HIND CONSTRUCTION CO vs National Insurance Company

THIS appeal is directed against the exhaustive and considered order of the District Forum, Ambala dismissing the complaint preferred by the appellants.

THE twin relief sought in the complaint was first the recovery of Rs. 6,094/- with interest on account of the payment of premium instalments at an excessive rate. Secondly an amount of Rs. 33,038/- was claimed as the difference between the insurance claim lodged by the appellants and the amount approved and paid by the respondent. It was the case that the appellants had insured their workshop premises including the goods and materials therein vide insurance policies detailed in para 2 of the complaint for the year 1987-1988 and 1988-1989. It was alleged that the complainant concern was registered as a Small Scale Industries Unit (hereinafter referred to as S.S.I) and this fact was known to the respondent and the complainant had submitted an affidavit in this regard. Never the less the respondent concern charged the premium for the ordinary industrial units instead of the concessional rate provided for the S.S.I concern. On this score it was alleged that a sum of Rs. 6094/- has been over charged. It was then alleged that consequent to loss and damage by flood a claim of Rs. 62,501/- was lodged with the respondent Insurance Company which however, passed the same for an amount of Rs. 29,463/- only. The balance of Rs. 33,038/- only was claimed on this score.

Whilst resolutely defending the complaint, the respondent first raised the preliminary objection that there was not the least deficiency in the services undertaken to be rendered. It was pleaded that the insurance claim was lodged on the 3rd of July, 1988 and after scrutiny and examination the claim was settled expeditiously on the 29th of December, 1988 in full and final settlement thereof. On merits whilst admitting the factum of the insurance cover, it was firmly pleaded that the respondents were wholly unaware that the appellant firm was a S.S.I unit and equally it was wrong that the complainant had ever furnished any af fidavit to the respondents at the material time. It was pointed out that the appellants had willingly and voluntarily paid the premium due without any hint of protest way back in 1988 and 1989 and was consequently not entitled to any refund and in any case the claim was belated and barred by time. As regards the difference between the amount claimed by the appellants for loss and that approved by the respondents, it was the firm case that the sum of Rs.29,463/- was duly paid and received in full and final settlement and a receipt to that effect was issued to the Insurance Company. The other averments of the complaint were also controverted and denied.

APART from the documents placed on the record, Shri Arunesh Aggarwal, a partner of the appellant firm stepped into the witness box, and was cross-examined at some length. In rebuttal Shri N.K. Sehgal, Branch Manager of the respondent appeared as RW-1 and documentary evidence, the authenticity of which was not challenged was placed on the record. The District Forum noticed the twin aspects of the claim in the complaint and concisely adverted to them individually. After an incisive and exhaustive discussion, it concluded as under on the first aspect of the case: "Thus, we are of the confirmed opinion that the complainant had neither brought to the notice of the respondent at the time the insurance policy was issued nor at the time the complainant had submitted proposal form to the respondent that the complainant firm was an SSI unit and that the respondent should have charged the premium from the complainant at the rate payable by SSI unit. Thus, there was no "deficiency of sendee" on the part of the respondent in this respect and the claim of the complainant for refund of any amount can not be entertained".

As regards the second aspect also the District Forum on a meticulous consideration of the facts and law came to the conclusion that the appellants were bound by the receipt Ex. R-2 and there had been a full and final settlement of the insurance claim lodged by them. Since, we are inclined to unhesitatingly affirm the considered finding of the District Forum, it seems wasteful to tread the same grounds repetitively in a judgement of affirmance.

LEARNED counsel for the appellants had first repeated the contentions raised below as regards the claim for the for the refund of the allegedly over charged amounts of premium. Somewhat curiously, it was argued that it was the duty of the respondent Insurance Company to find out whether the appellants were a S.S.I unit or not. Reliance was again sought to be placed on the alleged affidavit submitted on behalf of the firm which made marginal mention of the said fact We are afraid that mere is little or no merit in the submissions raised by the learned counsel. As a matter of broad approach, it deserves recalling that a contract of insurance is one of the utmost good faith and the burden lies heavily on the insured to disclose all the material facts. It is in this context that the proposal form Ex. RX, dated 6th of November 1987 admittedly signed and submitted by the complainant assumes material significance. This does not in the least mention that the complainant firm was a S.S.I unit. Obviously enough, it was for the appellants to disclose and claim any concessional rate of premium and not for the respondent to probe and find out whether the insured was a S.S.I unit or otherwise which patently enough was a matter within the special knowledge of the insured alone. This apart Ex. R-1 which is the insurance policy issued on the basis of the proposal form. This document again nowhere mentions that the appellants had been insured as a S.S.I unit It is not in dispute that even on the receipt of the said policy, the appellants did not at that stage, raise any objection or claim of being a S.S.I unit and consequently being entitled to concessional rates of premium. On behalf of the respondents the firm stand taken is that they were not at all aware of this fact and there is no particular reason at all to doubt that version. What is more Ex. R-3, which is an order passed by the Excise and Taxation Officer, as the assessing authority, Ambala Cantt. under the Haryana General Sales Tax Act does not in the least indicate that the appellants were claiming to be a S.S.I unit This unchallenged documentary evidence thus gives the lie direct to the appellant''s stand on this aspect The half-hearted attempt to place reliance on the affidavit Ex. C-l by the learned counsel for the appellants has again to be only noticed and rejected. This issue has been so meticulously dealt with by the District Forum in Paras 12 to 16 of the order under appeal that it would be wasteful to repetitively recount the same discussion since we are wholly in agreement therewith. It suffices to notice the following conclusion which must necessarily be affirmed: "Simply saying that some affidavit and that also with claim form had been subsequently submitted to the respondent in this regard is of no avail to the complainant particularly when it is doubtful if any such affidavit had been given to the respondent and on what date".

IN the light of the fore-going discussion, the appellant''s challenge on the first aspect of the case must inevitably fail.

THE gravamen of the submission of the learned counsel for the appellant on the second issue was that. they were not bound by Ex-R2 vide which a full and final discharge of the claim had been extended to the Insurance Company. We are afraid that this stand had also to be necessarily repelled. Herein again, there has been an in-depth consideration of the matter by the District Forum in Paras 22 to 24 of the order which could not be seriously assailed on behalf of the appellant. Apart from the reasoning therein, it is not in dispute that the goods and material in the appellant''s premises stood hypothicated with the Indian Overseas Bank and as a matter of practice, the said bank required that the same be provided insurance cover. Consequently, it is the admitted position that the insurance policy was taken out jointly in the name of Indian Overseas Bank, Ambala Cantt. and M/s Hind Construction Company. THEre is, thus, no dispute that the aforesaid bank was a co-insured with regard to the policy and its interest in the goods with regard to which loss occurred subsequently. What is however, of greater significance in this context is the agreed bank clause which is duly incorporated in the policies of this nature and admittedly in the particular policy governing the parties. THE relevant first two conditions of this agreed bank clause deserve notice in extenso:- "It is hereby declared and agreed: (1) that upon any monies becoming payable under this policy the same shall be paid by the Company to the Bank and such part of monies so paid as may relate to the interest of other parties insured here-under shall be received by the Bank as Agents for such other parties. (2) that the receipts of the Bank shall be a complete discharge of the Company there for and shall be binding on all parties insured here under".

It deserves highlighting that the very foundation of the appellants claim rests on the insurance policy and its terms and the afore-quoted 2 agreed bank clause is an integral part thereof. It needs no great erudition to hold that after an express stipulation by the parties that the receipts of the bank shall be a complete discharge of the respondent-Company, the insured cannot now attempt to wriggle out of the same. In this context, the relevant part of Ex.R-2 which is an undisputed document deserves notice in extenso: "Received from National Insurance Company Limited the sum of Rupees twenty nine thousand four hundred sixty three only in full discharge of fire claim for loss and damage in consequence of fire on or about the 3rd day of July, 1988 to property insured under Policy No. ---- in consideration whereof each item of said policy is declared to be reduced by the amount paid under the same until the date of next renewal. Rs. 29463/- For Indian Overseas Bank Sd/-Manager, Ambala Cantt"

In view of the above, it seems too late and futile on the part of the appellant to now ingeniously wriggle out all the stipulations to which they were admittedly a willing party. The second limit of the submissions of the learned counsel, therefore, must also be rejected.

FOR the fore-going reasons, this appeal fails and is hereby dismissed. The order of the District FORum is affirmed. However, we would not wish to burden the appellant-consumer with any costs. Appeal dismissed.