LALLACHERRA TEA CO. LTD. vs United India Insurance Co. Ltd.

IT is admitted that the complainant insured the tea crops for the year 1991-92 for worth of Rs. 1,60,00,000/- as per Policy No. 130301/86/1/ 00030/91 and paid total premium of Rs. 1,24,071/- as per agreed terms of the Insurance Policy and demanded by the Insurance Company. IT is also admitted that fire broke out on 11.1.92 and finished tea was burnt/gutted by devastating fire and the several surveyors appointed by the Insurance Company in this regard who assessed the loss at Rs. 6,30,528/- as against claim of Rs. 7,23,286/- made by the insured.

THE Insurance Company for the first time as per its alleged letter dated 5.5.94 demanded an arrear premium of Rs. 1,62,837/- and repeated the said demand of arrear premium of Rs. 1,62,837/- while approving the claim of Rs. 6,50,528/- on account of the claim of the insured for its loss of finished tea by devastating fire. In this regard irregularities and inconsistencies of statements made by Insurance Company are worthy to be noted. On the first occasion as per letter dated 5.5.94 the said claim of Rs. 1,62,837/- of the Insurance Company was related against arrear premium of the year 1992-93 again in the letter dated 5.7.94, the Insurance Company tried to relate the said claim of Rs. 1,62,837/- against arrear premium for the year 1991-92 and then again in the written objection filed by the Insurance Company the claim of premium has been stated as Rs. 3,65,780/- and after adjustment of Rs. 1,24,071/- paid by the insured an arrear premium has been shown as Rs. 2,41,709/-.

In the aforesaid situation, we believe that the insured paid the actual premium as per Policy conditions and disbelieve the said erratic statements of Insurance Company being baseless and after-thought.

THE subsequent plea of claim of arrear premium for the years 1990-91, 1991-92 and 1992-93 on the basis of Tariff rate fixed by the Tariff Advisory Committee is not also tenable to us in view of the decision in the case of Ramaseshaya Raw and Boiled Rice Mills v. United Insurance Co. Ltd. reported in I (1993) C.P.J. 56 (NC)pronounced by National Commission which runs thus: "THE so called Tariff Rules are not statutory rules because rules framed under Section 114 of the Insurance Act have to be mandatorily published in the Gazette of India which obviously had not been done inasmuch as the rules are said to be "confidential" rules or instructions which have not been disclosed to the complainant at any stage and whose terms have been incorporated in the Insurance Policy."

It would be also relevant to examine the provisions of Section 64 UC of the Insurance Act which describe the power of the Advisory Committee to regulate rates advantages etc. Sub-section (1) : "The Advisory Committee may from time to time and to the extent it deems expedient, control and regulate the rates advantages, terms and conditions that may be offered by insurers in respect of any risk or in respect of any class or category of risks, the rates advantages, terms and conditions of which in its opinion, it is proper to control and regulate and any such rates advantages terms and conditions shall be binding on all insurers". Sub-section 5 : "Where an insurer is guilty of breach of any rate, advantage, terms or conditions fixed by the Tariff Advisory Committee he shall be deemed to have contravened the provisions of this Act." So the decisions of TAC have no direct impact upon the insured as per provisions of Law.

THE calculation of alleged arrear premium as per recommendation of the Tariff Advisory Committee on the basis of 30% loading over and the actual production and the tariff rate fixed in this regard which is not incorporated in the original policy is illegal and not tenable. We, therefore, hold that the premium paid by the insured as per terms of the insurance agreement is proper and full satisfaction of the insured sum of Rs. 1,60,00,000/- and excess payment of Rs. 1,843,63 has been made thereby by the insured. It is admitted that the denaturing certificate demanded by the Insurance Company was supplied by the insured on 10.3.94. We are of opinion that there is no jurisdictional error in view that the opposite party has its branch or Divisional Officer within jurisdiction of this Commission and it satisfies the ingredients of Section 11(2) of the Consumer Protection Act, 1986. We also hold that the claim is not barred by limitation as the limitation starts from the date of repudiation as per decision in the case of Dawood Kumar Taj & Ors. v. Oriental Insurance Co. Ltd. reported in II (1994) CPJ 14 and the claim not being repudiated by the Insurance Company it is not barred by time but it has been neglected and delayed arbitrarily and unreasonably on different false pretexts and the said actions are extreme deficiency in service.

IN the circumstances, we allow the complaint petition on contest and award directing the opposite parties to pay the sum of Rs. 6,50,528/- together with interest @ 18% p.a. effective from April, 1993 until payment within one month from the date of this order. The petitioner shall communicate the order as early as possible.

WE award cost of Rs. 2,000/- to the complainant/ petitioner payable by the opposite parties. Complaint allowed with costs.