CANARA BANK Vs. J M ZUBAIR

JUDGEMENT

(1.) This appeal is directed against the order passed by the District Forum, Ernakulam, in O. P. No.506/1994. The Opposite Party is the appellant.

(2.) Briefly stated, the allegations in the complaint are as follows: the appellant is the owner of a fishing vessel and it was purchased by availing a loan from the first Opposite Party Bank and it was insured with the second Opposite Party. As part of the loan transaction, the vessel had been insured in the name of the first Opposite Party under account of the complainant and the premium had been paid by the first Opposite Party Bank and premium amount is debited in the loan account of the complainant. The vessel met with an accident on 10.7.1993 and the complainant submitted a claim with the second Opposite Party who ordered a survey but subsequently they intimated the complainant that there was no insurance coverage on the date of the accident due to non-payment of the third instalment of the premium of that year. It is common ground that in the case of Marine Hull Insurance Policy it was issued after valuation and the premium is paid in three instalments, that is 40% of the amount on taking the policy and 30% each at the intervals of three months and on payment of the third instalment the policy will be effective for the remaining six months period. In this case a policy was issued on 6.11.1991 and that was extended upto 5.11.1992. On 6.11.1992 the first Opposite Party Bank paid a sum of Rs.7,373/ as the 40% of the premium for the next year. However, according to the Opposite Party when the Surveyor was deputed for valuing the vessel he reported that it was undergoing repairs and hence not sea worthy and as such the vessel could not be covered under Marine Hull Policy. It is alleged by the second Opposite Party that they had informed the Bank about this and fire policy was issued for the period from 6.11.1992 to 5.11.1993 and after obtaining a valuation re port on the expiry of the fire policy when the vessel was undergoing repairs, a policy was issued covering the period of three months from 7.1.1993 to 6.4.1994 and obviously the premium paid by the Bank on 6.11.1992 was adjusted towards the same. The premium for the fire policy was collected directly from the complain ant and it was issued on 7.1.1993 with retrospective effect from 6.11.1992 to 5.1.1993 and according to the first Opposite Party they were not aware of the issuance of the fire policy until very late. It is admitted that the first Opposite Party had paid the second instalment of the premium of Rs.5,489/ on 2.4.1993. However, it was con tended by the first Opposite Party that at the time of handing of Demand Draft the Development Officer, Mr. Xavier told that the policy will be valid till 5.10.1993 and on the basis of this they made entries noting 5.10.1993 as the due date of the payment. It is stated in Ext. B 1 letter dated 13.9.93 and it was also alleged that inspite of repeated requests the second Opposite Party had not forwarded the renewal endorsement to them. However, it has come out that the first Opposite Party has not paid the instalment of the premium which was due on 7.7.1993 and the stand taken by the second Opposite Party is that there was no coverage after 7.7.1993 and in the circumstances the insurer is not liable to indemnify the complainant for the damage sustained due to the accident. The complainant alleged that the non-payment of the third instalment which resulted in the repudiation of claim made by the complainant by the second Opposite Party would amount to deficiency in service on the part of the first Opposite Party and in the circumstance they were liable to indemnify the complainant for the loss sustained by him.

(3.) In the version filed by the first Opposite Party they contended that the insurer had not forwarded the renewed policy to them and, therefore, they did not know when the premium had to be paid and the fire policy was taken without their knowledge and that was done by the insurer without any request from the Bank and as such they are not responsible for what had happened subsequently. It was also contended that the Development Officer Mr. Xavier in formed the Bank that the third instalment of premium was due only on 5.10.1993 and that was the reason why no payment was made on 5.7.1993. They are, therefore, not liable for the claim made by the complainant and the default is on the part of the insurer them selves.