CONSUMER DISPUTES REDRESSAL FORUM-II
Udyog Sadan, C-22 & 23, Qutub Institutional Area
(Behind Qutub Hotel), New Delhi-110016.
Case No. 522/2005
M/s Medical-E- Commerce Solutions Pvt. Ltd.
(Through its authorized representative Sh. Satvir Singh)
84, Khijrabad, New Friends Colony,
New Delhi …… Complainant Company
Versus
M/s ECGC India
NBCC Place, South Tower,
4th Floor, Pragati Vihar, Bhisam Pitamah Marg,
New Delhi-110003 ……Opposite Party
Date of Institution : 11.05.2005 Date of Order : 20.08.2015
Coram:
Sh. N.K. Goel, President
Ms. Naina Bakshi, Member
O R D E R
Complainant Company is formed and incorporated under the Companies Act. The OP approached it to take an insurance policy of Rs.75,00,000/- for the buyers in U.S. The OP had designed the policy specifically for providing insurance to the companies, who are doing business in other countries and can have some payment problems. On persuasion of the OP’s representative, Complainant Co. took an insurance policy No. SCR011009930 for Rs.75,00,000/- which was valid from 16.12.2002 to 31.02.2004 with the specific buyer cover note of Rs.20 lakhs for M/s Medical- E-Commerce Solutions Group Inc., USA, 4189, East Santa Ana Street, Suite D, Ontario CA, 91761. Due to cash problems the US Co. (i.e. Medicom USA) for whom the complainant company had taken the specific cover of Rs.20 lakhs, did not make the payment to them and even after frequent follow ups through email, telephone calls, personal meetings, no payment was sent by the US Co. to them. They also registered an FIR against the US Co. for not making payment. Since no payment was received, the complainant through its Director Sh. Rajat Bhatnagar sent a letter dated 29.10.2003 to the OP to get their payment recovered. They again sent a letter to the OP on 30.12.2003 requesting the OP to make the payment as the party had defaulted in making payment. They sent so many reminders including personal meetings but till date the OP has not made any payment to them which amounts to deficiency in service and negligence. On 01.03.2005 they sent a legal notice to the OP to make the payment but OP has not made any payment till date. Complainant has prayed that OP be directed to pay insured amount of Rs.20 lakh alongwith interest @ 15% compoundable interest per month alongwith costs to the Complainant
OP in its written statement has stated that the Complainant is not a consumer as defined in section 2(d)(ii) of the Consumer Protection Act as the complainant had availed the services for commercial purposes. It is stated that the complainant had played a fraud on the OP by suppressing the fact that the foreign buyer, Medical E-Commerce Group, Inc USA, had common Directors. One Mr. H. K. Khan, the Executive Chairman of the overseas buyer company was also one of the Directors as well as the majority share holder of the Complainant Co. If they had provided this information to them at the time of issuance of the policy they would have not issued the policy to the Complainant. On the other hand, Mr. Sunil Nigam was one of the Directors of the Complainant Firm and also of the overseas buyer’s Company. It was informed vide letter dated 13.1.2003 by the OP that Sh. Sunil Nigam had resigned from the directorship and the OP promised to submit the proof thereof but till date they have not submitted the same. Clause 2 of the policy reads as under:
“Disclosure of facts: Without prejudice to any rule of law it is declared that this policy is given on condition that the insured has at the date of issue of this policy disclosed and will at all times during the operation of this policy promptly disclosed all the facts in any way affecting the risk insured”
OP has further stated that it is common law of principles of Insurance that it is the duty of the proposed assured to disclose to an insurer all material facts which has bearing on the subject matter of the risk. If they were aware of one of the Directors being common on the board of buyer as well as of the exporter they would have not issued the policy. The Complainant had not paid premium for the second shipment dated 31.01.2003 which is a necessary condition under clause 10 of the policy which reads as under:-
“ Incident of premium and payment of additional premium: The insured shall be liable to pay premium, at the rates set out in Schedule-II hereto, or, as the case may be, at such other rates for the time being in force, on the gross invoice value of the all shipments to which this policy applies forthwith on the making shipments and shall pay to the Corporation additional premium, if any, that may become due and payable after adjustment to the Minimum Premium referred to hereinabove, while submitting the relevant declaration of shipment as per clause 8 (a) of this policy.”
They informed the Complainant vide letters dated 07.06.03 that there was a premium shortage of Rs.11,771/-. Thereafter they sent reminders dated 22.07.2003, 02.09.2003, 14.10.2003, 07.11.2003, 09.12.2003, 09.02.2004, 02.03.2004, 09.04.2004, 03.06.2004, 05.07.2004, 10.08.2004, 06.09.2004, 11.10.2004, 08.11.2004, 07.12.2004, 10.01.2005, 11.02.2005 and 06.04.05 but they had not paid the premium and therefore the second shipment remained unadjusted till date. Moreover, late declaration of shipments by them is also violation of clause 8 (a) of the policy. Complainant also submitted the declaration of payments delayed for one month or over (Form No. 205) late by 20 days which is also a necessary condition under clause 8 (b) of the policy. OP has prayed that the complaint may be dismissed with an exemplary cost.
Complainant has filed rejoinder to the written statement of the OP.
Affidavit of Sh. Satvir Singh has been filed in evidence on behalf of the Complainant while affidavit of Sh. Rohit Pandya, Regional Manager has been filed in evidence on behalf of the OP.
Written arguments have been filed on behalf of the parties. We have heard the arguments on behalf of the parties and have also gone through the file very carefully.
On 10.4.15 we asked the Proxy Counsel for the Complainant to cite case law on the point that the complaint does not pertain to commercial transaction. He filed copy of the judgment delivered by the Hon’ble Supreme Court in civil appeal No. 1879/2003 titled as Karnataka Power Transmission Corpn. & Anr. Vs Ashok Iron Works Pvt. Ltd. on 9.2.2009. We have gone through the said judgment very carefully. From the perusal of Para 24 of the judgment it becomes crystal clear that the effect of the expression ‘but does not include a person who avails of such services for any commercial purpose’ inserted in Section 2(1(d)(ii) of the Consumer Protection Act wherein the term ‘consumer’ has been defined was not considered because the said amendment was not applicable in the facts and circumstances of that case since the controversy related to the period prior to amendment. In the present case, the controversy arose sometimes after 16.12.2002 i.e. after the insertion of the above expression in the definition of the ‘consumer’ as defined in the Consumer Protection Act. Therefore, we hold that the judgment relied on behalf of the complainant is not applicable to the facts of the present case.
Without going into any further discussion, we hold that the transaction in question entered into between the complainant and the OP was a commercial transaction since the complainant had taken it to guarantee the payment for the buyers in U.S. and hence the complainant had taken the said policy for the purpose of its commercial activities.
In view of the above discussion, we do not want to discuss other issues. We dismiss the complaint.
Let a copy of this order be sent to the parties as per regulation 21 of the Consumer Protection Regulations. Thereafter file be consigned to record room.
Announced on 20.08.15.
(NAINA BAKSHI) (N.K. GOEL) MEMBER PRESIDENT
20.8.2015
Present – None
Vide our separate order of even date pronounced, the complaint is dismissed. Let the file be consigned to record room.
(NAINA BAKSHI) (N.K. GOEL) MEMBER PRESIDENT
