Delhi District Court
New India Assurance Company Ltd vs Fortune Oceanic Products Limited on 26 July, 2017
IN THE COURT OF SH. SURINDER S. RATHI: LD. ADDITIONAL DISTRICT
JUDGE03:PATIALA HOUSE COURT:NEW DELHI DISTRICT
CS No. 320/17
New India Assurance Company Ltd.
A subsidiary of the General Insurance Corporation of India.
Having its registered Office at 87, Mahatma Gandhi Road,
Fort, Mumbai 400023.
And
Divisional Office, inter alia, at 2213, Channana Complex,
4th Floor, Gurudwara Road, Karol Bagh, New Delhi110005. .....Plaintiff
VERSUS
Fortune Oceanic Products Limited
having its registered and Head Office
at A7, Community Centre (3rd Floor)
Naraina Vihar, New Delhi110028. .....Defendant
Date of Institution : 22.05.1997
Date of Final Arguments : 26.07.2017
Date of Decision : 26.07.2017
JUDGMENT
The Case
1.This suit has been filed by plaintiff Company for the recovery of Rs.27,53,206/ lacs along with interest @ 18% per annum on account of non payment of revised premium fixed by Tariff Advisory Committee for Sea Vessels belonging to the defendant company. The suit was contested by the defendant with a plea that it is barred according to Insurance Policy in hand and that the CS No. 320/16 Page 1 of 9 premium could not have been revised retrospectively. Appearance
2. I have heard arguments of ld. counsel Shri Pankaj Seth. None has appeared on behalf of the defendant to make the submissions. I have perused the case file.
Plaintiff's Case
3. The case of the plaintiff as per pleadings is that it is a duly incorporated Public Sector Insurance Company whereas defendant, which is also a duly incorporated company is in the business of Deep Sea Fishing by engaging deep sea fishing trollers. In the course of its business defendant had insured its three fishing vessels with the plaintiff. Initially a provisional premium was charged with a stipulation that final rate of the premium would be fixed by Tariff Advisory Committee, a statutory body constituted under Insurance Act, 1938.
4. In the month of September, 1993 defendant company had acquired two fishing trollers named Ontika and Kadri from Spain. A written request was made by the defendant to the plaintiff vide letter dated 10.09.1993 for transit remand from Spain to Goa and thereafter for their Hull Insurance. This letter was responded too by the plaintiff on 14.09.1993 by detailing terms of the insurance including the rate of premium applicable. It was clarified to the defendant that initially a provisional premium would be charged and final premium would be intimated post its fixation by the Tariff Advisory Company. It was accepted by the defendant.
CS No. 320/16 Page 2 of 95. Vide its response letter dated 01.10.1993 plaintiff company confirmed the above terms and conditions to the defendant. It was responded too by the defendant vide letter dated 18.10.1993 that the two fishing vessels had already started their voyage from Spain on 07.10.1993 and had reached the Suez Canal and simultaneously requested the plaintiff company to issue the insurance policy immediately. Consequently plaintiff on 26.10.1993 issued a letter requesting the defendant to furnish the particulars of the fishing vessels, personal etc. so that plaintiff can approach its Tariff Advisory Committee for fixing the premium.
6. The above requisite details were furnished by the defendant and consequently plaintiff issued two Insurance Policies having number 00/311301/00001 and 22/311301/00002 both dated 07.12.1993 for the period 01.10.1993 to 30.10.1994 qua the above two ships. The Policies contained a specific "special premium adjustment and/or cancellation clause". The premium in respect of the above two Insurance Policies was agreed to be paid in installments. The first installment was paid at the time of issuance of the Insurance Policy. While the payment for the second installment was to be made, on 31.12.1993 defendant confirmed the refixation of the premium and requested the plaintiff to get the premium finalised from Tariff Advisory Committee. This letter was responded too by plaintiff on 03.01.1994. Third installment was paid by defendant on 31.03.1994.
7. Subsequently on 22.04.1994 plaintiff received another request from the defendant for insurance of their fishing vessel 'Palamuse' acquired from Las Palamas, Canary Islands. Similar insurance was sought for transit to Goa.
CS No. 320/16 Page 3 of 9Premium rates were notified by plaintiff on 29.04.1994 with same provisional clause. Upon receipt of first installment the insurance policy for the third vessel was issued with No.22/311301/00003 dated 12.07.1994 for the period 17.05.1994 to 30.09.1994.
8. Vide letter dated 23.09.1994 plaintiff informed the defendant that Tariff Advisory Committee has finalise the ratings of the first two vessels at the rate of 3.357% (CRO). Plaintiff requested the defendant on 10.10.1994 to pay up Rs.17,77,796/ as differential amount where the first two policies. The premium fixed for the third insurance was at 2.653 % (CRO) and the differential amount was Rs.18,68,309/ in total.
9. However, when the payments were not made, upon calculation of interest the liabilty swelled to Rs.26,21,179/ as on 31.01.1997. Legal notice dated 03.02.1997 was issued seeking the above recovery with interest @ 18%. It was replied by defendant on 20.02.1997 whereby they admitted the existence, legality and validity to the policy of the insurance company but claimed that the revised premium was supposed to be paid only if the Tariff Advisory Committee so fixes it within the subsistence of the policy period. Consequently the plaintiff company was constrained to file the suit in hand for recovery of Rs. 27,53,206./ alongwith interest @ 18% per annum.
Defendant's Case
10. Upon service of summons of the suit before the original side of Hon'ble High Court, it was contested by defendant by filing a detailed written statement . Dismissal of the suit was sought on the ground that it is barred as per terms and CS No. 320/16 Page 4 of 9 insurance policy dated 07.12.1993 issued by Bombay office of the plaintiff. It is claimed that the Tariff Advisory Committee said to be constituted under Section 64(u) of the Insurance Company Act, 1938 is without any jurisdiction and contrary to the provisions of the Act. It is claimed that once the policy period was over, it is not open for Tariff Advisory Committee to regulate rights and other terms and conditions as done by them in the illegal manner. The factum of availing of three Insurance Policies for Deep Sea fishing troller has not been denied. The objection was also raised qua nonjoinder of necessary and proper parties i.e. contrary to Insurance and Tariff Advisory Committee constituted under the Act. It is also pleaded that the Tariff Advisory Committee did not afford defendant any opportunity of being heard while fixing a premium. It is stated that the National Insurance Company Ltd. which too issues a Marine Debt Insurance has fixed only 1.16% premium visa vis the value of the vessel whereas Oriental Insurance Company Ltd. was issuing Marine Policies at 2.05% value of the vessel.
11. It is said that Tariff Advisory Committee had no authority to fixed the premium at 3.35% of the value of the vessel and this amounts to take into advantage of their own default. It is also pleaded that the suit claim is barred by limitation in so far as the initial insurance policy issued in December, 1993 while the suit is filed in May, 1997. With these pleas, dismissal of the suit is prayed. Replication
12. Separate replication was filed by the plaintiff wherein he reiterated the pleaded case and denied the averments of the defendant.
CS No. 320/16 Page 5 of 913. Upon completion of pleadings, following issues were identified on 04.10.1999 ISSUES
1. Whether the plaint has been signed, verified and instituted by a duly authorised and competent person? OPP.
2. Whether the suit is barred by limitation? OPD.
3. Whether the increase in premium sought to be claimed by the plaintiff is as per the recommendations of the Tariff Advisory Committee? OPP.
4. Whether the recommendations of the Tariff Advisory Committee with regard to increase in premium were applicable for the period of insurance covered by policies under consideration? OPP.
5. Whether the escalation of the rates of premium by the Tariff Advisory Committee without affording an opportunity of hearing to the defendant is void and bad in law? OPD.
6. Whether the plaintiff is entitled to the suit amount? OPP.
7. Whether the plaintiff is entitled to the interest on the suit amount? If so, at what rate and for what period?
8. Relief.
14. To prove his case, plaintiff placed on record affidavit of PW1 Shri Ashok Kumar Verma. In his affidavit Ex.PW1/A he deposed on the lines of the plaint and exhibited following documents CS No. 320/16 Page 6 of 9 S.No. No. of Exhibits Details of the documents 1 Ex.PW1/1 Letter dated 14.09.1993 2 Ex.PW1/2 Letter dated 27.09.1003 3 Ex.PW1/3 Letter dated 01.10.1993 4 Ex.PW1/4 & 5 Carbon Copies of Insurance Policies 5 Ex.P5 Letter dated 31.12.1993 6 Ex.PW1/6 Carbon Copy of letter dated 03.01.1994 7 Ex.PW1/7 Letter dated 31.03.1994 8 Ex.P7 Letter dated 22.04.1994 9 Ex.PW1/8 Carbon Copy of Letter dated 29.04.1994 10 Ex.PW1/9 Carbon Copy of letter dated 16.05.1994 11 Ex.PW1/10 Carbon Copy of letter dated 20.05.1994 12 Ex.PW1/11 Carbon Copy of letter dated 30.05.1994 13 Ex.PW1/12 Carbon Copy of the insurance policy dated 12.07.1994 14 Ex.PW1/13 Carbon Copy of letter dated 23.09.1994 15 Ex.PW1/14 Carbon Copy of letter dated 10.10.1994 16 Ex.PW1/15 & 16 Carbon copies of letters dated 18.01.96 and 10.05.96 17 Ex.PW1/17 Carbon Copy of letter dated 10.10.1994 18 Ex.PW1/18 Copy of legal notice dated 03.02.1997 19 Ex.PW1/19 AD Card 20 Ex.PW1/20 Reply dated 20.02.1997
15. Although the examination in chief was tendered on 13.11.2009 but the witness was not produced for the purpose of crossexamination. Numerous opportunities were granted to the plaintiff to produce this witness between 2009 to 2012 but this witness was not produced. When the witness was not produced despite imposition of cost of Rs.25,000/, the evidence of the plaintiff was closed CS No. 320/16 Page 7 of 9 on 26.11.2012.
16. Thereafter, evidence was led by the defendant. They examined Shri Madan Lal Jain as DW1. He deposed on the lines of his affidavit Ex.DW1/A.
17. In his crossexamination he accepted that enhanced premium was demanded by the plaintiff but added that it was demanded after expiry of the policy. He maintained that the Tariff Advisory Company of the plaintiff had no authority to fix the premium qua the expired policies.
My issue wise findings are as follows ISSUE Nos.1 to 8 * Whether the plaint has been signed, verified and instituted by a duly authorised and competent person? OPP.
* Whether the suit is barred by limitation? OPD.
* Whether the increase in premium sought to be claimed by the plaintiff is as per the recommendations of the Tariff Advisory Committee? OPP.
* Whether the recommendations of the Tariff Advisory Committee with regard to increase in premium were applicable for the period of insurance covered by policies under consideration? OPP.
* Whether the escalation of the rates of premium by the Tariff Advisory Committee without affording an opportunity of hearing to the defendant is void and bad in law? OPD.
* Whether the plaintiff is entitled to the suit amount? OPP.
* Whether the plaintiff is entitled to the interest on the suit amount? If CS No. 320/16 Page 8 of 9 so, at what rate and for what period?
* Relief.
18. It is argued by Ld. Counsel for the plaintiff that since PW1 was not produced by the plaintiff company for the purpose of crossexamination, the evidence led by him cannot be read and relied. In the absence of any evidence, it is contended that the issues qua which the onus was placed on plaintiff is remained undischarged. On the contrary, it is argued that defendant has led their evidence. It is submitted that it is not the case of the plaintiff that it did not pay up the demanded premium within subsistence of the policy. It is argued that it was not open for the plaintiff to enhance premium of an expired policy that too after three years after the period of limitation as per schedule attached to Limitation Act expired.
19. In view of the above, on account of absence of any iota of evidence, I have no hesitation in concluding that plaintiff has failed to discharge the onus of proving the issues laid on it.
Relief
20. In view of the decision of the above issues, the suit of the plaintiff is dismissed. Parties are left to bear their own costs. Decree sheet be prepared accordingly.
File be consigned to record room.
Announced in an open Court On 26th day July, 2017. (Surinder S. Rathi) ADJ03/PHC/NEW DELHI 26.07.2017 CS No. 320/16 Page 9 of 9