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The facts CC No. 1546/2016, dated 13.07.2020.

Ministry of Commerce and Industry, Directorate General of Foreign Trade, Foreign Trade Policy, Handbook of Procedures (Volume I) w.e.f. 27.08.2009 – 31.03.2014.

2. The appellant is an exporter of fish meat and fish oil, whereas the respondent (hereafter, “ECGC”) is a government company (under the control of the Ministry of Commerce and Industry, Union Government). ECGC provides a range of credit risk insurance cover to exporters. On 13.12.2012, the appellant paid premium to ECGC for the Policy (bearing no. 0540000143), which covered foreign buyer’s failure to pay for goods exported. The coverage of this Policy, (with effect from 14.12.2012-13.12.2013), was for ₹ 2.45 crores. The vessel (Tiger Mango Voyage

62) set sail on 15.12.2012. The Bill of Lading (hereinafter, “BOL”) was prepared on 19.12.2012, with a line specifying the date of ‘onboard’ (i.e., date on which vessel commenced loading the goods in question on board) as 13.12.2012. The vessel delivered the goods on 22.01.2013. The overseas buyer defaulted on payment. The appellant then lodged a claim with ECGC on 14.02.2013.

3. ECGC rejected the appellant’s claim on several levels; with the final rejection by the Independent Review Committee (hereinafter, “IRC”) on 28.03.2015. IRC’s view was that the date of ‘despatch / shipment’ (provided in the Policy) was not clearly defined, and it placed reliance on the definition contained in the DGFT Guidelines. For containerized cargo, the same was to be interpreted as the date of ‘Onboard Bill of Lading’3, which in the present case was 13.12.2012. This was just a day prior to the effective date of the Policy, i.e., 14.12.2012. It was therefore reasoned that the appellant was not entitled to the claim amount. The appellant, feeling aggrieved, complained of deficiency of service, and approached the NCDRC for compensation. ECGC resisted the claim.

ECGC, being a government insurance company specifically providing coverage for exports, had to thus abide by the DGFT Guidelines, including the definitions contained in them. On an application of the definition of date of ‘despatch / shipment’ under the DGFT Guidelines, it was clear that the date to be construed was 13.12.2012, which was a day prior to the effective date of the Policy.

10. ECGC relied on Polymat India (P) Ltd. v. National Insurance Co. Ltd11 where this Court, while interpreting the term ‘factory-cum-godown’ and the (2005) 9 SCC 174, para 21.

of the insurance policy, that fix the responsibility of the insurance company must also be read strictly. The contract must be read as a whole and every attempt should be made to harmonise the terms thereof, keeping in mind that the rule of contra proferentem does not apply in case of commercial contract, for the reason that a clause in a commercial contract is bilateral and has mutually been agreed upon. (Vide Oriental Insurance Co. Ltd. v. Sony Cheriyan [(1999) 6 SCC 451], Polymat India (P) Ltd. v. National Insurance Co. Ltd. [(2005) 9 SCC 174], Sumitomo Heavy Industries Ltd. v. ONGC Ltd. [(2010) 11 SCC 296] and Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran [(2012) 5 SCC 306].)”14 (emphasis supplied) Thus, according to the counsel for ECGC, the date of shipment being a day prior to the effective date of implementation of the Policy, ECGC was not bound to honour to claim.