BUDGE BUDGE COMPANY LTD vs NEW INDIA ASSURANCE CO.LTD

THIS complaint petition was filed by the petitioner Budge Budge Company Ltd., admittedly a sick industry alleging the deficiency in service on the part of the opposite parties. The fact in short is that the petitioner took out Fire Insurance Policies as per rules and upto 1988-89 the said policies were with opposite party No. 1 and opposite party No. 2 National Insurance Company. From time to time the petitioner Company paid premium to Insurance Company, as it would be apparent from the renewal letter. By letter dated Feb. 13, 1989 opposite party No. 1 informed the petitioner that the Calcutta Region of the Tariff Advisory Committee did not allow FEA discount to continue and thus demanded Rs. 3,51,247/- for the period 1988-89. By letter dated 2.3.89 the opposite party No. 2 demanded payment of Rs. 3,01,903/- for the period 1987-88. That by letter dated May 8th, 1989 while informing the petitioner that opposite party No. 1 in the meantime confirmed that additional premium for the period 1987-88 had been paid by the Company to the opposite party No. 2 demanded additional premium of Rs. 3,51,247/-. It is an admitted fact that out of 5 (five) Fire Claims 4 survey reports reached the office of opposite party No. 1 but the claim could not be paid for non-compliance of Insurance Act. Admitted claim amount of Rs. 11,04,522/- still lying unpaid by opposite party No. 1 to the petitioner inspite of several requests and demands. Delay in settlement of insurance claim amounts to deficiency in service and as such this complaint had been initiated.

OPPOSITE party No. 1 filed objection alleging that: (a) It is a case of claim and counter claim as such this Commission has no competence to try and adjudicate the dispute. (b) It relates to question of pricing i.e., fixation of premium as such this Commission cannot entertain the complaint. (c) Guideline given by the Tariff Advisory Committee will have to be respected. (d) In fact there is no deficiency in service on the part of the opposite party No. 1 as alleged in the petition of complaint.

The opposite party No. 2 in their objection alleged that: (i) the complaint is barred by law of limitation. (ii) the complaint relates to Insurance Premium, addition or deduction as such is outside the jurisdiction of this Commission. (iii) the complaint is a money claim in nature as such this Commission has no jurisdiction to try the same. (v) that there is no deficiency in service on their part.

Heard learned Advocates of the contesting parties at length and perused the case record.

ENTIRE case relates to non-payment of admitted claim amount of Rs. 11,04,522/- since 1989 as it would appear from paragraph 31 of the petition of complaint which has not been specifically denied by the opposite parties, rather in their letter dated August 4th, 1995 the opposite party No. 1 while confirming the same informed the petitioner Company to accept Rs. 4,59,602/- after deducting Rs. 6,44,920/- as balance premium. Learned Advocate Mr. N.R. Mukherjee appearing on behalf of the opposite party No. 1 Insurance Company, argued that Tariff means price and price means premium and as such it is case of pricing for which this Commission can not entertain the said case. Learned Advocate of the petitioner placed before us several Dictionaries to show how the meanings of Tariff, Price and Premium had been misquoted by the opposite party No. 1 to patch up their own lacuna. Premium denotes consideration required of an assured for any form of insurance is a money payment and universally referred to as premium. Thus the question of pricing does not come at all. Moreover rules of Tariff Advisory Committee cannot be attracted here since the petitioner Company is a sick Industrial Company within the meaning of sick Industrial Companies (Special Provision) Act, 1985 and as such in view of the provisions contained in Section 22(1) of the said Act the petitioner is entitled to enjoy certain facilities and no steps can be taken against the petitioner Company which are distress in nature and this fact was properly intimated by the petitioner to opposite party No. 1 vide their letter dated 26th September, 1995. Opposite party No. 1''s claim that money due cannot be paid because of non-compliance of provisions of 64 VB of Insurance Act., by the petitioner is a futile attempt to withhold settled dues since in that provision in explanation (5) it has been written that "The Central Government may by rules relax the requirements of Sub-section (1) in respect of particular categories of Insurance Policies". In this case the petitioner being a sick industry enjoys certain priveleges and as such that under no circumstances be curtailed by the direction of Tariff Advisory Committee which is just a policy making body of Insurance Companies having no over-riding power of rules and laws framed by Central Government. Thus viewing from all angled it is crystal clear that opposite parties have withheld the admitted Fire claim amount of Rs. 11,04,522/- of the petitioner. The claim of opposite party No. 2 that the claim of the petitioner is barred bylaw of limitation has also no legs to stand upon since by letter dated August 4,1995 the opposite party No. 1 requested the petitioner Company, to come to a settlement with regard to such payment. By letter dated 8.5.89 the opposite party No. 1 requested the petitioner to send the additional premium of Rs. 3,51,247/- for the period 1988-89 and further informed that Calcutta Regional Committee had informed the opposite party No. 1 that petitioner paid additional premium for the period 1987-88 to the opposite party No. 2, the National Insurance Company. If that be so for the sake of argument it can be questioned that why there would be a deduction of Rs. 6,44,940/-? Moreover the premium asked for by opposite party No. 1 is long after the period. The act and conduct on the part of the opposite parties are really questionable. Knowing fully well that the petitioner Company is a sick industry and enjoys certain facilities purposely made inordinate delay in payment of settled insurance claim amount.

IT is a settled principle that delay in settlement of Insurance Claim amounts to deficiency in service as have been held in series of decisions as reported in II (1995) CPJ 87: II (1994) CPJ 119; I (1995) CPJ 66. From the act and conduct of the opposite parties it is clear that they made inordinate delay in payment of settled amount that too on flimsy ground. The decision reported in III (1994) CPJ 122 (NC) so cited by the opposite party No. 1 relates to quantification of loss. But here in this case the claim amount is clearly admitted. Moreover in the present case no one is impleaded wrongly as was done in the referred case. Thus the said case reference is of no use. In view of the aforesaid discussion we direct the opposite party No. 1 to pay the sum of Rs. 11,04,522/- together with interest at the rate of 18% per annum on and from 8th May, 1989 till the date of payment within three weeks from communication of this order. So far the damage claimed by the petitioner to the tune of Rs. 6,00,000/- we are of the opinion that in absence of proper documents it is not possible to quantify the damage. However considering that the company is a Sick Industry and there was inordinate delay on the part of the opposite parties to pay the settled amount we direct the opposite party No. 1 to pay compensation of Rs. 1,00,000/- to the petitioner within three weeks from the communication of this order together with cost of proceeding assessed as Rs. 3,000/-. The matter is thus disposed of. Complaint allowed with costs.