PRAKASH INDUSTRIES LTD Vs. NATIONAL INSURANCE CO LTD

JUDGEMENT

(1.) HEARD the learned counsel for the parties exhaustively. Undisputedly on 29.2.1992, the complainant company took a Marine- cum-Erection Policy from the opp.party insurance company for a sum of Rs.2.65 crores. The complainant had paid a premium of Rs.1,07,318/- by cheque dated 5.3.1992. Further, the complainant gave a bank guarantee in favour of the insurance company for a sum of Rs.1 lakh in order to cover the premium under the aforesaid policy as provided in Section 64VB(1) of the Insurance Act, 1938.

(2.) FURTHER , the complainant has produced on record the debit notes starting from 1.6.1992 indicating premium payable by the complainant. First debit note is dated 16.6.1992 wherein it is specifically stated - "the debit should be settled before the last date of the next calendar month". It is also specifically provided that extension of the policy was up to 31.8.1992. The next relevant debit note is dated 26.8.1992 wherein a premium of Rs.3,709/- was demanded from the complainant. In that debit note also, it is specifically mentioned that the debit should be settled before the last date of the next calendar month. That means, the complainant was required to pay the premium before 30.9.1992. The validity of the policy was also extended up to 30.9.1992. To that effect there is a specific endorsement:

(3.) THEREAFTER , Final Survey Report was submitted by him on 18.8.1994 wherein he arrived at the conclusion that net loss assessed was Rs.22,39,817/-. Thereafter, Sr.Divisional Manager wrote a letter to Executive Director of the complainant on 16.10.1995 that the claim was forwarded to the head-office. Finally on 16.3.1998, the insurance company repudiated the claim solely on the ground that the premium in respect of the second extension period was received only after the loss and, therefore, the insurance company was not liable to pay the loss suffered by the complainant. A reference was made to Section 64VB.