State Consumer Disputes Redressal Commission
M/S Fortune Marketing Pvt. Ltd. vs The New India Assurance Co. Ltd. on 19 December, 2025
CC/835/2015 DOD:19.12.2025
FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD.
IN THE DELHI STATE CONSUMER DISPUTES
REDRESSAL COMMISSION
Date of Institution:11.09.2025
Date of reserving the order:27.11.2025
Date of Decision:19.12.2025
COMPLAINT CASE NO.-835/2015
IN THE MATTER OF
M/S FORTUNE MARKETING PVT. LTD.
REGD. OFF. 201-202, GEDORE HOUSE,
51-52, NEHRU PLACE,
NEW DELHI-110019
...Complainant
(Through: Ms. Amrita Panda and
Mr. Devesh Panda, Advocates
Phone:011-41648787
Email: [email protected])
VERSUS
THE BRANCH MANAGER,
THE NEW INDIA ASSURANCE CO. LTD.
S1 TO 6, MANISH LINK ROAD,
PLAZA-1, PLOT NO.9,
SECTOR-5, DWARKA,
NEW DELHI-110075
...Opposite Party
(Through: Mr. Pankaj Seth, Advocate
Mob.:9811055345 &
Email: [email protected])
CORAM:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)
HON'BLE MS. PINKI, MEMBER (JUDICIAL)
Present: Mr. Debesh Panda, counsel for Complainant
OP proceeded ex-parte vide order dated 16.08.2017,
however, Ms. Vijay Laxmi, proxy counsel for Mr.
Pankaj Seth, counsel for the opposite party.
ALLOWED PAGE 1 OF 16
CC/835/2015 DOD:19.12.2025
FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD.
PER : HON'BLE PINKI, MEMBER (JUDICIAL)
JUDGMENT
1. The present complaint has been filed by the Complainant before this Commission alleging deficiency of service by the Opposite Parties and has prayed the following reliefs:
"a) Direct the Respondent to compensate the Complainant to the tune of Rs.67,22,177/- (Rupees Sixty seven lakhs twenty two thousand and hundred seventy seven only), being i. Rs.32,01,485.21 towards the goods lost; and ii. Rs.4,87,174.79 towards lost profits; and iii. Rs.5,00,000 towards hardship caused on account of Respondent's conduct; and iv. Rs.3,00,000 towards costs and legal expenses; and v. Pre-claim interest of Rs.22,33,517 calculated at 12% interest per year compounded per annum on the amount claimed under (i) above, with effect from 28.12.2010.
b) Pass any such other order which this Hon'ble Commission may deem fit and proper in the facts and circumstances of the case, in the interest of justice, equity and good conscience."
2. Brief facts necessary for the adjudication of the present complaint are that the Complainant, a private limited company engaged in the trade of electronics and multimedia goods, obtained an Annual Turnover Policy (ATO Policy) bearing No. 31150321100200000001 from the insurance company (hereinafter referred to as Opposite Party) for a period w.e.f. 01.04.2010 to 31.03.2011 on 30.03.2010, covering all Risks + ALLOWED PAGE 2 OF 16 CC/835/2015 DOD:19.12.2025 FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD. war & SRCC (Warehouse-to-Warehouse) including inland transit. Although the opposite party's software could not issue an ATO policy, the coverage was admitted by the insurer itself as per RO Sanction and subsequent correspondence.
3. It is the case of the complainant that under the said policy, the Complainant imported a consignment of 8,780 USB keyboards and 22,000 PS-2 keyboards from Shenzhen Guowen Electronics Co. Ltd., Shenzhen, China, vide Invoice no. CI-H0119 dated 29.11.2010 for USD 52,600. The consignment was sealed vide bearing seal No. CH6967769 and loaded for shipment at Shekou, China on 03.12.2010. It reached Chennai Port on 20.12.2010 and thereafter the Complainant's warehouse on 28.12.2010. Upon opening the container on 28.12.2010, the Complainant found only 280 cement bags with Chinese markings instead of keyboards. The original seal was found substituted with a different seal No. CH6967767. The Complainant immediately lodged an FIR with Chennai Police and informed all concerned including Customs, freight forwarders, shipping line, and the Opposite Party.
4. It is the case of the complainant that subsequent investigations revealed that the container was pilfered/theft-substituted in China. The Shenzhen Shekou Port Public Security Bureau, vide ALLOWED PAGE 3 OF 16 CC/835/2015 DOD:19.12.2025 FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD. Authentication Notice dated 01.12.2011, confirmed that 30,780 keyboards packed in 1,539 cartons were stolen, valuing RMB 3,38,560. Thereafter, Opposite Party appointed a surveyor, M/s K.C. Sharma & Co., who first submitted a Final Survey Report dated 29.08.2011 and later an Addendum Report dated 13.06.2012, confirming total loss due to container seal tampering within China, assessing loss at Rs. 32,01,485.21.
5. It is the case of the complainant that multiple rounds of clarifications were exchanged between the Complainant, the surveyor, branch office and divisional office. Eventually, both the Branch Manager and Senior Divisional Manager of the Opposite Party admitted that all queries were answered and recommended approval of the claim on a non-standard basis for Rs.24,01,114/-
6. However, the Opposite Party's DRO repudiated the claim vide letter dated 26.06.2013, communicated to the Complainant on 04.07.2013, on the ground that the consignment was allegedly shipped on FOB (FREE ON BOARD) terms, resulting in no insurable interest to the Complainant at the time of loss. This position was contradicted by overwhelming evidence including the Bill of Lading stating "Freight Collect," invoices of the freight forwarder raised to the Complainant, and confirmations from the consignor establishing that the consignment was shipped on Ex-
ALLOWED PAGE 4 OF 16 CC/835/2015 DOD:19.12.2025
FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD. Works, Freight Collect terms, with all freight, forwarding, trucking, sealing and customs clearance charges borne by the Complainant. The Complainant also demonstrated that the FOB (FREE ON BOARD) notation in Indian Customs documents resulted from software limitations and did not reflect the contractual shipping terms.
7. Despite repeated clarifications, including detailed submissions in February and August 2014, the Opposite Party began raising shifting, inconsistent, and new grounds to deny liability--first alleging lack of insurable interest, then alleging non-submission of documents, and later claiming that "Freight Collect" can also apply to FOB (FREE ON BOARD) shipments.
8. A legal notice was issued on 23.03.2015 enclosing all documents that the Opposite party had claimed were missing. In its reply dated 11.07.2015, the Opposite party took yet another new position by denying that the policy was an ATO policy, despite its earlier explicit admissions. This demonstrated further mala fide intent.
9. Thus, the Complainant was left with no other option but to file the complaint against the Opposite Party alleging arbitrary repudiation, shifting stands, and deficiency of service deficiency in service on the part of the Opposite Party.
ALLOWED PAGE 5 OF 16 CC/835/2015 DOD:19.12.2025
FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD.
10. Notice of the present complaint was issued to the Opposite Party vide order dated 29.08.2016 & 21.02.2017. However, the Opposite Party has failed to file the written statement as well as failed to appear before this Commission and was proceeded ex- parte by learned Predecessors vide order dated 16.08.2017.
11. The Complainant has duly filed ex-parte Evidence by way of Affidavit in order to prove their averments on record and written arguments.
12. On the other hand, the Opposite Party has also failed to file their written arguments despite directions given vide order dated 01.03.2023. Thereafter, right of the opposite party to file written submission was closed vide order dated 19.05.2023.
13. We have perused the material available on record.
14. The fact that the Complainant had imported 30,780 keyboards (8,780 USB keyboards and 22,000 PS-2 keyboards) from Shenzhen Guowen Electronics Co. Ltd., Shenzhen, China under the Annual Turnover Policy issued by the Opposite Party, is evident from the invoice bearing No.CI-H0119 dated 29.11.2010 (Annexure C-4 of the complaint).
15. The only question for consideration is whether there is any deficiency in service on the part of the Opposite Party.
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FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD.
16. The word 'deficiency in service' has been defined in Section 2(1)(g) of Consumer Protection Act, 1986, which is reproduced here for ready reference:-
"(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service."
17. This case concerns the wrongful repudiation of an insurance claim lodged by the Complainant under an Annual Turnover (ATO) Policy (Annexure C-1 page no. 23-24 of the Complaint) covering All Risks + War & SRCC (Warehouse-to-Warehouse), including inland transit. The repudiation constitutes clear deficiency in service and unfair trade practice on the part of the Opposite Party. The terms of the policy and the receipt of full premium in advance are undisputed (Page No.25-26 of the complaint; Annexure C-2). The Complainant asserts that the claim was rejected on two erroneous grounds, each amounting to deficiency and unfair trade practice.
18. The Complainant imported 8,780 USB keyboards and 22,000 PS-
2 keyboards from China under invoice bearing No.CI-H0119 dated 29.11.2010 (Annexure C-3; page No.27 of the complaint). The goods were stuffed and sealed in container CH6967769 at ALLOWED PAGE 7 OF 16 CC/835/2015 DOD:19.12.2025 FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD. the manufacturer's factory on 27.11.2010 at about 20:00 hrs, in the presence of its representative (Annexure C-4, C-26, page No.). The shipment was to be loaded at Shekou on 03.12.2010 as per Bill of Lading No. HKCEL08E551 (Annexure C-5). Upon arrival in Chennai on 20.12.2010, Customs cleared the shipment without examination (Annexure C-6).
19. When the container was opened at the Complainant's premises, it was found to contain 280 cement bags bearing Chinese markings. The original seal (CH6967769) had been replaced with CH6967767. The Complainant lodged an FIR and subsequently filed an insurance claim (Annexure C-7, C-9). The Surveyor, in his report dated 29.08.2011, confirmed that the loss had occurred in transit between the consignor's premises and the Water Gate in China between 27-28 November 2010 (Annexure C-13).
20. The insurer repudiated the claim (Annexure C-22) on the first ground that the Chinese customs declaration dated 29.11.2010 mentioned the delivery term as FOB (FREE ON BOARD); the Indian Bill of Entry also referred to FOB (FREE ON BOARD) insurance terms; and under an FOB (FREE ON BOARD) contract, risk passes to the buyer once the goods are placed on board the vessel. Based on this, the opposite party concluded that the ALLOWED PAGE 8 OF 16 CC/835/2015 DOD:19.12.2025 FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD. Complainant lacked insurable interest at the time of loss, since the Surveyor found that the loss occurred before loading on the vessel.
21. The Opposite Party was fully aware that the underlying commercial contract was Ex-Works. This is independently proved by Seller's Ex-Works certificate (Annexure C-26), Seller's invoice showing "Freight Collect" (Annexure C-4), confirming that freight up to port was borne by the Complainant; Freight Forwarder's invoice dated 18.12.2010 proving that trucking from factory to Water Gate was paid by the Complainant (Annexure C-18); Charges for stuffing, sealing, and other pre-shipment services also borne by the Complainant (Annexure C-18).
22. The opposite party's reliance on a single customs declaration to classify the transaction as FOB (FREE ON BOARD) is contrary to all contemporaneous documents. Once the goods were handed over Ex-Works to the Complainant's freight forwarder, title and risk passed to the Complainant. The insurer has deliberately misconstrued the transaction as FOB (FREE ON BOARD) to deny liability. Vide letters dated 01.02.2014 and 24.02.2014 (Annexure C-24, C-27) establishes that Chinese customs documentation does not permit selection of "Ex-Works," compelling exporters to choose FOB (FREE ON BOARD) for procedural purposes. Such ALLOWED PAGE 9 OF 16 CC/835/2015 DOD:19.12.2025 FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD. declarations cannot alter the true commercial nature of the contract. At most, the entry may constitute a customs "mis- declaration," but it cannot affect the insured's rights under the contract of insurance. As the contract was Ex-Works, title vested in the Complainant from the time of loading at the supplier's factory. The loss is squarely covered under the All Risks Warehouse-to-Warehouse policy. The repudiation is therefore patently wrongful.
23. At this stage, it is appropriate to refer the observation of Hon'ble Delhi High Court in New India Assurance Co. Ltd. v. T.T. Finance Ltd. (AIR 2011 Delhi 121), and by the J&K High Court in Oriental Insurance Co. Ltd. v. Sham Lal Matoo (AIR 2006 J&K 103), which reads as follows:
"9. The legal principle applicable qua meaning of an insurable interest will remain the same whether for marine insurance or for motor vehicles. The meaning of insurable interest has been further expounded by a Division Bench of Jammu & Kashmir High Court in the case of Oriental Insurance Co. Ltd. Vs. Sham Lal Matoo, wherein the Division Bench reproduced and adapted a paragraph from Banerjee''s Law of Insurance and the same reads as under:
13. It may also be advantageous to clarify any cobwebs in this regard by quoting the following passage from Banerjee''s Law of Insurance:
Insurable interest is not synonymous with legal interest. Thus an interest on an agreement to purchase is an insurable interest. A warehouse man who has assumed the obligation to insure the goods while in his possession has an insurable interest. Even the interest of a bailee is sufficient to establish an interest and an unpaid vendor of goods as an insurable interest in the property. Similarly, a husband has an insurable interest in his wife''s property and a wife in turn has an insurable interest in the property of her husband. So also a landlord may ALLOWED PAGE 10 OF 16 CC/835/2015 DOD:19.12.2025 FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD.
insure his rent which he may lose through the destruction of his premises, a tenant of premises has an insurable interest founded upon the beneficial enjoyment of the premises, which he loses in the event of their destruction so also a tenant renting a furnished house has an insurable interest in the furniture. Likewise a creditor whose debt is secured by legal or equitable mortgage upon any specific property has an insurable interest in the property mortgaged. A bankrupt remaining in possession of his estate has an insurable interest in it. A man may also insure the profits which he expects from some undertaking or adventure of from the carrying on a business."
24. In view of the above referred judgment of Hon'ble Delhi High Court, we are of the considered view that it is clear that the interest need not be an interest of ownership, even non-ownership interests such as possession, contractual obligations, or expected profits constitute insurable interest.
25. The Complainant has placed on record a series of internal correspondences of the Opposite Party-Insurer, marked as Annexure C-13, C-14, C-16, C-19, and C-20, which are highly material in assessing the conduct and intent of the insurer while processing the claim. A careful examination of these documents reveals that the insurer's own officers, at multiple hierarchical levels, had evaluated the claim on merits and found it admissible. The communication trail shows that the loss was accepted as genuine; the coverage under the policy was acknowledged; the documentary evidence submitted by the Complainant was found complete and satisfactory and a favourable recommendation for ALLOWED PAGE 11 OF 16 CC/835/2015 DOD:19.12.2025 FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD. claim approval was formally entered into the decision-making chain.
26. In Annexure C-13 and C-14, the officer handling the file clearly stated that the transit loss was fully proved and that no exclusion in the policy applied. Annexure C-16 shows that the insurer internally agreed to settle the claim, noting that the Surveyor's Addendum Report had answered all pending queries. Annexure C- 19 and C-20 further confirm that the file was forwarded for final approval, clearly showing that the company itself had acknowledged that the claim was valid and payable.
27. In sharp contrast, the repudiation issued in Annexure C-21 & C-
22 is a complete change of heart by the opposite party-insurer. No new evidence, no fresh inquiry, and no additional facts came up between the insurer's own final recommendation and the repudiation letter. The reasons given for rejecting the claim are not only wrong but directly contradict the insurer's own internal records. This unexplained reversal is arbitrary and shows a clear lack of proper consideration, amounting to a definite deficiency in service under the Consumer Protection Act, 1986.
28. It is well established in consumer law that if an insurance company's own internal notes show that a claim should be paid, then the company cannot suddenly reject the claim later without ALLOWED PAGE 12 OF 16 CC/835/2015 DOD:19.12.2025 FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD. any good reason. If they do so, the rejection is considered unfair, arbitrary, and against consumer law. An insurer cannot first accept that the claim is genuine and payable, and then, without any proper explanation, refuse to honour it. Such behaviour raises serious doubts about the fairness and honesty of the repudiation. Therefore, the insurer's internal correspondence strongly supports the Complainant's case that the repudiation was an unjustified afterthought and is completely unsustainable in law.
29. It is noted that the internal correspondence of the insurer (Annexure C-13, C-14, C-16, C-19, C-20) demonstrates that the claim had been accepted and recommended for approval. The subsequent repudiation in Annexure C-22 is a complete reversal without justification.
30. The INCOTERMS document (Annexure C-27) shows that under Ex-Works (EXW) terms, neither the buyer nor the seller is required to take insurance. Instead, insurance is taken only if both sides agree to it. In this case, the Complainant decided to take insurance under its ATO policy. The insurer issued the policy and accepted the premium. Therefore, the insurer cannot now refuse responsibility for the claim.
31. The second ground for repudiation was the alleged non-disclosure of a "roll-over cargo" advisory indicating a change of vessel from ALLOWED PAGE 13 OF 16 CC/835/2015 DOD:19.12.2025 FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD. Calicanto Bridge to Passat Breeze, based on an email dated 15.09.2012 from Stag Logistics.
32. The Complainant argues that the insurer has not explained why this information was important for deciding the claim. According to the Complainant, there was no rule or requirement that they had to share this information with the insurer in the first place. Moreover, the insurer has not shown that it suffered any disadvantage, loss, or confusion because the information was not disclosed. Therefore, the Complainant says the insurer cannot use this point as a reason to reject the claim.
33. The Hon'ble National Consumer Disputes Redressal Commission has already held in J.K. Dall Mill v. New India Assurance Co. Ltd. in Rev. Pet. No.503/2016 decided on 01.07.2019 that only important (material) facts must be disclosed. An insured person cannot be expected to disclose every small or unimportant detail.
34. Consequently, we hold that the Opposite Party is deficient in providing its services to the Complainant as the Opposite Party cannot deny the claim by using facts that are unrelated or not important. The Complainant had already disclosed all material information. The insurer's rejection of the claim is based only on wrongly treating the shipment as FOB (FREE ON BOARD), relying ALLOWED PAGE 14 OF 16 CC/835/2015 DOD:19.12.2025 FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD. on a single customs document, even though all the main documents clearly show otherwise.
35. In the present case, it is noted that the Opposite Party was proceeded ex-parte by this Commission vide order dated 16.08.2017. Therefore, the evidence of the complainant is unrebutted and the allegations made against the Opposite Party by the Complainant have not been challenged and has to be believed.
36. Keeping in view the facts of the present case, the complaint filed by the Complainant is hereby allowed and direct the Opposite Party to pay an amount of Rs.32,01,485.21 (net loss assessed by Surveyor) to the Complainant with the following arrangement:
A. An interest @ 9% p.a. calculated from 28.12.2010 (being the date on which the wrong goods reached to the complainant) till 19.12.2025 (being the date of the present judgment);
B. The rate of interest payable as per the aforesaid clause (A) is subject to the condition that the Opposite Party pays the entire amount on or before 18.02.2026.
C. Being guided by the principles as discussed above, in case the Opposite Party fails to refund the amount as per the aforesaid clause (A) on or before 18.02.2026, the entire amount is to be refunded along with an interest @ 12% p.a. ALLOWED PAGE 15 OF 16 CC/835/2015 DOD:19.12.2025 FORTUNE MARKETING PVT. LTD. VS. THE NEW INDIA ASSURANCE CO. LTD.
calculated from 28.12.2010 (the date on which the Opposite Party repudiated the claim of Complainant) till the actual realization of the amount.
36. In addition to the aforesaid and taking into consideration the facts of the present case, the Opposite Party is directed to further pay a sum of:
A. Rs.4,87,174.79 as lost profits to the complainant; and B. Rs.5,00,000/- as cost for mental agony and harassment to the Complainant;
C. The litigation costs to the extent of Rs3,00,000/-.
37. Applications pending, if any, stand disposed of in terms of the aforesaid judgment.
38. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.
39. File be consigned to record room along with a copy of this Judgment.
(JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (PINKI) MEMBER (JUDICIAL) Pronounced on 19.12.2025 ALLOWED PAGE 16 OF 16