ORDER
(Passed this on-01st December, 2016)
Shri Shekhar P. Muley, President.
01. This is a complaint of deficiency in service against TATA AIG General Insurance Company, the Opposite Party, for disallowing insurance claim of the complainant.
02. Facts in short are that the complainant is one of the largest manufacturing company of sweets, namkeen, etc and it has its own factory where raw materials are brought and are processed and made into final products. The complainant hired insurance service to secure raw materials for consignment under policy known as All Risk & SRCC Marine Cargo Open Policy. The first policy was for the period from 02.09.2008 to 01.09.2009 for the sum assured Rs.-4 crores. After expiry of the first policy, the complainant asked the O.P. to renew the said policy for the period from 02.09.2009 to 01.09.2010 on the same basis covering the same risk and same terms and conditions for the sum assured Rs.-3.50 crores. On payment of premium the policy was renewed for aforesaid period. It is further case of the complainant that as per the order, a consignment of 150 bags of Moong Dal and 240 bags of Masoor Dal was dispatched by a transporter by two trucks on 18.9.2010. The consignment reached the destination at the complainants’ factory on 25.09.2010. While unloading the materials it was noticed that the bags were badly soaked by rain water. The O.P. was immediately informed and was asked to depute a surveyor for assessment of loss. Accordingly a surveyor visited the spot and after due inspection assessed the loss to the tune of Rs.3,22,833.50 for Moong Dal and Rs. 78,163/- for Masoor Dal and accordingly a report was submitted to the O.P. on-04.11.2010.
It is further stated by the complainant that the insurance policy was not received till the occurrence of the incident. So the O.P. was asked to provide the policy immediately to fill up the claim form. The complainant received the policy along with the conditions on 27.09.2010. While going through it was found that the O.P. unilaterally had changed the condition “C” without prior permission, consent and knowledge of the complainant. The complainant therefore wrote a letter to the O.P. asking it to delete the said condition, but to no avail. The complainant asked the O.P. to settle the claim immediately. But the O.P. informed the complainant that the claim fell outside the scope of the policy in view of the condition ¨Excluding Rain Water Damage¨. It is stated that under All Risk policy rain water damages,
loss due to mould, mildew, fungus, infestation are covered. The O.P. cannot change the condition unilaterally after occurrence of the incident. It amounts to unfair trade practice and by not settling the claim and not giving quality service or warranty of service the O.P. is also guilty of deficiency in service. The complainant has therefore claimed a sum of Rs.-4,00,996.50/- compensation as assessed by the surveyor with 18% interest from the date of incident,Rs.-1,50,000/- for unfair trade practice by unilaterally changing the condition and cost of Rs.- 50,000/-.
03. The O.P. contested the matter by filing written version. While admitting the policy taken by the complainant, it is stated that the subsequent policies were renewed subject to the terms, conditions, warranties and exclusion clauses as stipulated in the policy. Placing of order for Moong Dal and Masoor Dal and dispatching the same by trucks is denied. It is not specifically denied that while unloading the consignment the same was found badly soaked by rain water. On getting intimation a surveyor was appointed, who conducted the survey and submitted his report. As per the report the consignment was affected due to rain water, Dal was having lumps, discolored and had fungus formation. Accordingly loss was assessed by him. It is denied that the complainant did not receive the policy till the occurrence of the incident. It is also denied that the O.P. unilaterally changed the policy condition. It is stated that the policy for the period 02.09.2009 to 01.09.2010 was issued on 07.09.2009 and was sent to the complainant. Alterations/ additions/changes made in the policy were incorporated in the policy. After expiry of the said policy, on the request of the complainant, the policy was renewed for the period 02.09.2010 to 01.09.2011 and was issued on 24.09.2010. The terms, conditions and exclusion clauses in the said policy were same as were in the policy of previous year. It is denied that it adopted unfair trade practice by unilaterally changing the condition regarding ¨excluding rain water damage¨ or there was any deficiency in service. Denying all other adverse allegations, it is urged to dismiss the complaint.
04. We have heard submissions of the counsels for the parties and perused averments, rejoinder and documents. Upon considering the same we record our findings and reasons as under-
FINDINGS AND REASONS
05. The dispute is limited to the question of policy condition, particularly the exclusion clause ¨Excluding rain water damage¨. Therefore without discussing much on other facts, we straight way come to the policies and their renewal. Admittedly, the first policy period was from 02.09.2008 to 01.09.2009. In this policy the said exclusion clause of rain water damage was not incorporated. Rest of the exclusions are not that material. The second policy was from the period 02.09.2009 to 01.09.2010. The complainant on 01.09.2009 had asked the O.P. to renew the second policy on same basis, covering same risks and same terms and conditions. However, in the second policy one more exclusion clause regarding rain water damage was incorporated. According to the complainant this additional clause excluding rain water damage was included without its permission or consent and without its knowledge. Therefore, it is contended that the O.P. cannot take shelter of this exclusion clause to refuse the claim.
06. It appears that the complainant has either some confusion regarding facts or purposely made it. It is to be noted from the complaint itself that the incident of damage to the consignment was occurred on 25.09.2010. That is during existence of third policy period. Our emphasis is on the underlined words. The third policy period was from 02.09.2010 to 01.09.2011. When the incident occurred, the second policy as well as its terms and conditions were very much in the knowledge of the complainant. The second policy was issued on 07.09.2009 and third policy was issued on 24.09.2010. Learned counsel for the complainant by referring to the second policy contended that this policy was received on 27.09.2010 i.e. after occurrence of the incident. He did not refer to the second policy, but by referring to the third policy he contended that when the complainant asked the O.P. to renew the first policy on the same basis and conditions vide letter dated 01.09.2009, the exclusion clause as to rain water damage was incorporated without knowledge of the complainant. This is absolutely incorrect submission. Even if we assume that the exclusion clause was incorporated unilaterally in the second policy, it is still not digestible that during the entire period of the second policy the complainant was not aware of the said clause. Learned counsel for the O.P. has rightly contended that it is not possible that a big manufacturing company, like the complainant, would not care to go through the terms, conditions and exclusion clauses of the policy before paying huge premium. The policy was taken for Rs.-3.50 crores. The policy was renewed for third year on the same terms and conditions, which means the complainant was aware of the exclusion clause. Otherwise it would have raised objection or would have gone for policy of other company. Thus from the documents it is confirmed that it was during existence of the third year policy the incident occurred. The disputed exclusion clause was already incorporated in the previous policy. Since there was no objection to that clause during the entire period of that policy and on the same terms and conditions third policy was asked to be renewed, now, it does not lie in the mouth of the complainant to say that the clause was unilaterally incorporated. No grievance of not receiving policy document was ever made by the complainant till the time of incident. Since as per its own case, the consignment was damaged due to rain water, the O.P. was right in invoking the exclusion clause. We, therefore, do not find any force in this contention of the complainant.
07. Learned counsel for the O.P. next contended that apart from the exclusion clause as to rain water damage, the claim was still not payable. Our attention was invited to other exclusions, which provide that any loss due to mould, mildew, fungus, infestation is excluded unless caused by Inland Transit (Rail/Road). He submits that as per the complaint the consignment was found damaged when it was unloaded from the lorry. So the consignment was not in transit when it got damaged. At least there is no such clear averment that the consignment got damaged during transit. The damage came to knowledge when the consignment had reached its destination. The argument sounds probable, though based on mere assumption. The lorry loaded with consignment started from Delhi on 18.09.2010 and it reached destination at Nagpur on 25.09.2010. The damage could have occurred either during transit or at the destination place or damaged goods were was loaded in the lorry. Any possibility is probable. The survey report reveals that some bags were most affected as there was severe fungus formation. Fungus forms due to mildew when goods remain or are kept in humid condition. It suggests the damage to the goods was caused when it was not in transit.
08. We may now advert to some judgments cited by the counsels. On behalf of the complainant following judgments are placed on record.
- United India Insurance Co. Ltd. v/s Manubhai Civil Appeal No. 4113- 4115/2008 (SC) decided on 16.5.2008
- Mahesh Chandra Ghiya v/s The New India Assurance Co. Ltd. Rev. Pet. no. 2596/2006 (NC) decided on 2.12.2010
- Biman Bose v/s United India Insurance Co. Ltd. Civil Appeal No. 2296/2000 (SC) decided on 2.8.2001
- M/s Rajendra Plastics v/s New India Assurance Co. Ltd. II (2004) CPJ 19 (NC)
- LIC Of India v/s Sunil K. Paliwal Rev. Pet. No. 2099/2009 (NC) decided on 3.7.2012
In all these judgments the common ratio is that insurance is in the nature of contract between the parties and no unilateral action on part of any party to the contract could be binding on the other. The insurer is to ensure that , during policy solicitation and sale, whether directly or through agent, the prospects are fully informed and made aware of the benefits of the product being sold vis-à-vis the product features attached thereto. Benefits/ returns of the policy shall not be mis- stated / mis -represented. Delay in issuing main policy amounts to deficiency in service as it keeps the complainant in dark about any terms/conditions which have been added in the policy. There cannot be any other view as expressed in these judgments. In the present case, as we have explained before, the complainant has knowledge of the exclusion clause, which was not in the first policy. From second policy said exclusion clause was incorporated and it was never objected to till the expiry of the second policy. We have also stated that a big company like the complainant is not expected to say that it did not read the terms and conditions during entire period of the policy. Under such circumstances, we find it hard to accept the complainants case.
09. In the judgment, Oriental Insurance Co. Ltd. v/s Sony Cheriyan II (1999) CPJ 13 (SC) cited by the counsel for the O.P., it is held that an insurance is a contract between the parties and 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. In one other case Smt. Ashokta Malhotra v/s The National Insurance Co. Ltd. F.A. No. 394/2011 decided by Delhi Commission on 17.12.2014 the complainant had taken two mediclaim policies, one individual and other joint. Certain diseases were not covered for the first 4 years of the policy. The individual policy was renewed which contained an exclusion clause regarding joint replacement. The complainant thereafter underwent treatment for knees and her knees were replaced. When she claimed reimbursement, it was rejected on the ground of exclusion clause. Her contention was that in the first policy no such exclusion clause was there and therefore the clause was not applicable to her case. It was contended on behalf of the insurance company that terms and conditions were wrongly interpreted. The mediclaim policy was issued for one year and in case of renewal, it was a new contract with certain advantages and disadvantages of the previous policy. The insurance company has every right ot incorporate / modify / add / delete any of the terms and conditions of the policy. It was held that renewal of insurance policy is nothing but issuance of a fresh medical policy though in continuation of the earlier policy, the terms and conditions of the existing policy alone would be applicable in that case.
10. Upon giving due consideration to the rival facts and arguments, we have come to the conclusion that the repudiation of the claim by the O.P. was justified. There is no scope to interfere. Hence, the complaint is liable to be dismissed. Hence, we pass the following order.
ORDER
(01) The complaint is dismissed with no order as to cost.
(02) Copy of the order be given to both the parties free of
cost.
