Jai Parabolics Springs Ltd. Vs. National Insurance Co. Ltd. and Another - Court Judgment

SooperKanoon Citationsooperkanoon.com/1113254
CourtUnion Territory Consumer Disputes Redressal Commission UT Chandigarh
Decided OnJan-24-2001
Case NumberComplaint No. 69 of 1999
JudgeK.K. SRIVASTAVA, PRESIDENT, THE HONOURABLE DR. P.K. VASUDEVA, MEMBER & THE HONOURABLE MRS. DEVINDERJIT DHATT, MEMBER
AppellantJai Parabolics Springs Ltd.
RespondentNational Insurance Co. Ltd. and Another
Excerpt:
consumer protection act, 1986 - section 2(1)(c) - comparative citations: 2001 (2) cpr 401, 2001 (2) clt 331, 2001 (1) cpc 586, 2002 (1) cpj 92dr. p.k. vasudeva, member: 1. the complainant m/s. jai parabolics springs ltd., a-30(a), phase 7, industrial area, s.a.s. nagar, mohali has filed this complaint under section 2-c read with section 17 of the consumer protection act, 1986 (for short hereinafter referred to as the c.p. act) against the opposite party no. 1 national insurance co. ltd., new fountain chowk, yamunanagar through its branch manager and opposite party no. 2 national insurance co. ltd., chro ii, sco 373-340, sector 35, chandigarh through its regional manager. the complainant company was insured against fire by the opposite parties vide policy no. 3300073/96 cover note no. 554235. the said policy was to cover the risk of rs. 9 crores and the policy became effective with effect from 7.3.1996 (copy of policy - annexure c-2). the said policy was issued by the opposite parties after charging the entire amount of premium i.e. a sum of rs. 3,90,522/- per annum which was paid to the opposite parties vide cheque no. 952025 dated 8.3.1996 for the year 1996-97. in view of the expansion of the company, the complainant further desired to have insurance risk cover to the tune of rs. 15.5 cores for which the insurance policy no. 3400002/96 dated 5.7.1996 with effect from 7.7.1996 in favour of the complainant-company was issued against fire for a premium of rs. 6,34,162/- per annum by the opposite parties. out of rs. 15.5 crores, rs. 2.5 crores were for covering the risk of the building, and rs. 13 crores to cover the risk of machinery, against fire. the complainant paid the complete premium for the year 1996-97 on the said amount to the opposite parties vide cheque no. 622976 dated 3.7.1996 which has been appended as annexure c-3 with the complaint case. with these two policies, the entire risk was covered to the tune of rs. 24.5 crores against fire. 2. in the averments made in para 5 of the complaint, a fire broke out in the factory premises of the complainant on 22.9.1996 thereby resulting into heavy loss on account of the fire. after assessment, the complainant quantified the loss to the tune of rs. 9,22,202/- and as such, the claim for the said amount was raised from the respondents vide letter dated 18.11.1996 (annexure c-4). the respondents appointed a surveyor to assess the damages/loss caused to the complainants premises on account of the fire. the surveyor assessed the loss to the tune of rs. 7,78,250/- against loss of quenching oil, rs. 95,456/- against other miscellaneous items and rs. 10,580/- against hydraulic oil. thus the surveyor quantified the total loss due to fire at rs. 8,93,286/-. however, the respondent no. 1 - insurance company sent a cheque no. 919392 dated 6.3.1998 for an amount of rs. 1,46,997/- (annexure 4a) against the entire claim raised by the complainant and assessed by the surveyor of the opposite parties. 3. aggrieved against the non-release of the entire amount of loss incurred by the complainant on account of fire, the complainant represented his claim vide letter dated 16.3.1998 to the opposite parties (annexure c-5). the main point in the representation was that no details of the amount of the said cheque was given with regard to the calculation despite the assessment of the losses by their own surveyor. the opposite parties on 31.3.1998 sent the reply to the representation dated 16.3.1998 (copy annexure c-6). on perusal of the said letter, the complainant had alleged that the said deduction was totally uncalled for and were totally unreasonable and without any basis. 4. the complainant-company again submitted a representation to the opposite parties dated 1.6.1998 which has been annexed as annexure c-7 along with the complaint case for making the corrections. the opposite parties, it is averred in para 12 of the complaint that after accepting the merit in the grievance of the complainant appointed a new surveyor to assess the loss afresh. the new surveyor after the fresh assessment, quantified the losses on account of the fire suffered by the complainant to the tune of rs. 9,18,476/-. however, the opposite party no. 1 - insurance company sent a voucher (copy annexure c-8) to the complainant asking to issue receipt for acknowledgement for the sum of rs. 4,17,974/- towards full satisfaction and discharge of claims under the policy for fire loss on 22.9.1996 (copy annexure c-9). the complainant has averred in para 14 of the complaint that the respondent no. 1 sanctioned only a claim of rs. 4,17,974/- as against the loss assessed at rs. 9,18,476/- by the surveyor of the opposite parties. an amount of rs. 1,23,684/- had been deducted from out of the amount of loss assessed, purportedly for short charge of premium under policy no. 420402/3400002/96. the complainant-company alleged that they never paid any short premium on any of the policies of the opposite parties. the entire premium as calculated and asked for by the opposite parties was paid to their complete satisfaction. at the time of issuing of the policies and even on the renewal of policies, the amount due as premium from the complainant was paid to the opposite parties. the complainant-company has alleged deficiency in service on the part of the opposite parties-insurance company for not paying the amount assessed by the two surveyors. the relevant portion of para 14 of the complaint is reproduced as under : “...it is pertinent to mention here that the complainant has never paid any short premium on any of the policies from the respondents. the entire premium as calculated and asked for by the respondents was paid to the complete satisfaction of the respondents at the time of issuing of the policy, and even on the renewal of policies, the amount due as premium from the complainant was paid to the complete satisfaction of the respondents. it is further pertinent to mention that initially the amount of premium of policy no. 3400002/96 was quantified at rs. 6,34,162/- per annum which was paid vide cheque no. 622976 dated 3.7.1996 as explained in the foregoing paragraphs. subsequent thereto on renewal of the policy i.e. for the year 1997-98, a premium of rs. 6,34,162/- were again paid to the respondents vide cheque no. 506540 dated 5.7.1997. the respondents in lieu thereof, issued the renewed policy and reflected the factum of receipt of premium from the respondents in the policy itself. a copy of the renewed policy is appended herewith as annexure c-10.” 5. the complainant has prayed that the amount of rs. 1,23,684/- has been arbitrarily deducted for which they are entitled the compensation of the said amount along with interest @ 24% per annum from the date of claim till the date of actual payment and has appended a legal notice (copy annexure c-11). the complainant has also prayed for the grant of compensation on account of loss due to fire amounting to rs. 5,41,658/- along with interest @ 24% per annum. from the date of claim i.e. 18.11.1996 till the date, the said amount is released by the opposite parties. in the joint written statement filed by respondent nos. 1 and 2 - national insurance company limited, the opposite parties have raised the preliminary objections saying that the complaint has not been filed by an authorised person and merit dismissal on this ground only. in the second preliminary objection raised, it has been contended that the amount of rs. 30,931/- were short-charged in the premium and the said amount along with three times thereof liable to be deducted from the compensation payable as per the guidelines of the tariff advisory committee. 6. on merits, the factum of the insurance policy and risk coverage for the building have not been controverted and admitted to be correct to the extent that the complainant company was insured which was as per the terms and conditions of the insurance read with the relevant rules of the tariff advisory committee which is a statutory body and whose rules/guidelines have a statutory force. 7. in reply the opposite parties have denied the contents of paras 3, 5, 8, 11, 12, 14, 15, 16, 17, 18, 19a, 20, 21 and para 22 of the complaint case, whereas paras 2, 7, 9 and 19 have been admitted to be correct by the opposite parties. paras 4, 6, 10 and 13 of the complaint case have been admitted to be correct being the matter of record. in para 14 of the reply, it has been averred by the opposite parties that the deduction made on account of short premium, were made as per the statutory guidelines of the tariff advisory committee. the shortage of premium charges was on account of misrepresentation by the complainant. however, it has been admitted that the policy in question was a renewed policy of insurance. it has been further averred that the contents of the complaint are specifically denied until and unless they are specifically admitted. the complainant has by his own choice, commission and defaults has not taken the amounts as passed and offered to them and hence the complaint is liable to be dismissed. 8. we have heard the learned counsel for the complainant mr. hemant bassi, advocate and the learned counsel for the respondents mr. r.m. suri, advocate, and have carefully perused the evidence in the shape of affidavits led by both the parties and the record of the complaint case. 9. the learned counsel for the complainant contended that the factory m/s. jai parabolics ltd., 8-30(a), phase - vii, s.a.s. nagar, mohali was insured under two policies i.e. policy no. 3300073 of 1996 in lieu of cover note no. 554235 w.e.f. 7.3.1996 to 6.3.1997 for a sum of rs. 9 crores. this policy was issued at yamunanagar. the second policy no. 3400002 of 1996 in lieu of cover note no. 554242 w.e.f. 7.7.1996 to 6.7.1997 was issued to cover the risk of a sum of rs. 15 crores 50 lacs. it was further contended that the complainant firm had duly paid the premium of both the policies and did not commit default in making the payment of the premium. the incident of fire broke out in the premises on 22nd september, 1996 and a claim of a sum of rs. 9,22,278/- was preferred vide report dated 31.3.1998. the opposite party - company, however, offered the claim of rs. 1,46,867/- towards the loss due to fire and delivered a cheque dated 6.3.1998 without submitting the details. it would appear from perusal of the reply of the legal notice served by the complainant on opposite party that the premium paid by the complainant firm was rs. 6,34,162/- whereas it should have been rs. 6,65,083/- which clearly means that the premium paid by the complainant firm to the tune of rs. 30,921/- was less by the said amount. the said shortage of premium of rs. 30,921/- was multiplied by four, subject to the terms and conditions of rule 8.7, the amount came to rs. 1,23,684/- under the aforesaid policies. the dispute, thus, is about the premium of the policy being short paid by a sum of rs. 30,921/-. it is relevant to note that the opposite party prior to the claim of the complainant for compensation for the loss occasioned due to the fire under the policy aforesaid, did not bring it to the notice of the complainant firm that the premium paid by the firm was short by a sum of rs. 30,921/-. it is for the first time that while considering the claim for the said loss, the opposite parties mentioned this fact that there was shortage of a sum of rs. 30,921/- in the payment of the premium for the policy. the policy was undoubtedly taken from 7.3.1996 to 6.3.1997 for rs. 9 crores and later on from 7.7.1996 to 6.7.1997 for a sum of rs. 15 crores 50 lacs. the opposite party - insurance company multiplied the alleged shortage of premium by four under rule 8.7 of the claim management guide the extract of which was placed on record by the opposite parties as annexures to the reply. rule 8.7 provides as under : “8.7. there are cases where incorrect rates are charges under the policy and which does not merit consideration as non-standard claims. in these cases, correct rates are to be charged not only under the affected policy but also for the past three years from the date from which such rate is applicable. these claims need approval of authority one step higher than the normal competent authority. it is made clear that dcc/rcc have no authority to rectify the policy.” 10. in our considered view the opposite party - insurance company cannot charge for the shortage of the premium not only during the relevant period but for the preceding three years period during which the policy was not even taken by the complainant and no premium much less a short premium was paid by the complainant-firm for these three years. even for the alleged shortage of rs. 30,921/-, the opposite party - company could not bring the case under rule 8.7. it is not the case of the opposite party that incorrect rates were charged under the policy. the case of the opposite party company is about shortage in payment of the premium. now coming to the alleged shortage, the policy which was renewed for a sum of rs. 15,50,00,000/- on fire was @ rs. 2 per thousand. the case of the opposite party-insurance company as set up in the affidavit of shri rakesh kanwar, senior branch manager, national insurance company, near fountain chowk, yamunanagar is as under : “4. that the policy of insurance issued is annxed herewith as annexure `a. cover note issued is annexed herewith as annexure ‘b. it may be seen that the sum insured was rs. 15,50,00,000/- for fire, and on which the premium was at the rate of rs. 2/- per thousand. in the policy, the same has been charged as rs. 2,79,000/-. whereas as per the calculation the actual amount should have been rs. 3,10,000/-. thus there was a difference of rs. 31,000/- and on which a 5% special discount of rs. 1,550/- was allowable thus the premium would have been rs. 29,450/-, to which 5% service tax as per the statute was to be added, that is rs. 1,473/- which should have been added, thus there was a shortfall of rs. 30,923/-...” 11. on perusal of the letter dated 21.4.1999, we find that the opposite party no. 1 - national insurance company limited sanctioned only a claim of rs. 4,70,974/- as against the loss assessed at rs. 9,18,476/- by the surveyor of the opposite parties. an amount of rs. 1,23,684/- had been deducted from the loss assessed purportedly for short charge of premium under policy no. 420402/3400002/96. whereas the complainant never paid any short premium on any of the policies from the opposite parties and the entire premium as calculated and as asked by the opposite parties was paid to the complete satisfaction of the opposite parties and even on the renewal of policies, amount due as premium from the complainant was paid to the complete satisfaction of the opposite parties. however, despite having paid the entire amount as per the policy as was due to be paid by the complainant, the respondent wrongly and erroneously deducted a sum of rs. 1,23,684/- from an amount of compensation claiming the same to be short charge premium of policy no. 420402/3400002/96. we find that a sum of rs. 1,23,684/- has been wrongly charged and needs to be refunded with interest to the complainant. 12. after hearing the learned counsel for both the sides and after carefully perusing the record of the complaint case as well as the affidavits, we find that the respondents - national insurance company limited never raised any point regarding the short-fall against the policy no. 3400002/96 (annexure c-3) for which the premium for a sum of rs. 6,34,162/- per annum for the year 1996-97 was paid and subsequently on renewal of the same policy (annexure c-10) for the year 1997-98, a premium of rs. 6,34,162/- were again paid to the opposite parties and at that time it had never been pointed that there is any short-fall of the premium paid during both the times. it has been adequately proved that there was no short-fall in the insurance policy issued by the opposite party at the time of the insuring the complainant company - m/s. jai parabolics springs ltd. and subsequently the renewal of the same policy. 13. in view of the foregoing discussion, we are of the considered opinion that there is no merit on the preliminary objections raised by the opposite parties. the deduction of rs. 1,23,684/- has neither been justified by the learned counsel for the opposite parties in its reply nor during the course of arguments. the complaint of m/s. jai parabolics springs ltd. succeeds on merit. we hold that the opposite parties are liable to refund the sum of rs. 1,23,684/- with interest @ 12% per annum from the date of claim till the date of actual payment with costs which we quantify at rs. 5,000/-. copies of this judgment be supplied to the parties free of charges.
Judgment:

Dr. P.K. Vasudeva, Member:

1. The complainant M/s. Jai Parabolics Springs Ltd., A-30(a), Phase 7, Industrial Area, S.A.S. Nagar, Mohali has filed this complaint under Section 2-C read with Section 17 of the Consumer Protection Act, 1986 (for short hereinafter referred to as the C.P. Act) against the opposite party No. 1 National Insurance Co. Ltd., New Fountain Chowk, Yamunanagar through its Branch Manager and opposite party No. 2 National Insurance Co. Ltd., Chro II, SCO 373-340, Sector 35, Chandigarh through its Regional Manager. The complainant Company was insured against fire by the opposite parties vide Policy No. 3300073/96 Cover Note No. 554235. The said policy was to cover the risk of Rs. 9 Crores and the policy became effective with effect from 7.3.1996 (Copy of Policy - Annexure C-2). The said policy was issued by the opposite parties after charging the entire amount of premium i.e. a sum of Rs. 3,90,522/- per annum which was paid to the opposite parties vide Cheque No. 952025 dated 8.3.1996 for the year 1996-97. In view of the expansion of the Company, the complainant further desired to have insurance risk cover to the tune of Rs. 15.5 Cores for which the Insurance Policy No. 3400002/96 dated 5.7.1996 with effect from 7.7.1996 in favour of the complainant-Company was issued against fire for a premium of Rs. 6,34,162/- per annum by the opposite parties. Out of Rs. 15.5 Crores, Rs. 2.5 Crores were for covering the risk of the building, and Rs. 13 Crores to cover the risk of machinery, against fire. The complainant paid the complete premium for the year 1996-97 on the said amount to the opposite parties vide Cheque No. 622976 dated 3.7.1996 which has been appended as Annexure C-3 with the complaint case. With these two policies, the entire risk was covered to the tune of Rs. 24.5 Crores against fire.

2. In the averments made in para 5 of the complaint, a fire broke out in the factory premises of the complainant on 22.9.1996 thereby resulting into heavy loss on account of the fire. After assessment, the complainant quantified the loss to the tune of Rs. 9,22,202/- and as such, the claim for the said amount was raised from the respondents vide letter dated 18.11.1996 (Annexure C-4). The respondents appointed a Surveyor to assess the damages/loss Caused to the complainants premises on account of the fire. The Surveyor assessed the loss to the tune of Rs. 7,78,250/- against loss of quenching oil, Rs. 95,456/- against other miscellaneous items and Rs. 10,580/- against hydraulic oil. Thus the Surveyor quantified the total loss due to fire at Rs. 8,93,286/-. However, the respondent No. 1 - Insurance Company sent a Cheque No. 919392 dated 6.3.1998 for an amount of Rs. 1,46,997/- (Annexure 4A) against the entire claim raised by the complainant and assessed by the Surveyor of the opposite parties.

3. Aggrieved against the non-release of the entire amount of loss incurred by the complainant on account of fire, the complainant represented his claim vide letter dated 16.3.1998 to the opposite parties (Annexure C-5). The main point in the representation was that no details of the amount of the said cheque was given with regard to the calculation despite the assessment of the losses by their own Surveyor. The opposite parties on 31.3.1998 sent the reply to the representation dated 16.3.1998 (Copy Annexure C-6). On perusal of the said letter, the complainant had alleged that the said deduction was totally uncalled for and were totally unreasonable and without any basis.

4. The complainant-Company again submitted a representation to the opposite parties dated 1.6.1998 which has been annexed as Annexure C-7 along with the complaint case for making the corrections. The opposite parties, it is averred in para 12 of the complaint that after accepting the merit in the grievance of the complainant appointed a new Surveyor to assess the loss afresh. The new Surveyor after the fresh assessment, quantified the losses on account of the fire suffered by the complainant to the tune of Rs. 9,18,476/-. However, the opposite party No. 1 - Insurance Company sent a voucher (Copy Annexure C-8) to the complainant asking to issue receipt for acknowledgement for the sum of Rs. 4,17,974/- towards full satisfaction and discharge of claims under the policy for fire loss on 22.9.1996 (Copy Annexure C-9). The complainant has averred in para 14 of the complaint that the respondent No. 1 sanctioned only a claim of Rs. 4,17,974/- as against the loss assessed at Rs. 9,18,476/- by the Surveyor of the opposite parties. An amount of Rs. 1,23,684/- had been deducted from out of the amount of loss assessed, purportedly for short charge of premium under Policy No. 420402/3400002/96. The complainant-Company alleged that they never paid any short premium on any of the policies of the opposite parties. The entire premium as calculated and asked for by the opposite parties was paid to their complete satisfaction. At the time of issuing of the policies and even on the renewal of policies, the amount due as premium from the complainant was paid to the opposite parties. The complainant-Company has alleged deficiency in service on the part of the opposite parties-Insurance Company for not paying the amount assessed by the two Surveyors. The relevant portion of para 14 of the complaint is reproduced as under :

“...It is pertinent to mention here that the complainant has never paid any short premium on any of the policies from the respondents. The entire premium as calculated and asked for by the respondents was paid to the complete satisfaction of the respondents at the time of issuing of the policy, and even on the renewal of policies, the amount due as premium from the complainant was paid to the complete satisfaction of the respondents. It is further pertinent to mention that initially the amount of premium of Policy No. 3400002/96 was quantified at Rs. 6,34,162/- per annum which was paid vide Cheque No. 622976 dated 3.7.1996 as explained in the foregoing paragraphs. Subsequent thereto on renewal of the policy i.e. for the year 1997-98, a premium of Rs. 6,34,162/- were again paid to the respondents vide Cheque No. 506540 dated 5.7.1997. The respondents in lieu thereof, issued the renewed policy and reflected the factum of receipt of premium from the respondents in the policy itself. A copy of the renewed policy is appended herewith as Annexure C-10.”

5. The complainant has prayed that the amount of Rs. 1,23,684/- has been arbitrarily deducted for which they are entitled the compensation of the said amount along with interest @ 24% per annum from the date of claim till the date of actual payment and has appended a legal notice (Copy Annexure C-11). The complainant has also prayed for the grant of compensation on account of loss due to fire amounting to Rs. 5,41,658/- along with interest @ 24% per annum. From the date of claim i.e. 18.11.1996 till the date, the said amount is released by the opposite parties. In the joint written statement filed by respondent Nos. 1 and 2 - National Insurance Company Limited, the opposite parties have raised the preliminary objections saying that the complaint has not been filed by an authorised person and merit dismissal on this ground only. In the second preliminary objection raised, it has been contended that the amount of Rs. 30,931/- were short-charged in the premium and the said amount along with three times thereof liable to be deducted from the compensation payable as per the guidelines of the Tariff Advisory Committee.

6. On merits, the factum of the insurance policy and risk coverage for the building have not been controverted and admitted to be correct to the extent that the complainant Company was insured which was as per the terms and conditions of the Insurance read with the relevant Rules of the Tariff Advisory Committee which is a Statutory Body and whose Rules/Guidelines have a statutory force.

7. In reply the opposite parties have denied the contents of paras 3, 5, 8, 11, 12, 14, 15, 16, 17, 18, 19A, 20, 21 and para 22 of the complaint case, whereas paras 2, 7, 9 and 19 have been admitted to be correct by the opposite parties. Paras 4, 6, 10 and 13 of the complaint case have been admitted to be correct being the matter of record. In para 14 of the reply, it has been averred by the opposite parties that the deduction made on account of short premium, were made as per the Statutory Guidelines of the Tariff Advisory Committee. The shortage of premium charges was on account of misrepresentation by the complainant. However, it has been admitted that the policy in question was a renewed Policy of Insurance. It has been further averred that the contents of the complaint are specifically denied until and unless they are specifically admitted. The complainant has by his own choice, commission and defaults has not taken the amounts as passed and offered to them and hence the complaint is liable to be dismissed.

8. We have heard the learned Counsel for the complainant Mr. Hemant Bassi, Advocate and the learned Counsel for the respondents Mr. R.M. Suri, Advocate, and have carefully perused the evidence in the shape of affidavits led by both the parties and the record of the complaint case.

9. The learned Counsel for the complainant contended that the factory M/s. Jai Parabolics Ltd., 8-30(a), Phase - VII, S.A.S. Nagar, Mohali was insured under two policies i.e. Policy No. 3300073 of 1996 in lieu of Cover Note No. 554235 w.e.f. 7.3.1996 to 6.3.1997 for a sum of Rs. 9 Crores. This policy was issued at Yamunanagar. The second Policy No. 3400002 of 1996 in lieu of Cover Note No. 554242 w.e.f. 7.7.1996 to 6.7.1997 was issued to cover the risk of a sum of Rs. 15 Crores 50 lacs. It was further contended that the complainant firm had duly paid the premium of both the policies and did not commit default in making the payment of the premium. The incident of fire broke out in the premises on 22nd September, 1996 and a claim of a sum of Rs. 9,22,278/- was preferred vide report dated 31.3.1998. The opposite party - Company, however, offered the claim of Rs. 1,46,867/- towards the loss due to fire and delivered a cheque dated 6.3.1998 without submitting the details. It would appear from perusal of the reply of the legal notice served by the complainant on opposite party that the premium paid by the complainant firm was Rs. 6,34,162/- whereas it should have been Rs. 6,65,083/- which clearly means that the premium paid by the complainant firm to the tune of Rs. 30,921/- was less by the said amount. The said shortage of premium of Rs. 30,921/- was multiplied by four, subject to the terms and conditions of Rule 8.7, the amount came to Rs. 1,23,684/- under the aforesaid policies. The dispute, thus, is about the premium of the policy being short paid by a sum of Rs. 30,921/-. It is relevant to note that the opposite party prior to the claim of the complainant for compensation for the loss occasioned due to the fire under the policy aforesaid, did not bring it to the notice of the complainant firm that the premium paid by the firm was short by a sum of Rs. 30,921/-. It is for the first time that while considering the claim for the said loss, the opposite parties mentioned this fact that there was shortage of a sum of Rs. 30,921/- in the payment of the premium for the policy. The policy was undoubtedly taken from 7.3.1996 to 6.3.1997 for Rs. 9 Crores and later on from 7.7.1996 to 6.7.1997 for a sum of Rs. 15 Crores 50 lacs. The opposite party - Insurance Company multiplied the alleged shortage of premium by four under Rule 8.7 of the Claim Management Guide the extract of which was placed on record by the opposite parties as Annexures to the reply. Rule 8.7 provides as under :

“8.7. There are cases where incorrect rates are charges under the policy and which does not merit consideration as non-standard claims. In these cases, correct rates are to be charged not only under the affected policy but also for the past three years from the date from which such rate is applicable. These claims need approval of Authority one step higher than the normal Competent Authority. It is made clear that DCC/RCC have no authority to rectify the policy.”

10. In our considered view the opposite party - Insurance Company cannot charge for the shortage of the premium not only during the relevant period but for the preceding three years period during which the policy was not even taken by the complainant and no premium much less a short premium was paid by the complainant-firm for these three years. Even for the alleged shortage of Rs. 30,921/-, the opposite party - Company could not bring the case under Rule 8.7. It is not the case of the opposite party that incorrect rates were charged under the policy. The case of the opposite party Company is about shortage in payment of the premium. Now coming to the alleged shortage, the policy which was renewed for a sum of Rs. 15,50,00,000/- on fire was @ Rs. 2 per thousand. The case of the opposite party-Insurance Company as set up in the affidavit of Shri Rakesh Kanwar, Senior Branch Manager, National Insurance Company, near Fountain Chowk, Yamunanagar is as under :

“4. That the policy of insurance issued is annxed herewith as Annexure `A. Cover note issued is annexed herewith as Annexure ‘B. It may be seen that the sum insured was Rs. 15,50,00,000/- for fire, and on which the premium was at the rate of Rs. 2/- per thousand. In the policy, the same has been charged as Rs. 2,79,000/-. Whereas as per the calculation the actual amount should have been Rs. 3,10,000/-. Thus there was a difference of Rs. 31,000/- and on which a 5% special discount of Rs. 1,550/- was allowable thus the premium would have been Rs. 29,450/-, to which 5% Service Tax as per the Statute was to be added, that is Rs. 1,473/- which should have been added, thus there was a shortfall of Rs. 30,923/-...”

11. On perusal of the letter dated 21.4.1999, we find that the opposite party No. 1 - National Insurance Company Limited sanctioned only a claim of Rs. 4,70,974/- as against the loss assessed at Rs. 9,18,476/- by the Surveyor of the opposite parties. An amount of Rs. 1,23,684/- had been deducted from the loss assessed purportedly for short charge of premium under Policy No. 420402/3400002/96. Whereas the complainant never paid any short premium on any of the policies from the opposite parties and the entire premium as calculated and as asked by the opposite parties was paid to the complete satisfaction of the opposite parties and even on the renewal of policies, amount due as premium from the complainant was paid to the complete satisfaction of the opposite parties. However, despite having paid the entire amount as per the policy as was due to be paid by the complainant, the respondent wrongly and erroneously deducted a sum of Rs. 1,23,684/- from an amount of compensation claiming the same to be short charge premium of Policy No. 420402/3400002/96. We find that a sum of Rs. 1,23,684/- has been wrongly charged and needs to be refunded with interest to the complainant.

12. After hearing the learned Counsel for both the sides and after carefully perusing the record of the complaint case as well as the affidavits, we find that the respondents - National Insurance Company Limited never raised any point regarding the short-fall against the Policy No. 3400002/96 (Annexure C-3) for which the premium for a sum of Rs. 6,34,162/- per annum for the year 1996-97 was paid and subsequently on renewal of the same policy (Annexure C-10) for the year 1997-98, a premium of Rs. 6,34,162/- were again paid to the opposite parties and at that time it had never been pointed that there is any short-fall of the premium paid during both the times. It has been adequately proved that there was no short-fall in the insurance policy issued by the opposite party at the time of the insuring the complainant Company - M/s. Jai Parabolics Springs Ltd. and subsequently the renewal of the same policy.

13. In view of the foregoing discussion, we are of the considered opinion that there is no merit on the preliminary objections raised by the opposite parties. The deduction of Rs. 1,23,684/- has neither been justified by the learned Counsel for the opposite parties in its reply nor during the course of arguments. The complaint of M/s. Jai Parabolics Springs Ltd. succeeds on merit. We hold that the opposite parties are liable to refund the sum of Rs. 1,23,684/- with interest @ 12% per annum from the date of claim till the date of actual payment with costs which we quantify at Rs. 5,000/-.

Copies of this judgment be supplied to the parties free of charges.