STATE OF RAJASTHAN Vs. ORIENTAL INSURANCE CO. LTD.

JUDGEMENT

(1.) The present complaint was filed by the Small Saving Department of State Government of Rajasthan, Ministry of Finance, Jaipur. An agreement was entered into between the Government of Rajasthan, the complainant and M/s. Oriental Insurance Company (in short 'OIC') on 19.1.1998 for giving Group Public Personal Accident Insurance Benefits to investors under the 'Swarn Jayanti Savings Insurance Scheme' for a period of 5 years, whereby an investment of Rs. 5000 or multiples thereof would be insured for 10 times the same. This beneficial scheme was made applicable during the period from 19.1.1998 to 28.2.1998. In this regard, the premium for the policy under the Scheme was fixed at the rate of Rs. 6.95. per Rs. 25,000. The period for insurance was from 1.3.1998 to 28.2.2003. As per the agreement, the Insurance Company was to be paid insurance premium of Rs. 75 lakh by the complainant. It was also stipulated in the agreement that on the basis of the insured persons and the insured amount; the aforesaid amount was to be increased or decreased. The opposite party sent its letter dated 31.3.1998 informing the complainant that the earlier paid provisional premium amount of Rs. 75 lakh would be less.

(2.) Keeping in view that there should be no violation of Section 64V.B. of the Insurance Act, it was decided that a sum of Rs. 25 lakh would be paid on 31.3.1998. Thereafter, a sum of Rs. 12.50 lakh, the total being Rs. 87.50 lakh, was paid to the opposite party. It was also agreed that 5% of the premium was to be disbursed by the Insurance Company for publicity and communication through small savings directorate and under the advice of the Director, Small Savings. The insurance certificates were to be issued to the investors by 15thMarch, 1998 and to the agent by 31.3.1998. On 23.4.1998, the Insurance Company informed that they were not receiving the complete list of insurance certificates from the Districts. Accordingly, the directions were issued for complete list. The directions were issued on 18.4.1998 and again on 5.6.1998 by the complainant/department. The department was informed that all the information was furnished. The complainant/ department vide letter dated 10.1.1998 asked the Insurance Company to inform the final premium and deposit 5% of the amount for publicity and dissemination. However, the complainant did not give the response. Reminders were also issued on 13.1.1999 and 11.2.1999. Several personal meetings were also held. Ultimately, vide letter dated 4.3.1999 the Insurance Company informed that on the basis of the proposal letters received from the districts, they had prepared a districtwise list. However, that list was not sent to the department. Reminders were sent but they did not ring the bell. Finally, last effort was made on 10.5.2000 asking the Districts to have its record reconciled with the record of Insurance Company for this purpose and the date fixed was 25-26.5.2000. Another letter was also written on 11.5.2000. The complainant sent letter dated 15.7.2000 but the opposite party did not give the details of final payment of the premium.

(3.) It is transpired that the opposite party was liable to pay back the balance premium in the sum of Rs. 55,02,600. The letter sent by the complainant did not produce the desired result. Consequently, the present complaint was filed with the following prayers on 3.8.2001: