ORIENTAL INSURANCE COMPANY LIMITED Vs. SUMANGALA STEEL LIMITED

JUDGEMENT

(1.) The Oriental Insurance Company Limited has preferred this appeal against the order of the State Consumer Disputes Redressal Commission, Madras, directing it to pay to the complainant Rs. 6,61,324/- with interest thereon @ 18% p.a. from 5.3.1993 till the date of payment. The Insurance Company has also been directed to pay costs assessed as Rs. 3,000/-. The dispute arises out of a Machinery Insurance Policy issued by the appellant on 30.6.1989 in favour of M/s. Sumangala Steel Limited, respondent herein. The period of insurance is stated to be from 11.9.1988 to 10.9.1989. The annual premium was shown as Rs. 23,871/-. Total sum insured was Rs. 17,00,402/-, out of which Rs. 10,29,600/- was on account of Furnace Transformer, 4000/4500 KVA/22KV-200V - Cromptom Greaves India - Make 1987.

(2.) M/s. Sumangala Steel Limited, the complainant is a manufacturer of steel in Ingots having its factory at Industrial Estate Pondicherry. In 1987, it purchased the Furnace Transformer alongwith the other machinery which was insured for which the insurance cover was taken in 1989. There is a dispute about the quantum of premium payment. According to the Insurance Company, the full amount of the premium was not paid till 30.6.1989. Initially a sum of Rs. 22,000/- was paid by the complainant. But on further evaluation, the Insurance Company demanded another sum of Rs. 1,871/-.According to the Insurance Company, this sum was received by it on 30.6.1989,7 days after the breakdown of the machine in the factory of the complainant. The complainant's case is that a sum of Rs. 1,871/- was sent by it by cheque dated 20.6.1989 alongwith the covering letter which was also dated 20.6.1989. The State Commission has upheld the contention of the complainant.

(3.) It has been vehemently argued on behalf of the Insurance Company that the complainant had not submitted the full bills relating to the purchase of the Furnace Transformer and other machinery which was insured. Ultimately, on scrutiny of the additional list of bills filed by the complainant, the Insurance Company called upon the complainant to pay a further premium of Rs. 1,871/-. There was no response from the complainant till after the date of the breakdown. In the list of documents annexed to the Order of the State Commission, it can be seen that as many as 4 reminders dated 16.11.1988, 15.2.1989, 31.3.1989 and 15.5.1989 were sent by Insurance Company to the complainant. The alleged letter and cheque dated 20.6.1989 was sent by the complainant after ignoring all these reminders and more than four weeks after a statutory notice under Section 64VB of the Insurance Act, 1938. The breakdown of the Transformer took place on 23.6.1989. The finding of the State Commission that the cheque and the letter dated 20.6.1989 was actually sent on 20.6.1989,3 days before the breakdown is a finding of fact. But unfortunately there was no explanation from the complainant as to why they delayed the payment till the 20.6.1989 after ignoring all the reminders which were sent to it. The proximity of the alleged date of payment and the date of breakdown is highly suspicious but we are not inclined to disturb the finding of fact made by the State Commission on the ground of suspicion alone.