State Consumer Disputes Redressal Commission
Saurashtra Chemical Ltd vs The New India Ass. Co. Ltd on 7 January, 2021
1
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION,
GUJARAT STATE AT AHMEDABAD.
Complaint No. 27 of 2014.
Saurashtra Chemical,
A Division of Nirma Ltd.
Birlasagar,
Porbandar. ...Complainant
Vs.
1. The New India Assurance Co. Ltd.
Through its Regional Manager Claims Hub,
Ahmedabad Regional Office,
401, 4th Floor, Popular House,
Ashram Road,
Ahmedabad.
2. The New India Assurance Co. Ltd.
Through its Director,
Head Office,
New India Assurance Building,
87, Mahatma Gandhi Road,
Fort,
Mumbai. ...Opponents
Complainant- Learned advocate Mr. R. D. Shah
Opponents- Learned advocate Mr. A. R. Mehta
Coram : Justice V. P. Patel, President
Smt. U. P. Jani, Member
ORDER:By Justice V. P. Patel, President
1. The complainant has filed the consumer complaint u/s. 17 of the Consumer Protection Act, 1986 (For short "The Act) against the opponents insurance company claiming main relief in terms of para 9 which reads as under:
(A) That this Hon'ble Commission be pleased to pass orders granting the claim of the complainant for cost of 234 metric tonnes soda ash as covered under the terms of the policy number 2 212300/21/09/02/000000009 issued by the opponents for insurance policy of the complainant, such cost amounting to Rs.
42,62,711/-.
(B) That this Hon'ble Commission be pleased to pass orders granting the claim of the complainant for compensation on account of suffering, harassment and opportunity cost, such cost quantified at Rs. 25,00,000/-.
(C) That this Hon'ble Commission be pleased to pass orders granting the claim of the complainant for cost quantified at Rs. 1,00,000/-
(D) That this Hon'ble Commission be pleased to pass orders granting the claim of the complainant for interest on the amount mentioned in prayer (A), (B) and (C) above at the rate of 18% per annum from 13.11.2009 till payment of such amount.
Facts of the complaint:
2. Short facts giving rise to the present complaint are as under:
The complainant is registered under the companies Act, 1956 and carrying on its business activity of processing certain chemicals including soda-ash. The complainant merged with M/s. Nirma Ltd. in the year 2013 vide order dated 22.1.2013 passed by Hon'ble Board for Industrial and Financial Reconstruction in case no. 13 of 2007. That the complainant had obtain insurance with regard to Marine Transpiration of its goods. Opponent has issued the policy being policy no. 212300/21/09/02/000000009 in favour of the complainant for the period of 1.4.2009 to 31.3.2010 for covering all means of conveyance by road, rail, air or sea made by the complainant.
2.1 It is submitted that on 10.11.2009, around 90 nautical miles from the shore of Veraval, the ship transporting soda Ash on behalf of the complainant capsize and sank due to heavy cyclone/storm conditions therefore, cause loss of 234 metric tonnes of soda ash. The complainant has lodged claim with the opponent.3
2.2 The opponent had appointed Mr. Jayesh Shah to verify the books of account on 20.7.10. That opponent insurance company has appointed Mr. Gawarikar as a surveyor for inspection for the said claim raised by the complainant.
2.3 The complainant has received letter dated 7.6.11 from communication that the claim is repudiated. The complainant had requested the opponent to reconsider the matter positively vide letter dated 29.6.11 and 30.9.11. The opponents had agree to reconsider the claim and appointed Mr. U. C. Nahar, as surveyor and loss assessor for review of the claim.
2.4 The opponent had again by letter dated 21.11.2012 repudiated the claim of claimant. That the claim was arbitrarily and improperly repudiated. The action of the opponent is within the definition of deficiency in service.
2.5 It is submitted by the complainant that the act of the opponent was absolutely arbitrarily with clear cut approach of unfair practice hence, the complainant has filed present consumer complaint before State Commission under the provision of Consumer protection Act, 1986.
3. The State Commission has admitted the complaint, notice was duly served to the opponent and Ld. advocate Mr. A. R. Mehta, has filed his appearance and written statement for the opponent.
Defense of the Opponent:
4. Notice was duly served to the opponent, the opponent appeared through ld. Advocate and filed a written statement. It is stated that the each and every allegation, averments and contention made in the complaint are denied. That the averments made in complaint on the face value its entirely, the same do not constitute any deficiency in service and hence the complaint is not maintainable. That the no cause of action is arise to the complainant against the opponent. That 4 the complainant is a commercial entity involved in the commercial activity and the policy in question is taken in respect of its commercial purpose therefore, the complaint is not maintainable as complainant is cannot be said to be consumer. That the opponents have appointed independent surveyor who had opined that the present claim was not tenable under the policy. That the complainant has not submitted quarterly return regularly and completely and they have breached the terms and conditions of the policy. Further, it is defense of the opponent that the complaint is not tenable in eye of law and is required to be dismissed with cost.
Evidence produced by complainant:
5. We have gone through the following documents submitted in this complaint, which are on record at page no. 36 to 109.
Sr. Description Page no.
Copies of communication dated 31.03.2009 and 1 policy issued in favour of complainant by the 36-46 opponent as well as order dated 22.1.2013 passed by the Hon'ble BIFR."
Copies of the claim of the complainant company 2 dated 13.11.2009 as well as the bill of lading of 47-49 the ship MSV Indirani.
Copies of internal communications of the 3 complainant as well as with the opponent as well 50-55 as the information provided to the opponents. 4 A copy of the communication of the complainant dated 19.11.2009. 56-59 5 A copy of communication dated 20.11.2009. 60-61 6 Copies of internal communication of the complainant dated 14/15/16.12.2009. 62-64 7 A copy of communication dated 20.7.2020. 65 8 Copies of communications to Shri Jayesh H. Shah. 66-70 9 A copy of the communication of the opponent 71 dated 31.01.2011.
10 Copies of communications dated 18.02.2011. 72-73 11 A Copies of the communication of Shri Minesh 74-76 Patel and the expert.
12 Copies of communication dated 11.03.2011 as 77-78 well as communication dated 12.03.2011.5
Copies of the communications of the complainant 13 as well as opponent dated 7.6.2011 and 79-81 29.6.2011.
14 A copy of the communication dated 30.09.2011. 82-83 15 Copies of the communication dated 09.01.2012, 84-86 16.01.2012 and 07.02.2012.
16 Copies of communication dated 21.02.2012, 87-93 11.04.2012, 01.05.2012 and 31.05.2012.
17 Copies of communication dated 07.06.2012 and 94-97 18.06.2012.
Copies of communication dated 22.06.2012, 18 07.07.2012, 9.8.2012 and 31.8.2012 98-107 19 Copies of communication dated 21.11.2012 and 108-109 02.01.2013.
6. Evidence produced by the opponent:
Sr. Description Page no.
A Copy of policy issued in favour of the
1. complainant by the insurance company along with 121-129
terms and conditions.
2. A Copy of survey report of Mr. U. C. Nahar, 130-137
Surveyor & Loss Assessor, dated 25.7.2015.
Arguments of the Complainant:
7. Ld. Advocate for the complainant has argued that the complainant is carrying out the business of processing certain chemical including Soda-Ash. For that purpose goods are required to be transferred from one place to various places. The complainant has taken marine insurance policy for transported goods from the opponent. The policy was issued on 10.4.09 and it was effective from 1.9.09 to 31.3.10. That the said policy was for the total sum insured of Rupees Five Hundred Crores and included commodities of all type of raw-material, packing material, stores and spares, machinery and all type of finish goods. That the mode of transit was also accepted by opponent as by rail, road, air or sea. That the premium of Rs. 6,23,781/- was paid. That the during the currency of policy, on 10.11.09 unfortunate 6 incident was occurred and entire cargo of 231 MT of soda ash was sinked. That the claim was lodged for Rs. 42,62,711/- along with necessary documents. The insurance company has repudiated the claim arbitrarily, illegally and therefore, the complaint is filed.
That the complainant is falls within the definition of consumer, the opponent is a service provider of the complainant.
7.1 It is further argued that the opponent could not repudiate the claim on technical ground when the claim was covered under the policy. That the opponent has raised technical ground for denying the claim. That the grounds are incorrect since the request was specifically for marine policy, which has been considered in the policy itself.
7.2 The policy specifically mentioned that "declaration should be furnished within 15 days from the date of shipment in case of imports or arrival of ship whichever is earlier. Even such clause will not apply in the light of the fact that the vehicle send on 10.11.09 that is date of shipment, and the accident took place on 10.11.09 and the claim was raised on 13.11.09.
7.3 That the claimant has produced sufficient evidence to the show actual loss of goods had been cause. That the complainant suffered and harassment is caused to the complainant on account of illegal action of the opponent. It is further argued that the claim is genuine whichever the documentary evidence are produced is sufficient for satisfying the claim. The repudiation order is not tenable in eye of law. He requested to allow the consumer complaint and award the amount as prayed for.
7.4 ld. advocate for the complainant has submitted following judgments.
a) First Appeal No. 42 of 2014 (NCDRC): M/s. Metco Export International v. Federal Bank Ltd. and Ors.
b) Civil Application NO. 378 of 2020 (SC): Sangrur Sales Coportation v. United India Ins. Co. Ltd. and Anr.
7c) (2009) 9 SCC 159: Oriental Ins. Co. Ltd. v. Ozma Shipping Co. and Anr.
Arguments of opponent:
8. Learned advocate for the opponent has submitted that the activity of the complainant is commercial activity and the policy in question is taken for commercial purpose. The complainant cannot be considered as a consumer. Therefore, the insured is not entitled to invoke jurisdiction of this Hon'ble Commission claiming the compensation.
8.1 It is further argued that the complainant was required to make declaration of the goods transported under the policy. That the complainant was required to furnish declaration within 15 days from the date of shipment in case of imports or arrival of ship whichever is earlier. That the complainant has admitted that he had failed to make the complete declaration to the opponent about the goods transported. That in an open policy with the declaration of goods transported are not supplied to the insurer, the policy for the said undeclared goods will not set into motion and thereby the rendered policy void for the said undeclared goods. That the claim of complainant cannot be accepted on the short ground that there was breach of condition of the policy.
8.2 That the complainant had not made all declaration as a required under the policy. That the surveyor was appointed and he has opined that there was a breach in terms and conditions of policy. The report of the surveyor is statutory document it cannot be disregarded or dismissed without justify ground.
8.3 As per the letter dated 31.3.09 the complainant had specifically mentioned with regard to the policy coverage that the policy was to wholly cover ITC (A) + SRCC. That this policy coverage only includes road and rail and does not includes air and sea cover. That the complainant has produced report of the expert who was privately acted on his behalf and submitted his report. That such report cannot 8 be even have persuasive value. That the complainant has not filed any affidavit of the expert who has given the report.
8.4 It is also argued that the complainant has not produced cogent evidence in support of his claim he has not produced documentary evidence in support of his contention raised in the claim and failed to prove his case. Ld. advocate for the opponent concluded that the insurance company has acted upon the survey report submitted by the competent surveyor appointed by the Insurance company and hence there is no deficiency of service on the part of opponent and therefore, complaint should be rejected with exemplary costs.
8.5 ld. advocate for the opponent has submitted following judgments.
a) Skeleton Arguments of the Opponent-New India Assurance Co. Ltd.
b) Laxmi Engineering Works Vs. PSG Industrial Institute- (1995) 3 SCC 583.
c) Super Engineering Corporation Vs. Sanjay Vinayak Pant and Anr. - 1992 CPJ(1) 95 NC
d) Suraj Mal Ram Niwas Oil Mills Private Limited Vs. United India Insurance Company Limited and Another - (2010) 10 SCC 567
e) Export Credit Guarantee Corporation of India Limited Vs. Garg Sons International - (2014) 1 SCC 686
f) Vikram Greetech India Limited Vs. New India Assurance Co. Ltd. - (2009) 5 SCC 599
g) Wilson Home Appliances Vs. Assurance Co. Ltd. decided on 10.12.2020 by New India the Hon'ble National Consumer Disputes Redressal Commission, New Delhi in First Appeal No. 959 of 2015.
Maintainability of complaint on the ground of commercial purpose:
9. It is argued by the ld. Advocate for the opponent that the complainant is not maintainable as the complainant is not consumer within the purview of section 2(1)(D)(ii) of 'the Act.' He has relied upon the judgment reported in (1995) 3 SCC 583 delivered in the case of Laxmi Engineering Works vs. PSG Industrial Institute. It is held in para 24, which reads as under:9
24. We must, therefore, hold that (i) the explanation added by The Consumer Protection (Amendment) Act 50 of 1993 (replacing Ordinance 24 of 1993) with effect from 18.6.1993 is clarificatory in nature and applies to all pending proceedings.
(ii)Whether the purpose for which a person has bought goods is a "commercial purpose" within the meaning of the defi- nition of expression "consumer" in Section 2(d) of the Act is always a question of fact to be decided in the facts and circumstances of each case.
(iii)A person who buys goods and use them himself, exclusively for the purpose of earning his livelihood, by means of self employment is within the definition of the expression "consumer".
9.1 He has also relied upon the judgment reported in 1992 CPJ (1) 95 (NC) delivered in case of Super Engineering Corporation vs. Sanjay Vinayak Pant and Anr. This, the judgment is referred in the judgment reported in Laxmi Engineering Works vs. PSG Industrial Institute therefore, we have not discussed in this case.
9.2 ld. Advocate for the complainant has submitted that the transaction as regards to taking of insurance for protection of goods is not a commercial activity. Therefore, complainant is to be considered as consumer. He has relied upon the judgment delivered in FA/42/14 by the Hon'ble National Commission in case of M/s. Metco Export International vs. Federal Bank Ltd. and Ors.
5. Learned counsel for the appellant states that the complaint has been dismissed at admission stage in limini observing that the complainant is not a consumer as the service of the OPs was availed for commercial purpose. It was emphasized by the learned counsel that banking service is included in the definition of Service under Section 2(1)(o) of the Consumer Protection Act, 1986 and anybody who avails the services of the Bank is a consumer. Learned counsel further stated that the complainant has availed the service of the Bank after paying the due charges to the Bank and therefore, complainant is a consumer. In support of his arguments, learned counsel referred to the judgment of this Commission in Canara Bank Vs. M/s. Jain Motor Trading Company, 2013 SCC OnLine NCDRC 656 (2013) 646 wherein it has been observed:
"We also do not accept the contention of Counsel for Appellant /bank that Respondent being a commercial firm is not a 'consumer' as 10 per the provisions of the Consumer Protection Act, 1986. Commercial concerns per se are not excluded from filing a complaint under the Consumer Protection Act, 1986 if it does not involve direct generation of profits or resale. Also as stated in the instant case, the OCC facility was sought from Appellant/bank to help resolve the financial difficulties being faced by Respondent which was not per se a commercial activity generating profits. As pointed out by Counsel for Respondent, these aspects are well settled in a number of judgments, including of this Commission as also of the Hon'ble Supreme Court e.g. Harsolia Motors v. National Insurance Company Ltd. [I (2005) CPJ 27 (NC) and Madan Kumar Singh v. Distt. Magistrate, Sultanpur [(2009) 9 SCC 79]."
6. Further, learned counsel referred to the judgement of this Commission in the matter M/s. Harsolia Motors Vs. M/s. National Insurance Company Ltd. [F.A. No.159 of 2004 and others, decided on 3.12.2004] to support his assertion that the appellant/complainant is a consumer. This Commission observed as under:
"23. Further, from the aforesaid discussion, it is apparent that even taking wide meaning of the words 'for any commercial purpose' it would mean that goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose. But, in a case where goods purchased or service hired in an activity which is not directly intended to generate profit, it would not be commercial purpose."
11. In Harsolia Motors Vs. National Insurance Co. Ltd. [I (2005) CPJ 27 (NC)], this Commission has observed as follows:-
"16. Further, what is commercial purpose is discussed by the Apex Court in various decisions.
We would refer to few relevant judgments:
In Regional Provident Fund Commissioner Vs. Shiv Kumar Joshi, (2000) 1 SCC 98, the Court elaborately considered the provisions of Sections 2(1)(d) and 2(1)(o) as well as earlier decisions and held that The combined reading of the definitions of consumer and service under the Act and looking at the aims and object for which the Act was enacted, it is imperative that the words consumer and service as defined under the Act should be construed to comprehend consumer and services of commercial and trade-oriented nature only. Thus any person who is found to have hired services for consideration shall be deemed to be a consumer notwithstanding that the services were in connection with any goods or their user. Such services may be for any 11 connected commercial activity and may also relate to the services as indicated in Section 2(1)(o) of the Act.
17. The aforesaid ratio makes it abundantly clear that services may be for any connected commercial activity, yet it would be within the purview of the Act.
12. From the above judgments of this Commission, it is clear that for commercial purpose, generation of profit from the goods purchased or services availed would be the main criterion and it should be seen whether the complainant is engaged in regular trading of the goods so purchased or of the services availed. It is clear that dispatch of papers by the Bank per se is not going to generate any profit to the complainant as the actual profit will come from the dispatch and sale of the exported goods. Therefore, by taking a wider view of the matter, it is held that the complainant/appellant is a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986.
9.3 Complainant has taken insurance from the opponent for insurer his interest of the goods which are to be transported from one place to another. The main activity of the complainant is dealing with the Soda Ash which is different from the transportation. Such activity not directly related to generate profit. Considering the judgment reported in above (supra) M/s. Metco Export International vs. Federal Bank Ltd. and Ors we are of the opinion that the complainant is engaged in regular travelling of goods so purchased. The services of insurance is not for the generating any profit to the complainant as the actual profit will come from his trading activity therefore, complainant is a consumer under the Consumer Protection Act.
Non-compliance of the terms and conditions of the policy:
10. ld. Advocate for the complainant has submitted that the policy was for the sum insured of Rs. 500 crores and included commodities of all type of raw-material, packing material, stores and spares, machinery and all type of finish goods and mode of transit was accepted by the rail, road and air or sea. The by way of the report, non-declaration of returns is a technical ground and such ground is not sufficient for repudiation of the claim. The company has wrongly repudiated the claim.
1210.1 Per contra, ld. Advocate for the respondent has submitted that the complaint was required to be make quarterly declaration of the goods transported under the policy and the declaration was to be made within 15 days from the date of shipment in the case of imports or arrival of the goods. That the complainant has admitted that the declaration to the opponent was not done for the two quarters. In the case of open policy the details of goods transported are to be informed. Complainant has breached the terms and conditions of the policy and therefore, the opponent has rightly repudiated the claim. He has relied upon the following judgments.
A) Suraj Mal Ram Niwas Oil Mills Private Ltd. vs. United India Ins. Co. Ltd. and Anr - (2010) 10 SCC 567
23. Before embarking on an examination of the correctness of the grounds of repudiation of the policy, it would be apposite to examine the nature of a contract of insurance. It is trite that in a contract of insurance, the rights and obligations are governed by the terms of the said contract. Therefore, the terms of a contract of insurance have to be strictly construed, and no exception can be made on the ground of equity.
26. Thus, it needs little emphasis that in construing the terms of a contract of insurance, the words used therein must be given paramount importance, and it is not open for the court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer. Therefore, the endeavour of the court should always be to interpret the words in which the contract is expressed by the parties.
27. Having considered the instant case on the touchstone of the aforenoted broad principles to be borne in mind while examining the claim of an insured, we are of the opinion that the claim of the appellant must fail on the short ground that there was a breach of the aforeextracted special condition incorporated in the cover note. The special condition viz. "each and every consignment" must be declared before dispatch of goods is clear and admits of no ambiguity. The appellant was obliged to declare "each and every consignment"
before it left the appellant's factory premises and there is nothing in the policy to suggest that the insured had the liberty to pick and 13 choose the dispatches which they wanted to declare to the insurer, not even at the instance of the consignee, who otherwise is a stranger to the contract between the insurer and the insured.
28. We have no hesitation in rejecting the plea of the appellant that they were required to declare only those dispatches in which they had an insurable interest. It bears repetition that notwithstanding any request by the consignee, the policy of insurance postulated declaration in respect of each and every dispatch by the appellant. Therefore, the fact that purchasers did not want an insurance cover on certain dispatches had no bearing on the obligation of the appellant to declare each and every dispatch under the policy. it is a settled proposition of law that a stranger cannot alter the legal obligations of parties to the contract.
B) Export Credit Guarantee Corporation of India Ltd. vs. Garg Sons International (2014) 1 SCC 686
9. The relevant clauses of the insurance policy dated 23.3.1995, read as under:
"8. Declarations:
(a)Declaration of shipments.-
(b) Declaration of overdue payments.- The insured shall also deliver to the Corporation, on or before the 15th of every month, declaration in the term prescribed by the Corporation, of all payments which remained wholly or partly unpaid for more than 30 days from the due date of payment in respect of shipments made within the policy period and such declaration shall continue to be rendered to the Corporation even after the expiry of the policy period so long as any such payment remains overdue.
13. Thus, it is not permissible for the court to substitute the terms of the contract itself, under the garb of construing terms incorporated in the agreement of insurance. No exceptions can be made on the ground of equity. The liberal attitude adopted by the court, by way of which it interferes in the terms of an insurance agreement, is not permitted. The same must certainly not be extended to the extent of substituting words that were never intended to form a part of the agreement.
C) Vikram Greetech India Ltd. vs. New India Assurance Co. Ltd. (2009) 5 SCC 599 14
16. An insurance contract, is a species of commercial transactions and must be construed like any other contract to its own terms and by itself. In a contract of insurance, there is requirement of uberimma fides i.e. good faith on the part of the insured. Except that, in other respects, there is no difference between a contract of insurance and any other contract.
17. The four essentials of a contract of insurance are, (i) the definition of the risk, (ii) the duration of the risk, (iii) the premium and (iv) the amount of insurance. Since upon issuance of insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the insurance policy, its terms have to be strictly construed to determine the extent of liability of the insurer.
10.2 Complainant has produced the following judgments.
A) Sangrur Sales Corporation vs. United India Ins. Co. Ltd. and Anr. SLP (C) No. 1899 of 2020 dated 17.1.2020 10 It is well-settled that in the event that the two constructions are possible or in the event of an ambiguity, that construction which is beneficial to the insured should be accepted consistent with the purpose for which the policy was taken, namely to cover the risk on the happening of a certain event. [See in this context, the decision of this Court in United India Insurance Co Ltd v Pushpalaya Printers.
B) Oriental Ins. Co. Ltd. vs. Ozma Shipping Co. and Anr. (2009) 9 SCC 159
18. Before parting with this case we would like to observe that the insurance companies in genuine and bona fide claims of the insurers should not adopt the attitude of avoiding payments on one pretext or the other. This attitude puts a serious question mark on their credibility and trustworthiness of the insurance companies.
19. Incidentally by adopting honest approach and attitude the insurance companies would be able to save enormous litigation costs and the interest liability. The tendency of approaching the Apex Court in every such case also needs to be effectively curbed.
11. Complainant has produced letter dated 31.3.09 (Annexure P1, Page. 36) address to the opponent company for taking insurance when it is stated in para 2 as under:
2. Marine Policy details are as under:15
2.1 Marine Inland Transit insurance (open) Policy.
* Declaration should be submitted on quarterly basis.
2.2 Marine Export (open) Insurance Policy * Declaration should be submitted on quarterly basis.
11.1 complainants has also produced the copy of the policy at page 38 wherein, it is stated as under:
This insurance is to remain in force for a period of 12 months i.e. 01.04.2009 to 31.3.2010 unless the sum insured is previously exhausted by declaration.
Lost covered: All risk including SRCC Term of insurance: As per the following clause written hereunder, current on the date of sailing or dispatch and/or otherwise stated and attached hereto.
Inland, transit (rail or road) A- All Risk Private carriers warranty Warranted vehicle/vagon is closed or covered with terpoline. Institute Radio-active contamination exclusion clause.
Subject to open police clause as attached computer liaise clause (Cargo) BASIS OF VALUATION: CIF +10% POLICE COVERAGE: ITCIAJ +SRCC, DECLARATION OR QUARTERLY BASIS CONVEYANCE MODE : BY ROAD/RAIL/AIR/SEA.
The declaration should be tarnished within 15 days from the date of shipment in case of imports or arrival of ship whichever is earlier.
11.2 The opponent has written letter dated 31.1.11 (Annexure P-9 Page-71) to the complainant wherein it is mentioned as under:
Please refer your letter ref.no. NL - NHVINSISJS UIIC \ 292009 dated 31st March 2009 item no.4) Marine Policy details are as under
4.1) Marine inland Transit Insurance (Open) Policy:
* Commodity cover "All type of Raw material, Packing material, stores and spares, Machineries and all type of finished Goods.16
* "Declaration on quarterly basis"
As per Open Policy condition reads as under:
"Declaration: - It is a condition of this insurance that assured is bound and will declare each and every dispatch coming under the scope of the open policy without any exception ". But you have not declared above sales in both quarters declaration. On receipt of your clarification in the matter, we shall proceed further in the matter, which please note.
11.3 Complainant has written a letter dated 18.2.11 (Annexure P-10, Page-72) wherein, it is admitted as under:
From the above I may he envisaged that as we have taken policy of substantial amount above missed out are not intentional. if you consider our total annual transshipment it comes to Rs . 418.54 Cr. (CIF Cost for annual sales and purchase except project material , which is covered under the project policy which is well within the policy sum insured amount.
11.4 Anther letter dated 18.2.11 at page 73 reads as under:
Later declaration of sales by road was through a software error . Our policy was taken for Rs.500 crore with an intention for covering annual transit upto Rs. 500 crore. The sales through road of Rs. 258. 74 Crore is to be covered by buyer as mentioned in our invoices le not in our purview unless specifically requested.
12. The company has repudiated the claim vide letter dated 7.6.11 at page 79 on the following ground.
1. As per the policy the goods transported through Mechanized sailing vessel is not covered and the said consignment was being transported by mechanized sailing vessel at the time of loss.
2. You have specifically requested vide your letter dtd 31.03.2009 to issue the policy with clauses ITC - A and SRCC which indicate that you wanted to cover inland transit by Road / Rail only.
3. As per your 1st and 2nd quarter declarations you have not declared any outgoing materials except goods sent for repairs which clearly shows that you had no intention to cover the outgoing sales. In view of the above the competent authority has decided to repudiate our liability from the above claim.
1713. Thereafter, the representation made by the complainant. New surveyor was appointed and he has submitted the report dated 9.8.12. After considering the surveyor report the opponent has again sent the letter of repudiation dated 21.11.12 (Page-109) on the following ground.
1) As per the policy the goods transported through mechanised sailing vessel is not covered and the said consignment was being transported by mechanised sailing vessel at the time of loss.
2) You have specifically requested vide your letter dated 31.03.2009 to issue the policy with clauses ITC - A and SRCC which indicate that you wanted to cover inland transport by road / rail only.
3) As per your 1 " and 2nd quarter declaration , you have not declared any outgoing material except goods sent for repairs which clearly shows that you had no intention to cover the outgoing sales .
4) Upon receipt of above stated letter of repudiation letter dated 07.06.2011 , you represented before the Insurance Company by your letter dated 29.06.2011 and requested for reconsideration of the decision . The company has gone through the contents of the said letter and also sought further opinion from a duly authorized and competent surveyor and loss assessor Shri.U.C.Nahar .
5) After receipt of the opinion of the said surveyor and loss assessor Shri.U.C.Nahar , the company re - verified its earlier decision and contents of its letter of repudiation dated 07.06.2011 . But the company still sticks to the contents of the letter of repudiation dated 07.06.2011.
14. The surveyor has given his observation in the report at page 105 that the insured declared partially as per the statement for the consignment having claim from Oct, 2009 onwards. It is also observed as under:
4. From the above declaration submitted by the insured it is noted that insured did not declare each & every consignment for finished goods excepting in the month of October to December quarter where loss is reported & thereafter January - 2010 to March 2010 quarter Prior to the same no declaration for finished goods even for these customers are declared . No declaration for raw materials , packing materials & machinery arrived had been made by the insured during the policy period .18
15. In view of the above documentary evidence on record, it is admitted fact that the claimant has not made declaration quarterly as per the terms and conditions of the policy. The claimant has not made declaration for the two quarters and made partial declaration for the third quarters. It amount the breach of conditions. If the basic terms and conditions of the contract is breached then parties cannot enforce it and they are not entitled for compensation.
16. Considering the contents of the complaint, written statements, documentary evidence on record, arguments advanced by the ld. Advocate for the parties, ratio laid down in the above referred judgments, we are of the view that the complainant has not complied with the terms and conditions of the policy and therefore, the opponent has rightly repudiated the claim. There is no deficiency in service rendered by the opponent. Therefore, the complaint is required to be dismissed. Hence, following final order is passed.
ORDER
I) The complaint No. 27 of 2014 is dismissed.
II) No order as to costs.
III) Copy of the judgment and order be provided to the parties free of costs.
Pronounced in the open Court today on 7th January, 2021.
[J. P. Jani] [Mr. V. P. Patel]
Member President
M. B. Desai