National Consumer Disputes Redressal
M/S Bdr Pharmaceuticals International ... vs M/S Icici Lombard General Insurance Co. ... on 15 September, 2017
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 339 OF 2013 1. M/s BDR PHARMACEUTICALS INTERNATIONAL PVT. LTD., Regd. Office: 407/408, Sharda Chambers, 15, New Marine Lines, MUMBAI - 400020. ...........Complainant(s) Versus 1. M/s ICICI LOMBARD GENERAL INSURANCE CO. LTD., Regd. Office: ICICI Bank Towers, BKC, MUMBAI - 400051. ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE AJIT BHARIHOKE,PRESIDING MEMBER HON'BLE MR. ANUP K THAKUR,MEMBER
For the Complainant : MR. S. M. TRIPATHI, For the Opp.Party : Mr. Vishnu Mehra, Advocate
Dated : 15 Sep 2017 ORDER
JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER
BDR Pharmaceuticals International Pvt. Ltd. has filed the instant complaint alleging deficiency in service on the part of the opposite party insurance company in respect of insurance claim submitted by the complainant under Burglary Insurance Policy of Rs.5.00 crores.
2. Briefly put, the allegations in the complaint are that the complainant had taken Burglary Insurance Policy on stocks for Rs.3,50,00,000/- from the opposite party on payment of premium @ Rs.0.04 per thousand. The duration of the said policy was from 12.06.2007 to 11.06.2008. On expiry of said policy, the complainant got it renewed for the period 17.06.2008 to 16.06.2009 with increase in sum insured from Rs.3,50,000,00/- to Rs.5.00 crores on payment of premium @ 0.06 per thousand. The above noted policies were on full value basis without any endorsement to restrict liability of the opposite party insurance company on 'First Loss' basis.
3. It is further the case of the complainant that complainant continued to renew the above said insurance policy from year to year for sum insured Rs.5.00 crores at the same rate of premium. The last insurance policy was valid during the period 30.07.2011 to 29.07.2012.
4. That during the currency of last insurance policy, the complainant suffered loss due to theft of the stock from the insured premises during the period between 22.10.2011 and 25.10.2011. The intimation of loss was given to the opposite party insurance company. The opposite party appointed a surveyor who visited the site and assessed the loss caused due to theft / burglary at Rs.2,55,40,180/-. Despite that opposite party without any justification restricted their liability to Rs.50 lakhs on the premise that the policy was subject to 'First Loss' endorsement. It is the case of the complainant that he had never agreed to such 'First Loss' basis restriction on the claim nor he had applied for the same nor the opposite party ever informed him that such an endorsement restricting 'First Loss' liability was introduced in the latest renewed policy. According to the opposite party, the stocks were fully insured but the opposite party by failing to reimburse the complainant for actual loss caused and instead offering to settle the claim at Rs.47,50,000- has committed unfair trade practice and the act of the opposite party amounts to deficiency in service. The complainant has thus raised the consumer dispute seeking following reliefs:
a. To hold and declare that the opposite party / respondent to be guilty of deficiencies in Services and Unfair Trade Practices as per the Consumer Protection Act, 1986.
b. The opposite party / respondent be ordered to pay to the complainant / petitioner sum of Rs.3,47.34.644.50 ( Rupees Three Crores Forty Seven Lakhs Thirty Four Thousand Six Hundred Forty Four and paise Fifty only) being Rs.2,55,40,180.50 (Rupees Two Crores Fifty Five Lakhs Forty Thousand One Hundred Eighty and Paise Fifty only) the principal gross / full stock value as assessed by the licensed Surveyor of the opposite party / respondent payable under the policy of insurance for the loss suffered and interest of Rs.91,94,464/- ( Rupees Ninety One Lakhss Ninety Four Thousand Four Hundred Sixty Four only) as detailed in the particulars of claim annexed hereto and marked as Exhibit-GG.
c. The opposite party / respondent be ordered to pay to the complainant / petitioner interest @ 18% per annum or at such rate of interest on the Gross / Full Stock Value of Rs.2,55,40,180.50 from the date of loss i.e. 25.10.2011 till date 24.10.2013, which is calculated at Rs.91,94,464/- as per the particulars of claim annexed hereto and further interest on the said sum of Rs.2,55,40,180.50 from 24.10.2013 @ 18% per annum or at such rate until payment / realization.
d. The opposite party / respondent be ordered to pay to the complainant / petitioner as an interim relief admitted sum of Rs.47.50 lakhs together with interest thereon @ 18% or at such rate of interest from the date of Loss 25.10.2011 or from the date of admission of liability for this amount i.e. 21.08.2012 until payment / realization or for such period as this Hon'ble Commission may deem fit;
e. The opposite party / respondent be ordered to pay to the complainant / petitioner sum of Rs.2,50,000/- or such amounts as this Hon'ble Commission may deem fit towards litigation cost of this complaint;
f. The complainant / petitioner be granted any other or further relief in the opinion of your Lordship may consider fit and reasonable in the circumstances of the Complaint.
5. The opposite party on being served with the notice of the complaint filed written statement denying the allegations made in the complaint. According to the opposite party, the insurance policy with endorsement regarding 'First Loss' restriction was issued with full knowledge of the complainant. The opposite party thus claimed that it has not committed unfair trade practice nor any deficiency in service. The opposite party also raises a preliminary objection that consumer complaint is barred by principle of resjudicata because before filing the consumer complaint, the complainant had filed Arbitration Application No. 111 of 2013 in Hon'ble High Court of Judicature at Bombay seeking appointment of Arbitrator invoking the arbitration clause. The said application was dismissed by the Hon'ble High Court with following observations :
"I find no merit in the application. Insurance policy is annexed at page 14 (exhibit 'A') of the application. It is titled as 'Burglary Insurance Policy Schedule'. Part 1 of the Schedule gives particulars of the policy. As per clause (6) of the said part, total sum insured is Rs.5.00 crores. However, first loss sum insured is Rs.50.00 lakh only. Conditions of the policy are given on second page of the said schedule, condition no. 3 talks about 'excess'. Insurance Company is liable to deduct an amount of 5% of claim amount under this head. Condition no. 4 specifically states that "policy is issued on first loss @ 10% basis'. At page 6 of the said Schedule, there is not under the head 'Burglary Endorsement' which reads as follows :
Burglary Endorsement "BP 1 First Loss.
Notwithstanding anything herein contained to the contrary, it is hereby declared and agreed that this policy is issued on a First Loss Basis in respect of the insured stocks for the amount specified in Part I of the Schedule.
It is further declared and agreed that in the event of the total value of stocks at the time of loss be greater than the total value declared for purposes of this insurance and incorporated in part I of the Schedule the insured shall be considered as being his own insurer, for the difference and shall bear a rateable share of the loss accordingly.
Every item if more than one, under or in terms of the endorsement, shall be separately subject to this condition.
Subject otherwise to the terms and conditions of the policy"
6. According to the opposite party, the aforesaid order of the High Court operates as resjudicata because it was not challenged and has thus attained finality. It is pleaded that consumer complaint is, therefore, barred in view of Section 11 of the Code of Civil Procedure.
7. The parties have filed evidence by way of affidavit in support of their respective stand.
8. We have heard learned counsel for the parties and perused the material on record.
9. The main issue which needs determination in this case is whether or not the opposite party insurance company is justified in restricting the insurance claim of the complainant to Rs.50.00 lakhs in view of First Loss clause in the insurance contract?
10. In order to find answer to the above question, we have perused the Burglary Insurance Policy of the relevant insurance policy valid w.e.f. 30.07.2011 to 29.07.2012 ( exhibit 'K'). In coloumn 6 of the schedule, it is recorded as under:
6. Total Sum Insured : Rs.50,000,000.00 First Loss Sum Insured : Rs.5,000,000.00 Learned counsel for the opposite party has contended that as per the aforesaid term of the insurance policy, the First Loss Sum Insured was restricted only to the tune of Rs.50.00 lakhs/-. Therefore, the insurance company was justified in restricting the claim submitted by the insured to the extent of Rs.50.00 lakhs less 5% under the head 'Excess'.
11. Learned counsel for the complainant on the contrary has contended that complainant had been regularly taking insurance policy from the opposite party insurance company. The first policy was taken which was effective from 12.06.2007 to 11.06.2008. The said insurance policy was on full value basis without the First Loss clause restriction. It is contended that thereafter complainant had been renewing the insurance policy from year to year with only difference that policy for the period 17.06.2008 to 16.06.2009 was renewed with increase in sum insured to Rs.5.00 crores. It is submitted that the opposite party surreptitiously started issuing renewed policy with First Loss clause instead of full IDV value without there being any such proposal on the part of either of the parties. Learned counsel has argued that as the premium received by the complainant at the time of renewal of subject policy was the same, the complainant was under the impression that renewed policy has been issued with same terms and conditions as was agreed between the parties at the time of purchase of first insurance policy. In support of his contention, learned counsel for the complainant has drawn our attention to copy of quotation submitted by the opposite party insurance company for issue of Burglary Insurance Policy.
12. We are not convinced with the submissions made on behalf of the complainant for the reason that contention of complainant is belied by the document. The quotation referred to by the learned counsel for the complainant in his submissions is at page 60 of the file, which is reproduced as under:
"Dear Rajesh Kindly find the premium for the renewal of the policy - 4002/ 0029557...... the premium to be paid is Rs.33,090/- favouring ICICI Lombard GIC Ltd.
ICICI Lombard General Insurance Company Ltd., Quotation for Burglary Insurance Policy Insured Name BDR Pharmaceuticals International Pvt., Ltd. Risk Location Bhiwandi Quote Date July 29, 2009 Quote Valid till August 13, 2009 Premium Calculation Description Sum Insured Rate Premium Stock of Powder Chemical 50,000,000 First Loss SI @ 10% 5,000,000 0.18 9,231 Balance SI 45,000,000 0.05 20,769 Total Sum Insured 50,000,000 Gross Premium 30,000 Service tax @ 10.3% 3,090 Premium Payable 33,090 Conditions/ Extension
Excess - 5% of claim amount subject to a minimum of Rs.1 lakh for each and every claim.
Terrorism is excluded Policy is issued on 10% first loss basis warranted that the premises are guarded round the clock Warranted that goods held in trust or commission are not covered under the policy. Warranted that the building construction is made of RCC structure Warranted that stocks should not be stored in open and must be stored in closed warehouse."
13. On reading of the aforesaid quotation, we find that this quotation was submitted by the insurance company on 29.07.2009 with its validity till 13.08.2009. The quotation clearly mentions that sum insured for stock of powder chemical is Rs.5.00 crores with First Loss Sum Insured @ 10% i.e. Rs. 50.00 lakhs. In the conditions mentioned below, it is provided that policy is issued on 10% First Loss basis. If this quotation was received by the complainant, it cannot be believed that insurance policy pursuant to the quotation was issued without the knowledge of the complainant particularly when the complainant paid the premium pursuant to the quotation. Thus, it is evident that insurance policy issued w.e.f. 30.07.2009 to 29.07.2010 was issued on the basis of First Loss Sum Insured @ 10% i.e. Rs.50.00 lakhs. It is admitted case of the complainant that thereafter the insurance policies on the same conditions were issued from time to time. However, perusal of Exhibit 'K' i.e. schedule of the Burglary Insurance Policy for the subject period would show that at Sl. No.6 of Part I of the schedule, it is categorically mentioned that total sum insured Rs.5.00 crores and First Loss Sum Insured Rs.50.00 lakhs.
14. From the facts enumerated above, it is evident that subject insurance policy was issued in favour of the complainant for total sum insured Rs.5.00 crores with First Loss Sum Insured Rs.50.00 lakhs. Admittedly, the insurance company after deducting the excess from First Loss Insurance claim Rs.50.00 lakhs has sanctioned the claim of the complainant to the extent of Rs.47,50,000/-, which obviously is in accordance with the contract between the parties. Thus, in our view, the opposite party cannot be said to be deficient in service.
15. In view of the discussion above, we find no merit in the complaint. It is accordingly dismissed.
......................J AJIT BHARIHOKE PRESIDING MEMBER ...................... ANUP K THAKUR MEMBER