BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

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Delhi Assam Roadways Corporation, presently known as DARCL Logistics Ltd., having its office at 19/3, Tilak Bazaar, Hissar, Haryana, through its authorized representative Sh.Kailash Chander, Sr.Branch Manager.

…..Complainant

                           V E R S U S

1.    The New India Assurance Co. Ltd., through its Senior Divisional Manager, Divisional Office – II, SCO No.104-106, 1st Floor, Sector 34-A, Chandigarh.

2.    M/s Embee Insurance Brokers Ltd., SCO No.2935-36, 1st Floor, Sector 22-C, Chandigarh, through its Managing Director.

                                  ……Opposite Parties

CORAM:     SH.P.D.GOEL                                    PRESIDENT

                   SH.RAJINDER SINGH GILL               MEMBER

                   DR.(MRS) MADANJIT KAUR SAHOTA  MEMBER

Argued by:    Sh.Manish Joshi, Counsel for complainant.

                        Sh.Sukaam Gupta, Counsel for OP No.1.

                        None for OP No.2.

PER P.D.GOEL,PRESIDENT

1.           Briefly stated, the facts of the case are that the complainant company took cash in transit policy from OP No.1 through its broker OP No.2, effective from 10.8.2008 to 9.8.2009. The case of the complainant is that under the above said policy, the Divisional Office of OP No.1 charged excess premium amount of Rs.2,73,835/-.

              It has been further averred that the theft took place at Alwar on 1.11.2008 and the thieves took away the safe/almirah, which contains Rs.1,25,000/- in the shape of currency notes and Rs.200/- - Rs.400/- in the shape of coins besides some other articles/documents. That FIR No.397 dated 2.11.2008 was recorded with Police Station, Udyog Nagar, District Alwar, Rajasthan. After completing the investigation, the police submitted its Final Investigation Report/Cancellation Report as the thieves could not be arrested. That OP No.1 was also duly informed by the complainant vide its letter dated 3.11.2008. The complainant received a letter dated 31.3.2010 from OP No.1. He was shocked to know as OP No.1 had illegally deducted Rs.1,16,315/- as a difference in premium without any valid reason.

              It has been further stated that the OP No.1 sent a cheque of Rs.9085/- after deducting Rs.1,16,315/- as a difference in premium out of the total amount of Rs.1,25,400/-. It is further the case of the complainant – Company that OP No.2 had written a letter dated 28.5.2010, stating therein, that the extra premium charged from the claim amount was not justified on the part of insurer. Thereafter, the complainant wrote a letter dated 15.7.2010 & 22.9.2010 to OP No.1 with the request to clear the claim amount.  The OP No.1 replied vide its letter dated 29.9.2010, wherein they stated that the matter was discussed with OP No.2 and, thereafter, it was agreed that the amount of Rs.1,16,315/- stands recoverable from insured, so the question of payment of balance claim amount did not arise and the claim was paid after deducting the premium to regularize the policy. The complainant contacted the OP No.2, who told him that he had never given any consent for deduction of any amount from the approved claim amount. OP No.2 also wrote letters dated 21.10.2010 and 9.11.2010 to release the outstanding amount but to no avail. The complainant sent a legal notice dated 11.1.2011 to OP No.1 but it had failed to release the claimed amount. Hence, this complaint.

2.           OP No.2 filed the reply, wherein, it has been pleaded that the replying OP was only an insurance broker and acted as a facilitator for arranging insurance policy for the complainant. The OP No.2 at the instructions of the complainant submitted the insurance slip for the cash in transit to be effective from 10.8.2008 to 9.8.2009. OP No.1 quoted the premium rate, which was paid by the complainant and thereafter, the cover note was issued. It has been further pleaded that in the policy document, the premium shown was Rs.0.02474% for cash in transit, Rs.0.02401% for cash in safe, as such, the total premium payable by the insured comes out to be Rs.3,16,395/- including service tax but the insurance company charged the premium of Rs.4,94,190/-. It has been further pleaded that the OP No.1 never raised the issue of miscalculation at any stage and whatever premium was demanded by OP No.1, the same was paid to it.

              It has been further pleaded that after the issuance of policy, the demand of OP No.1 for the extra premium is not sustainable. The premium rate shown in the policy is contractual and the OP No.1 cannot charge extra premium over and above shown in the policy document. The OP No.2 sent two letters dated 21.10.2010 and 9.11.2010 to OP No.1 to release the amount but all in vain. Denying all the material allegations of the complainant and pleading that there has been no deficiency in service on their part and prayer for dismissal of the complaint has been made.   

3.           Parties led evidence in support of their contentions.

4.           We have heard the learned Counsel for the complainant and the learned Counsel for OP No.1 and have also perused the record.

5.           The learned Counsel for the complainant argued that the complainant took cash in transit policy from OP No.1 through its broker - OP No.2, effective from 10.8.2008 to 9.8.2009. It was contended that OP No.1 charged excess premium amount of Rs.2,73,835/-, the detail of which has been given vide para No.3 of the complaint.

              The learned Counsel for the complainant further argued that the theft took place at Alwar on 1.11.2008. The thieves took away the safe/almirah containing Rs.1,25,000/- (currency notes) + Rs.200/-+ Rs.400/- (coins) besides some other articles. The matter was reported to the police. The police submitted the cancellation report as the thieves could not be arrested. It was further argued that the complainant received a letter dated 31.3.2010 from OP No.1, qua which, the Insurance Company had illegally deducted Rs.1,16,315/- as a difference in premium without any valid reason and sent a cheque of Rs.9085/- out of the total amount of Rs.1,25,400/-. It was further argued that the extra premium charged from the claim amount was not justified on the part of insurer – OP No.1, so the complainant made a request to OP No.1 to clear the claim amount but the Insurance Company vide letter dated 29.9.2010 had declined the said request. It was lastly argued that the complainant has never given any consent for deduction of any amount from the approved claim amount.

6.           Vide order dated 13.12.2011, the defence of OP No.1 was struck of.

7.           Now, the point for consideration is whether the OP No.1 has illegally deducted the amount of Rs.1,16,315/- as difference in premium and secondly whether the Insurance Company – OP No.1 is also liable to release the amount of Rs.1,57,520/-, which has been wrongly charged as excess premium. The answer to both the questions is in the affirmative.

8.           It is a settled proposition of law that the claim cannot be denied by the Insurance Company on the ground of having originally charged the less premium by mistake. Further the Insurance Company cannot deny the refund of the proportionate premium in respect of unutilized portion of the coverage, on the ground that the premium had been levied at a rate lesser than prescribed.

9.           In the instant case, the deduction of Rs.1,16,315/- was done by OP No.1 for no fault of the complainant. He paid the entire premium amount originally demanded by the Insurance Company. Therefore, there is no justification of linking up the matter of short payment of the premium with the insurance claim. Therefore, OP No.1 is under any legal obligation to refund the extra premium in terms of the policy as it cannot itself unilaterally make any adjustment from the amount of unutilized premium and retain a part of it on the ground that the premium charged was less than but it should have been charged. Reliance placed on (2000) 10 SCC 26, Oriental Insurance Co. Ltd. Vs. Mantora Oil Products Pvt. Ltd. and by the law laid down by the Hon’ble National Consumer Disputes Redressal Commission vide judgment dated 19.8.2008 in First Appeals No. 639 & 640 of 2007, Esys Information Technologies Ltd. Vs. New India Assurance Co. Ltd.

10.         Exactly, the same is the position in the present case, as OP No.1 had illegally deducted Rs.1,16,315/- as a difference in premium without any valid reason. Thus, it is held that OP No.1 is liable to pay the amount of Rs.1,16,315/- to the complainant, which has been deducted illegally as a difference in premium by the Insurance Company – OP No.1.

11.         The complainant – Company took cash in transit policy from OP No.1 – Annexure C-2 through its broker namely M/s Enbee Insurance Brokers Ltd. – OP No.2, effective from 10.8.2008 to 9.8.2009. The theft took place at Alwar on 1.11.2008 during the subsistence of the said policy. The description of the insured money has been given vide para No.2 of the complaint. Annexure C-8 is the copy of the FIR recorded by the police.  That the complainant received a repudiation letter dated 31.3.2010 – Annexure C-11 from Opposite Party No.1.  The claim has been denied/repudiated on the ground i.e. sum assured for cash in safe risk is Rs.20 lacs for Head Office (Hisar). The meeting was held with the broker – Opposite Party No.2 and it was conveyed that the policy was demanded for Rs.20.00 lacs each for all offices against cash in safe risk.  Accordingly, the policy is regularized and the total sum insured for cash in safe comes to Rs.40.00 Crores.  The difference in premium was calculated as Rs.1,16,315/- which stands recoverable, as such, the same was recovered from the net payable amount and the claim is settled for the balance amount.

12.         It will be relevant to state here that the OP No.1 prior to the said incident had never asked or demanded the difference of premium from the complainant. Therefore, OP No.1 itself cannot unilaterally make any adjustment and retain a part of the claim amount on the ground that the premium charged was less than but it should have been charged.

13.         More so, the cover note issued by OP No.1 – Annexure C-1 specifically states that the insurance cover was provided to and from anywhere in India including inter offices and loading points and it will include the registered office/H.O./Z.O/ R.O / B.O / Agent / site offices. Therefore, it can legitimately be concluded that the OP No.1 had wrongly mentioned in the repudiation letter – Annexure C-11 that the sum insured for cash in safe risk is Rs.20 lacs for Head Office i.e. Hisar only.

14.         Admittedly, the OP No.1 sent a cheque of Rs.9085/- after deducting Rs.1,16,315/- as a difference in premium, out of the total amount of Rs.1,25,400/-. In view of the conclusions drawn in para supra(s) it is held that OP No.1 has no legal right to deduct Rs.1,16,315/- as difference in premium out of the total amount of Rs.1,25,400/-. It is further held that OP No.1 is also liable to release the amount of Rs.1,57,520/- to the complainant, which has been wrongly charged by it as excess premium.

15.         As a result of the above discussion, it is held that the OPs have illegally deducted the amount of Rs.1,16,315/- as difference in premium. The OP No.1 has also illegally charged Rs.1,57,520/- as excess premium from the complainant. Thus, the complaint is allowed and OP No.1 is directed to release the amount of Rs.1,16,315/- deducted as difference in premium and Rs.1,57,520/- charged as excess premium from the complainant. OP No.1 is also directed to pay Rs.50,000/- as compensation for mental agony and harassment and Rs.10,000/- as costs of litigation.           

16.         This order be complied with by OP No.1 within one month from the date of receipt of its certified copy, failing which OP No.1 shall be liable to pay the awarded amount along with penal interest @ 12% p.a. from date of filing of the complaint i.e. 30.08.2011 till its realization besides Rs.10,000/- as litigation costs.

17.         Certified copies of this order be sent to the parties free of charge. The file be consigned.