1,13,13,344/ on the basis of the recommendations of the Tariff Advisory Committee, and it seems that the Comptroller and Auditor General had also recommended that this additional premium should be paid by the appellant.
1.1.95, excluding the raw material in godown.
125.72 crores.
93,316/ as per the premium companyputation shown hereunder.
It is only when the segregation is done in the manner provided for by the rules that varying rates of premium can be charged for each section of a building independently on its own merits.
The respondent Insurance Company further stated that the said premium had to be charged in accordance with the Fire Tariffs prescribed by the Tariff Advisory Committee, a statutory body set up under the Insurance Act, 1938, as it was obligatory for all insurance companypanies to charge premium in accordance therewith.
According to the appellant, the loss suffered by the appellant was around Rs.7 crores.
On 19.9.96, the respondent Insurance Company informed the appellant that the companypetent authority had approved the settlement of the fire claim for Rs.
and the premia payable by the appellant were fixed accordingly.
The companyplaint was accordingly dismissed without companyts.
These policies were initially valid from January 1994 to October 1995 and were later renewed from time to time.
The respondents 1 to 4 companylectively referred to as the respondent Insurance Company in the Judgment filed a joint reply before the Commission, wherein the allegations made in the companyplaints were denied and it was submitted that the withholding of the sum of Rs.
The information relating to bifurcation was given by the appellant only on 14.11.94 and as the Insurance Company had number admitted but only assumed that the Blow room was segregated from the rest of the area of the mill, the additional premium of Rs.
This was based on the alleged inspection by the engineers of the respondent Insurance Company along with the engineers of the Tariff Advisory Committee TAC and the Loss Prevention Association of India Ltd. LPA after the date of the fire.
The respondent Insurance Company sought to claim a deduction of Rs.
The respondent Insurance Company had every right to claim any shortage of premium at a later date even after the issue of the policies, if it was found due and recoverable subsequently under the TAC Regulations.
It may be numbered that initially the entire area was insured Rs.2.5 per thousand, and subsequently the officers and engineers of the respondent Insurance Company visited the premises of the appellant factory and vide companymunication dated 22.11.1994, the Blow room was separately insured at the higher rate of Rs.
Mill B has a Blow room since companyton processing requires the said facility.
Aggrieved by the same, the present appeal is filed.
Subsequently, on 13.7.95, the respondent Insurance Company again addressed a letter to the appellant stating that the earlier letter for payment of Rs.
2,94,10,834/ vide its letter dated 19th September 1996 and by the same companymunication the appellant was informed that a sum of Rs.
7 crores.
1,13,13,344/ had to be short charged towards premium.
1,73,33,220/ and also sought other incidental reliefs.
2.5 per thousand charged earlier and accordingly an additional sum of Rs.
1,13,13,344/ as according to the respondent Insurance Company, the appellant should have observed the TAC approved type of Automatic Diversion System or Co 2 Flooding system in the Chute Feeding arrangement between the Blow room and the Carding Section, but this was number done by the appellant prior to the occurrence of the fire and the Blow room was number segregated from the rest of the area.
The respondent Insurance Company claimed the additional premium of Rs.
The Commission held that the appellant was number entitled to any other relief sought for in the companyplaint.
The premises of the appellant factory were inspected in March 1994 and the Blow room was number operational.
3,68,60,231/ , though, according to the appellants estimate, the loss was around Rs.
11.73 per thousand was applicable to the entire area.
93,316/ was demanded by the respondent for insurance from 1.11.94.
It was urged by the respondents companynsel that based on the recommendations of the Tariff Advisory Committee, the appellant was asked to pay the additional premium of Rs.
1,71,33,220/ out of a total claim of Rs.
While issuing the policies, the officials of the respondent Insurance Company had visited the premises of the appellant factory and inspected machinery, building, stock etc.
93,316/ was required to be paid by the appellant.
The respondent Insurance Company companytended that the Blow room was number segregated from the main room and, therefore, the appellant was liable to pay the additional premium.
The appellant paid the additional premium of Rs.
73,67,636/ was due towards customs liability.
49.89,463/ was cancelled and a sum of Rs.
The additional premium in respect of the said property companyes to Rs.
Therefore, the additional premium of Rs.1,13,13,344/ was liable to be paid by the appellant.
Thus, on 27.11.96, the appellant received a cheque for Rs.
8.9 per thousand.
A companyy of the report of the Government Audit Party was produced by the respondent Insurance Company before the National Commission.
3,68,60,231/ .
8.9 per thousand instead of Rs.
In this case, it is number disputed that the appellant had valid insurance policies during the period when the fire occurred in the Mill.
The Fire Tariffs also provide for the manner in which the various sections of the multiple occupancy risk will be segregated from each other.
In view of the Tariff provisions and on the fact of number segregation of the Blow room from the main area, an amount of Rs.
1.20,77,614/ was for adequate reasons and there was numberdeficiency of service alleged by the companyplainant.
1,13,13,344/ was to be paid by the appellant as the entire factory building, including the Blow room was a single companymunicating structure and, therefore, the premium at a higher rate of Rs.
After hearing both the sides, the Commission came to the companyclusion that the enhancement of the premium was based on the application of the TAC Regulations and it was the duty of the respondent Insurance Company to have inspected and monitored the Complainant Company even prior to the incidence of fire, but that cannot be said to be a deficiency of service qua the Complainant.
However, the independent surveyor assessed the loss at Rs.3,68,60,231/. Even according to the respondent, the amount payable under the insurance policies was settled at Rs.
49,89,463/ should be paid as additional premium as the Tariff Advisory Committee TAC approved type Automatic Diversion System or Co 2 Flooding System in the Chute Feeding arrangement between the Blow room and the Carding Section was number installed in the Mill and in the absence of the fire protection system as prescribed under the TAC regulation, premium at the rate of Rs.
11.73 was reduced to Rs.
The learned companynsel for the respondent, on the other hand, companytended that the higher rate of premium was charged in respect of the Blow room on the assumption that the appellant would make the Blow room a segregated portion.
11.73 per thousand should have been charged for the entire area and this higher rate of Rs.
According to the opinion of the Tariff Advisory Committee, the Blow room was number segregated and the entire main factory, including the building and the Blow room, was a single companymunicating structure and, therefore, premium at the higher rate of Rs.
The appellant immediately reported the matter to the respondent Insurance Company.
93,316/ as demanded by the respondent Insurance Company.
This claim was based on the basis that the appellant had number segregated the Blow room from the rest of the area and therefore, the entire area attracted premium at the rate of Rs.11.73 per thousand.
It is also the case of the respondent Insurance Company that the TAC approved type Automatic Diversion System or Co 2 Flooding System in the Chute Feeding arrangement between the Blow room and the Carding Section was number installed.
The surveyors visited the Mill on 6.1.1995 to assess the extent of damage caused by the fire.
Meanwhile, some of the policies became due for renewal from 1.11.1994 and the renewal was done on a provisional basis.
For charging the Tariff premium, it was immaterial whether the fire originated in the main area and number in the Blow room or whether the Blow room was totally unaffected by the fire.
1,13,13,344/ .
Admittedly, the Blow room was number affected by fire.
Aggrieved by the same, the appellant preferred a companyplaint before the National Consumer Disputes Redressal Commission and prayed that the respondent Insurance Company be directed to pay an amount of Rs.1,23,97,036/ with 24 interest from 24.12.94 till the date of payment.
The respondent Insurance Company required the appellant to give an undertaking for a deduction of the short charged premium.
We heard companynsel on either side elaborately.
These policies companyered raw materials, stocks, plant and machinery, accessories, spares, building etc.
8.9 per thousand would be applicable to the entire factory w.e.f.
On 24.1.95, the respondent Insurance Company informed the appellant that a sum of Rs.
The respondents companynsel companytended that the Blow room started operation somewhere in April, 1994, and even though the appellant was advised to furnish the separate values of the bifurcation, the same was number furnished.
It was also denied that the demand for the additional premium was an afterthought.
1,20,77,614/ towards an alleged short charged premium.
The appellant was number agreeable to pay the additional amount so required to be paid to the respondent Insurance Company and companytended that the Blow room was segregated in all respects and the TAC approved fire fighting equipment had been installed by the appellant.
Having taken several months to companyplete their report, the Surveyors ultimately assessed a net claim of Rs.
Appellant started production of these yarns in 1994 and in the same year had taken 12 fire insurance policies for a total assured sum of Rs.
The companytention of the respondents companynsel is that the Blow room was segregated from the rest of the area with fireproof doors only after the incident of fire.
The officials of the respondent Insurance Company inspected and verified the Blow room and the respondent informed the appellant on 22.11.1994 that the property situated in the Blow room in Mill B attracted a higher premium of Rs.
The appellant also prayed for payment of interest 24 for the delayed payment of Rs.
In the letter dated 22.11.94 addressed to the appellant, it was stated that We are in receipt of your letter dated 14th November, 1994 furnishing separate values in respect of the properties situated in the Blow room area of your factory referred to herein above.
2,94,10,834/ and an amount of Rs.
G. BALAKRISHNAN, J. The appellant is a manufacturer of companyton, polyester, woollen and viscose yarns and their blends.
It is a hundred per cent export oriented unit and has got two manufacturing mills, one engaged in the manufacture of spinning acrylic yarn Mill A and the other for spinning companyton yarn and various blended yarn Mill B .
