Delhi District Court
Through Its Power Of Attorney vs Iffco Tokio General Insurance Company on 28 July, 2023
IN THE COURT OF MS. PURVA SAREEN ADDITIONAL
DISTRICT JUDGE-01, SOUTH DISTRICT, DISTRICT
COURTS, SAKET, NEW DELHI
CS No. 550/2017
ID No.DLST01-004020-2017.
In the matter of:
Nitol Insurance Company Ltd.,
Having its Registered office at
Nitol Center (5th Floor),
71, Mohakhali Commercial Area,
Dhaka 1212, Bangladesh.
Through its Power of Attorney
Protection Insurance Services WLL
Having its registered office at Suite 206,
Car Park Building, Government Avenue,
P.O. Box 33133, Manama,
Kingdom of Bahrain. ..... Plaintiff.
VERSUS
IFFCO Tokio General Insurance Company,
IFFCO Sadan,
C-1, District Centre, Saket, New Delhi-17. ....Defendant.
Date of institution : 01.06.2017.
Final arguments heard on : 15.04.2023.
Date of pronouncement of judgment : 28.07.2023.
JUDGMENT
Summary Suit under Order XXXVII of the Code of Civil Procedure, 1908 for recovery of INR 21,37,564.72 alongwith pendente-lite and future interest.
1. Plaintiff has filed the present suit under Order XXXVII Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 1/40 of the Code of Civil Procedure, 1908 for Recovery of INR 21,37,564.72 alongwith pendente-lite and future interest against the defendant. On the request of counsel for the plaintiff for treating this suit as ordinary suit, this Court vide order dated 07.06.2017 allowed it to be treated as ordinary suit.
2. Defendant entered appearance through its counsel upon receipt of summons.
3. Brief facts as stated in the plaint are that the plaintiff is an insurance company having its registered office at Dhaka, Bangladesh and it underwrites all classes of insurances and over the years, it has established an excellent reputation for working closely with the clients ensuring that every service is successfully and professionally delivered to meet the customer's satisfaction.
4. Plaint further states that the present suit is filed through its constituted attorney, Protection Insurance Services WLL ("PIS"), authorized by way of a Power of Attorney dated 08.06.2016 executed in its favour. PIS is professional reinsurance brokerage firm with a considerable business presence in the Middle-Eastern and Asian markets and is headquartered in kingdom of Behrain. All the acts performed by PIS as specified hereinafter have been performed for and on behalf of the plaintiff with the consent of the plaintiff. PIS acts as a reinsurance broker and negotiates contracts of reinsurance between a re-insured entity (also called "the Cedant") and the re-insurer. A contract of Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 2/40 re-insurance is a contract wherein an insurance company (re- insurer) like the defendant herein for a consideration (called the "premium") to be agreed between the parties, agrees to indemnify the re-insured entity/Cendant, like the plaintiff against all or part of the loss which the Cendant may sustain on account of settling claims of its customers as per the re-insurance policy issued to it by the re-insurer.
5. It is further stated that there are various kinds of re- insurance contracts but the two most common methods are facultative re-insurance and treaty re-insurance. In the instant case, the re-insurance contract in question is of 'Facultative Reinsurance' which is reinsurance for a single risk or a defined package of risks. It is further stated that the insurance in question was co-insurance program under facultative reinsurance, the co- insurers being Pioneer Insurance Company to the extent of 40%, Nitol Insurance Company Ltd. to the extent of 35 % and Bangladesh General Insurance Company Ltd. to the extent of 25%.
6. It is further stated that generally the business of insurance is conducted through a reinsurance broker who acts as the connecting link between the Cedants and the re-insurers. Under this process, the contracts of reinsurance and its renewal are negotiated by the re-insurance brokers. Upon execution of a contract, both the Cedant and the reinsurer transact through the reinsurance broker without directly involving the other party. It is Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 3/40 for this reason the reinsurance broker plays a great role in case of any default from the re-insurer.
7. The present suit filed by the plaintiff on following facts and grounds:
i) The plaintiff and the defendant had been involved in various re-insurance contracts from time to time.
ii) The parties began negotiating re-insurance contract on 07.10.2010, pursuant to which a contract of re-insurance dated 13.10.2010 was negotiated by PIS between the plaintiff and defendant for reinsurance of the property and business of Barkatullah Electro Dynamics Ltd., a 51 MW Power Plant located at Fenchuganj, Sylhet, Bangladesh, whereunder the defendant gave its consent for binding itself for 5% risk in the business and property of Barkatullah Electro Dynamics Ltd.
subject to certain conditions which are being reproduced hereunder:
• No known or reported loss i.e. "NKORL" in respect of the risk covered.
• Premium payment warranty i.e. PPW of 90 days. • Total reinsurance deduction of 25%.
• IFFCO's share not more than Cedant's retention. • Most favourable reinsurer terms.
• Every claim to be intimated within 30 days of occurrence. The insurance policy was a 'Power plant operational package insurance'.
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iii) PIS confirmed the 5% line on the specified terms and conditions on behalf of the plaintiff vide its email dated 20.10.2010. PIS also circulated the renewal slip wherein the premium rate was reduced from 0.21% to .20%. Plaintiff sought the reconfirmation from the defendant about the same. Vide another email dated 20.10.2010, PIS informed the defendant that the sum insured towards third party liability was BDT 30,000,000 (Thirty Million Bangladeshi Taka) and a reconfirmation was sought from the defendant in respect of the same.
iv) Acknowledging both the emails dated 20.10.2010, the defendant by its email dated 26.10.2010 confirmed the third party liability changes. Subsequently, PIS circulated the updated reinsurance slip to the defendant by its email dated 28.10.2010. The defendant confirmed and acknowledged the changes in the revised reinsurance slip by its email dated 29.10.2010.
v) Thereafter PIS by its email dated 07.11.2010 confirmed 5% share of the defendant towards the risk and bound it for the risk accordingly.
vi) In these circumstances, a re-insurance policy bearing no.NIC/SYL/OP/P-001/10/2010 came into existence between the plaintiff and the defendant for the risk qua Barkatullah Electro Dynamics Ltd. which was valid from 22.10.2010 to 22.10.2011.
vii) Under the said re-insurance contract, the defendant undertook to cover 5% share of the risk on building, Plant Machinery, Equipment (others) and all other personal properties forming part of the business interruption of Barakatullah Electro Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 5/40 Dynamics Ltd.
viii) As per the re-insurance contract, the defendant undertook to cover 5% of all risk of physical loss or damage to property including machinery breakdown to all real and personal property of the insured used in connection with the insured business interruption. The defendant also undertook to cover 5% risk of loss of revenue, additional expenditure incurred for avoiding or minimizing loss and interest charges payable on loans raised due to an interruption or interference of insured's business following loss or damage to the insured property.
ix) The sum insured under the re-insurance policy was as under:
a) Building BDT 7,00,00,000/- b) Plant and Machinery BDT 14,80,000,000/- c) Equipment BDT 2,50,000,000/- d) Business Interruption BDT 7,00,00,000/- e) Bodily Injury and Death - BDT 1,00,00,000/- f) Property damage BDT 2,00,00,000/-
The total insurance coverage was BDT 66,50,00,000/- and the only exclusion to the contract were war, civil war and sabotage and terrorism.
x) On 28.03.2011, the requisite premium of USD 823.65 was paid to the defendant by PIS for and on behalf of the plaintiff vide Telex Transfer.
xi) The premium was paid to defendant after 153 days on account of reconciliation of the ongoing running accounts that were maintained between the defendant and the PIS regarding various re-insurance contracts wherein regular set-
Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 6/40 off took place against the claims and premium in the course of business.
xii) The said premium was accepted by the defendant without any protest and/or demur and the same is still with the defendant. Upon receipt of the premium, the defendant did not raise any grievance/objection regarding receipt of the same beyond the PPW of 90 days.
xiii) Pertinently, PPW contains specific clauses which address on the mode of payment of premium and the re-percussions in failure to do so. In the instant case, such specific condition was neither mentioned by the defendant in the original contract nor in the renewed contract. Therefore, since the premium was unconditionally accepted by the defendant and was not objected to or refunded back at any stage, the defendant waived its right to raise any objection in that regard. Moreover, in the absence of auto-cancellation of re-insurance contract or notice of cancellation and/or refund of belated premium amount, the defendant bound itself as per the terms and conditions of the reinsurance contract.
xiv) On 10.02.2011 the staff operating the unit at Barkatullah Electro Dynamics Ltd. found out that one generator of the plan S/L #18 was shut down due to low demand by Load Dispatch Center (LDC) of National Grid Line at 11.00 am. From that time, the unit was kept on stand-by for operation at any time as per requirement of LDC. In the second shift, LDC demanded more load and accordingly, the unit was made ready for operation. Then, the unit was started to run in the automatic mode but after Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 7/40 certain attempts of cranking, it failed to start and failed to gain sufficient speed for operation.
xv) When auto-start failed, attempts were made to start it manually twice. However, the machine failed to start and water started spreading out of the engine. Sensing there was a problem in the engine, it was kept idle and attempts to crank it up were given up.
xvi) M/s. Greenland Inspections (the Surveyor) (hired by the plaintiff insurance company) were called to inspect the engine. During inspection, it was found that 01 number of GE Jenbacher Natural Gas Generator Engine of JGS 620 type, whose plant Serial Number 18 was damaged but the Power Plant was in order. Later on, the Surveyor found 05 numbers of engine heads open and the cylinders and liners broken and damaged. The Surveyor reported that most of the internal part alongwith its crank shaft was affected due to thrust of cylinder. Since crank shaft is a vital component of the engine, it could not be brought back to the original shape economically.
xvii) Once it was concluded after various inspections that the machine would not be in a position to be repaired economically, the plaintiff informed PIS about the aforesaid loss in its email dated 22.05.2011. Claim intimation for the same was forwarded by PIS to the defendant in its email dated 23.05.2011. xviii) In the present case, the Surveyor intimated that there was a case of total loss and the Gen Set was to be replaced with a new one. This fact was communicated to the original insured by Orient Energy Systems Ltd. (hired by the insured for their Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 8/40 professional opinion in respect of the present loss), Bangladesh vide letter dated 26.06.2011.
xix) Thereafter, by its email dated 17.07.2011, PIS informed the defendant that the plaintiff had requested it to maintain a reserve of EURO 4,04,930.35/-.
xx) Further, after various inspections, a Final Inspection Report dated 17.08.2011 was prepared and issued by one 'Greenland Inspections - Assessors, Adjusters, Surveyors' wherein it was opined that since the crank shaft was damaged, repairing it would involve huge financial involvement though no guarantee for future services could be given. It was held that the Gen-set was beyond economical repair and was thus, treated as a case of total loss and should be replaced with a new one.
xxi) By email dated 28.09.2011, PIS inter alia informed the defendant that the plaintiff had settled its claim with respect to Barkatullah Electro Dynamics Ltd. and sent them a request letter to settle 5% of the total amount due to it by the defendant. A total amount of BDT 2,50,10,557/- (BDT 2,48,38,563.00 towards the claim and BDT 1,71,994.00 towards survey bill) was settled. In view thereof, an amount of BDT 12,50,527.85 (5% of BDT 2,50,10,557) was due to be paid by the defendant in terms of the policy dated 13.10.2010.
xxii) In response to the above-mentioned email dated 28.09.2011, the defendant by its email dated 29.09.2011 requested PIS to provide the claim documents so as to enable it to process the claim and various emails dated 29.09.2011, 02.10.2011 and 03.10.2011 were exchanged between them.
Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 9/40 xxiii) Subsequently, PIS provided the relevant claim documents to the defendant by an email dated 07.03.2012. A claim debit note dated 15.01.2012 was raised for an amount of BDT 1,250,527.85/- (5% of the total amount BDT 2,50,10,557/- comprising of BDT 24,838,563/- towards the claim amount and BDT 171,994/- towards the Survey fee).
xxiv) Upon not receiving any approval from the defendant, the plaintiff started frequently inquiring about the status of its claim from PIS. Since the defendant had delayed the claim due to the plaintiff, being left in an awkward and embarrassing position, PIS paid the claim amount from its pocket and informed the plaintiff about the same. In another email dated 15.05.2013, PIS requested the defendant to update it on the payment status regarding the claim made by the plaintiff with respect to Barkatullah Electro Dynamics Ltd. By this e-mail, defendant was informed that all re-insurers had already made payments towards payment of settlement of claim amount and default was occurring on the part of the defendant. Claim Debit Note with correct date of loss i.e. 10.02.2011 was also re-sent to the defendant via this e-mail.
xxv) Thereafter, after sending various reminder emails dated 21.05.2013 and 06.06.2013, PIS vide its email dated 26.03.2014 circulated statement of accounts containing settlement amount due by defendant qua various claims and request was made to clear and settle the said claim amounts. Subsequently, similar emails were also sent to the defendant.
xxvi) PIS was shocked and dismayed when the defendant in its Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 10/40 email dated 26.05.2014 for the first time stated that list of claims outstanding and payable by defendant does not reflect in its book of accounts and disputed the claims as being first time intimations or claims where defendant was not participating and asked PIS to provide documents on case to case basis. xxvi) PIS by its email of 02.06.2014 inter alia clarified that it had on previous occasions already circulated full details of claim settlement and corresponding documents for each of the claim and asked defendant to specify which claims were first time intimation or repudiated claims or claims where defendant was not participating and informed defendant that it shall forward the claim document on case to case basis after preparing them again. xxvii) PIS by its email of 05.06.2014, sent claim documents with respect to Barkatullah Electro Dynamics Ltd. to the defendant calling upon the defendant to release amount of USD 16,006.76/- towards total loss of one Gen-set of the said insured. xxviii) Vide email dated 06.06.2014, the defendant informed PIS that it had repudiated claim of plaintiff for Barkatullah Electro Dynamics Ltd. on the grounds of :-
• Premium payment warranty (PPW) breach.
• Delay in intimation of claim.
xxix) Thereafter, vide email dated 09.06.2014, PIS expressed its disappointment and clarified that though date of loss in the instant claim was 10.02.2011, it received the claim intimation from plaintiff on 22.05.2011. The said information was circulated to the defendant on very next date i.e. 23.05.2011. The Surveyor took some time to assess the loss and prepare a surveyor report Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 11/40 which could not have been done within 30 days of occurrence of loss. The same is very common business practice and PPW breach should have been pointed out by the defendant at the intimation of claim i.e. 23.05.2011 but defendant vide its emails dated 29.09.2011 and 03.10.2011 requested for documents to process the claim and for discharge voucher respectively. No intimation was ever sent from defendant regarding PPW breach rather premium was accepted and appropriated by the defendant on 29.03.2011 without any protest or demur which had been retained by the defendant for years and no notice of cancellation of re-insurance of policy was sent by defendant nor refund of premium was made.
xxx) Thereafter, PIS sent various reminders through emails dated
22.06.2014, 30.06.2014, 03.07.2014, 09.07.2014, 14.07.2014, 17.07.2014, 12.08.2014 to the defendant regarding payment status of outstanding claim and for settling the same as soon as possible. PIS also met various officials of defendant requesting them to reconsider their decision and make payment towards the outstanding claim but nothing has been paid till date. xxxi) Due to illegal and arbitrary actions of defendant, plaintiff was left with no choice, and a consolidated legal notice dated 10.03.2016 was sent to the defendant mentioning all claims to be payable by the defendant and calling upon the defendant to pay total amount of USD 610,318.33/- due to it on account of various outstanding claims that were to be made to various Cedant Companies.
xxxii) Despite receipt of legal notice, defendant neither made any Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 12/40 payment nor responded to the said legal notice. Since there is a liability upon the defendant to pay plaintiff but he is not making the payment, therefore the plaintiff is left with no other option other than filing the instant suit.
(f) The plaintiff in his plaint alleges liability of the defendant to pay the plaintiff on the ground that though premium was paid to the defendant after 153 days i.e. beyond PPW of 90 days but the said delay was on account of reconciliation of on-going running accounts maintained between the defendant and the PIS regarding various insurance contracts where regular set-off took place against claims and premium in the course of business and in consonance with the conduct of re-insurance business. The plaintiff also alleges that as the said premium was accepted by the defendant without any protest and/or demur and is still lying with the defendant and, the defendant had waived its right to raise any objection in this regard and subsequent objections raised by the defendant in this regard for repudiating the claim of the plaintiff shall be of no consequence. It was also alleged that in absence of auto-cancellation of re-insurance contract or of notice of cancellation and/or refund of belated premium amount, the defendant bound itself as per terms and conditions of the re- insurance contract.
(g) Citing above facts and grounds, plaintiff filed the present suit under Order XXXVII of the Code of Civil Procedure as a summary suit.
(h) Plaintiff further avers that the cause of action in the present suit is within limitation since the cause of action has arisen on Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 13/40 various dates i.e. 10.02.2011, 03.05.2011, 17.07.2011, 17.08.2011, 03.10.2011, 15.05.2013, 21.05.2013, 06.06.2013, 02.06.2014, 06.06.2014, 30.06.2014, 03.07.2014, 09.07.2014, 14.07.2014, 17.07.2014, 12.08.2014 and 10.03.2016. It has also averred that this Hon'ble Court has both territorial and pecuniary jurisdiction to decide the present cause.
(i) Since the payment has not been made by the defendant to the plaintiff and the action of the defendant is illegal and arbitrary, therefore, the present suit is filed claiming total amount of USD 16,006.67/- alongwith interest @ 18 %.
8. In reply to the averments contained in the plaint, the defendant filed its Written Statement wherein it submitted both preliminary objections and para-wise reply to the plaint.
9. Under preliminary objections, the defendant submitted as under :-
ADMITTED VIOLATION OF CONDITION PRECEDENT AND WARRANTY :-
The defendant averred that the plaintiff has admittedly violated the condition precedent and warranty to the understanding between the parties. In terms of the Defendant's e-mail dated 13.10.2010, the acceptance of risk was inter alia subject to :
a. Premium Payment Warranty of 90 days.
b. Intimation of claim being within 30 days of occurrence.
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10. It is further submitted that as per the Premium Payment Warranty, the premium was to be remitted by 20.01.2011. The Plaintiff has admittedly failed to remit the premium by the said date, and made payments towards the same only on or about 15.04.2011, which is a delay of around 85 days.
11. The Plaintiff has never brought the said default to the notice of the Defendant and had never sought any accommodation for the admitted delay. Even at the time of submission of claim, there was no whisper of the defaults committed by it. It is evident that the act of the Plaintiff lacks bonafide, and the Plaintiff, by its conduct has sought to derive benefits which it is not entitled to.
12. It is admitted that in light of the admitted delay of around 85 days of the Plaintiff in making the payment of Premium, no agreement ever came into existence between the parties with binding obligations on the Respondent.
13. Further, the incident of loss admittedly occurred on 10.02.2011. Even as per the pleaded case of the plaintiff, it was only on 23.05.2011 that the claim was intimated to the defendant. The claim was as such intimated to the defendant in 102 days as opposed to the requisite 30 days, without any reasons being attributed for such delay. The Plaintiff has tried to suppress this default without any intimation to the defendant.
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14. It is submitted that given the express violation of the Warranties and Condition precedent of the understanding between the Parties, the Plaintiff has no relief or cause of action against the defendant, as prayed for, or otherwise.
15. It is further submitted that the date of occurrence of loss was on 10.02.2011 (when the cause of action first arose, as per the plaintiff's pleaded case). Since no subsequent cause of action has arisen nor there has been any acknowledgement of debts nor has there been any negotiations between the parties, the present suit is hopelessly time barred being belated instituted on 07.06.2017.
16. It is further averred that suit is not duly instituted in proper form, since plaintiff has not disclosed the underlying board resolution authorising the Power of Attorney in favour of Mr. Zagariah Mankoj Varghese and the Power of Attorney and Resolution have not been duly notarised and apostilled.
17. The defendant denies that any re-insurance policy came into existence between the plaintiff and the defendant with regard to Barkatullah Electro Dynamics Ltd. which had any binding obligations on the defendant since conditions precedents and warranties to the re-insurance agreement had not been fulfilled in the present case. Defendant further states that in terms of plaintiff's own pleaded case, there has been a delay of around 85 days in payment of premium amount to the defendant and Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 16/40 therefore, on such express violation of pre-conditional warranty between parties, no agreement with binding obligations on the defendant ever came into existence. Defendant further submitted that it was incumbent upon the plaintiff, being the party in material violation of the understanding between the parties to have brought to the notice of the defendant that such breaches had occurred and to seek suitable accommodation for the same. Defendant further denied that in the absence of auto cancellation of re-insurance contract or notice of cancellation or refund of admitted belatedly premium amount, the defendant had bound itself to the re-insurance contract as alleged or otherwise. Defendant also denied that any duty or obligation to serve notice to the plaintiff in case of PPW breach and that failure to do so by the defendant shall make him bound and obligated by the terms of re-insurance policy.
18. Defendant also submitted that as per the admitted case of the plaintiff, there had been a delay of more than 3 months in intimation of the incident of loss which again was an express violation of Conditions Precedent. Defendant expressly denied that determining the nature of machinery breakdown required time as alleged or otherwise and that the defendant requested PIS documents for processing of claim. Defendant further submitted that in the usual course of business, the defendant would seek all documents for its records and reference regardless of the admissibility of the claim.
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19. Defendant further submitted that the plaintiff had all along been aware of the material breaches of the understanding on its part in fulfilling the conditions to their insurance agreement and had intentionally never brought the same to the notice of the defendant so as to hoodwink the defendant and make unlawful gains and that both grounds of repudiation stated in e-mail dated 06.06.2014 had been admitted by the plaintiff in its pleadings and the plaintiff being in express violation of the understanding between the parties and in commission of material breaches to the understanding between the parties, plaintiff is not entitled to any relief against the defendant.
20. In a nutshell, defendant rejects the claim of the plaintiff on the ground of delay in payment of premium resulting in PPW breach as well as delay in intimating the occurrence of loss. Defendant submitted that except facts that are matters of record, and what has been specifically admitted by the defendant herein, each and every allegation and/or averments or contention made in the plaint are denied and disputed in seriatim. Therefore, the defendant prays for dismissal of suit with exemplary cost contending reliefs sought by the plaintiff being wholly misconceived and false.
21. Thereafter, the case was put up for replication of the plaintiff as well as for the purpose of filing of affidavit of admission and denial of the documents filed by the parties in the suit.
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22. Replication thereof was filed by the plaintiff and since defendant had not filed any document with the Written Statement, no affidavit of admission/denial was required from the side of plaintiff. Affidavit of admission/denial was filed by the defendant.
23. In replication, the plaintiff controverted the stand taken by the defendant in its Written Statement and reiterated in substance, the facts and grounds as stated in its plaint.
24. On completion of abovesaid pleadings and after perusing the said pleadings, the following issues were framed :-
1. Whether the plaintiff violated the condition precedent and warranty to the understanding between the parties? OPD
2. Whether the suit is barred by limitation? OPD
3. Whether the suit has been signed, verified and instituted through a duly authorized person? OPP
4. Whether repudiation of the plaint, made under policy/contract of re-insurance dated 13.10.2010, by the defendant is invalid and incorrect? OPP
5. Whether the plaintiff is entitled to recover a sum of Rs. 10,33,556.49/- from the defendant? OPP
6. Whether the plaintiff is entitled to claim pre-suit interest? If so for which period and at what rate? OPP
7. Whether the plaintiff is entitled claim pendente-lite and future interest? If so, at what rate? OPP Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 19/40 No other issue arises, raised of pressed by the parties.
8. Relief.
25. Thereafter, the parties of this suit were told to lead their evidence in support of their pleadings and to file list of witnesses thereof. Local Commissioner was appointed in the present case for recording the evidence of the parties.
26. Plaintiff in support of his case examined Mr. Zagariah Manoj Varghese, Director of Re-insurance of Protection WLL, and the Power of Attorney Holder of plaintiff as PW1 who tendered the evidence by way of affidavit in his examination-in- chief as Ex.PW1/A.
27. On the basis of admission and denial of documents, following documents were exhibited :-
(a) Email dated 13.10.2010- Ex. P1.
(b) Email dated 20.10.2010, 26.10.2010, 28.10.2010, 29.10.2010 & 07.11.2010 and copy of RI Slip -Ex. P-2 (Colly).
(c) Email dated 23.05.2011- Ex. P-3.
(d) Email dated 17.07.2011- Ex. P-4.
(e) Email dated 28.09.2011, 29.09.2011, reply dated 29.09.2011, Email dated 02.10.2011, 03.10.2011 and reply of the same date and Email dated 07.03.2012- Ex. P-5 (colly).
(f) Claim debit note dated 15.01.2012- Ex. P-6.
(g) Email dated 15.05.2013, 21.05.2013, 06.06.2013, 26.03.2014, 26.05.2014, 02.06.2014, 05.06.2014, 06.06.2014, Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 20/40 09.06.2014, 22.06.2014, 30.06.2014, 03.07.2014, 09.07.2014, 14.07.2014, 17.07.2014 and 12.08.2014-Ex. P-7 (colly).
(h) Office copy of legal notice and postal receipts -Ex. P-8 (Colly).
28. During recording of evidence before the Local Commissioner appointed by this court, following documents were further exhibited :-
(a) Original bank receipt showing transfer of premium from PIS to IFFCO Tokio as Ex. P-10.
(b) Email dated 22.05.2011 as Ex. P-11.
(c) Office copy of letter dated 29.06.2011 informing the original insured that it was the case of total loss as Ex. P-12.
(d) Office copy of survey report dated 17.08.2011 as Ex. P-13.
29. Defendant in support of his case examined Mr. Hemant Bhatia, General Manager of IFFCO Tokio General Insurance Company and he tendered the evidence by way of affidavit in his examination-in-chief as Ex.DW1/A.
30. After completion of evidence, final arguments were addressed by the counsels for plaintiff and defendant. Written arguments were also filed by both the counsels.
31. The court has gone through the evidence tendered by the parties alongwith the documentary evidence and heard the final arguments of both the parties in detail and in view of the Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 21/40 evidence so led, the issue wise findings of this court are as under.
Issue no. 1. Whether the plaintiff violated the condition precedent and warranty to the understanding between the parties? OPD"
32. Onus to prove this issue was on the defendant. The plaintiff has alleged that both the plaintiff and the defendant began negotiating a re-insurance contract on 07.10.2010, pursuant to which a contract of re-insurance dated 13.10.2010 was negotiated by PIS between the plaintiff and defendant for reinsurance of the property and business of Barkatullah Electro Dynamics Ltd., a 51 MW Power Plant located at Fenchuganj, Sylhet, Bangladesh, where under the defendant gave its consent for binding itself for 5% risk in the business and property of Barkatullah Electro Dynamics Ltd. subject to certain conditions hereunder:
• No known or reported loss i.e. "NKORL" in respect of the risk covered.
• Premium payment warranty i.e. PPW of 90 days. • Total reinsurance deduction of 25%.
• IFFCO's share not more than Cedant's retention. • Most favourable reinsurer terms.
• Every claim to be intimated within 30 days of occurrence.
33. The insurance policy was a 'Power plant operational package insurance'. Thereafter, several emails for the purpose of negotiation were exchanged between the plaintiff and the Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 22/40 defendant and finally vide email dated 07.11.2010 of the PIS to the defendant confirmed 5% share of defendant towards the risk and bound it for the risk accordingly and consequently, reinsurance policy bearing no. NIC/SYL/OP/P-001/10/2010 came into existence between the plaintiff and defendant for the risk of Barkatullah Electro Dynamics Ltd valid from 22.10.2010 to 22.10.2011. These facts with regard to negotiations via emails exchange between the PIS and the defendant are admitted by the defendant in its written statement as well as proved by documents (Ex.P-1 to Ex.P-7 and Ex.P-11) duly admitted by the defendant. Thus, there is no dispute between the parties with regard to the conditions of premium payment warranty (PPW) of 90 days and of every claim to be intimated within 30 days of occurrence of loss.
34. As regards payment of premium, it is the case of the plaintiff that premium amounting to USD 823.65 was paid by the PIS to the defendant on 28.03.2011 but as per Ex.P-10, the said payment is shown to be paid on 31.03.2011 after the expiry of 90 days from 22.10.2010. However, as per the defendant, the same was made only on or about 15.04.2011 and there was a delay of around 85 days. Thus, there is no doubt that the premium was paid after the expiry of agreed period of 90 days and therefore, there is a clear breach of the condition of premium payment warranty (PPW) of 90 days.
35. It has been further pleaded by the plaintiff that though Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 23/40 payment of premium was made after the said 90 days but the defendant has accepted it without any protest or demur and also that there was no auto cancellation of the agreement or any notice of cancellation or refund of premium, therefore, defendant has waived the alleged delay in payment of the premium and is bound by the terms and conditions of the insurance contract. Though, as per Ex.P-10, exact premium amount has been shown USD 823.65 to be paid to the defendant but there is nothing on evidence or on record to show that the said payment was brought to the notice of the defendant and that same was appropriated in lieu of the premium regarding reinsurance of Barkatullah Electro Dynamics Ltd.
36. PIS representing plaintiff itself pleads that there was a reconciliation of the ongoing running account maintained between the defendant and the PIS regarding various reinsurance contract and that delay in payment of premium occurred due to this reason.
In order to substantiate his argument, plaintiff has relied upon the judgment of Hon'ble Madras High Court in P Abdul Azeez v. New India Assurance Company Ltd., AIR 1954 Mad 520, (1953) 2 MLJ 714, wherein it is held that "As soon as the contract is signed, the assured becomes liable to pay the premium, but his failure to pay it does not in itself absolve the insurers from the liability which they in turn have undertaken under the contract. In the event of a loss, therefore happening Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 24/40 before payment, they must pay the amount due under the contract, unless the contract otherwise provides. In practice, prepayment of the premium is usually made a condition precedent to liability, in the case not only of the first premium, but also of the renewal premiums. The assured is then precluded from recovering for a loss which happens before the premium is paid. Any such condition, however, may be waived." In Porter on the Law of Insurance the position is thus stated:
"But where it is a condition in the policy that the policy shall not be binding until the premium, is paid, it is competent for insurers to waive the condition, and the court will readily infer a waiver. The law therefore is well settled that a contract of insurance, like other contracts, is concluded by offer and acceptance. If there is a stipulation that the liability will attach itself under the contract only if the premium is paid that will be a condition precedent to the policy taking effect. But that is a condition inserted for the benefit of the insurer and that can be waived. On this statement of the law we have no doubt that the learned Judge has come to the correct conclusion on the facts that there has been a waiver of the condition. It was the defendant who offered to take the policies. When repeated demands were made on him for payment of premia, he did not repudiate his liability to pay them. On the other hand, he expressly agreed in Ex. P. 6 to pay them. He also renewed those very policies. These facts lead to the irresistible conclusion that the condition had been waived and that there was a concluded contract of insurance between the parties".
37. Plaintiff has also referred to the judgment of the Hon'ble Supreme Court of India titled as Om Prakash v. Reliance General Insurance and Ors., Civil Appeal No. 15611 of 2017, decided on 4th October, 2017, wherein it is held that "It Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 25/40 is common knowledge that a person who lost his vehicle may not straightaway go to the Insurance Company to claim compensation. At first, he will make efforts to trace the vehicle. It is true that the owner has to intimate the insurer immediately after the theft of the vehicle. However, this condition should not bar settlement of genuine claims particularly when the delay in intimation or submission of documents is due to unavoidable circumstances. The decision of the insurer to reject the claim has to be based on valid grounds. Rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry. If the reason for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay. It is also necessary to state here that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the Investigator. The condition regarding the delay shall not be a shelter to repudiate the insurance claims which have been otherwise proved to be genuine. It needs no emphasis that the Consumer Protection Act aims at providing better protection of the interest of consumers. It is a beneficial legislation that deserves liberal construction. This laudable object should not be forgotten while considering the claims made under the Act".
38. However, plaintiff has not led any evidence or brought on record any document proving reconciliation of ongoing running accounts including account relating to Barkatullah Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 26/40 Electro Dynamics Ltd rather it made a specific payment equal to the premium amount which shows it was relating to premium with regard to the present reinsurance contract. Had there been reconciliation of running account between parties, plaintiff through PIS would not have deposited specific amount equivalent to premium amount rather would have sought set-off or paid some round-off payment to the defendant and would have intimated running accounts containing mention of plaintiff's payment of premium qua the insured. Thus, delay in payment of premium is not properly explained and therefore plaintiff cannot seek waiver of condition of PPW of 90 days in his favour.
39. Defendant has inter-alia pleaded that PPW of 90 days was a warranty condition/condition precedent for a binding contract for reinsurance between the parties subject to which the reinsurance understanding was reached between the parties on 13.10.2010 and it was incumbent upon the plaintiff to ensure policy terms were adhered to and in case of violation of such condition precedent, the contract of insurance is void ab-initio. The defendant argued that PIS was placing thousands of reinsurance arrangements with defendant and it was not practicable for the defendant to verify each placement and it was understood that being the broker PIS was ensuring compliance of the reinsurance conditions. Anyways incumbent upon the plaintiff to ensure that the policy terms were adhered to.
40. As per the facts, on 10.02.2011, it was found that the Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 27/40 power plant was malfunctioned and thereafter failed to start. In terms of condition (f), this ought to have to be intimated to the defendant within a period of 30 days from occurrence, therefore there were latches on the part of the plaintiff in notifying the loss to the defendant which was done on 22.05.2011 admittedly well beyond the stipulated period. The plaintiff hence breached the condition of PPW and the time of intimation hence the defendant refused to make the payment. On 26.05.2014 defendant informed the PIS that claim could not be processed due to the above breaches.
41. Ld. Counsel for defendant has referred to several judgments of the Hon'ble Supreme Court as well as of the Hon'ble Delhi High Court and as per all the judgments, the contract of insurance and the terms of agreement in an insurance policy have to be strictly construed to determine the extent of liability of the insurer. It is argued that in interpreting document relating to 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. The said proposition has been laid down in the landmark case of General Insurance Society v. Chandumall Jain, AIR 1966 SC 1644.
42. Similar position was enumerated in United India Insurance Co. Ltd. v. M/S.Harchand Rai Chandan Lal, Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 28/40 decided on 24 September, 2004 wherein it is held that "It is possible that an insurer may sustain loss in technical terms of the criminal law, but no relief can be given to him unless his case is covered by the terms of the policy. It is not open to interpret the expression appearing in policy in terms of common law; but it has to give meaning to the expression as defined in the policy. The act that causes the loss must fall within the definition in the policy and it cannot take the cover and contents of the definition as laid down in the criminal law. Therefore, when the definition of the word 'burglary' has been defined in the policy then the cause should fall within that definition. Once a party has agreed to a particular definition, he is bound by it and the definition of criminal law will be of no avail. In this connection, the decision of the National Consumer Disputes Redressal Commission in the case of National Insurance Company Ltd. v. Public Type College which has taken the colour and content of the definition given in the criminal law does not lay down the correct proposition of law. It is settled law that terms of the policy shall govern the contract between the parties, they have to abide by the definition given therein and all those expressions appearing in the policy should be interpreted with reference to the terms of policy and not with reference to the definition given in other laws. It is a matter of contract and in terms of the contract the relation of the parties shall abide and it is presumed that when the parties have entered into a contract of insurance with their eyes wide open, they cannot rely on definition given in other enactment. Similarly, in the case of Oriental Insurance Co.Ltd. Vs. Sony Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 29/40 Cheriyan reported in (1999) 6 SCC 451 an insurance was taken out under the Motor Vehicles Act, 1988 in which their Lordships' observed :
"The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy."
Similarly in the case of General Assurance Society Ltd. Vs. Chandumull Jain and Anr. reported in (1966) 3 SCR 500 the Constitution Bench has observed that the policy document being a contract and it has to be read strictly. It was observed, " 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. Looking at the proposal, the letter of acceptance and the cover notes, it is clear that a contract of insurance under the standard policy for fire and extended to cover flood, cyclone etc. had come into being."
Therefore, it is settled law that the terms of the contract has to be strictly read and natural meaning be given to it. No outside aid should be sought unless the meaning is ambiguous".
43. In the landmark judgment of Polymat India Pvt. Ltd. v. National Insurance Company, (2005) 9 SCC 174 the Hon'ble Supreme Court held that "the terms of the contract had to be construed strictly without altering the nature of contract as it may affect the interests of the parties adversely".
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44. In Vikram Greentech India Ltd. v. New India Assurance Company (2009) 5 SCC 599, it is held that "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. 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. The endeavour of the court must always be to interpret the words in which the contract is expressed by the parties. The court while construing the terms of policy is not expected to venture into extra liberalism that may result in re-writing the contract or substituting the terms which were not intended by the parties. The insured cannot claim anything more than what is covered by the insurance policy. [General Assurance Society Ltd. Vs. Chandumull Jain and another 1, Oriental Insurance Co. Ltd. Vs. Sony Cheriyan2 and United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal3]".
45. Ld. Counsel for defendant has referred to the judgment of Gamma Investments v. National Insurance Company Ltd., Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 31/40 (2009) 157 DLT, wherein it is held that "Law of Insurance makes a distinction between warranty clauses and conditions for payment of a claim. Warranty clauses are those stipulations which are the most fundamental term of the Policy and constitute the essential promise made to the insurer by the insured. Warranty in insurance contracts is opposite and invert of warranty as understood in contracts for sale of goods etc. Good faith, existence of subject matter of insurance, identification of subject matter in the Policy and insurable interest of the insured are normally regarded as implied warranty clauses. Insurance contract can also incorporate express warranty clauses to protect interest of the insurer. Warranty clause CS(OS) NO.1445/2002 Page No.18 can relate to a condition precedent to the contract of insurance, promissory conditions to be performed in future and conditions to be performed after the event/loss. In case of violation of condition precedent, subject to statutory provision to the contrary, (see section 45 of the Insurance Act, 1938), the contract of insurance is void abinito. Breach of a future promissory condition, in absence of any statutory provision, makes the contract of insurance void at the instance of the insurer from the date of the breach but not for the prior period".
46. It is submitted that plaintiff by not complying with PPW warranty terms has acted in breach of future promissory condition and has rendered contract void abinitio.
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47. In Balkrislina Khirwal v. The New India Assurance Co. {1958) SCC Online Pat 79}, the Hon'ble court observed that 'if any of the statements in the proposal form or the declaration form accompanying the proposal form made by the assured and which had been made the basis of contract are found to be untrue, the contract of insurance would be void and unenforcible in law, irrespective of the question whether the statement concerned is of a material nature or not'. The effect of the warranty therefore is to bind the assured to a strict compliance to its terms.
48. The court is therefore of the view that the plaintiff by not complying with the PPW terms has been in breach of the condition and has rendered the contract void.
49. As far as the argument of the plaintiff that the defendant waived off its right is concerned, it is a settled law that waiver cannot be inferred merely from a failure of the party to take the objection. Ld. Counsel preferred to the case of Vasu P Shetty v. M/s. Hotel Vandana Palace and Ors. Wherein it is held that "waiver cannot always and in every case be inferred merely from the failure of the party to take the objection. Waiver can be inferred only if and after it is shown that the party knew about the relevant facts and was aware of his right to take the objection in question."
38. Thus, in a given case if a party knows the material facts and is conscious of his legal rights in that matter, but fails to take the plea of bias at the earlier stage of the proceedings, it creates an effective bar of waiver against him. In such facts and Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 33/40 circumstances, it would be clear that the party wanted to take a chance to secure a favourable order from the official/court and when he found that he was confronted with an unfavourable order, he adopted the device of raising the issue of bias. The issue of bias must be raised by the party at the earliest. ( See Pannalal Binjraj v. Union of India and P.D. Dinakaran (1) v. Judges Enquiry Committee.)
39. In Power Control Appliances v. Sumeet Machines (P) Ltd. this Court held as under: (SCC p. 457, para 26) "26. Acquiescence is sitting by, when another is invading the rights.... It is a course of conduct inconsistent with the claim.... It implies positive acts; not merely silence or inaction such as involved in laches. ... The acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant...."
40. Inaction in every case does not lead to an inference of implied consent or acquiescence as has been held by this Court in P. John Chandy & Co. (P) Ltd. v. John P. Thomas. Thus, the Court has to examine the facts and circumstances in an individual case. In Municipal Corpn. of Greater Bombay v. Dr Hakimwadi Tenants' Association. The court considered the issue of waiver/acquiescence by the non-parties to the proceedings and held: (SCC p. 65, paras 14-15) "14. In order to constitute waiver, there must be voluntary and intentional relinquishment of a right. The essence of a waiver is an estoppel and where there is no estoppel, there is no waiver. Estoppel and waiver are questions of conduct and must necessarily be determined on the facts of each case".
50. This court is in agreement with the said ratio of the abovementioned judgments that terms of insurance agreement have to be strictly construed and any non express action or any inaction on the part of the insurer cannot be construed as waiver of condition against him so as to make him liable under the Insurance Contract. In present case, defendant has pointed out Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 34/40 that there is delay in payment of premium admittedly by the plaintiff and thus, there was breach of warranty condition of PPW of 90 days and thereafter, any payment made by the insured to the account of the defendant without express intimation by the plaintiff to the defendant for specific appropriation towards specific contract cannot bind the defendant. Moreover, there is no duty of the defendant under the contract to notice the plaintiff about auto cancellation or refund of premium and therefore, any such inaction on the part of the defendant cannot be construed as waiver of condition of contract in favour of the plaintiff.
51. In view of the above, it is clear that the plaintiff violated the condition of PPW in the contract. On account of such breach, the contract of reinsurance has become void abinitio hence the plaintiff is not entitled to recover any money from the defendant. Therefore, the present issue no.1 is decided in favour of defendant and against the plaintiff.
Issue No.2. Whether the suit is barred by limitation? OPD.
52. Onus to prove this issue was on the defendant. The defendant has submitted that the date of occurrence of loss was 18.03.2012 and thereafter no cause of action ever arose as there was no acknowledgement of debt and hence, suit is barred by limitation. Communications were made between the parties on several occasions and vide emails dated 02.06.2014, 06.06.2014, 20.06.2014, 03.07.2014, 09.07.2014, 14.07.2014, 17.07.2014 and Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 35/40 12.08.2014 when PIS sent emails calling upon the defendant to process the claim of the plaintiff. These email correspondences between the plaintiff and the defendant were with regard to the claim for the loss suffered by the insured i.e. Barkatullah Electro Dynamics Ltd. The email correspondence between the plaintiff and the defendant has been admitted by the defendant and it was only vide email dated 06.06.2014 that the defendant repudiated the claim of the plaintiff on the ground of PPW breach and of delay in intimation of the loss. Thus, cause of action to institute the present suit occurred in favour of the plaintiff as late as 06.06.2014 and the present suit was filed on 01.06.2017 and is, thus within three years from the date of accrual of cause of action and is, therefore within limitation. Resultantly, the present issue is decided in the favour of plaintiff and against the defendant.
Issue No.3. Whether the suit has been signed, verified and instituted through a duly authorized person? OPP.
53. Onus to prove this issue was on the plaintiff. The present suit has been filed for and on behalf by the plaintiff, by its constituted attorney, Protection Insurance Services WLL (PIS) authorized by way of a power of attorney dated 01.09.2016 duly executed in its favour by the plaintiff. In this regard, the plaintiff has filed the power of attorney dated 01.09.2016 Mr.Zagariah Manoj Varghese (Director Re-insurance) to act as attorney of the cedent company i.e. Nitol Insurance company Ltd. and has also filed Board Resolution dated 29.05.2016 authorising the abovenamed to sign and accept power of attorney from the Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 36/40 plaintiff insurance company, the same is accompanied by Apostille dated 16.05.2017. The said documents have been filed in original with the plaint and the defendant has denied these documents being 3rd party documents but said documents i.e. the power of attorney as well as board meeting is accompanied by Apostille and this court sees no reason that the present suit has not been signed, verified and instituted through a duly authorized person. Therefore, this issue is decided in favour of the plaintiff and against the defendant.
Issue no.4. Whether repudiation of the plaint, made under policy/contract of re-insurance dated 13.10.2010, by the defendant is invalid and incorrect? OPP.
54. Onus to prove this issue was on the plaintiff. The repudiation of the claim made under policies/contract of re- insurance dated 13.10.2010 by the defendant was done on the ground of PPW breach and delay in intimation of occurrence of loss. As regards PPW breach, admittedly the premium was paid beyond the period of 90 days. The plaintiff alleged waiver , of delay in payment of premium, by the defendant but the same has been explained and decided under discussion of issue no.1, against the plaintiff. Though plaintiff has pointed out in cross- examination of DW-1 wherein in answer to question whether premium was accepted without any protest, DW-1 has answered it to be correct but in subsequent answers, he has clearly mentioned that premium was never allocated to the policy in question and it was only at the time of settlement of and of Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 37/40 processing the claim, the defendant company came to know of the PPW breach.
55. As regard, repudiation on the ground of delay in intimation of occurrence of loss, there was a express condition that loss / claim shall be communicated within 30 days of occurrence and the existence of said condition is admitted by the plaintiff in its pleadings as well as documents exhibited by it and the said condition has also been not denied by the defendant. It is plaintiff's case that on 10.02.2011, the staff of the insured found that generator set started functioning abnormally and that there was a problem in its operation. Surveyor was called for the inspection and after inspections, it opined that machine could not be in a position to be repaired economically and the said fact was informed to PIS by plaintiff vide email dated 22.05.2011 and the same was further forwarded by PIS to defendant on 23.05.2011, though, as per documents on record, no report of date 22.05.2011 or before 22.05.2011 of the surveyor was ever sent to the defendant. Only a final surveyor report dated 17.08.2011 by the said surveyor has been exhibited as P- 13(though denied by the defendant being 3rd party document) but same has not been shown to be sent promptly by the plaintiff or PIS to the defendant. Thus, it can safely be concluded that the date of occurrence is 10.02.2011 and the loss should have been promptly communicated within 30 dates from this date. There is nothing on record to show promptness for intimation of loss to the defendant. Rather, court from the file observes that date of Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 38/40 occurrence of loss was 10.02.2011 and the premium has been paid subsequently on 31.03.2011 (as per Ex.P-10). i.e. after the loss had already occurred and thus, subsequent intimation after expiry of 30 days from 10.02.2011 lacks bonafide of the part of the insured as well as the plaintiff and since insurance contracts are based on uberrima fides i.e. of utmost good faith, therefore, there is a express breach of this condition also and also of good faith underlying the contract of insurance, therefore, this issue is decided against the plaintiff and in favour of the defendant.
Issue No. 5. Whether the plaintiff is entitled to recover a sum of Rs. 10,33,556.49/- from the defendant? OPP".
56. Onue to prove this issue was on the plaintiff. Since the relief claimed by the plaintiff is dependent substantially on the decision on Issues no. 1 and 4 and the same have been decided against the plaintiff and in favour of defendant, therefore, this issue is also decided against the plaintiff and in favour of the defendant.
Issues Nos. 6. Whether the plaintiff is entitled to claim pre- suit interest? If so for which period and at what rate? OPP.
& Issue No.7. Whether the plaintiff is entitled claim pendente- lite and future interest? If so, at what rate? OPP."
57. Both the issues are taken up together being interconnected. Onue to prove both the issues was on the plaintiff. Since the relief in terms of interest claimed by the Nitol Insurance Company Ltd. v. IFFCO Tokio General Insurance Company CS No.550/2017 Page No. 39/40 plaintiff is dependent substantially on the decision on Issue No. 5 read with Issues no. 1 and 4 and the same have been decided against the plaintiff and in favour of defendant, therefore, these issues are also decided against the plaintiff and in favour of the defendant.
Relief:
58. In view of my findings on the abovementioned issues, the present suit is dismissed. However, defendant has admitted the receipt of the premium and is still lying with it both in its pleadings and evidence and therefore, relying on Section 65 of the Indian Contract Act, since there was no concluded contract between the parties, the defendant is bound to restore the benefit i.e. the premium of USD 832.65 to the plaintiff alongwith interest @ 9% per annum for the period from the date of deposit till the payment is made to the defendant. Decree sheet be prepared accordingly. File be consigned to record room after Digitally due compliance. signed by Announced in the open Court Purva Purva Sareen Date:
On 28th July, 2023 Sareen 2023.08.01
16:16:25
(Purva Sareen) +0530
Additional District Judge-01,
(South) Saket District Courts,
New Delhi.
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