1. Heard Mr. Siddharth Sinha, Advocate for the complainant and Mr. D. Varadarajan, Advocate for the opposite party. 2. Union of India through Chief Mechanical Engineer, Railway Wheel Factory, Yalahanka, Bangalore has filed above complaint for directing the ICICI Lombard General Insurance Company Limited (the opposite party) to pay (i) Rs.34582757.5818 with interest @ 18% per annum from the date of loss to the date of payment as the insurance claim; (ii) Rs.1 Crore, as compensation for the loss of reputation in global market; (iii) Rs.2 lacs as litigation costs; and (iv) any other relief which is deemed fit and proper in the facts and circumstance of the case. 3. The complainant stated that the Railways Board, Ministry of Railways, Union of India had invited tender for Marine Import Insurance (Open) Policy from the various insurance companies. Ministry of Railways accepted the tender of ICICI Lombard General Insurance Company Limited as submitted on 13.03.2009, through letter dated 27.03.2009. In pursuance of the letter dated 27.03.2009, ICICI Lombard General Insurance Company Limited issued Marine Import Insurance (Open) Policy for the period of 01.04.2009 to 31.03.2010 for a sum insured of Rs.10000/- Crores. Limit Per Sending was Rs.39/- Crores, from anywhere in world to anywhere in India. This Insurance Policy covered the 24 railway’s factories including the Rail Wheel Factory, Bangalore, mentioned at Serial No. 21 of the list attached to the policy. As per letter dated 27.03.2009, the quarterly advance premium (called compulsory deposit account-CDA) based on the estimated imports for each quarter was required to be paid by each unit to the insurance company through account payee cheque. The Rail Wheel Factory, Bangalore entered into an import contract dated 20.03.2008 with M/s. Groupo Danobat Lealde S Coop., E-48280 ISPASTER (Bizkaia), Spain (the supplier) for supply of ‘Axle Machining Line’, in which, name of the insurer was mentioned as “M/s. Reliance General Insurance Company Limited”. However, supply of ‘Axle Machining Line’ was delayed and in the meantime new insurance policy was issued by the opposite party, as such, Rail Wheel Factory, Bangalore deposited Rs.2584184/- towards the quarterly advance premium, in the CDA. In pursuance of the aforesaid contract, the supplier shipped ‘Axle Machining Line’ in 23 securely packed packages on 05.09.2009 through Bill of Lading No.9906BI000048 dated 05.09.2009. The supplier, through letter dated 07.09.2009, intimated the opposite party on 08.09.2009 in respect of supply of the consignment under above contract shipped on 05.09.2009. Port of unloading of consignment was Mumbai Port. The consignment reached at Mumbai Port on 20.09.2009. The complainant, vide letter dated 22.09.2009, requested the opposite party to issue the insurance policy relating to the consignment as well as bill of premium along with it, again giving full details of consignment and its value as Rs.541758914.57p. The opposite party was requested to send its surveyor on 01.10.2009 at 11:00 am at the time of unloading of the consignment from the vessel for joint survey. The opposite party appointed M/s Cunningham Lindsey International Pvt. Ltd., Bangalore as the surveyor, who fixed 05.10.2009 for joint inspection. Joint inspection was conducted and joint inspection memo was prepared on 05.10.2009, in which, Package Nos. 5/23 and 19/23 were found damaged. On opening the damaged packages, it was found that in Package No.5/23, only wooden package was damaged and the machinery parts contained in it were intact, while all the components inside Package No.19/23 was found broken. However, it was observed that working condition of the components would be observed after commissioning. The damaged packages were repacked and all the packages were transported to Rail Wheel Factory at Yalahanka, Bangalore. On reaching the consignment at factory premises, the opposite party was informed. The complainant lodged a claim for damaged component to the carrier. The complainant made insurance claim of damaged consignment to the opposite party along with the necessary documents for assessing the loss vide letter dated 12.11.2009. The opposite party, by letter dated 18.12.2009, refused to register the claim on the ground that the consignments were shipped on 05.09.2009 while declaration in respect of shipment was given on 22.09.2009 although under warranty of the policy, the declaration had to be given within 15 days from the date of shipment and in view of Section 64VB of the Insurance Act, 1938, the insurance risk would be assumed only on payment of premium. As the declaration was not made timely as such no insurance certificate was issued. The complainant, vide letter dated 04.01.2010, requested to review the matter inasmuch as the information relating to the shipment of consignment was given to the concerned authority on 08.09.2009 and the premium of Rs.2584184/- was already deposited in advance in CDA. Therefore, none of the reasons stated in the letter dated 18.12.2009 was correct. Central Organization for Modernization of Workshop, New Delhi also wrote a letter dated 25.03.2010 for reconsidering the claim. Thereafter, the surveyor M/s Cunningham Lindsey International Pvt. Ltd., Bangalore conducted physical verification of the damaged component on 12th and 13th April, 2010 and prepared joint physical verification report and found that there was total damage which was beyond satisfactory repairs. However, the opposite party, through e-mail dated 14.10.2011, informed that the claim was reconsidered and was found ‘not payable’. The complainant gave a legal notice to the opposite party on 31.05.2013. In spite of service of the notice, nothing was done, then this complaint was filed on 13.03.2014, alleging deficiency in service. 4. The opposite party filed its written reply and contested the complaint. In the written reply, the opposite party admitted that in pursuance of the tender invited by the Ministry of Railways, the opposite party gave the bid which was accepted by the Ministry of Railways vide letter dated 27.03.2009 and the opposite party, vide letter dated 30.03.2009 demanded appropriate amount of premium and issued the Marine Import Insurance (Open) policy No.2002/1/4000832/01 on 10.04.2009 for the period from 01.04.2009 to 31.03.2010, under which ‘Limit Per Sending’ was Rs.39/- Crores. Under the warranty of the Policy, the insured had to declare each and every shipment and obtain policy certificate of it within 15 days of the shipment. The claim is payable only in respect of which, policy certificate was issued and shipment is under ‘Limit Per Sending’. In the present case, total value of the consignment was more than Rs.49.87/- crores and the information of the consignment shipped on 05.09.2009 was given to the opposite party only through the letter dated 22.09.2009, received on 29.09.2009. The complainant has violated terms of the policy and warranty. On receipt of claim intimation, the opposite party deputed a surveyor i.e. M/s. Cunningham & Lindsey International Pvt. Limited. The surveyor submitted Preliminary Survey Report dated 06.11.2009 and Final Survey Report dated 25.11.2009, mentioning that there was violation of terms of the policy in respect of ‘Limit Per Sending’ and breach of Warranty No.xiv. Had the shipment been declared vide letter dated 07.09.2009, then there was no reason for not giving reminder for policy certificate. It was duty of the Insured to declare each and every shipment and obtain policy certificate of the consignment after depositing premium in the CDA. The opposite party, by letter dated 18.12.2009, informed the Insured as policy certificate in relation of the damaged consignment was not issued as such the claim could not be registered. The letter dated 07.09.2009 has been issued by the supplier in Spain and its acknowledgement date in India is 08.09.2009, which raises serious doubt of as to its veracity, which cannot be decided in summary proceeding. The mode of sending of this letter has not been mentioned. The said letter is not marked to any concerned office/person of the opposite party. The complainant is required to prove its authenticity. The opposite party is of bonafide belief that the said letter is not genuine and might have been obtained later on post event of loss. The opposite party received letter dated 22.09.209 on 29.09.2009. As the complainant requested for appointment of the surveyor, the opposite party appointed M/s Cunningham Lindsey International Pvt. Ltd., Bangalore as the surveyor, who submitted Immediate Loss Advice dated 01.10.2009. Liability for reimbursement of loss depends insurance certificate and compliance of its terms and conditions and not due to appointment of the surveyor. Preliminary issues that the complainant is not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986 and the complicated issue of fact cannot be decided by this Commission, are raised. However, the opposite party has not admitted deposit of advance premium by the complainant company as stated of Rs.2584184/-. 5. The complainant filed Rejoinder reply, Affidavit of Evidence of A. Chandrappa, and documentary evidence. The opposite party filed Affidavit of Evidence of Vikash Goel and documentary evidence. The complainant filed a written argument and both the parties have argued at length. 6. We have considered the arguments of the counsel for the parties and examined the record. The opposite party repudiated the claim vide letter dated 18.12.2009, on the grounds that the consignments were shipped on 05.09.2009, while it was declared to the opposite party through a letter dated 22.09.2009, received on 29.09.2009. As the insurance certificate has not been issued, therefore, under Section 64VB of the Insurance Act, 1938, the risk cannot be assumed. Preliminary issue has no merit as it has been held by Supreme Court in National Insurance Company Limited Vs. Harsolia Motors, (2023) 8 SCC 362 that contract of insurance is a contract of indemnity and not for profit motive as such, the Insured is a consumer. 7. Under the letter dated 27.03.2009, which was accepted by the opposite party and policy was issued, the quarterly advance premium had to be deposited in the compulsory deposit account (CDA) of the insurance company, based on estimated imports for each quarter by each unit through an account payee cheque. In the letter dated 18.12.2009, deposit of advance premium relating to the consignment was not questioned and only objection was that the consignment was not declared to the opposite party within 15 days of shipment and no certificate of insurance was issued before loss. But at the time of arguments, the counsel for the opposite party seriously disputed deposit of advance premium relating to the damaged consignment. The complainant, in paragraph-5 of the complaint, stated that the advance premium of Rs.2584184/- was deposited by the complainant company Rail Wheel Factory, Bangalore, relating to the consignment under the contract dated 20.03.2008, which was shipped on 05.09.2009 by the supplier. Although paragraph-5 has been admitted in the terms that (admitted only to the extent as to what are matters of genuine record). In light of the admission of the opposite party in its paragraph-5 of written reply, the deposit of the advance premium is proved. 8. The second ground for repudiation was that the consignment was shipped on 05.09.2009, while its intimation was given through a letter dated 22.09.2009, received on 29.09.2009. The complainant filed the letter dated 07.09.2009, issued by the supplier as Annexure R-5 to the complaint. It bears the signature and seal of the officer of the opposite party, i.e., the Area Head, who finalized the deal relating to the issue of the policy. The signature and seal of the Area Head have not been denied, only a vague reply was given in this respect in paragraph 7 of the written reply, stating that it might have been procured post the event of loss. The Area Head was the best person, who could have admitted or denied this document. The opposite party has avoided to file the affidavit of Area Head denying this document or stating that it was signed by him post intimation of loss. The opposite party has withheld best evidence in this respect as such adverse inference has to be drawn against it. Therefore, the ground mentioned in the repudiation letter, that the claim was not intimated within 15 days of the shipment, is incorrect and not liable to be accepted. 9. The opposite party took a new ground, which had not been taken in the repudiation letter that the ‘Limit Per Sending’ was Rs.39/- crores inhte policy. While, in the present case, the value of the consignment shipped on 05.09.2009 was exceeding Rs.54 crores. Thus, there was a breach of the policy condition. It may be mentioned that if the value of the insured goods was found to exceed the limit of the insurance, then underinsurance has to be applied. Underinsurance has been specifically provided under Section 81 of the Marine Insurance Act, 1963. In the present case, if the consignment was underinsured, then the clause of underinsurance can be applied, but on this ground, the claim cannot be repudiated. The counsel for the opposite party relied upon the judgment of Supreme Court in Export Credit Guarantee Corporation of India Limited Vs. M/s Garg Sons International, (2014) 1 SCC 686, in that case the claim was found falling within the exclusion clause. This case is not applicability in present case. 10. In joint inspection memos dated 05.10.2009 and 13.04.2010, consignment no. 19/23 was found fully damaged beyond satisfactory repair, as such its claim was payable. The opposite may assessed the loss on the basis of invoice of the consignment and other incidental expenses for import of the consignment as per terms of the policy. ORDER In view of the aforesaid discussions, the complaint is partly allowed. The opposite party is directed to pay the value of Consignment no. 19/23, which was found fully damaged beyond satisfactory repair in joint inspection memos dated 05.10.2009 and 13.04.2010, after applying underinsurance as well as the excess clause as per the terms of the policy, along with interest @ 9% per annum from May 2010 till the date of payment along with cost of Rs.2 lakhs, within a period of two months from the date of this judgment. |
