisite premium duly received by the Insurance Company, Insurance Company was within its legal rights to repudiate the claim. Forum below had taken a very strange view. Forum below was of the view that if the amount was insufficient, Insurance Company should have called upon the respondent/Company to make good the premium amount and then should have allowed the claim. Payment of premium is sine qua non for any insurance cover. If in any instance, premium is not paid then there cannot be insurance cover. Even if respondent/Company was having permanent account in terms of Cash Deposit Account with the Insurance Company for last 8 years, still it was their duty to see that when they are asking for insurance cover for a particular Invoice of particular Declaration, that there was adequate balance in their Cash Deposit Account of the premiums maintained with the Insurance Company. Since there was no cash balance of the requisite amount, in our view the repudiation made by the Insurance Company of this particular claim was just and proper and the Forum below erroneously allowed the complaint ignoring this material aspect of the matter. In the result, we are inclined to allow this appeal to quash and set aside the order passed by the District Consumer Forum. Hence, we pass the following order :-
-: ORDER :-
1. Appeal is allowed.
The impugned order is quashed and set aside. The complaint stands dismissed.
2. Parties are left to bear their own costs.
3. Copies of the order be furnished to the parties.
(S.P. Lale) (P.N. Kashalkar) Member Presiding Judicial Member