BINAGURI TEA CO. PVT. LTD. vs National Insurance Co. Ltd.

THIS is an appeal against an order of the Calcutta District Forum-II passed in CDF Case No. 3118 of 95 CDF-II/169/96 dated 27.3.1997 dismissing a complaint of deficiency filed by the appellant complainant on the grounds that the dispute was one of accounting and the complainant was not a consumer. The brief facts of the complaint case are as follows :

THE appellant-complainant Binaguri Tea Company Pvt. Ltd. took out a Tea Crop Insurance Policy for a period of one year from 13.4.1989 to 31.3.1990. For effecting this policy they had paid a premium of Rs. 76,388/- which was accepted by the respondent-1. National Insurance Co. Ltd. (opposite party-1 in the lower Court). In me policy there was a premium adjustment clause (Clause 7) to the effect that the premium collected should be subject to adjustment on the basis of tea actually produced, sold or disposed of. THE insured was required to submit to the insurer a Model Premium Statement certified by the Chartered Accountant within 180 days from the date of expiry of the policy. THE complainant submitted such Model Premium Statement duly certified by a Chartered Accountant Firm from July 16, 1990. THE total premium payable on actual basis for the period from 13.4.1989 to 31.3.1990 was Rs.58.418/-and as such the amount refundable in terms of the policy for the Crop Season Year 1989-90 is Rs. 17.970/-. In a similar way the complainant paid extra premia for the Season Years 1990-91,1991-92,1992-93 and 199394 to the tune of Rs. 1.19.244/-. THE policy in question was actually handed over to the complainant in June, 1995 and that too after repeated requests. THE complainant demanded a refund of the aforesaid amount on the basis of the Chartered Accountant''s Report but the Insurance Company refused the claim. Hence, a complaint was filed before the District Forum, Unit- 1, claiming refund of the excess premium amount and damages. 2A. THE opposite parties-respondents contested the case by filing a written objection. THEy raised various objections against the claim of the complainant. THEir first objection was that the policy of insurance was guided by the terms fixed by the Tarrif Advisory Committee and as such the policy for the period from 1989-90 was due to cover risk from 18.4.1989 to 1.3.1990, i.e. the Tea Crop Season for the said year. Thus, the Model Premium Statement certified by the Chartered Accountant was not correctly prepared. THE opposite parties themselves prepared a premium adjustment statement as per rules and regulations of the Tarrif Advisory Committee and found that the refundable amounts for each year were much less than the amount claimed by the complainant. THE opposite parties also raised an objection that the claim was barred by limitation. The learned District Forum-II after hearing the parties at length held that the complaint was actually not barred by limitation. As regards the contention that the period of the insurance policy was to be re-modelled on the basis of the Tarrif Advisory Committee''s Report, the District Forum held that the relevant premium having been accepted by the Insurance Company and the period of insurance being noted on the body of the policy, the contention of the Insurance Company could not be upheld. As regards the amounts to be refunded, however, the Forum was of the view that it was purely a matter of accounting and that the same should be adjudicated before a competent Forum other than the Consumer Forum as no consumer dispute was involved in this case. In that view of the matter, the Forum dismissed the complaint and advised the complainant to move the appropriate Forum for redressal of their grievance.

The point for determination is if the view taken by the District Forum concerned is correct and if not, what relief the complainant is entitled to ? Decision

WE have perused the papers submitted by both the parties. WE have also seen the terms of the Crop Insurance Policy and the report of the Tariff Advisory Committee. As regards the point of limitation we agree with the views expressed by the Forum that this case was not barred by limitation. There is no doubt that the Insurance Company kept the matter hanging for a long period without actually repudiating the claim or allowing it in part or whole. In such circumstances, we endorse the views of the District Forum that the cause was continuing and there was no bar of limitation. As regards the controversy over the period of insurance year also we are in full agreement with the views expressed by the District Forum. The issue of the policy after accepting the aggrieved premium made a conclusive contract between the parties and the terms of the same could not be varied by a subsequent report of the Tariff Advisory Committee. This view is fully supported by a decision of the Supreme Court reported in III (1996) CPJ 8 (SC), United India Insurance Company Ltd. v. MKJ Corporation. In paragraph 6 of the said judgment the Supreme Court observed as follows : "The duty of good faith is of a continuing nature. After the completion of the contract, no material alteration can be made in its terms except by mutual consent. The materiality of a fact is judged by the circumstances existing at the time when the contract is concluded. In the present case, the introduction of the Tarrif Advisory Committee document materially affects the terms of the policy, resulting in the denial of the very indemnity of claim. And this was what the appellant sought to do, at the stage of clearing of the complaint. The Commission rightly rejected the appellant''s plea. Notwithstanding this, on behalf of the appellant, it was insisted that the instructions of the Tarrif Advisory Committee form part of the contract. Admittedly, the appellant-insurer had not incorporated the above quoted clause as part of the policy undertaken with the insured. Consequently, the insured is not bound by this exclusionary clause of liability since the appellant-insurer, admittedly, had undertaken liability for the riot or strike, damage due to riot or strike."

IN this case, the original contract was prior to the publication of the Tarrif Advisory Committee and any suggestions or requirements incorporated in the said report cannot legally be a binding factor in the terms of the policy. Moreover, the report of the Tariff Advisory Committee was not made known to the complainant at any time during the period of dispute in the instant case. It was never suggested that the Model Premium Statement to be prepared by the Chartered Accountant was to be re-modelled on the basis of the Tariff Advisory Committee. So, the contention of the INsurance Company that the claim is bad for not following the suggestions of the Tariff Advisory Committee is not at all acceptable. The Calcutta District Forum-II has, however, rejected the claim of the complainant on a technical ground that this is purely a dispute of accounting and not a consumer dispute. We are afraid that the view taken by the Forum is not correct. An insurance claim arises out of a service of insurance as defined in the Consumer Protection Act. It is very much a service coming under the Act. If the basis of claim made by the Insurance Company is found to be wrong and the basis of calculation relied on by the complainant is accepted to be true, the question of accounting is actually not a complicated matter. It is actually not a claim of money but a claim arising out of an insurance policy. As discussed above, we have found that the claim is covered fully by the policy of insurance as provided in Clause 7. It is not a question of difference of two amounts of claim simplicitor but a claim on the basis of two different criteria. We have A ready shown above that the criterion followed by the complainant should be accepted and as such there is no difficulty of accounting as has been pointed out by the District Forum. For the above reasons, we hold that the decision of the District Forum is not a correct one. The claim of the complainant is essentially a consumer''s claim and the complainant is a consumer. As we find that the Model Premium Statements placed by the complainant on the basis of a Chartered Accountant''s Certificate are true, we allow the complainant''s claim in full. This appeal is accordingly allowed. The order dated 27.3.1997 passed in CDF-II/169/96 is hereby set aside. The complainant''s case in the aforesaid case is allowed. The opposite parties are directed to pay Rs. 1,19,244/- (Rupees one lakh nineteen thousand two hundred forty four only) to the complainant within one month from the date of communication of this order. The aforesaid amount shall carry an interest @ 18% p.a. from the date of filing the complaint case before the Calcutta District Forum, Unit-1, till the date of payment. The opposite parties are also directed to pay cost of Rs. 2.000/-. The case is, thus, disposed of. Appeal allowed.