LOVELY PROFESSIONAL UNIVERSITY

Course Code: BSL 201 Course Title: Legal Aspect Of Business

Academic Task: 02 Academic Task Title: Assignment 2
Student Roll No: RQ2207B35 Student Registration No: 12211869
Maximum Marks: 30 Date of Submission: 15/04/23
Faculty Name: Dr Shaiku Shahida Section:Q2102
Saheb
Date of Allotment: 24/03/23 Student Name: Aaditya Raj

Learning outcomes:
Declaration:
I declare that this Assignment is my individual work. I have not copied it from any other
students’ work or from any other source except where due acknowledgement is made
explicitly in the text, nor has any part been written for me by any other person.
Evaluation Criterion: Rubrics on different parameters
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General Observations Suggestions Best Part of assignment

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 Case Study – 1 (Consumer protection Act 1986)
National Insurance Company Ltd. Vs. Hindustan Safety Glass Works Ltd. & Anr.

APPELLANT- NATIONAL INSURANCE COMPANY

RESPONDENT- HINDUSTAN SAFETY GLASS WORKS

JURDISCTION- Supreme Court Of India

HOUNARABLE JUDGE - Madan B Lokur

ISSUE
Here In this case Respondent (Hindustan Saftey Glass Works) is and
appellant (National Insurance Compnay) an insurance company dealing
with insurance works

In the case the respondent (Hindustan safety glass works) took two
policies with the appellant, the National Insurance Company, on August
29, 1990, for Rs. 4.9 lakhs and Rs. 5.7 crores, respectively. The first
policy covers risk in office buildings, offices, and canteens, while the
second policy covers risk in factory buildings, machines, goods, semi-
finished items, and other accessories (both premises are in Calcutta).

The policy was originally only for a year, but it was later extended until
1992.

According to the report, there was severe rain in Calcutta on August 6,

1992 which caused gathering of rainwater within and around the factory,
and which caused damage to commodities, furniture, and raw materials.
The appellant submitted the claims on the 7th and 8th of August 1992,
that is, immediately after the incident, claiming a sum of Rs. 52 lakhs
because damaged material were under the cover of insurance.

On September 24, 1992, the Insurance Company appointed N.T. Kothari

& Co. as a surveyor for the purpose of inspection. On November 11th of
the following year, the surveyor's report was submitted, stating that the
amount to be claimed was Rs. 24 lakhs. Because the report sent to the
 Insurance Company lacked clarity, then they hired a different firm to
conduct the study again and submit the fresh and clear report.

On November 23, 1994, the second surveyor (Seascan Services (WB)

Pvt. Ltd) produced a report indicating that the insured had suffered a loss
of Rs. 26 lakhs. The amount to be claimed was lowered to Rs. 24 lakhs
after an addendum was passed on 10 February 1995 (list of goods and
other properties that must be added in order to claim an amount and
removal of other materials that should not be submitted for the claim).
Even after a sufficient amount of time had passed, the insurance
company refused to pay the insurance demanded.
Why company didn’t pay the insurance after investigating two times ?

Rules/Relevant Law

The current world need an unique rule to protect everyone's rights, and thus the
Consumer Protection Act, 1986 makes its first appearance in Indian society,
listing consumer rights, penalties for violating such rights, authority to deal with
such situations, and so on. Consumer rights are based on the essential consumer
rights addressed by the International Organization of Consumers under the Act.
The following rights are available to the consumer as to get relif from unfair
trade practices.
Even applying for a policy with an insurance company falls under the definition
of consumer right, and this circumstance is addressed further below in this case.

Analysis
The Consumer Protection Act of 1986, in this case, is a law that aims to better
protect consumers' interests by establishing consumer councils and other
agencies for the resolution of consumer disputes and their issues. The National
Insurance Co. Ltd filed an appeal against Hindustan Safety Glass Works in
relation to the claims they requested from the insurance company. The appellant
National Insurance Company had taken out two policies for the respondent
Hindustan Safety Glass Works Ltd. To put it another way, the national
insurance took more than two years to survey or cause a survey of the insured's
loss or damage. This entire delay in their investigation is undoubtedly due to
National Insurance, and it cannot affect the respondent's claim, especially as the
respondent had already filed a claim well inside the time limit.

Appeleant justify that according to the policy of insured claim there

is mentioned condition 6(ii), which says that period of filling a claim
is 12 months from the time of case happened. But in this case
customer failed to do so a/c to National Insurance Company. As well
as rule also says that if client do not get the insurance then he or she
can file an appeal in judiciary within a spam of 12 months. But the
case entered in court after year 1996 but the incident happened in the
year of 19921

→ And aside all the law according to consumer protection act the
maximum spam of 2 year is allowed if there is any delay under
section 24A of consumer protection Act. As a result, the appellant
questioned the complaint's validity before the National
Commission.
The insurance company claimed that the insured's loss was caused by
dust and moisture accumulating on stock that had been left unattended
since 3 May 1991 due to a respondent personal reason.

Respondent Justify that-

→ The lawyer appearing on behalf of the petitioner claims that the

insurance company's actions caused the delay in filing the
petition. According to the facts, the insurance company appointed
two companies, one after the other, to conduct a survey, which
caused the insured to wait two years to file a lawsuit.

→ The insurance company then passed an addition the next year,

which must be taken into account when determining the amount to
be claimed. The first months of 1996 were spent waiting for a
response to the notice of April 22. As a result, the delay in bringing
the complaint is valid, and the National Commission has
jurisdiction over such matters.

→ The purpose of the two survey reports for dealing with a single
incidence was then addressed by the responder. The 1st surveyor
 was not a bona fide surveyor and had no authority to submit any
report about the damage or loss, according to the reports submitted.

Conclusion
Here in this case after hearing the case The National Commission issued a
payment order to the National Insurance Company after weighing all of
the arguments. It ordered the payment of Rs. 21,05,803.89 plus interest at
a rate of 9% per year beginning May11, 1995.
As after studying the case we found that respondent didn’t filled the
complain late due to the national insurance company as the company
arranged surveyors two times which took 2 years. As well as in the in the
insured policy of the materials , products there is nothing mentioned about
the particular problem or disaster should occur for the damage of goods
and other material to claim the insurance.
Hence National insurance should return the amount of 21 lakh to
the respondent with 9% interest per year from 11 may 1995.

Case Study – 2 (Negotiable Instrument Act 1988)

MODI CEMENTS LTD VS KUCHIL KUMAR NANDI
APPELLANT- Modi Cement

RESPONDENT- Shri Kuchil Kumar Nandi

JURDISCTION- Supreme court of India

HOUNARABLE JUDGE - MK Mukherjee , S.P Kurdukar

ISSUE
• Here In this case Modi cement ( Appeleant ) is a public limited company
manufacturing and selling cement under the brand name of Modi cement
in all INDIA. And the respondent Shri Kuchil Kumar Nandi was
respondent in this case who is the sole proprietor of the M/s Nandi
Traders , M/s Nandi Concerns and many more.
 • The appellant (Modi cement) claims in his complaint that the respondent
(Shri Kuchil Kumar Nandi) purchased non-levy Modi Cement on credit
from them in exchange for orders placed on his behalf. The respondent
placed these orders with the appellant's Calcutta office, and it was agreed
that the respondent would pay the price of the consignments at the said
office.

• After analyzing the report respondent incurred a liability or debt of

1,10,53,520.30 payable to the appellant Shri (Kuchil Kumar Nandi) on
23.02.1994 for the purchasing price of the cement provided by them to
the respondent, according to the accounts. On 23.02.1994, 26.02.1994,
and 28.02.1994, the respondent wrote three cheques in favour of the
appellant bearing cheque Nos. 1308340- 42 for a total of Rs.2,00,000/- in
partial payment of the aforementioned liability/debt.
• On 09.08.1994, the Modi cement took these three checks to the bank for
payment Bank of India, J.L. Nehru Branch Calcutta. The respondent's
banker, Indian Bank Bankura, returned the particular three cheques as
unpaid on 6.9.94, with the reason of "payment stopped by the drawer."

• The respondent had issued such instructions in his letter dated

08.08.1994, as was later revealed. On September 13, 1994, the appellant
served the respondent with a legal notice under Section 138 of the Act,
demanding payment of the total payment amounts due under the
transaction. On September 17, 1994, the respondent received the
abovementioned notification. The appellant filed three criminal charges
against the respondent under Section 138 of the Act because the
respondent failed and forgot to pay the amount of the aforesaid three
cheques within the specified 15-day period, which expired on 2.10.1994

Legal Question-
1. Is it necessary to have the bank's "payment stopped" endorsement to
consider the complaint under section 138 of the NI Act?

Rule/Relevant law

This case falls under Section 138-142 of Negotiable Instrument Act , which
defines efficiency of banking operations and to ensure smooth process in
transacting business through cheques.
If a person draws a cheque on an account maintained by him with the Banker
for payment of any amount of money to another person from that account for
the discharge, in whole or in part, of any debt or other liability, and the cheque
is returned by the Bank unpaid, either because the amount of money standing to
the credit of that account is insufficient to honour the cheque or because it
exceeds the amount arranged to honour the cheque, a penalty is imposed under
Section 138 of the Act.
Analysis

Here in this case Section 138 of the Act imposes a penalty if a person draws a
cheque on an account maintained by him with the Banker for payment of any
amount of money to another person from that account for the discharge, in
whole or in part, of any debt or other liability, and the cheque is returned by the
Bank unpaid, either because the amount of money standing to the credit of that
account is insufficient to honour the cheque or because it exceeds the amount
arranged to honour the cheque.

→ The appellant has not claimed in his complaint that the Bank returned the
cheques unpaid "either because the amount of money standing to the
credit of that account is insufficient to honour the cheque or because it
exceeds the amount arranged to be paid from that account by an
agreement made with that Bank." The Court could not have taken
cognizance of the offence since the requisite elements of Section 138 of
the Act had not been stated.
→ The dialogue of the Bank "payment stopped" was insufficient to uphold
the complaint because it was not a component of the violation under
Section 138 of the Act.
→ As a result, it is evident that when a person writes a check on an account
he maintains with his banker for payment of any amount of money to
another person out of the account for the discharge of a debt in whole or
in part or other liability, the bank returns the check.
→ Even a "Stop payment" decision, according to the Supreme Court's three-
judge panel, would trigger section 138's mischief. It was found that if,
after the cheque is issued to the payee or holder in due course and before
it is presented for encashment, a notice is issued to him not to present the
same for encashment, but the payee or holder in due course presents the
 cheque to the bank for payment and it is returned on instruction, Section
138 of the NI Act is not triggered.
Conclusion

Here in this case appleant Modi cement stopped the payment of respondent via
cheque. Stopped the cheque even after purchasing the material by him for their
different usages. The drawer of the check mentioned , obviously gets
opportunitdy under the the rule of Dishonour of cheque.
Section 138 of the Act is a penal provision that states that if a person draws a
cheque on an account maintained by him with the Banker for payment of any
amount of money to another person from that account for the discharge, in
whole or in part, of any debt or other liability, the Bank will return the cheque
unpaid on the grounds that the amount of money standing to the credit of that
account is insufficient to honour the cheque or that it exceeds the amount agreed
upon, the cheque will be returned unpaid by the Bank.

→ Hence respondent should get payment of all the dues against the
order of Kuchil kumar nandi. And kuchil kumar nandi shall be
deemed to have commited the offence and penalty should be
charged on him