National Consumer Disputes Redressal
National Insurance Company Ltd. vs Vijay Mistry on 16 February, 2017
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 1496 OF 2016 (Against the Order dated 24/08/2016 in Complaint No. 74/2006 of the State Commission Maharastra) 1. NATIONAL INSURANCE COMPANY LTD. THROUGH ITS REGIONAL OFFICE AT: NATIONAL LEGAL VERTICAL, 2E/9, JHANDEWALAN EXTEN., NEW DELHI-110055 ...........Appellant(s) Versus 1. VIJAY MISTRY THROUGH ITS PROPRIETOR DIGNUS APPLIED AESTHETICS, 27, F. KASTURCHAND BUILDING, GOKHALE ROAD (SOUTH) DADADR (W), MUMBAI-400028 ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Appellant : Mr. Animesh Sinha, Advocate For the Respondent : Mr. Sukumar Pattjoshi, Sr. Advocate with Mr. Vikas Nautiyal, Advocate
Dated : 16 Feb 2017 ORDER
JUSTICE V.K.JAIN (ORAL)
The respondent/complainant obtained a Fire & Special Perils Policy from the appellant company initially for the period from 19.6.2001 to 18.6.2002, in respect of the stock pertaining to his trade at B-9, J.K. Compound, near Arihant Complex, Village Kalhar, Bhivandi, Dist. Thane, Maharashtra, to the extent of Rs.35 lakhs. The table on the first page of the first policy reads as under:-
"Sr. No. Tariff Ref.
Description of the Risk Basic Kutcha (-) RSKTD/STFI (+/-) Claim/FEA Disc (+) E'qke Det. Stock (+) Forest Spont. Fire (+) Other Net Rate Sum Insured Annual Premium 1 VI/19G Stocks pertaining to insured's trade. (Godown - CAT.I. Goods) Address: B-9, J.K. Compound, near Arihant Complex, Village Kalhar, Bhivandi, Dist. Thane 2.50 0.20 2.70 35,00,000 It would thus be seen that while issuing the above-referred policy, the appellant company did not exclude the STFI cover which admittedly the insured had sought in the proposal submitted by him. For the next year, i.e., from the period from 19.6.2002 to 18.6.2003, the insurance policy identical to the first policy was issued to the complainant/insured. The premium charged from the complainant/respondent was Rs.12,044/- in both the years. However, the table on the insurance policies for the period from 19.6.2003 to 18.6.2004 and for the period from 21.6.2005 to 20.6.2006, the table on the policy read as under:-
"Risks covered Risk/Rate Code No. Block No. Basic Rate (Permile) RSHD Excl.(Per mile) STFI Excl. (per mile) Disc/Load (%) Claim Exp (%) Net Rate(%) Sum insured In Rupees Premium In Rupees Building 19/9 1 2.500 0.000 0.259 0.00 0.00 2.250 0 0 Stock (s)/content (s) 2.500 0.000 0.250 0.00 0.00 2.250 35,00,000 "Risks covered Risk/Rate Code No. Block No. Basic Rate (Permile) RSHD Excl.(Per mile) STFI Excl. (per mile) Disc/Load (%) Claim Exp(%) Net Rate(%) Sum insured In Rupees Premium In Rupees Building 20/9 1 2.500 0.000 0.250 0.00 0.00 2.250 0 0 Stock (s)/content(s) 2.500 0.000 0.250 0.00 0.00 2.250 35,00,000 It would thus be seen that while issuing the policies for the period from 19.6.2003 to 18.6.2004 and 21.6.2005 to 20.6.2006, the insurer excluded the STFI cover by reducing the premium. A sum of Rs.11,151/- was charged for the period from 19.6.2003 to 18.6.2004. The premium charged was Rs.10,607/- for the period from 21.6.2005 to 20.6.2006.
2. The complainant/respondent having suffered loss on account of floods, on 26.7.2005 a claim of Rs.35 lakhs was lodged by him. Though the surveyor assessed the loss to the complainant at Rs.34,12,796/-, the claim was not considered taking the stand that the policy did not cover the peril of storm, tempest, flood and inundation (STFI). Being aggrieved from the stand taken by the insurer, the respondent/complainant approached the concerned State Commission by way of a consumer complaint.
3. The complaint was resisted by the appellant/insurer primarily on the same ground on which the claim had been repudiated.
4. The State Commission vide impugned order dated 24.8.2016 directed as under:-
"1.Consumer complaint is partly allowed with costs quantified at Rs.25,000/- (Rupees Twenty Five Thousand only).
2. Opponent/Insurance Co. is directed to pay Rs.31,23,406/- (Rupees Thirty-One Lakhs Twenty Three Thousand Four Hundred Six only) to the complainant towards full and final settlement of claim under the insurance policy within a period of 45 days together with interest @ 9% p.a. from the date of filing of consumer complaint i.e. 25.5.2006. Interest shall be enhanced to 12% p.a. till realization in case of non-compliance within stipulated period."
5. Being aggrieved from the order passed by the State Commission, the insurer is before this Commission by way of this appeal.
6. The contention of the learned counsel for the appellant is that since the insurer had excluded the STFI cover and reduced the premium accordingly, the benefit of STFI cover was not available to the insured and, therefore, rejection of the claim was justified. The exclusion is sought to be justified on the basis of Clause 1(c) of the General Rules and Regulations framed by the Tariff Advisory Committee on 31.3.2001. The learned counsel for the complainant/respondent, however, has contended that (1) the Regulations relied upon by the insurer permits exclusion of such a cover only at the inception of the policy, i.e., at the time when the policy is issued for the first time, on the basis of the proposal submitted by the insured (2) the exclusion of STFI cover was not brought to the notice of the insured either by the insurer or by its agent before the such exclusion was made (3) the agent had filed an affidavit before the State Commission stating therein that the aforesaid exclusion of STFI cover was not brought to the notice of the insured.
7. It would be seen from a perusal of the tables appearing on the insurance policies that the insurer did not exclude the STFI cover while issuing the first two policies. It is also evident that the STFI cover was excluded while issuing the 3rd policy, i.e., the policy for the period from 19.6.2003 to 18.6.2004 as well as at the time of issuing the 4th policy, i.e., the policy for the period from 21.6.2005 to 20.6.2006. This was done by recording the premium deducted on account of the aforesaid exclusion in the column under heading 'STFI Excl'. It would also be seen that the insurance premium which was Rs.12,044/- for the period from 19.6.2002 to 18.6.2003 was reduced to Rs.11,151/- while issuing the policy from 19.6.2003 to 18.6.2004. As a result, lesser premium was paid by the insured for the period from 19.6.2003 to 18.6.2004. The same was the position for the period from 21.6.2005 to 20.6.2006 since a lesser premium of Rs.10,607/- was paid for the same insured amount of Rs.35 lakhs.
8. Having received the insurance policy for the period from 19.6.2003 to 18.6.2004 incorporating deduction on account of STFI exclusion and taking a lesser premium of Rs.11,151/- as compared to the premium of Rs.12,044/- in the previous policy year, the complainant/insured had an opportunity to protest against the said exclusion, by writing to the insurer that the exclusion was not acceptable to him and he was ready to pay the premium required for a policy without exclusion of STFI cover. That, however, was not done by the complainant who took the benefit of paying a reduced premium.
9. When the policy for the period from 21.6.2005 to 20.6.2006 was sent to the complainant/insured, again he did not protest against exclusion of the STFI cover and did not write to the insurer to issue a revised policy without exclusion of STFI cover. Again, he paid a reduced premium of Rs.10,607/- which came to be charged on account of exclusion of STFI cover. Having accepted the aforesaid two policies with the STFI cover exclusion and having paid a lesser premium on account of the said exclusions, the complainant/insured, in my view, is estopped from claiming the benefit of STFI cover even if I proceed on the basis that such exclusion was not permissible under the General Rules and Regulations framed by the Tariff Advisory Committee and no prior notice of the said exclusion was given to the insured either by the insurer or by the agent.
10. For the reasons stated hereinabove, the impugned order cannot be sustained and the same is accordingly set aside. The complaint is consequently dismissed, with no order as to cost.
......................J V.K. JAIN PRESIDING MEMBER