MUMBAI, July 24: The State Consumer District Redressal Commission recently held the New India Assurance (NIA) Co. Ltd. guilty of issuing a wrong insurance policy to one of its clients.The state commission order was passed in the case of M/s K S Bhatia, a civil engineering firm which had undertaken a project, Aghai Rural Water Supply Scheme at an estimated cost of Rs 6 crore, for the Maharashtra Water Supply and Sewerage Board (MWSSB) in Sahapur and Bhiwandi talukas of Thane district.Bhatia and the MWSSB jointly applied for an insurance policy with the NIA. They gave a proposal for a ``Contractors All Risks Assurance Policy'' (CAR) in December 1992. In January 1993, NIA accepted the `provisional' premium of Rs 80,839.However, when the engineering firm received the policy in December 1993, it turned out to be an Erection All Risks (EAR) policy. Besides, the engineering firm was not informed about the premium instalments totalling Rs 1,32,308/- to be paid in July and October '93. After it failed to make the payments, the policy lapsed.M/s Bhatia moved the Thane District Consumer Redressal Forum. Advocate Jehangir Gai, representing Bhatia, stated that the NIA had issued a wrong insurance policy and had also failed to intimate them about the premium due. He argued that there was no clear concluded insurance contract and hence they were entitled to the refund of the provisional premium. S R Singh, advocate for NIA, argued that the firm had asked for an EAR policy.President A S Medekar and member Gauri Deshmukh in their June 5, 1995 order directed the refund of the provisional premium. However, they held that the EAR policy was rightly issued as `demanded by Bhatia' and that there was no deficiency in service by the NIA.Both M/s K S Bhatia and the NIA went in appeal against the district forum order in the State Commission. The higher court held that that there was no concluded contract. It stated that CAR policy as per the original proposal was not issued.In their judgement on April 1, 1997, state commission president A A Halbe and member Rajyalakshmi Rao quashed the Thane Forum's ruling. They ordered NIA to pay 18 per cent interest on Rs 80,839/- from February 1994 to the date of the actual payment.
