National Consumer Disputes Redressal
National Insurance Co. Ltd. vs A.S. Moosani & Co. on 19 May, 2017
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 4068 OF 2010 (Against the Order dated 30/07/2010 in Appeal No. 355/2008 of the State Commission Andhra Pradesh) 1. NATIONAL INSURANCE CO. LTD. Delhi Regional Office I, at Tower II, Level IV, Jeean Bharti Building, 124, Connaught Circus New Delhi - 110001 Delhi ...........Petitioner(s) Versus 1. A.S. MOOSANI & CO. R/o. 5-8-112, 21st Century Complex, 1st Floor, Nampally Hyderabad - 1 Andhra Pradesh ...........Respondent(s)
BEFORE: HON'BLE MRS. REKHA GUPTA,PRESIDING MEMBER
For the Petitioner : MR. YOGESH MALHOTRA For the Respondent : MR. K. MARUTHI RAO & MRS. K. RADHA
Dated : 19 May 2017 ORDER
The present Revision Petition has been filed against the Order dated 30.07.2016 passed by A.P. State Consumer Disputes Redressal Commission at Hyderabad (for short, 'the State Commission') in First Appeal No.355 of 2008.
2. The brief facts of the case as per the Respondent/Complainant that on 3112.2004, Respondent obtained a Marine Cargo(Open Declaration) policy bearing No.551201/21/04/44000067 for Rs. One crore valid from 31.12.2004 to 30.12.2005. The Respondent /Complainant submitted monthly declarations declaring the consignments for which insurance cover was required from January to August, 2005 worth Rs.49,26.489/-, by covering consignments of acetic acid, methanol, formic acid, formaldehyde, phenol, acetone, aniline oil and chemicals. On 03.09.2005, the Respondent imported 100 MT of Hydrated Phenol from Republic of Korea. The shipment was received at Kandla port in Gujarat and the consignment weight was 16,620 KG and valued worth Rs.9,50,987/-. It was loaded in a Tanker No. GJ-18-T-1368 LR No.7676 through M/s. Arab Road Lines for transportation from Kandla to Hyderabad, the tanker met with an accident and fell down from the bridge into the river on 06.09.2005 due to which the entire consignments of Hydrated Phenol was lost. On 07.09.2005, the Respondent was received the intimation of the said loss from the carrier. On 08.09.2005, the Respondent informed the same to the Insurance Company and also submitted its claim. The Surveyor appointed by the carrier submitted his report and thereafter on 23.08.2006, the Petitioner appointed an investigator who submitted his report on 23.08.2006. On 20.09.2006, the Petitioner repudiated the insurance claim of the Respondent on two grounds i.e. (i) as per the investigator's report, the sum insured of Rs.one crore in the above policy had been exhausted within 18 days of taking of the policy (ii) proper post-accident precaution was not taken immediately after the accident. Thereafter, on 22.11.2006, the Respondent has served a legal notice to the Petitioner, which was duly replied by the Petitioner Company on 10.11.2007. The Respondent contended that sum assured could be exhausted only on the basis of declarations made to the Petitioner. It cannot be said that the sum insured was exhausted in the first 18 days based on the total sale/purchase made by the insured in the absence of any declarations from the insured. The insured reserve his rights to decide and declare which consignments were to be insured. The insured carried out a lot of business, but at the same time he did not want all the business and transaction, covered under the insurance policy and he had the choice as to which consignment was to be covered or not. Accordingly, in the present case, the Respondent had given monthly declarations as required till August, 2005 covering the consignments worth of Rs.49,26,489/- and premium payable thereon was Rs.6,897.08/-. The balance premium available as on 10.09.2005 was Rs.14,868.92/-. The consignment covered in the accident was included in the declaration made in September, 2005 covering the value of Rs.39,90,140/-. Hence, the repudiation of the claim was not justified. It was also submitted that in the event of any ambiguity in any clause or where two interpretations were possible, an interpretation which favours the policy-holder should be given. Hence, having no other alternative, the Respondent filed a Consumer Complaint before the District Forum with the following prayers;
"1) To direct the Opposite Party to pay a sum of Rs. 9,51,986.41 paise along with interest @ 12% per annum from 6.9.2005 till date of payment.
2) To direct the Opposite Party to pay a compensation of Rs.10,000/-
3) To grant costs of the complaint and legal expenses. 4) And pass such other relief or reliefs as this Hon'ble Forum may deem fit and proper in the circumstances of the case.
3. The Petitioner/Opposite Party filed his written statement denying therein all the allegations levelled by the Respondent/ Complainant against it except issuance of issuance of a Marine Cargo (Open Declaration) Policy to the Respondent. However, it was stated that the policy in question taken by the Respondent was with a limit per transit of Rs.8,00,000/- which remained in force for a period of 12 months from 31.12.2004 to 30.12.2005 unless the sum assured was previously exhausted by declaration and as per the condition of the insurance policy, subject to open policy clause attached, the declaration had to be furnished within 15 days from the date of shipment in case of imports or arrival of ship, whichever was earlier. Condition No.1 of the Policy provided that the insured was bound to declare 'each and every dispatch shipment without exception'.
4. It was stated that on 06.09.2005, a tanker allegedly carrying 100 MT of Hydrated Phenol imported from Republic of Korea going Kandla to Hyderabad, allegedly met with an accident on 06.09.2005 and fell from a bridge and the Respondent intimated the Petitioner about the alleged loss/leakage of consignment consisting of 16.620 Kgs of H. Phenol. Further, without even waiting for a sufficient time and without giving due intimation to the Petitioner immediately after the alleged accident, at the instance of the Respondent, the Carrier Arab Road lines, Gandhidham appointed one Sh. S.P. Bhatt, Surveyor to conduct the survey. The said Surveyor on 27.01.2006 submitted a survey report stating therein that he had received the instructions from the transporters at about 3.00 P.M. on 08.09.2005 for the survey and he reached at 5.00 P.M. on 08.09.2005. At the time of Survey, it was found that the Tanker was in a topsy-turvy condition and the top of tanker on rear side was submerged in the water canal. At the time of survey, while hitting the bottom portion of tanker it was giving sound of its empty condition. At the time of survey, it was seen that at no side of the tanker were there any markings, tempering/denting, which could lead to complete leakage of the material. He again visited the site of accident to find out the marking/dentin/shearing of compartments of tanker. It was found that there was no such marks or damages to the tanker which could lead to complete leakage of the Hydrated Phenol. There were also no heavy damages to the Manhole on top of tanker and/or twisting of pipes, which could result into complete leakage. Further, there were some discrepancies as per record which had to be verified/checked while processing the claim such as the total distance covered by the tanker from Kandla to site if accident was only 350 km and the time taken till the accident site was about 60 hours which was not justified. As per police complaint made by the driver he had not been injured but as per his statement dated 03.01.2006, he was found injured. The tanker was insured with the Oriental Insurance Co. Ltd., Mumbai vide Policy No. 124201/ 2005/3196.
5. On 02.02.2006, the Respondent submitted a copy of the said survey report to the Petitioner and made a claim for Rs.9,50,987.41P. On 29.04.2006, Sh. S.P. Bhatt, Surveyor clarified to the Petitioner that the carrier had approached him for conducting the survey and the survey was conducted as per their instructions. The surveyor appointed by the carrier himself had expressed doubts over the manner of loss narrated and discrepancy in statements made to the police and to the surveyor. The Petitioner then appointed Sh. M. Rajendra Kumar, Investigator to investigate the matter and submit his report.
6. The said investigator submitted his report on 23.08.2006 after conducting investigations he observed that the sum insured had been exhausted by the purchases between 1st January to 18 January, 2005 and the investigator concluded that claim was lodged for alleged loss of material in an uninsured transit. The investigator observed that the alleged loss on one hand appeared to be fabricated either by the transporter or by the tanker owner. On the other hand the sum insured under the policy was exhausted and thus the insurer had no liability. On 20.09.2006, the claim made by the Respondent was repudiated by the Petitioner. It was stated that the sum insured balance maintained as per the insured books and declarations submitted to the insurer were with vast difference and not corroborating and the counting of the purchases from January 1st to January, 18th, the amount of purchase by the insured exceeded the sum insured limit of Rs.one crore. Further, the tanker of the Respondent met with an accident in September, 2005, while as per the purchases made by the insured, the issued insurance coverage of Rs. One Crore had been exhausted within 18 days i.e. by 18th January, 2005 and it was established that all the purchases for years together had not been declared to the insurer as per the Policy. Moreover, pertaining to the subject claim, though the covered/declared chemical in the proposal was allegedly transported, there was no insurance cover for the same as the sum insured under the policy in question had already exhausted seven and half months ago.
7. The District Consumer Disputes Redressal Forum-III, Hyderabad (For short, 'District Forum') vide its order dated 08.02.2008 while dismissing the Complaint has held as under;
" The main issue that arises in the present case whether the insured had exhausted the sum insured by the months of September, 2005 thus rendering his shipments uninsured and the policy invalid. Before proceed to decide the merits of the case it is important to understand the 'Open Policy (Declaration)". An Open policy described in general times and leaves the name of the ship or carrier and other particulars to be specified latter. Such policies are taken by merchants engaged in regular overseas or in-land trade to insure cargo. The policy is taken for a relatively large sum to cover all the expected shipments The details of the shipment are to be declared honestly to the insurer as and when each shipment is dispatched until the sum insured is exhausted and the premium account is adjusted at the end.
It is fundamental principles of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non- disclosure of the particulars which the parties know.
In the present case the opposite party contends that the complainant had exhausted the sum insured in the first two months after issuing the policy. In such a scenario the burden is on the insurance company to prove the breach in the policy in order to get exemption from liability. The book entries, the transit register and purchase register [Ex. B-8 to B-10] are evidence of the purchase made by the complainant since January,2005 until September, 2005 which reveal that there has been turn over to the tune of Rs.15 Crores. It is obvious that the above chemicals purchased by the complainant had to be transported to a specified destination (wherever that may be.) Therefore it is apparent that the complainant ought to have declared the above transit carriage of chemicals so as to truthfully reflect his monthly declarations. We are therefore of the opinion that the insured has discharged his burden and has established by the evidence on record that the complainant had exhausted the sum insured prior to September, 2005.
The insured must disclose to the insurer every material circumstance which is known to the assured. Insurer is entitled to avoid a policy for non-disclosure of a material circumstances. Any circumstance or representation was material, if it would influence the judgment of a prudent insurer in fixing the premium. Thus, in the present case there is a direct relationship between the premium, the sum insured and the actual value of shipments undertaken. Therefore suppression of the material facts; or under declaring the monthly transits undertaken is a clear case of breach of the conditions of the policy.
The claim preferred by the complainant for the vehicle which met with an accident on 06.09.2005 cannot be entertained as the sum insured had already been exhausted thus invalidating the marine cargo open policy no.B50201. In such circumstances the said vehicle is rendered uninsured and the complainant is not entitled for any claim. In addition it is also observed that the complainant had failed to declare the said shipment within 15 days from the date of shipment, as Ex.B-3 reveals that the said shipment left the port of loading in Ulsan from Republic of Korea on 17.06.2005 for its destination at Kandla port, Gujarat to be delivered to the importer A.S. Moosani & Co.
In view of the above discussion we are of the opinion that the opposite party was justified in repudiating the claim of the complainant and there is no liability fastened on the opposite party. The complainant has failed miserably to establish his claim.
In the result, the claim is dismissed. No costs."
8. Aggrieved by the order of the District Forum, the Respondent/ Complainant filed an Appeal before the State Commission. The State Commission vide their order dated 13.07.2010 while allowing the Appeal, observed as under;
"10). It is an undisputed fact that whenever the complainant was sending the consignments he was furnishing the declarations mentioning the details evident from Ex. B7. They pertain to declaration Nos.1751 to 1759. Declaration No. 1758 pertains to the consignment in question. There is a specific mention against declaration No.1758 Dated 5.9.2005 that total amount declared from 31.12.2004 to 30.09.2005 was Rs. 49,26,489/- and the unutilized balance was Rs.50,73,511/- and the commodity declaration was "On acetic AIO, menthanol, formic acid, formal dehyde, phenol, acetone, aniline oil and chemicals". A statement was also appended by the complainant dispatches made for the month of September,2005, wherein the consignment in question was noted mentioning the value at Rs.9,28,537/-, "It is clearly stated in the said letter as under:
Balance amount b/d forward from Sept.2005 : Rs.50,67,211/- Declared as above Rs.39,90,140/- Balance premium c/d to October, 2008 Rs.10,77,071/-
Since it is filed by every insurance company it cannot be said that the complainant has created these documents. Equally the opposite party filed the details of purchased made during the period from 1.1.2005 to 30.09.2005 vide Ex.B8. Ex. B9 pertains to Profits and Loss account of complainant from 01.04.2005 to 31.03.2006. Ex.B10 is transit sale register for each of the commodity from 6.4.2005. it is not known whether it is deliberated or just to mis-direct the District Forum it pleaded that the complainant had already exhausted the value of consignment amounting to Rs.5,82,51,521/- as on 30.3.3005 as against the sum assured amount of Rs.1 crore under the policy and therefore not entitled to any amount.
11). In fact the complainant informed the purchase made during the period 1.1.2005 to 30.9.2005 under Ex.B8. It did not mention that they were transported. The complainant was informing the insurance company not only the purchase made but also profit and loss account. It was also furnishing transit sale register etc. It never stated that it had transported the consignment worth Rs.14,95,17,144,72/-. This is contrary to every declarations given by them which we have already adverted to marked as Ex.B7. Obviously the insurance company from the statement given by the complainant pertaining to purchase made by it assumed that they pertain to consignments transported. It is not as though it did not understand the statements filed by the complainant in regard to its sales. The insurance company has been certifying the amounts covered under the declaration and also the amounts still lying with them towards premium deposit. Therefore, it cannot be said that the complainant had transported the consignments worth more than the assured amount.
12). The contention that the complainant has exhausted the amount even by the date of transportation is false evident from declarations given under Ex.B7. It intends to equate the amounts spent for purchase of various commodities with that of value of goods transported by it. The complainant will be entitled to the amount towards loss caused while transporting the consignment on hand and not for the entire commodities purchased by it.
13). . The second ground that the proper post-accident precautions were not taken immediately after the accident without supervising the loss personally avoiding possibility of involvement of the driver-cum-owner of the tanker, except leaving all the matters to the transporters. A report to the policy immediately, which made a mention by the surveyor. No foul play was detected by the investigator. Therefore, we are of the opinion that the repudiation was unjust. The complainant is entitled to the value of the consignment. Since the repudiation was unjust, the insurance company is directed to pay interest @ 9% p.a., from the date of repudiation till the date of payment .We award a compensation of Rs.10,000/- for unjust repudiation.
14). In the result the appeal is allowed setting aside the order of the District Forum, consequently the complaint is allowed in part. The insurance company is directed to pa Rs. 9,28,537/- together with interest @ 9% p.a., from the date of repudiation viz., 20.09.2005 till the date of realization together with compensation of Rs.10,000/-. The complainant is also entitled to costs of Rs.10,000/-.time for compliance for weeks."
9. Hence, the present Revision Petition.
10. I have heard the learned counsel for the Parties and perused the records. Mr. Yogesh Malhtora, learned Advocate for the Petitioner contended that the State Commission has erroneously allowed the Appeal filed by the Respondent without appreciating the book entries, transit register and purchase register which clearly established that since January, 2005 until September there was a substantial turn over to the tune of Rs.15 crores and it was obvious that the said chemicals purchased by the Respondent had been transported to specified destinations.
11. He further contended that the State Commission had wrongly and erroneously failed to appreciate that the Respondent had already exhausted the sum insured much prior to September, 2005. The State Commission wrongly and erroneously failed to appreciate that on the face of the record of book entries, the transit register and the purchase register, it was clear that the Respondent deliberately did not declare the transit/carriage of chemicals, so as to truthfully reflect the monthly declarations. Further, the State Commission wrongly and erroneously failed to appreciate that the Respondent cannot take advantage of his omission in not disclosing the monthly declarations as per actual transit of chemicals and by withholding material information from the Petitioner.
12. The counsel further contended that the present matter is fully covered by the judgment of the Hon'ble Supreme Court of India in the matter of "Suraj Mal Ram Niwas Oil Mills Private Ltd. Ltd. Vs. United India Insurance Company Ltd, reported in Supreme Court Cases (2010) 10 SCC.
13. On the other hand, the learned Counsel for the Respondent contended that the sum insured can be exhausted only on the basis of declarations and not otherwise. It cannot be said that the sum insured was exhausted in the first 18 days based on the total sales/ purchases made by the insured in the absence of any declarations from the insured. The insured reserved his rights as to which consignment is to be insured. The insured does a lot of business, but at the same time he does not went all business to be covered and he has choice to choose which consignment is to be covered or not. Accordingly, in the present case, the Respondent has given monthly declarations as required till August, 2005 covering the consignments worth of Rs.49,26,489/-and premium payable thereon is Rs.6,897.08/-. Balance premium as on 10.09.2005 was Rs. 14,868.92/-. The consignment covered in the accident was included in the declaration made in September, 2005 covering the value of Rs.39,90,140/-. Hence, the repudiation of the claim is not justified.
14. I have heard the Counsel for the Parties and gone through the record very carefully.
15. Condition No.1 of the Memorandum attaching to and forming part of open Policy in question is the core point to adjudicate upon the main issue involved in the present case, which reads as under;
"1. DECLARATION:- It is condition of the insurance that until completion of the contract the assured is bound to declare hereunder to the company each and every despatch shipment without exception in the form prescribed by the company purpose within............Hours day of the:-
Departure of the overseas vessel from the port of shipment in the case of exports, Receipt of advice of despatch/shipment, in the case of imports.
Issue of the railway receipt/parcel way bill/postal receipt consignment note in the case of inland transits.
The company being bound to accept the same upto, but not exceeding the limit specified herein."
16. From the above, it is an admitted fact that the Respondent/Complainant had failed to declare to the Petitioner each and every shipment without exception and on the other hand the insured admittedly picked and chose its right as to which consignment was to be insured.
17. In view of the above extract of Special Condition No.1 of the Policy in question, viz., "each and every consignment must be declared before dispatch of goods" I am of the view that that the Respondent was duty bound to declare 'each and every consignment' before it left from the Respondent's premises and there is nothing in the insurance policy to suggest that the Insured/Respondent had liberty to pick and choose as to which consignment has to be covered or not. This could lead to fraud in connivance with the employees of the Petitioner to file a claim by declaring only dispatches which were not above board or when a mishap occurs. Even in the instant case, the surveyor appointed by the carrier was of the opinion that the tanker had not suffered the damage which could had to full leakage and further there was no evidence of the leakage of 16.620 Kgs. Of H. Phenol.
18. A similar issue has been covered extensively by the Hon'ble Supreme Court in the case of "Suraj Mal Ram Niwas Oil Mills Private Ltd. Ltd. Vs. United India Insurance Company Ltd, reported in Supreme Court Cases (2010) 10 SCC, wherein Hon'ble Supreme Court observed that;
"16. As regards the objection of the respondents about the non-disclosure of dispatch of each and every consignment, as pointed by the second surveyor, learned counsel submitted that the said condition has to be understood in the context of the fundamental condition that the insurance cover was intended to secure only the "insurable interest" of the appellant in the dispatches. It was urged that the appellant had declared only those consignments in which they had an "insurable interest" as in relation to dispatches which had not been declared, the consignees had desired that their consignments should be dispatched without an insurance cover. In all such cases, the purchasers took the risk of loss to their goods, and hence the appellant had no "insurable interest" in them, unlike in the consignment in question for which due declaration was made. Reference was made to the decisions of this Court in New India Assurance Co. Ltd. Vs. G.N. Sainani6 and New India Assurance Company Limited Vs. Hira Lal Ramesh Chand & Ors.7, wherein it was held that "insurable interest" 9 over a property is "such interest as shall make the loss of the property to cause pecuniary damage to the assured."
17. It was then contended by learned counsel for the appellant that in the instant case the insurance policy covered all risks from the point of loading at Jaipur till the final delivery and the appellant was only under a duty to ensure that goods were in a properly packed condition when they were handed over at Jaipur for transport by train. It was asserted that the appellant had done everything possible to ensure that the goods reached their destination in proper condition as the event that had occurred at Dharamnagar station was beyond their control. In order to buttress the contention that the goods were in transit till they reached their destination, viz. Agartala, learned counsel relied on Kilroy Thompson, Ltd. Vs. Perkins & Homer, Ltd.8 and United India Insurance Co. Ltd. Vs. Great Eastern Shipping Co. Ltd.9 It was argued that in the instant case the respondents have not led any evidence to prove negligence on the part of the appellant.
18. Relying on the decisions rendered by the National Commission in Divisional Manager, LIC of India Vs. Shri Bhavanam Srinivas Reddy10, 8 [1956] 2 Lloyd's Rep. 49 9 (2007) 7 SCC 101 10 (1991) CPJ 189 10 Divisional Manager, LIC India of India Vs. Smt. Uma Devi11 and M/s Raj Kamal & Co. Vs. M/s United Insurance Company12, learned counsel contended that the jurisdiction of a consumer forum has to be construed liberally and it covers unilateral repudiation of a claim arising out of insurance. It was also submitted that apart from the fact that the present case does not involve any complicated issues of fact for which very detailed evidence would have to be led, which the State or the National Commission would not be able to do, mere complication either of facts or of law cannot be a ground for shutting the doors of those fora to the person aggrieved. To buttress the submission, reliance was placed on the decisions of this Court in Dr. J.J. Merchant & Ors. Vs. Shrinath Chaturvedi13 and CCI Chambers Coop. Hsg. Society Ltd. Vs. Development Credit Bank Ltd.
19. Per contra, Mr. Vineet Malhotra, learned counsel appearing for the respondents, while supporting the judgment of the National Commission, urged that the claim of the appellant could not be considered as the appellant had violated the special condition of the policy by not disclosing each and every consignment before it had left the factory11 premises. It was asserted that the said condition was the basic condition of the policy and on its breach the liability of the respondents stood repudiated.
20. It was also pleaded that the moment goods worth Rs.1 crore had been dispatched from the factory of the appellant, the policy ceased to exist. It was argued that prior to the dispatch of the goods in question, goods worth Rs.1,43,59,303/- had already been dispatched, whereas the appellant had declared dispatches of goods worth Rs. 91,22,778/- only and, therefore, liability of the respondents under the policy ceased to exist both on account of non-declaration of material facts, as also due to the fact that the value of dispatches had exceeded the policy limit. In support of his plea that it was not open to the insured to pick and choose the consignments for the purpose of declaration, learned counsel relied on the decision of the Kings Bench in Dunlop Brothers & Company Vs. Townend.
21. The Learned counsel contended that appellant had also violated the terms of policy by not informing the respondents immediately about the accident as well as not taking adequate steps to minimise the losses, in as much as the goods dispatched from Dharamnagar to Agartala were not properly packed. According to the learned counsel, the insurance policy casts an obligation on the insured and its agents to take steps for 15 1919 (2) 127 (KB) 12 minimizing losses, and the fact that the appellant permitted the carriage of oil in broken tins clearly establishes that the appellant had violated the terms of the policy and, therefore, the respondents cannot be made liable for the losses.
22. Lastly, the learned counsel urged that there must be strict compliance with the terms and conditions of an insurance policy, and the appellant having breached a fundamental condition of the policy, the respondent is not liable to pay any amount to them. In support of the contention that in a contract of insurance, rights and obligations are strictly governed by the terms of the policy and no exception or relaxation can be given on the ground of equity, learned counsel relied on the judgments of this Court in Deokar Exports Private Limited Vs. New India Assurance Company Limited, United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal and Vikram Greentech India Limited & Anr. Vs. New India Assurance Company Limited.
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 13rights 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.
24. In General Assurance Society Ltd. (supra), a Constitution Bench of this Court had observed that:
" 11.....In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves."
(See also: Oriental Insurance Co. Ltd. Vs. Sony Cheriyan; Vikram Greentech (supra); Sikka Papers Limited Vs. National Insurance Company Limited & Ors.; New India Assurance Company Limited Vs. Zuari Industries Limited & Ors.; Amravati District Central Cooperative Bank Limited Vs. United India Fire and General Insurance Company Limited.)
25. Similarly, in Harchand Rai Chandan Lal's case (supra), this Court held that:
" 6.......The terms of the policy have to be construed as it is and we cannot add or subtract something. Howsoever liberally we may construe the policy but we cannot take liberalism to the extent of substituting the words which are not intended."
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 afore-extracted 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 choose the dispatches which they wanted to 15 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."
19. The facts of the above cited case are totally applicable to the facts of the present case, as the conditions of the policy had been violated and the sum assured exhausted in January,2005 itself thus, Petitioner cannot be said to have committed deficiency in service in repudiating the insurance claim of the Respondent.
20. In view of the above discussion, present Revision Petition is allowed and the order of the State Commission is set aside. Consequently, the Complaint filed by the Respondent/Complainant also stands dismissed.
...................... REKHA GUPTA PRESIDING MEMBER