State Consumer Disputes Redressal Commission
The New India Ass. Co .Ltd. vs Surat Metalics Pvt Ltd. on 29 January, 2022
Details DD MM YY
Date of Judgment 29 01 2022
Date of filling 31 03 2014
Duration 29 09 07
BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION,
GUJARAT STATE AT AHMEDABAD.
Court-3
APPEAL NO. 759 of 2014 Dt: 29.01.2022
The New India Assurance Co. Ltd.
Through its Legal Cell,
4th Floor, Popular House,
Ashram Road,
Ahmedabad. ...Appellant
Vs.
M/s. Surat Metalic Pvt. Ltd.
Through its Director
Shri Pragneshbhai Ishwarbhai Jariwala
6/1183, Daliaya Sheri, Mahidharpura,
Surat. ...Respondent
Appearance: Mr. Darshil Parikh, for Mr. V. P. Nanavaty, Ld. Advocate
for the appellant
Mr. P. S. Godiawala, Ld. Advocate for the respondent
Coram: (Shri S. N. Vakil, Judicial Member)
(Smt. J. Y. Shukla, Member)
Order by Shri S. N. Vakil, Judicial Member
1. This appeal is by the Insurance Company.
2. The Opponent - Claimant - M/s. Surat Metalics Pvt. Ltd., filed Consumer Complaint No. 127 of 2009 with CDRF, Surat (Add.) against the New India Assurance Co. Ltd., that the complainant has been obtaining Marine Open Insurance Policy from the opponent since long. For 5 crores in 2005-06. The last being for the period from 3.05.2006 to 2.05.2007 for Rs. 10 crores, paid premium of Rs. 1,03,423/-. The terms and condition of the insurance were not given by the opponent. Metalic Polychester K.S.P A-14-759 Page 1 of 8 Film Rolls valueing Rs. 16,88,052/- was coming from Vacmet packaging India Private Limited, Koshi-Kalan, Punjab, in Rahul Cargo Carrier Truck No. RJ-02-G-7276 to claimant‟s factory at such in G.I.D.C. Surat on 9.02.2007. The truck met with accident whereby 14 rolls of Metalic Polyester Film, weighing about 14,191.800 Kg was dispatched in damaged condition on 17.04.2007. Certificate was obtained from the transporter, information was given to the insurance company which appointed surveyor Shri G. K. Jadav and investigator Shri Pratik Joshi. The surveyor valued the loss at Rs. 12,39,847/- after deducting the salvage. Despite submission of reports of surveyor and the investigator, the claim has not been paid. The claim amount having not been paid the claimant inquired from the insurance office which asked for details of the declaration submitted every month. The claimant answered that they are submitting declaration every month which the company can inspect. Thereafter the insurance company sent the letter of repudiation by stating "since there was no sufficient credit balance of premium available under the above referred policy of Rs. 10 crores to cover this particular consignment the same was not insured." Considering the declarations if balance is required in premium deposit account the insurance company has to inform the insured to pay additional premium. Insurance company has not done so and has not by maintaining the account of declaration and premium deposit and by not informing the claimant to pay more premium, failed to observe its responsibilities. For this deficiency it claims Rs. 12,39,847/- with 15% interest from the date of 10.08.2007 till realization, Rs. 5 lakhs towards compensation for mental pain and economic loss and Rs. 50,000/- towards costs.
K.S.P A-14-759 Page 2 of 8
3. Defence of the opponent vide written version is of total denial. In the Marine Cargo Open Insurance Policy, the Sum Insured reduces on submission of each declaration by the Insured during the year and gets exhausted and needs to enhanced if required, and the Insured is required to keep watch on the amount of declarations submitted by himself. The Complainant are taking Insurance for last many years and therefore they are well aware of the terms and conditions of the Insurance Policy and are also aware of the Importance of the Insurance as they have increased the Sum Insured as and when required by them, which is clear from their complaint itself. Complainant had entered into contract and therefore Complainant agreed to and accepted the terms and conditions and definitions and exclusions mentioned attached with the insurance policy. All insurances are taken subject to the terms and conditions and definition and exclusions of the Insurance policy. The insured has never demanded of not having any knowledge of the Insurance terms and conditions nor have sent any letter in that regard to the Insurance Company. Therefore the say of the Complainant that they have got only the Policy schedule and have not received the complete policy with terms and conditions is not true. On perusing the Documentary evidences the Complainant has not produced the Original Policy given to them duly signed along with terms and conditions but has produced a copy which was obtained from the Opponent Insurance Company's Office bearing run-date 25/02/2008. Therefore their say on oath that they have received only the Policy Schedule without terms and conditions is not true. Copy of Policy with terms and conditions is produced for perusal of the Court. The subject Insurance Policy is a Marine Cargo Open Policy K.S.P A-14-759 Page 3 of 8 issued to avoid issuing Insurance Policy at each time goods are transported and the Insured has only to file declaration at the end of each month and the Insurance Company accepts the details forwarded by the Insured in good faith. There is a specific clause in the said Insurance Policy schedule itself which states as "This Insurance is to remain in force for a period of 12 months i.e. 03/05/2006 to 02/05/2007 unless the sum Insured is previously exhausted by declaration." Since the Insured gave wrong details which was observed later on, though the Insured is claiming the amount as per the Surveyor's assessment of loss, as the Sum Insured had exhausted, the Claim was rightly repudiated as "No Claim". From the records produced clearly shows that the Sum Insured had exhausted on 06/03/2007 itself and therefore the Opponent Insurance Company was not on risk for further period of any goods and since there was no increase in the Sum Insured during the pending period of the Insurance Policy, hence the Insurance Policy stands expired or closed or over. There is no deficiency in service.
4. The CDRF, Surat (Addi.) by its judgment dated 17.02.2014 partly allowed the complaint, ordered the insurance company to pay Rs. 12,39,847/- with 9% interest from the date of complaint, Rs. 2,000/- towards mental pain and Rs. 1,000/- towards costs, holding that even if it is believed that the amount of premium was exhausted yet the insurance company had accepted liability on the basis of policy contract till 2.05.2007. Not only that if the premium amount was exhausted why the insurance company appointed surveyor and investigator. Insurer‟s advocate Shri B.C.Shah has not answered this. The company surveyor has assessed loss at Rs. 12,39,847/-, the documents produced by the complainant K.S.P A-14-759 Page 4 of 8 have not only challenged, whereby the complaint get substantiated. The insurance company has not produced any record in support of the table of balance premium. Insurance company has produced declaration from May 2006 to April 2007 by list dated 25.10.2010 but declaration having come from the custody of the insurance company, there is no reason to disbelieve it. The insurance company has not given complainant copy of the survey report by which loss is assessed at Rs. 12,39,847/-. The insurance company has not given any reason why it did not believe the report. Moreover, after appointment of a surveyor disbelieving his report, another surveyor has not to be appointed. Citations of Supreme Court on this point are clear. If the insurance company has not supplied terms and conditions and exclusion clause as argued for the complainant then they are not binding to the complainant. It is also clear from the ruiing of the Supreme Court. The insurance company has made it an instrument to earn and has without any reasonable cause disallowed the claim and thereby has shown deficiency in services.
5. Being aggrieved by the same the New India Assurance Co. Ltd. has preferred this appeal on the ground that the inferences drawn and conclusions arrived at by the Forum are erroneous; it ought to have considered letter of repudiation while adjudicating the claim, wherein it was specifically intimated that the sum insured was exhausted on 6.03.2007, whereas the consignment carrying in vehicle No. RU-02-G- 7276 on 14.04.2007; it did not care to appreciate the specific question of law with respect to the liability of the Opponent insurance company succinctly and failed to follow the basic principles of rules of natural justice; the findings as to non-supply of survey and terms and conditions K.S.P A-14-759 Page 5 of 8 the policy are vague findings and against the settled legal position of law; it ought to have appreciated that there was no pleadings with respect to the non-supply of policy particulars to the complainant yet has considered it only on the basis of oral statement without basis of findings foundation of pleadings; findings of facts recording the non-supply of terms and conditions of the policy is not applicable in the present matter as the complainant has knowledge that it has obtained open marine cargo policy, wherein it was required to forward declaration on supply of every material and therefore, upon the counting the said supply of the cargo, the complainant would have knowledge that it exhausted the sum assured; judgment is against the basic principles of Section 64VB of the Insurance Act.
6. Heard Ld. Advocates Shri Darshil Parikh, for Mr. V. P. Nanavaty, for the New India Assurance Co. Ltd. and Shri P. S. Godiawala for the M/s. Surat Metalics Pvt. Ltd. Read their written submissions.
7. The policy schedule reads the policy period as from 3.05.2006 to 2.05.2007, total sum insured 10 crore and that "the insurance is to remain in enforce for a period of 12 months i.e. 3.05.2006 to 2.05.2007 unless the sum insured is previously exhausted by declaration" and for this sum insured 10 crore, total premium paid is Rs. 1,03,823/-. Now, when the material terms as aforesaid is clearly mentioned in the policy schedule itself, it is binding.
8. Declaration of M/s. Surat Metalics Pvt. Ltd. for balance sum insured shows declaration from 3.05.2006 till 26.04.2007, inter alia showing consignment declaration value deducting it from Rs. 10 crore and the available balance of sum insured after deduction. On 6.03.2007 the K.S.P A-14-759 Page 6 of 8 consignment JW-164 for Rs. 7,23,463/- left the balance of sum insured at Rs. 1,44,176/- and by the consignment vide bill No. JW-165 of this 6.03.2007 itself for Rs. 2,98,257/- has left the sum insured in negative balance as „- Rs. 1,54,081/-‟. On the date of loss on 9.04.2007 it already was „- Rs. 1,54,29,471/-‟ or „- Rs. 1,37,41,419/-‟ to be precise. There is nothing that after the sum insured was exhausted, there was further re- insurance by paying extra premium. Nor anything is shown that the sum insured of Rs. 10 crores was not exhausted as above. It is argued for the insured to the effect that the insurance company ought to have intimated that the sun insured has exhausted and that appointment of surveyor and investigator itself has effect of making the insurance substanting which would go to show that following it the repudiation is only an afterthought. The argument is on the same line as adopted by the Ld. Forum. Now, there was no any issue before the Ld. Forum whether the insurer did actually issue policy and therefore there was nothing for it to resolve it by considering the fact that the insurance company appointed surveyor or investigator which can go to show that the policy was actually issued by the insurance company. Besides the factum of appointing surveyor has had no effect of enhancing the sum insured, that too by premium paid or deemed to have been paid. It is mandatory to appoint a surveyor on receipt of intimation of the loss, M/s. Sonell Clocks and Gifts Ltd. Vs. New India Assurance Co. Ltd., 2018 JX (SC)
559. Hence, the argument is not acceptable. There is no nor shown any statutory or contractual provision whereby any duty can be held to have been casted upon the insurance company to intimate that sum insured has exhausted and to call for to pay extra premium. It is clear that all K.S.P A-14-759 Page 7 of 8 these fall on the shoulder of the insured only and not the insurance company. The complainant failed to keep the sum insured alive by paying premium, and for its own shortcoming cannot find fault with the insurance company. Ld. Forum‟s findings cannot be sustained.
9. Therefore, for the season stated the appeal deserves to be allowed with dismissal of the complaint, for which following final order is passed.
FINAL ORDER
i) Appeal No. 759 of 2014 is allowed.
ii) The judgment and order passed by the DCRF, Surat (Addi.) on 17.02.2014 in CC No. 127 of 2009 is set aside with dismissal of the complaint.
iii) No order as to costs
iv) Registry is directed to pay the deposited amount, with accrued interest, if paid by the bank, on proper verification to the appellant by account payee cheque and the cheque be handed over to the advocate for the appellant after obtaining receipt.
v) Registry is directed to send a copy this order to the District Commission Surat (Addi.), through E-mail in PDF format for taking necessary action.
vi) Copy of the judgment be provided to the parties free of charge.
Pronounced in the open Court today on 29th day of January, 2022.
(J.Y.Shukla) (S.N.Vakil)
Member Judicial Member
K.S.P A-14-759 Page 8 of 8