HINDUSTAN COPPER LIMITED vs New India Assurance Co. Ltd

THE complainant, a Government of India Undertaking, had obtained an insurance policy from the Respondent Insurance Company in respect of consignments of copper of different shapes and kinds for delivery anywhere in India. Under the contract of Insurance, it was entitled to certain special discounts which varied with the value of the risk insured. THE claims of the petitioner under the insurance policies for the years 1989-90,1990-91 and 199192 (total number of claims 167) of the value of Rs. 22.66 lacs (in the round) have not been paid by the respondent Insurance Company.

THE respondent Insurance Company has disputed the quantum of the claim by asserting that the special discounts offered with reference to the turn over (value of the insured risk) was not admissible. According to the respondent Insurance Company, "THE special discounts under the said declaration policies were granted to the petitioner subject to the approval from the Delhi Regional (Tariff) Committee and as such when the Delhi Regional Committee did not approve the grant of such discounts the petitioner was bound to remit the difference of the insurance premium in respect to the insurance policies in question". Consequently, the respondent Insurance Company claimed a short premium of Rs. 11.28 lacs (in the round) towards the amount of inadmissible discount granted to the insured before admitting the claim under the insurance policy. The respondent Insurance Company also contended that in the case of certain consignments there was no loss or damage of any kind. There was only "weight variation" and that weight variation was not covered by the policy of insurance. According to the respondent Insurance Company the weight variation is due to differences in weight by two weighing machines at two different places and there was no loss or damage to the goods due to any fault of the transporters or otherwise.

From the perusal of the policy of insurance, it is clear that there was no qualification that the special discount varying with the turnover was dependent on and subject to the approval of these discounts by the Delhi Regional (Tariff) Committee. The contract of insurance was un-qualified in this respect. It is not necessary for us to discuss the matter in detail because, after discussion at the hearing, the Counsel for the Insurance Company gave up his claim for the short premium on account of the alleged unauthorised or irregular discounts on premium given to the insured. This also establishes that the Respondent had unfairly repudiated the discounts under the contract of insurance and thus mere has been deficiency in service to the insured.

HE, however, pressed his second objection regarding the rejection of the claim where there was weight variation in the consignment. The Commission is unable to appreciate this point. The nature of the goods insured viz. copper, is such that there is no likelihood of dryage or shrinkage leading to weight variation. Consequently, the weight variation due to error or difference in the weighing machine can only be marginal. More importantly the G.Rs (Goods Receipts) bearing the remarks of the Transporters regarding the weight of the consignments at the time of delivery are conclusive. These remarks do not support the contention that the shortage in the weight of consignments delivered was due to differences in weighing scales. In the result the appeal is accepted and the respondent insurer is directed to pay the full amount of the claim under the insurance policy of Rs. 22,66,284/- with interest at 18 per cent from one month after the date on which the claim was lodged till the date the payment is made.

THE petitioner has also claimed damages amounting to Rs. 10 lacs which, on the face of it, are extremely exhorbitant. We allow damages to the extent of Rs. 20,000/- only. In addition, the respondent will pay Rs. 5,000/- as costs to the petitioner. Appeal accepted.