PIPES LTD. vs National Insurance Co. Ltd.

THIS complaint has been filed by M/s. Shree Pipes Ltd. against the National Insurance Company claiming compensation amounting to Rs. 3,67,092/- for short delivery of the consignment and Rs. 1,00,000/- as interest @ 21% p.a. from 21.3.90,in all Rs. 4,67,092/-. The complainant has further claimed Rs. 1,00,000/- for mental distress and agony.

IT appears that two consignments of asbestos grade BV 4T of 80 MT and 40 MT were consigned to the complainant by the Mineral & Metals Trading Corporation of India Ltd., Bombay. This goods was raw material for manufacturing asbestos cement, pressure pipes and had been imported in India from foreign countries. Under a Marine Certificate of Insurance, the consignment was got insured from the National Insurance Co. Ltd. by the Mineral & Metals Trading Corporation of India Ltd. in the account of the complainant. When the consignment reached Bombay Harbour, there was a shortage of 31 Pallets. The complainant lodged a claim with the National Insurance Co. Ltd. on 21.3.90. The question now involved in this complaint is very narrow. The National Insurance Co. Ltd. has settled the claim of the complainant on 14.8.92 by making payment of a sum of Rs. 3,59,315/- to the complainant. In this regard, the complainant sent a receipt duly signed by him acknowledging the said receipt of the amount being in full settlement and satisfaction of his claim under the insurance policy.

The only grievance of the complainant now is that although the claim was preferred on 21.3.90, but it was settled by the Insurance Company as late as on 14.8.92 i.e., after near about 29 months for no reason and, therefore, the complainant was entitled to get compensation for delay in settlement of the claim by way of interest at 21% p.a. with effect from 21.3.90 and also compensation for mental distress and agony. As against this, the case of the Insurance Company is that for the amount which was payable to the complainant for the loss sustained by him, payment of Rs. 3,59,315/- has been made by the Insurance Company by cheque dated 28.8.92. The complainant has received the said amount in full and final settlement of his claim and, therefore, the complaint deserves to be dismissed with costs.

IN this regard, it may be mentioned that initially the complainant had committed an error in making the claim inasmuch as it had sent a claim bill for Rs. 11,02,275/-. This error was clarified by the complainant on 30.12.90 by sending a letter Annexure 16 to the National INsurance Company. IN this letter, the complainant stated that the actual amount for the loss of 31 Pallets out of 120 Pallets worked out to Rs. 3,67,091/-. The complainant enclosed along with the letter the revised claim bill dated 30.12.90 for Rs. 3,67,091/-. It is thus clear that initially the complainant had made exaggerated claim and the claim was corrected by the complainant only on 30.12.90. For any delay prior to 30.12.90, the INsurance Company is not liable to compensate. However, it is clear that even after 30.12.90 when the complainant made the revised claim for Rs. 3,67,091/-, the Insurance Company took about 20 months in settlement of the claim. It is clear that practically the Insurance Company has settled the claim of the complainant for near about the same amount as had been claimed by the complainant on 30.12.90. There is only a difference of about Rs. 8,000/-. It is thus clear that substantially the Insurance Company accepted the revised claim made by the complainant on 30.12.90.

WE may refer the decision of the National Commission in M/s. Ajmer Singh Cotton & General Mills v. Dr. Manager, United India Insurance Co. & Others reported in II (1993) CPJ 160 (NC). In this case, the National Commission held that after the report of Surveyor had been received, the Insurance Companies should not have taken such a long time in ascertaining if the policies had been ante-dated or in scrutinising the materials. It was held that if the Insurance Companies have taken so much time in making payment after the receipt of the Surveyor''s report, it will amount to deficiency in service. On the facts of that case, the National Commission held that two months time can be taken as reasonable time even for the scrutinising of the report of the Surveyor. In that case also the claimant had given full and final discharge receipt of the claims. It was held by the National Commission that the discharge can only be considered under the policies, but the claim did not arise under the insurance policies and, therefore, the full and final discharge receipts issued by the complainant did not cover the claim for compensation for belated payment. The learned Counsel for the opposite parties urged that the complainant sent the subrogation letter to the Insurance Company dated 28.10.91. subrogating his rights of indemnity as against the Shipping Corporation of India or any other authority in case the short delivered goods was traced out and was offered for delivery. It may be mentioned that a contract of insurance is for indemnity of the loss suffered by the insured. Question of subrogation of rights only arises when the Insurance Company settles the claim of the claimant and offers him the settled amount. Till that is done the Insurance Company does not acquire even an equitable right to give a subrogation letter. The Insurance Company could not delay the settlement of the claim on that account. It could have settled the claim and intimated to the complainant regarding settlement and could have asked the claimant to send subrogation letter. We are of the view that six months time from 30.12.90 was quite reasonable time within which the Insurance Company should have settled the claim of the complainant even after 30.12.90. The complainant filed the present complaint before this State Commission on 12.8.92 and the payment of the claim was made by cheque dated 28.8.92. We are of the view that the complainant is entitled to get interest on the amount of Rs. 3,58,315/- at 15% p.a. from 1.7.91 till 28.8.92 as compensation for late settlement of the claim by it.

WE, therefore, partly allow this complaint and direct the National Insurance Company Ltd. to pay compensation to the complainant by way of interest on the amount of Rs. 3,59,315/- @ 15% p.a. from 1.7.91 till 28.8.92 i.e. the date on which the payment was made. No other compensation is called for. Complaint partly allowed.