PLASTIC INTERNATIONAL vs Divisional Manager, New India Assurance Co. Ltd.

A complaint is filed by M/s. Plastic International against New India Assurance Co. Ltd. alleging deficiencies in the service. Admittedly, Complainant was insured by the Opposite Party under Insurance Policy No. 11/110400/06476 for the period from 1.4.91 to 31.3.92 for a total sum of Rs. 9 lakhs. In an incident of flood on 9.6.91, the insured property under the policy was damaged. The Complainant alleged that their rightful and justifiable Insurance claim is being refused by the Opposite Party. There are again certain admitted facts. The Complainant was being granted previously similar policies to cover the risk of flood/riot etc. and for the year 1991-92 also the Complainant paid the full premium for the similar policy and after the receipt of that premium amount a cover note at ''Exhibit B'' was issued in favour of Complainant by the Opposite Party in which it is clearly stated to cover the risk of flood/riot etc. It is also stated that the Insurance Policy is being forwarded in due course. The Complainant alleged that the Opposite Party, were deficient in its service in not sending the Insurance Policy but unilaterally returned the amount of Rs. 428/- without any covering letter and without any reason for the refund. It is now claimed by the Opposite Party that the amount of Rs. 428/- were refunded to the Complainant towards the premium amount and therefore, the complainant was not covered with the risk under a valid policy. The Complainant further submits that the Complainant declined to accept that amount and informed the Opposite Party by letter dated 20.11.93. The Complainant alleged that the services of the Opposite Party were deficient firstly in not issuing the Insurance Policy after the grant of cover note and secondly unilaterally refunding the amount of the premium without assigning any reasons. The Complainant, therefore, alleged the action of the Opposite Party is wrongful, arbitrary and amounts to deficiency in the service.

THE Opposite Party filed a routine denial in its version. However, the Opposite Party has not given any reason in not sending supplying the necessary cover and especially, when the previous policies covered the similar risk. THE Opposite Party has produced a copy of the survey report of M/s. Bhatawadekar & Co. who have assesed the Complainant''s loss at Rs. 4,28,400/- and also quantified his salvage value at Rs. 1,77,800/-. It is again to note that the learned Advocate for the Opposite Party sought adjournments on the ground that the Complainant''s claim is being settled on the basis of the Surveyor''s report and for that purpose, sought time from this Commission. THE complaint was therefore, adjourned for 2-3 times. THE talk of settlement could not be materialised since the salvage value assessed by the Surveyor is not correct. THE Opposite Party was willing to settle the Complainant''s claim for Rs. 2,28,100/- which is not acceptable to the Complainant. According to Complainant, he is entitled for the full loss of Rs. 4,28,400/- as assessed by the Surveyor. We have heard Mr. Mokashi, Advocate for Complainant and Ms. Singh, Advocate for New India Assurance Co. Ltd.

After hearing the arguments of both the sides and after going through the relevant records, we are satisfied that the Opposite Party, New India Assurance Co. intended to issue an Insurance Policy to Complainant to cover the risk of flood, riot etc. and accepted the premium amount. It is subsequently rectified by issuing a cover note which is at Ex. ''B''. The said cover note clearly states that the Policy is under preparation and will be forwarded in due course. Thus, undisputedly the Insurance Company had decided to issue an Insurance policy to the Complainant but unilaterally and without consulting the Complainant refunded his premium amount. The unilateral breach of contract at the instance of the Opposite Party is clearly an act of deficiency and, therefore, the Complainant''s allegations about the deficiencies are abundantly proved. Another circumstances, which support the Complainant''s claim is that the Opposite Party sought time for settlement of the claim and requested this Commission accordingly. Another circumstance is that the Surveyor got the survey done and recommended the amount of Rs. 4,28,400/- towards the settlement of the Complainant''s claim. Thus, we find that the Opposite Party has clearly indulged the acts of deficiencies, as a result of negligence and caused loss to the Complainant by trying to frustrate the Complainant''s claim for unjustifiable reasons. We, therefore, find that the Complainant is entitled to claim the compensation for the delayed settlement of the Complainant''s claim. Although the Complainant''s claim is of Rs. 9 lakhs towards the total claim, we restrict the amount of compensation to Rs. 2,28,100/- as assessed by the Surveyor. Since there has been inordinate delay in settlement of Complainant''s claim, we would like to award the compensation to Complainant by way of interest at the rate of 18% per annum over the amount of loss of Rs. 4,28,400/-. Hence we pass the following order. ORDER

THE complaint is allowed. THE Opposite Party is directed to settle the Complainant''s claim for Rs. 2,28,700/- together with 18% per annum interest from 3 months after the date of incident, till realisation. THE Complainant also be paid Rs. 1000/- as cost. Complaint allowed with costs.