State Consumer Disputes Redressal Commission
M/S Ultratech Cement Limited, vs M/S New India Assurance Co. Ltd., on 6 January, 2026
I
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
JUDGMENT RESERVED ON: 02/12/2025
JUDGMENT PRONOUNCED ON: 06/01/2026
CONSUMER COMPLAINT NO. 282 OF 2013
Ultratech Cement Limited, 'B Wing, Ahura Centre, 2nd Floor Mahakali Caves Road,
Andheri (East), MUMBAI- 400093
Complainant
Versus
The New India Assurance Co. Ltd., Divisional Office- 121200, 2nd Floor, New India
Centre, 17/a, Cooperage Road, MUMBAI - 400001
Opposite Party
BEFORE:
HON'BLE MR. JUSTICE A.P SAHI, PRESIDENT
HON'BLE MR. BHARATKUMAR PANDYA, MEMBER
For The Complainant : Mr. Burzin Somandy, Advocate
For The Opposite Party : Mr. Parveen Kumar Mehdiratta, Advocate
JUDGEMENT
PER HON'BLE MR. BHARATKUMAR PANDYA, MEMBER
1. Heard Mr. Burzin Somandy, Advocate for the Complainant and Mr. Parveen Kumar Mehdiratta, Advocate, for Opposite Party.
2. The present consumer complaint has been filed by Ultratech Cement Limited (hereinafter referred as the Complainant) against The New India Assurance Co. Ltd. (hereinafter referred as the Opposite Party), alleging deficiency in service, gross negligence, inordinate delay, misinterpretation of policy terms, unfair trade practice and wrongful repudiation of a genuine insurance claim of Rs.6,53,45,305/- under a Marine Open Cover Insurance Policy. The insurance policy in question was originally taken by the Cement Division of Grasim Industries Ltd. in 2010. Subsequently, pursuant to . schemes of arrangement approved by the Hon'ble High Courts of Madhya Pradesh, Gujarat, and Bombay, the Cement Division vested in and was amalgamated with the Complainant. The Complainant submits that for the purpose of its cement manufacturing operations, it intended to purchase and import a Planetary Gear Box for its cement mill. Accordingly, it approached M/s MAAG Gear AG, Switzerland, and after negotiations, Page 1 of 24 placed a purchase order dated 19.08.2005 bearing No. BOM/DC/MBD/IMP/P.O. No. 244/05-06 for supply of one Planetary Gear Box for a total value of CHF 12,50,000. One of the conditions of the purchase order required the Complainant to arrange transit insurance in its own name (Annexure A). In compliance with the said condition, the Complainant procured a Marine Open Cover Insurance Policy dated 01.07.2006, bearing Cover No. 121200/21/06/00006, from the Opposite Party for the period 01.07.2006 to 30.06.2007, after payment of requisite premium. Under the said policy, the Complainant was insured against damage to dispatches containing mechanical, electrical, electronic, fragile items, refractories, castables, and oil lubricants. The policy was initially issued with a sum insured of ?50 crores, with a per-bottom limit of ?2 crores, which was subsequently enhanced to ?25 crores by endorsement dated 03.10.2006 at the request of the Complainant (Annexure B). Pursuant to the purchase order, the Planetary Gear Box (hereinafter referred to as "the consignment") was shipped by the foreign supplier. The Complainant informed the Opposite Party about the dispatch of the consignment, and the Opposite Party issued an Insurance Certificate bearing No. 121200/21/06/1070000136. The consignment reached Chennai Port in 03.10.2006 (Annexures C and D). On 10.10.2006, while the consignment was being unloaded from the ship and loaded onto a trailer at the Chennai Port, it met with an accident, resulting in severe damage to the equipment. The transporters, M/s Union Roadways Ltd., informed the Complainant of the accident by letter dated 11.10.2006. The Complainant immediately intimated the Opposite Party about the accident in accordance with the policy conditions. Upon intimation of the loss, the Opposite Party appointed M/s Comtec Surveyors, Chennai, to assess the damage. A preliminary survey was conducted at the Chennai Port, and an interim report was submitted. Since the extent of damage could not be fully ascertained at the port, the consignment was sent back to the consignor in Switzerland for detailed inspection. After inspection, the foreign supplier informed the Complainant that the equipment was severely damaged, that repair costs would be approximately 70% of the equipment value, and that even after repairs, no performance guarantee or warranty could be provided. In view of this, the Complainant treated the equipment as a total loss for practical purposes. The Complainant submitted a detailed claim on 01.02.2008 for ?6,53,45,305/- along with all Page 2 of 24 supporting documents (Exhibit E). After prolonged silence, the Opposite Party sought clarifications vide letter dated 20.10.2008, which were duly replied to by the Complainant on 24.10.2008, followed by further compliance vide letters dated 15.12.2008 and 16.09.2009 (Annexures F, G, H, I and J). Despite full compliance, the Opposite Party again raised objections vide email dated 23.03.2010, alleging valuation mismatch and lack of insurable interest, which were comprehensively refuted by the Complainant on the same date, clarifying that valuation was strictly on GIF value + 10% as per policy, balance sheet figures were irrelevant, and insurable interest was undisputed (Annexures K and L). The Complainant asserts that there was no delay or suppression in declaration of the consignment and that it was normal industry practice to declare consignments received during a month in the subsequent month. The Complainant further clarified that the policy was always intended to cover high-value consignments, and the enhancement of the per-bottom limit to ?25 crores was done at the request of the Complainant and with the knowledge of the Opposite Party. Nevertheless, the Opposite Party wrongfully repudiated the claim vide letter dated 18.05.2010, on untenable grounds of valuation variation and alleged insurance by the supplier, ignoring policy terms and documents. The said repudiation was immediately refuted by the Complainant vide email dated 03.06.2010, and further clarified by the supplier vide letter dated 08.06.2010, confirming that transit risk from Antwerp onwards was to the Complainant's account (Annexures M, N and O). Left with no alternative, the Complainant approached the IRDA by filing a complaint dated 08.08.2011, yet the Opposite Party, even thereafter, vide letter dated 20.10.2011, mechanically reiterated the repudiation without application of mind (Annexures P and Q). The Complainant submits that the conduct of the OP amounts to continuing deficiency in service and arbitrary repudiation, causing substantial financial loss, business disruption and mental agony, and that the present complaint is within limitation filed on 03.09.2013, the last cause of action having arisen on 20.10.2011 (Page No. 50).
3. The OP filed its written statement on 16.01.2014, and denied the allegations, and strongly contested the maintainability of the consumer complaint and submitted that there is no deficiency in service, as the insurance claim was lawfully, reasonably, and justifiably repudiated on 18.05.2010 strictly in accordance with the terms and conditions Page 3 of 24 of the Marine Open Insurance Policy. It is contended that the complaint deserves dismissal at the threshold on the grounds of delay in filing the complaint and of the complainant not qualifying u/s 2(1 )(d). At the outset, the OP submits that the complainant failed to exercise due care and caution as mandated under the policy. As per the policy conditions, the insured was required to take all reasonable safety measures to avoid loss. However, the complainant failed to verify the credentials of the driver and failed to ensure proper unloading, squaring, and lashing of the consignment. The loss occurred due to the negligence of the driver and transporter, and such negligence disentitles the complainant from claiming indemnification. The OP further submits that these disputed facts can only be adjudicated by leading oral and documentary evidence and cross-examination, which is impermissible in summary proceedings under the Consumer Protection Act, 1986. The OP has further raised a preliminary objection of limitation, stating that the claim was repudiated on 18.05.2010, which was duly communicated to the complainant. Though the complainant made a representation on 30.09.2010, the respondent reiterated its decision vide letter dated 22.10.2010. Despite this, the complaint was filed only on 03.09.2013, i.e., after nearly three years, and is therefore barred by limitation. The Opposite Party submits that it had issued a Marine Open Cover Insurance Policy bearing No. 121200/21/06/00006 for the period 01.07.2006 to 30.06.2007 in favour of M/s Grasim Industries Ltd., covering only its specified cement units, namely Vikram Cement, Aditya Cement, and Rajashree Cement, with an estimated annual turnover of ?50 crores and a per-vessel limit of ?2 crores. It is specifically contended that the policy terms clearly stipulated that any consignment exceeding the said per-vessel limit was required to be covered under a separate specific voyage policy, which was admittedly never obtained for the subject consignment. The Opposite Party further submits that the complainant has suppressed material facts and has not approached this Commission with clean hands. As per the mandatory conditions of the Marine Open Cover Policy, the complainant was required to declare each and every shipment, whether arrived or not, and obtain an insurance certificate, failing which the policy would lapse on intentional non-declaration of any of the shipments during the policy period. However, the complainant willfully failed to declare all shipments, thereby violating the declaration clause of the policy. The Page 4 of 24 Opposite Party has further pointed out that several imports made by the complainant far exceeded the values declared to the insurer, which is evident from the statement of GIF + 10% values and corresponding customs duty amounts pertaining to different cement units, (para 4i, 4k) clearly demonstrating material non-disclosure and breach of policy conditions (para 4b), disentitling the complainant from any benefit under the policy. The complete chronological details of all shipments for all the units covered under the open policy were not made available which prevented the requirements of "declaration" condition of the policy as also requirements of section 64VB of the Insurance Act. The complainant failed to declare the subject consignment in a timely and proper manner, inasmuch as the consignment was shipped from Antwerp on 17.08.2006, whereas the declaration was made after the incident. It is contended that the complainant neither made declarations serially nor declared shipments during September 2006, which amounts to a willful violation of the declaration clause of the Marine Open Cover Policy and constitutes a fundamental breach of policy conditions. The OP contends that the value of the consignment was ?4,77,12,949, which far exceeded the per-vessel limit of ?2 crores available under the policy at the time of shipment. It is alleged that the complainant, after becoming aware of the accident, attempted to retrospectively enhance the per-bottom limit to ?25 crores by a letter dated 03.10.2006, which according to the OP was backdated and was actually received by the insurer only on 20.10.2006, i.e., after the accident. Hence, the enhancement could not apply to a loss that had already occurred. The OP asserts that the foreign supplier, M/s MAAG Gear AG, had itself arranged insurance for the subject consignment, as is evident from the invoice terms, and that the sale was on FOB basis, under which the supplier's insurance covered the risk until the goods crossed the ship's rail at the port of loading. Consequently, according to the OP, any loss alleged to have occurred during unloading at Chennai Port was required to be claimed from the supplier's insurer and not from the Opposite Party. It is further alleged that the complainant deliberately failed to implead the supplier's insurer as a party to the proceedings. The OP has also pleaded double insurance, contending that the complainant was simultaneously covered under another Marine Open Insurance Policy issued by United India Insurance Co. Ltd. for the period 01.10.2006 to 30.09.2007, covering plant and machinery, including gearboxes. Despite Page 5 of 24 being aware of the existence of the said policy, the complainant allegedly failed to disclose the same and also did not implead United India Insurance Co. Ltd. as a necessary party, rendering the complaint bad for nonjoinder of necessary parties and not maintainable on this ground alone. The OP alleges that the accident occurred due to improper, uneven and unsecured loading of the consignment on the trailer at Chennai Port, as a result of which the heavy consignment toppled while being moved, owing to inadequate placement and lashing. Relying upon the transporter's version, the OP contends that the complainant failed to properly supervise the unloading and loading operations, thereby breaching its contractual duty under the policy to take reasonable steps to minimize loss. It is further alleged that the complainant handed over valuable goods to an unauthorized transporter without issuance of a Goods Receipt (GR), which constitutes negligence and disentitles the complainant from any indemnification. The OP further asserts that the damage admittedly occurred within the port premises and prior to removal of the goods from the docks, and therefore the shipper and/or transporter alone was liable for the alleged loss. Since the complainant had itself lodged a claim against the transporter, the OP contends that the transporter is a necessary party, and on this ground also, the complaint is alleged to be bad for misjoinder and nonjoinder of necessary parties. With regard to the accident, the respondent submits that the alleged loss occurred on 10.10.2006 during unloading at Chennai Port. However, the respondent was informed only on 18.10.2006, amounting to an inordinate delay of 8 days in intimation, in violation of policy conditions. The surveyor, M/s Comtec, was appointed on 19.10.2006 and conducted a preliminary survey. The respondent highlights that there are contradictory versions regarding the cause of damage reported i.e. while the transporter claimed the consignment toppled from the trailer, the surveyor reported that it fell during unloading from the vessel, thus necessitating a detailed trial. The OP also relies on the reports of the surveyors:
a. M/s Comtec Surveyors, whose preliminary report stated that the damage occurred during unloading/loading at the port and that the damage appeared repairable.
b. M/s Insurance Technical Services, whose final survey report concluded that the loss occurred due to unsecured and uneven loading, and that the gearbox was repairable, with estimated repair cost significantly lower than the cost of a new gearbox.Page 6 of 24
4. Based on these reports, the OP contends that the complainant, in any case and without prejudice to the ground of repudiation, is not entitled to claim the full value of a new gearbox. The OP further submits that the supplier, M/s MAAG Gear AG, Switzerland, had arranged insurance as is reflected in the invoice dated 25.07.2006, and under an FOB contract, the seller's risk continues till the goods cross the ship's rail.
Therefore, the supplier's insurer, and not the OP, was liable for indemnifying the loss. The OP also alleges that the complainant sought enhancement of the per-vessel limit from ?2 Crores to ?25 Crores without disclosing that the high-value consignment was already in transit since 17.08.2006, and the enhancement was granted only on 20.10.2006, i.e., after the loss. The OP has further disputed the quantum of claim. The complainant submitted the claim was raised only on 01.02.2008, after a delay of about 15 months, claiming a total loss of ?6,33,45,305, comprising ?4,77,12,949 towards the gearbox and ?1,76,32,356 towards customs duty. The OP submits that the gearbox was repairable, as confirmed by the supplier's repair quotation dated 17.09.2007 for CHF 86,820, and therefore the claim of total loss is untenable. The complainant failed to mitigate the loss by effecting repairs, and, in any case, the insurer cannot be held liable for more than 70% of the original value as that was the quoted rate for repairs. The OP has also challenged the claim for customs duty, relying upon Sections 23 and 74 of the Customs Act, 1962, which permit remission or drawback of up to 98% of duty when damaged goods are re-exported. Since the complainant admittedly sent the consignment back to the supplier, it could have availed duty drawback, and therefore the insurer is not liable for the customs duty component. Without prejudice, the respondent submits that even if liability were to be assumed, the indemnity would be restricted to the per-vessel limit of ?2 Crores, subject to deductions for salvage, recovery rights, and standard policy excess. The respondent further submits that the complainant is not a "consumer" under the Consumer Protection Act as the goods were imported for commercial purposes, and the dispute involves complex questions of fact and law beyond the scope of summary jurisdiction. The OP submits that the complaint is misconceived, barred by limitation, vitiated by suppression of facts, and devoid of merit, and accordingly prays that the same be dismissed with costs.
Page 7 of 245. The Complainant, through its rejoinder filed on 03.05.2016, reiterates that the reply filed by the Opposite Party is evasive, misleading, and deliberately silent on crucial factual and documentary aspects governing the insurance claim. At the outset, the Complainant specifically denies the preliminary objections raised by the Opposite Party regarding maintainability, limitation, and alleged suppression of facts. It is pleaded that the Opposite Party has not disputed the existence of the Marine Open Cover Policy bearing No. 121200/21/06/00006, the issuance of Insurance Certificate No. 121200/21/06/10/70000136 on 20.10.2006 or of the endorsement request dated 03.10.2006 for enhancing the per bottom limit from ?2 crores to ?25 crores. The rejoinder asserts that the repudiation letter dated 18.05.2010 was founded solely on an alleged discrepancy between the declared value and balance sheet figures, and none of the additional grounds now raised--such as delay in declaration, age of vessel, alleged alternate insurance, delay in intimation, supervision during unloading, or alleged negligence--find any mention in the repudiation letter. The Complainant submits that the Opposite Party is legally estopped from expanding or improving its case by introducing fresh grounds at the stage of reply, which clearly establishes that the repudiation was wrongful and arbitrary. The Complainant further reiterates that the cause of action is well within limitation, as the final repudiation and last correspondence were received on 20.10.2011 and the complaint was filed on 03.09.2013. The plea of limitation is therefore false and untenable. The rejoinder specifically controverts the Opposite Party's allegation of delay in declaration and intimation, clarifying that monthly declarations were the accepted commercial practice and that the Opposite Party itself appointed surveyors, conducted surveys, and processed the claim, thereby waiving any such objection. The Complainant emphasises that the enhancement of per bottom limit was effected on 03.10.2006, prior to the accident dated 10.10.2006, and that the Opposite Party has itself admitted this enhancement in its reply, rendering its objections contradictory and self-defeating. The Complainant further clarifies that the insurance cover arranged by the other insurer United India Assurance was for small-value transits only and did not cover the subject high-value consignment, a fact acknowledged by the Opposite Party in its own correspondence. The allegation that the supplier had arranged insurance is expressly denied and stands disproved by the supplier's letter dated Page 8 of 24 08.06.2010, which clearly states that the supplier's responsibility and insurance were limited only up to the North European port. The rejoinder asserts that the accident occurred during unloading and loading at Chennai Port, well within the policy coverage, and that the Opposite Party has failed to produce any documentary evidence to support its allegations of negligence or breach of policy conditions.The Complainant submits that the reply of the Opposite Party is replete with afterthoughts, conjectures, and unsubstantiated assertions, none of which were part of the repudiation. The Opposite Party has failed to rebut the core issue of wrongful repudiation with any cogent evidence. The rejoinder therefore prays that the misleading defences raised by the Opposite Party be rejected, the repudiation be held illegal and deficient in service, and the Opposite Party be directed to pay the insured loss of ?7,05,45,305/- along with interest and consequential reliefs as prayed for in the complaint.
6. The Complainant filed its evidence by way of affidavit on 03.05.2016 reiterating the averments in the complaint. OP filed evidence by way of affidavit of Sh. Chirag Indulia on behalf of respondent as RW-1 alongwith documents and evidence by way of affidavit of Sh. Harish Kumar Surveyor on 09.11.2016. Written arguments have also been placed on record by both the parties.
7. Mr. Somandy, on behalf of the complainant has taken is through the relevant policy document, the declaration for the consignment in question and the letter acknowledging the request for enhancing the per-bottom limit from Rs. 2 crores to Rs 25 crores dated 03.10.2006. It is submitted that the accident and loss is not disputed. The issues of insurance from other insurer, i.e United India Assurance, of alleged coverage by the supplier and the alleged negligence in not taking due care, belated intimation/declaration etc raised in the reply filed by the insurer are all afterthoughts and not at all referred to in the repudiation letter, and hence of no significance. The contentions of the Ld. Counsel were encapsulated in the order dated 28.07.2025 which we may extract along with the grounds raised in the repudiation letter:
(18th May, 2010) MRO-lll/2010.
Grasim industries Ltd., Cement Division - Manufacturing, Ahura Centre, 15 Floor, Mahakali Caves Road, Andheri (E), Mumbai 400 093.Page 9 of 24
18"' May, 2010 Kind Attn.: Mr. Mukesh Agarwal.
Dear Sir, Re: Claim for damage to the consignment of Maag Planetary Reduction Gear Box CPV -17 Claim No. 121200/21/07/10/90000018 Marine Open Cover No. 1212000600006 Marine Insurance Certificate No. 121200/21/06/10/70000136 A/c. M/s. Grasim Industries Ltd "In reference to the above, we would like to inform you that after a thorough scrutiny of the entire claim by the Competent Authority, it has been found that there is a wide variation between the value declared to us for insurance and your balance sheet figures of the imports. The invoice for the subject import also shows that the insurance arrangement was made by your suppliers too. This matter was taken up with you for your detailed clarifications wherein ultimately you have shown your inability to provide the above details. In view of the same, we regret to inform you that the Competent Authority has declined our liability for the alleged loss. The claim hence, is not tenable and is hereby repudiated. Thanking you and assuring you of our best services at all times." (ANJAN DEY ) REGIONAL MANAGER
8. This Commission on 28.07.2025 passed the following detailed order. The said order dated 28.07.2025 is reproduced herein below:
"Dated: 28 July 2025 ORDER "Heard Mr. Somandy, learned counsel for the complainant who has advanced his submissions contending that the letter of repudiation dated 18.05.2010 proceeds on a couple of erroneous grounds which are untenable in law as well as on facts.
He submits that the inference drawn about the value of the damaged goods on the basis of the balance-sheet figures of the imports is a totally misconceived approach inasmuch as the value of the goods were categorically disclosed in all the documents successively right from the purchase order upto the marine insurance coverage that was granted by the opposite party - Insurance Company itself. He submits that there is no reason whatsoever to have found out a difference in order to infer a cause for repudiation which he contends is contrary to the evidence of record.
He then submits that the insurance arrangement was clearly recited in the policy itself and he has invited the attention of the Bench to the terms 8i conditions as well as the premium that has been calculated and debited from the account of the complainant which the learned counsel submits substantiates and corroborates the fact that it was the complainant who had been extended the insurance coverage on the value as indicated therein and the premium was also accordingly calculated and charged from the complainant. He therefore submits that the inference that an arrangement was made with regard to the insurance from the suppliers too is a totally misconceived approach which amounts to rewriting the terms of the contract.
Learned counsel has then urged that a request was made to review the same yet the request was declined vide letter dated 20th October, 2011 that resulted in the filing of the present complaint.
He then submits that apart from these erroneous considerations the Insurance Company has stepped ahead while filing its reply and has referred to certain grounds in paragraph-2 and para 4-C thereof to support their repudiation which are not the grounds Page 10 of 24 taken in the repudiation letter. He therefore submits that the Insurance Company according to the decisions of the Apex Court and this Commission cannot be permitted to raise any such new grounds other than those taken in the repudiation letter itself, inasmuch as, the decisions have categorically held that the Insurance Company will be presumed to have waived its right to raise any other issue apart from those taken in the repudiation letter. He has then invited the attention of the Bench to the final survey report dated 30th August, 2008 to urge that a net assessed loss according to the surveyor himself stands indicated in the penultimate line of the survey report which calculation has neither been disputed nor commented in the repudiation letter.
In such circumstances, in the absence of anything to the contrary, the repudiation is unjustified and that the complainant is entitled to the entire claim as assessed by the surveyor himself.
Mr. Pankaj Kumar holding brief of Mr. Mehdiratta, learned counsel for the Insurance Company states that the learned counsel is unable to come on account of some medical emergency in his family and therefore the matter may be adjourned for today.
We have noted the submissions of Mr. Somandy to enable Mr. Mehdiratta to respond to the same on the next date fixed. Let the matter come up on 2nd December, 2025 at 2.00
-- II pm. 8.1 Mr. Mehdiratta replied on 02.12.2025, when the order was reserved for judgment. He reiterated that the open cover was for for Rs. 50 crores, the request for enhancement of per vessel cover was made, received, and such additional cover granted after being aware of the loss, late on 20.10.2006 much after the cargo was shipped in August 2006 and also after the incident. As per Mr. Mehdiratta, in view of the mandatory declaration clause of the policy, the insured was required to declare each and every shipment immediately when the risk commenced, whether arrived or not, and to obtain an insurance certificate. The subject consignment was shipped from Antwerp on 17.08.2006, whereas it was declared only on 03.10.2006, and that the complainant failed to make declarations serially and did not declare shipments during September 2006, amounting to a willful breach of policy conditions. It was further asserted that the value of the subject consignment, as per Invoice No. 36014189 dated 25.07.2006, issued by M/s MAAG Gear AG, Switzerland, was CHF 12,50,000, equivalent to ?4,77,12,949/-, which far exceeded the per-vessel limit of ?2 Crores (Annexure RW-1/3, pages 276-285) when it left Antwerp port. The invoice terms also indicated that the insurance arrangement was made by the supplier on FOB basis, and therefore, according to the Opposite Party, the consignment did not fall within the scope of the Marine Open Cover Policy and ought to have been covered under a separate specific Page 11 of 24 voyage policy, which was admittedly never obtained. Reliance was placed on the transporter's letter dated 11.10.2006 (Annexure RW-1/8, pages 286-290), which stated that the consignment toppled due to uneven placement and improper lashing on the trailer. It was specifically pleaded that the complainant intimated the Opposite Party about the accident only on 18.10.2006, resulting in an unexplained delay of more than eight days, contrary to the policy requirement of immediate intimation (Annexure RW-1/6, pages 311-315). Upon intimation, the Opposite Party appointed M/s Comtec Surveyors, Chennai, who conducted site inspection between 19.10.2006 and 24.10.2006, and submitted a Preliminary Survey Report dated 28.02.2007 (Annexure RW-1/10, pages 316-350), observing that the damage occurred during unloading/loading and that the Gear Box was prima facie repairable, with damage appearing to be localized to one side. Subsequently, the complainant re-exported the Gear Box to the manufacturer, and a second surveyor, M/s Insurance Technical Services, was appointed. The Final Survey Report dated 30.08.2008 (Annexure RW-1/15) concluded that the cause of loss was unsecured and uneven loading, that the Gear Box was repairable, and that the estimated repair cost was only CHF 8,48,093, thereby holding that the claim for a new Gear Box or total loss was not justified. It was further submitted that the complainant lodged a claim for ?6,53,45,305/-, comprising ?4,77,12,949/- towards the cost of a new Gear Box and ?1,76,32,356/- towards customs duty. The Opposite Party denied liability for customs duty, stating that under Sections 23 and 74 of the Customs Act, 1962, the complainant could have availed duty drawback up to 98% upon re-export of the damaged goods (pages 441-470). Asserting the issue of double insurance, relying on documents showing that the complainant had another Marine Open Policy with United India Insurance Co. Ltd. for the period 01.10.2006 to 30.09.2007, covering plant and machinery including gear boxes, which was neither disclosed nor was United India Insurance impleaded as a party (pages 471-490). Finally, reliance was placed on the repudiation letter dated 18.05.2010 (Annexure RW-1/1, pages 491-495), whereby the claim was declined on the grounds of variation between declared values and balance-sheet figures, supplier-arranged insurance, breach of declaration conditions, and survey findings. Mr. Mehdiratta, drawing our attention to the declaration clause in the policy, stressed that it is obligatory Page 12 of 24 for the insured, under open marine policy, to declare each and every shipment or consignment forming part of the open cover and ensure payment of premia accordingly. This requires that the declarations are made serially when the risk/coverage starts and requisite premia are duly paid thereon. It has come on record, as pleaded in reply para 4(i) that the insured had shipments of nearly 65 crores as against the cover of only Rs. 50 crores and the shipments were not serially declared, resulting in loss of premia and violation of 64VB of the Insurance Act. The fact that the insured, without informing the OP, had also obtained another cover from another insurer which policy specifically covered gear-box, and resulted into arbitrary and selective declaration in violation of the declaration clause which is re-produced in para 4(b) of the reply. As per the declaration condition, premia are required to be paid on all consignments of import without any arbitrary exclusion or selection in which the insured demonstrably failed and it was therefore necessary for the insurer to have a complete reconciliation of the balance-sheet figures of imports and declarations made to the insured so as to verify that all import consignments are declared and premia thereon received. The insurer sent detailed mail on 23.03.2010 (pg 31) asking for specific details and explanation about wide variation between the balance-sheet figures of imports and those declared under the open cover for policy periods 2005-06 and 2006-07. While the imports in the balance-sheets were shown to be in the range of Rs. 668 crores and Rs. 883 crores respectively, the declaration to the insurer were only approximately Rs. 64 crores and Rs. 42 crores respectively. The insured's response to this critical query (pg 44) was vague and did not specifically and exhaustively met the concerns of the insurer. Only approximate figures and vague explanation that the imports pertained to "other businesses", that the figures in the balance-sheet were for the whole company etc was provided. Rather than providing complete reconciliation to establish the adherence to the policy condition of making the serial declaration of all imports, the insured provided only "approximate" figures that too only of Grasim South when admittedly all cement divisions are covered under the policy. The reply, on the face of it, is vague, perfunctory and unsubstantiated and therefore rightly formed the basis of repudiation. Neither in post-repudiation representation nor in the present complaint the insured has been apple to validly provide the true and bona fide picture of declarations and match the same with Page 13 of 24 the figures of import shown in the balance-sheet figures. On these premises, it is asserted that the repudiation was legally valid and justified, that there was no deficiency in service, and that the complaint deserved dismissal with costs. In rejoinder, it was submitted that the detailed explanation about the variation in the figures of declaration was provided, the verification of such declaration was also made by the Surveyor M/s Comtec and reported that all declarations were made. The point raised in the repudiation is merely an attempt to scuttle the valid claim of the complainant.
9. We have carefully considered the submissions made and the material placed on record. There is no dispute about the coverage under the policy and the damage to the cargo, though there is dispute with regard to the validity of enhancement of the per-vessel limit from Rs. 2 crores to Rs. 25 crores for which the covernote was issued on 20.10.2006 after the incident took place on 09.10.2006, which was applied for as per the insured on 03.10.2006. The insured claimed the full replacement value of cargo alongwith customs duty thereon, but, the insurer, without prejudice to the claim of validity of the repudiation, has stated and maintained that the gearbox was repairable and only 70% of the original value was stated to be the repair-cost by the manufacturer and therefore the whole claim of replacement is not justified or payable under the policy. The claim of customs duty, which can be claimed as drawback by the insured under section 74 and section 23 of the Customs Act, is also stated to be neither loss nor indemnifiable. The surveyor, however, has assessed the loss.
10. At the outset, we reject the preliminary objections to the complaint on two grounds. Firstly, there is no delay in filing the complaint. The request for reconsideration and raising the grievance to the statutory oversight authority IRDA are to be deemed active pursuit of the grievance. Similarly, though the intimation is "not immediate", the same is neither objected to nor made basis of repudiation by the insurer. The objections with regard to absence of credit balance in the account of the insured to cover the subject declaration, or suo motu sending back the cargo by the insurer, or the observations in the preliminary survey report regarding the damage being "minor" etc have neither any merits nor are these grounds forming part of the repudiation letter and hence are rejected. We would therefore deal only with the grounds raised and relied upon in the repudiation letter, which are only two.Page 14 of 24
11. The ground of the supplier having obtained the insurance or that the supplier was required to obtain the insurance is based merely on the wrong and convenient reading of the invoice. The invoice was on the FOB terms, and the supplier covered his own risk only till the cargo was loaded on the ship. The insured has also placed on record the communication from the supplier stating that no insurance for the post-loading period was obtained or required to be obtained by the supplier. The purchase order for the consignment, which stipulates that the complainant would obtain the insurance, supports the stand of the complainant. Otherwise also, the policy obtained by the insured itself specifies the coverage from "anywhere in the world to anywhere in India".
There is no merit in this ground.
12. We, however, find conclusive merit in the ground of vide variation in the figures of imports as shown in balance-sheet and those declared for the purposes of payment for insurance premia:
"In reference to the above, we would like to inform you that after a thorough scrutiny of the entire claim by the Competent Authority, it has been found that there is a wide variation between the value declared to us for insurance and your balance sheet figures of the imports.
Before we reproduce the the back-ground communications (pg 40-44 of the complaint and 42-44 of OP evidence) and the relevant declaration clause in the policy, we may observe that the ground of simple wide variation may appear innocuous and superfluous at the first sight, but after going through the pre and post-repudiation correspondence between the parties and after carefully going through the declaration condition, and after perusal of the pleadings and evidence (or lack of it) brought on record even in this complaint by the insured, and after hearing the parties, we have no doubt at all in our mind that the repudiation is validly made and that the insured has willingly avoided and failed in providing the critical and decisive information to the insurer further entitling the insurer to avoid the policy contract. The concern and enquiry of the insurer goes to the very root of the contract in as much as the declaration condition of the policy obliged the insured to "declare every consignment and pay premium", which obligation has been expressly made the foundation of the contract. The respective communications/condition are:Page 15 of 24
b. The said clause is reproduced here under "It is a condition of this Insurance that until completion of the contract the Assured is bound to deciare hereunder each and every shipment whether arrived or not and to obtain certificate of Insurance from the company's office, which has issued this Open cover or (under previous arrangement) from the company's branch office at place of shipment. Unintentional failure of the assured to report shipment to the company shall not void this open cover and such shipments are held covered subject to open cover conditions. "
The Company is entitled to premiums at the rates of this company on all shipments covered by this open cover whether reported or not.
Should the Assured willfully fail to report shipments under this Open Cover then the open cover as to all subsequent shipments, shall at company's option become null anc void"
Page 16 of 24--................................. Original Message............................... -- Subject: Claim No. 121200/21/07/10/90000018 A/c. Grasim Industries Ltd. From: [email protected] Date: Tuc, March 2.2010 11:28 am To: [email protected] Cc: [email protected] [email protected] This refers the personal meeting of the insured's representatives with our Gen. Manager Mr. S.B.L. Gouron 22.02.2010. The following clarifications & documents are required to be obtained from the insured to examine the claim further.
1. As per the insured's balance-sheet for 2005-2006 & 2006-2007. their imports at GIF value were as under:2
TRUE COPY t F Year 2005.2006 2006.2007 .Raw Materials - Rs. 540.87 crores Rs.539.00 crores Spare parts, components & coal - Rs.l 12.10 crores Rs. 189.37 crores Capital goods - Rs. 15.22 crores Rs. 154.97 crores Total - Rs. 668.19 crores Rs. 883.34 crores As against this, the insured's declarations during the open cover period from 01.07.2006 to 30.06.2007 amounted to Rs.48,15,89.210/- for GIF value and Rs. 15,51,26,823/- for duty and during theopen cover period of01.07.2005 to 30.06.2006 amounted to Rs. 31,10,25,476/- tor GIF va ue and Rs. 10,49.62,686/- for duty as mentioned in your note.
As there is vide variation between the amounts declared for insurance to us and the value of the imports a; shown in their balance-sheet, kindly obtain the insured's detailed clarification (substantiating with the documentary' proofs such as policies, certificates, declarations, etc.) as to how the insurance of the balano:
imports was done. Further, this should be noted that the figures given in the balance-sheets are only for GIF values and do not include the duty value, whereas the insured's declarations are for CIF-f-10%. Though the balance-sheet figures are in respect of b ah Fibre and Cement Divisions, the open cover issued to them is wide enough to cover all types of imports made by the insured.This aspect is also to be taken into account, r* - - ■ --------------- ---------------------------------------------------- --
Pto-<Se also obtain unit-wise balance-sheet figures of imports for April to June 2006 and April to June 200 7 : ratcly to arrive at the figures corresponding to the open cover period.
Please also obtain a copy of the Leiter of Credit along with its amendments., if any, in respect of the consignment in question on which the claim has been preferred with us.Page 17 of 24
Muiay Kishorc Anrawal 1 From: Malay Kishorc Agrawat (malay.t:[email protected]].
Snnt: Thursday, June 03,2010 5:50 I'M
To: 'arijan.dey@ne'.'sndia.co.ir>' ' ■ . .
Cc; '[email protected] '; 's.pradhan@nowihclifl:co.in';
, 'ramakrishna.karvitaadityabirla.com'; 'Dipankar Chowdliury' Subject: , Grasim - Gear Box Claim .
Attachments: rmase001.jpg ",
Shri A.ijrui Dey
.J Regional Manager MRO -ill
M/s. The New India Assurance Co Ltd.,
New India Centre, 3"* Floor,
17-A, Cooperage Road,
Mumbai - 400 001.
i Dear Shri Dey
Ref: Claim no 121200/21/07/10/90000013 - Claim for damage to the consignment of MAAG Planetary Reduction Gear Box CPV-17 We are in receipt: of your letter no MRO-111/20.10 dated 18"' May, 2010 repudiating ou above claim. ■ •. . ■ At the very outset we take strong exception to your remarks .made in the above letter Your allegations that "This matter was taken up with you for your detailed clarification:
wherein ultimately you haw: shown your inability to provide.'thd ' above details' is false incorrect and totally baseless. All your queries were duly, explained, but it appears tha the same has been ignored, intentionally or otherwise. ' • • You have sought to repudiate the claim on the following Iwo 'groiindsj: i i. There is a wide variation between the value declared, for insurance and valut declared in Balance Sheet. . - . • •i ' ii. Invoice for the import shows that insurance was arranged by suppliers also I;
t? ° '
. Your attention is drawn once again to our email dated 23.03:2010 wherein both the above
points were fully clarified. You have neither considercdThe sani'e, nor discussed with us you had any problems in understanding the explanation-. Instead your dated IS11 f May,2010 contains vague and generalised cummeuis,, whfoh'tlrr: not correct and do no present any ground at all for repudiation of the claim.
You are, therefore, requested to .rectify th:: civrrwotw repudiation uad settle tlih: Mu; pending claim i<iitued.ia-'.nly mid without lurttv:!- dtitty.
I Looking forward to your assurance ut' l»<:at se.'/iccj:: and settlement oi' Uii: claim.
Warm Regard.':, Malay Kishora Agrww.il Smnruddhi Cement l.td (erstwhile Cement Division of Cninim Industries Qd) TRUE COPY Ahum Cento:, 8 Wing, '.bid f''|(ii,r Mahukali Caves Road Andheri Must. Miirniiai . <jnhO').'t Phone: 9 I AtiO t yrstii c y'Vi VSNOD JUWALE I T/O/r O*'/ • Aadvodate C/o. ei2, Cnn'.i'.srco House Nagind as Raad.
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13. The policy conditions, particularly the Declaration Clause, required the insured to declare each and every shipment, whether arrived or not, and to do so in a timely and serial manner. From the record, it is evident that although the consignment was shipped on 17.08.2006, the declaration was made in October-2006, and no declarations were made during September 2006. This fact stands admitted. It was explained that it is a normal practice to declare the consignment in the "next month of receipt" of consignment, without explaining or substantiating why should it be so late and why could it not be "declared" immediately on loading or despatch when the risk under the policy commenced. The policy clearly mandates the insured to declare each and every consignment and each import which for obvious and logical reasons has to be in chronological order unless explained why it is otherwise. The declarations which govern the receipt of premia by the insurer, are to be made bona fide and fully transparently and carefully as the open policy covers the risk also for the declarations missed out bona fide and unintentionally. It is the bona fides of the insured on which the insurer has put trust and has relied on and in fact receives its consideration which is the foundational premise on which open policy is based. The insurer pointed out that the import as per the balance-sheet is nearly 10 times the declarations made to the insurer and sought explanation in light of the condition that intentional non-declaration would entail lapse of policy and of subsequent liability of the insurer. The insurer found the explanation and information provided by the insured to be inadequate and unsatisfactory. We, after examination, agreeing with the insurer, find that the insured in reply to the said query has not at all satisfactorily explained the alleged variation of nearly 10 times the value declared for two insurance periods of 2005-06 and 2006-07.
The insurer is right that the reply is vague and unsubstantiated. As can be seen, the insured in the "explanation" stated that no further information or explanation can be provided as the matter is many years old, which we also find it to be not credible and and merely a ploy to avoid providing categorical and specific information. If the balance-sheet figures are for the whole company, as was explained, simply a statement to that effect is meaningless, and it was only fair to provide a substantiated bifurcation of the figures and provide categorical figures and details of import consignments separately for the cement units. We also note that the insured asked for the figures of Page 21 of 24 two policy periods but the insured still provided the figures only for policy period 06-07 on "approximate" basis and that too only for Grasim South Unit and categorically avoided providing import figures of other seven cement units covered under the policy. Even these stated imports of "approximately" Rs. 25.44 crores have not even been attempted to be linked transparently with declarations, if any, made and no reason or explanation is also provided for such failure. Additionally, it is stated without any substantiation, that import of coal/petcock worth Rs. 17.71 crores is "not covered under the policy", which was in fact an issue for the insurer to examine once complete details as called for are made available, particularly in light of the following coverage under the policy (for 3 units, which coverage was subsequently expanded/increased to cover other 5 units), and the requirements of the declaration clause in the policy: Also, we, in light of the following coverage under the policy, are unable to comprehend as to how the insured could avoid providing the complete details of all consignments received when the insurer wanted to verify these very facts on the basis of the information to be collated and provided by the insured:
nvnaiu, MMr«snin Journey Froe Jottroey To ■ Mode Of Transit.
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LUBRICANTS, STOCKS COVERED FOR VIKRAN CEMEKT, ADITYA CEMENT AND RAJASHREE CEMENT.
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13.1 Moreover, we also note that the figures provided are also merely on estimate basis and are wholly unsubstantiated. This inadequate and superfluous explanation evades our comprehension and, in our opinion, goes to the root of the matter. Open policy rests on the fundamental premise of the bona fide, timely, and full declarations of all the consignments of imports covered under the policy, and if the insured is of the opinion that a particular import is not covered under the policy or is desired by him to Page 22 of 24 exclude from coverage, the same too should be so intimated before the start of the voyage and not subsequently unilaterally when the consignment has safely arrived.
Otherwise, the insurer having covered the risk, is left in the lurch without receiving the rightful premium due on that consignment which it covered. This is the very concern of the insurer which has been left unaddressed by the insured. It is for the insured to whole-heartedly and fully establish its own bona fides by substantiating that its conduct has been careful and bona fide in not depriving any due premium on any consignment of import and has made all requisite declarations bona fide. More so, when admittedly even the consignment in question is declared after the incident and when the total import is found by the insurer to be ten times the value of declarations. The figures of imports of all the other cement units also which are covered under the policy, and details and bifurcation also of the imports allegedly "not covered under the policy" or "which are not relevant" could and should have been provided wherein the insured has willingly and unreasonably failed. Of course, the surveyor had made some verification for a single month and found the conduct of the insured qua making of declarations made by the insured to be satisfactory and "as per management policy". But the insurer thereafter found the same requiring deeper scrutiny. After going through the Surveyor's verification report, we find nothing uncalled for, unreasonable or arbitrary in the insurer's HO's further queries with regard to a matter, which, as rightly urged, goes to the very declaration condition of the policy and root of the matter. The information and full details were simply denied "after so many years" on the ground of the matter being very old. We do not find this stand of the insured to be bona fide or justified. The insured, being a public limited company, is bound to have a responsible accounting department and the details and reconciliation of declarations made with the figures of imports was absolutely essential for the insured to have firstly maintained, and if not maintained, prepared and submitted as was requisitioned by the insurer. The denial to prepare and provide the collated information is irresponsible and unjustified. Even after the repudiation, in the letter dated 03.06.2010, the insured merely relied on the explanation already offered without in anyway further clarifying the position or furnishing the details as called for, which necessitated the insurer to maintain the Stand of repudiation. No substantial ground or details with regard to the compliance of the query of the insurer Page 23 of 24 were raised/provided in the complaint also. Even the reply to the complaint filed by the insurer, particularly in para 4(i) and para 4(k) raised the same issue which, even in rejoinder, in our opinion, is not categorically explained or dealt with or substantiated by the complainant. The perusal of rejoinder para 5(d) and (e) reveals that it merely mentions that the ground raised by the insurer is a new ground, when in fact we find that this is the fundamental ground which stood raised in the email of the insurer dated 23.03.2010 and reiterated in repudiation letter as also in rejection of the representation of the insured dated 03.06.2010. Hence, we are unable to find any invalidity or illegality in the repudiation of the claim on the basis as mentioned in the repudiation letter. As such, there is no deficiency in service on the part of the insurer in repudiating the claim on the basis of failure of the insured in providing due explanation, details and requisite evidence despite the policy condition of declaration requiring the insured to declare all the consignments and exclude none, and to maintain and provide such information and to pay premia on each consignment. In the absence of this substantiation by the insured regarding the payment of premium due to the insurer on each consignment of import by all the cement units during two policy periods as mandated by declaration clause of the policy, by way of providing complete details and explanation about the "wide variation"
between the figures of balance-sheet and the declarations actually made by the insured, the insurer has rightly repudiated the claim.
14. In view of the foregoing discussion and the findings recorded hereinabove, we find that the consumer complaint is devoid of merit. We hold that the repudiation of the insurance claim by the Opposite Party vide letter dated 18.05.2010 was legal and justified, and we further find that no deficiency in service or unfair trade practice is made out against the Opposite Party. Accordingly, we dismiss the consumer complaint. No order as to costs.
Sd/-
( A.P. SAHI, J. ) PRESIDENT Sd7- 1 l ( BHARATKUMAR PANDYA) Pawan/aj MEMBER Page 24 of 24