M/s Bird Information System Private Ltd vs M/s National Insurance Company Ltd. & Anr

Heard Mr. Sukumar Pattjoshi, Senior Advocate, assisted by Mr. Virender Mehta, Advocate, for the complainant and Mr. Abhishek Kumar, Advocate, for the opposite parties.

M/s. Bird Information System Private Limited has filed above complaint for directing M/s. National Insurance Company Limited to pay Rs.66170000/- with interest @ 18% per annum, from 22.09.2006 till its payment i.e. the insurance claim and any other relief, which is deemed fit and proper, in the facts and circumstances of the case.

The facts, as stated in the complaint and emerged from the documents attached with the complaint, are as follows:-

(a) The complainant was a company, registered on 19.05.1999, under the Companies Act, 1956. Main objects of the company were (i) to act as consultants, advisor to airlines, travel agents and to supply infrastructure, technology and marketing global image to travel agents, (ii) to operate, establish and manage the activities of BPO delivery centres, network operation centres, telemarketing, call centres, consumer services, information technology enabled services including consultancy, training, design, development, sales, support, analysis, programming, implementation, operations as well as setting up sales, purchase, franchise representation and acquisition of training centres, call centres, software development centres, customer service centres for international and domestic customers. (iii) to operate, establish and manage data collection, data entry, data processing, data compilation in the form of electronics & print, IT programming inclusive of all types of database activities from database design, database development, data storage, data migration, data mining, data warehousing etc.

(b) M/s. National Insurance Company Limited (the opposite party) is a public sector company and provides various types of insurance services. The complainant entered into an agreement dated 03.07.2006 with Opodo Limited, Waterfront Hammersmith Embankment Chancellor Road, London, W6 9RU, United Kingdom, , for providing online services including data encoding and input services, for the period of 01.04.2006 to 31.03.2009. In order to protect itself from any loss under the said agreement with Opodo Ltd., the complainant necessitated for an insurance policy. The complainant wrote a letter dated 03.09.2006 to Divisional Office, Muzaffarnagar of the Insurer, seeking an insurance cover for (i) Comprehensive General Liability Insurance (including premises, product and completed operations, contractual liability and personal injury coverage), covering all services performed by the handling company under this agreement. Such coverage should be in an amount of not less than US$1000000/-. Bodily injury and property damage combined. (ii) Workers Compensation-Statutory limits and (iii) A fidelity bond with a minimum limit of not less than US$1000000/-, specifically covering the services performed by the handling company under this agreement. Thereafter Mr. M.M.S. Beg (opposite party-2) visited the office of the complainant at E-9, Connaught House on 22.09.2006 and examined the agreement dated 03.07.2006 arrived between the complainant and M/s. Opoda Limited and suggested that the complainant need “Computer Services and Software Developers Professional Liability Policy” in terms of the agreement dated 03.07.2006. Mr. M.M.S. Beg provided a proposal form of this policy. Said proposal form was got filled up by the Director of the complainant, under his supervision on 22.09.2006. He collected the proposal form on 22.09.2006. As asked by Mr. M.M.S. Beg, a copy of Proposal Form was also sent to Reginal Office, Dehradun through fax on 22.09.2006. After submission of Proposal Form, the complainant deposited cheque of Rs.370312/-of the premium and Mr. M.M.S. Beg issued Cover Note No. G-40-230248 dated 27.09.2006.

(c) Cover Note mentioned “Comprehensive General Liability Insurance (including premises, products & completed operations, contractual liability and personal injury coverage) covering all services performed”. The Insured clarified from Mr. M.M.S. Beg about non-mentioning of the wordings of the proposal form in the Cover note, then he pointed out that the insurance coverage contained “covering all services performed” by the Insured, which was inclusive of “and the act of errors or omission whether done intentionally or unintentionally or corruption of data”. He also ensured the officials that the Policy would be issued in terms of the proposal form. The officials of the complainant were not an expert in the terminology of Insurance language, believed upon the explanation/assurance given by opposite party-2.

(d) The complainant requested to enhance the insurance cover from Rs.5.50/- crore to Rs.25.50/- crore. The opposite parties assessed the premium to Rs.1199277/-, for enhancement of cover, which was paid by the complainant through cheque dated 07.11.2006, which was en-cashed on 30.11.2006. On encashment of the cheque, endorsement of enhanced coverage was done on 30.11.2006. Opposite party-1 delayed issuance of the policy, then the complainant wrote a letter dated 13.02.2007 and emails dated 15.03.2007 and 16.03.2007. Opposite party-2, in his email dated 14.03.2007 admitted that they were in confusion about the proper wording of the Insurance policy, as such, issuance of the policy has been delayed. The complainant, vide letter dated 13.02.2007, requested opposite party-2 to provide Terms and Condition of the insurance policy. Thereafter, the complainant gave an emails dated 15.03.2007 and 16.03.2007, for issue of insurance policy and procedure for claim. Opposite party-2 also gave an email dated 16.03.2007 to opposite party-1, for issue of policy in terms of Proposal Form. The complainant received Insurance Policy in last week of March, 2007, bearing signature of the competent authority in the date 27.09.2006, by ante-dating it, which amount to forgery.

(e) Then it was noticed that Insurance Policy was not in terms of Proposal Form. The complainant, therefore, made a representation dated 04.04.2007, requesting that in case there was no specific policy of legal and contractual liability arising out of default in execution/performance of the services, a suitable endorsement as per Proposal Form be made in the policy. Then opposite party-1, vide email dated 16.04.2007, supplied a Proposal Form of new policy. The opposite party-1, vide email dated 03.05.2007, declined to make endorsement in the earlier policy. The complainant made a representation dated 07.05.2007 to rectify the mistake and also wrote reminders dated 19.05.2007 and 20.05.2007. The complainant made a representation to General Manager (Technical) of opposite party-1, dated 08.06.2007 and reminders dated 07.07.2007, 20.08.2007 and 18.09.2007. Along with letter dated 20.08.2007, the complainant raised claim on the basis of invoices of Opodo Ltd. amounting to Great Britain Pound 1120000/-

(f) Opposite party-1, vide letter dated 19.10.2007, rejected the claim as not admissible in “Commercial General Liability Policy” and informed that for that purposes “Errors and Omission Policy” had to be obtained. The complainant then made a representation to Chief Managing Director on 05.03.2008 and Insurance Regulatory and Development Authority on 22.07.2008. The complainant, vide letter dated 15.07.2008, informed that Opodo Ltd. had revised its claim to INR 4.50 crores in place of INR 9/- crores. Then he received a reply dated 26.08.2008 that the claim was not covered under the policy. Then this complaint was filed on 12.03.2009 alleging that in the Proposal Form “Any act of error or omission whether done intentionally or unintentionally or corruption of data” was specifically mentioned. The opposite parties ought to have issued “Errors and Omission Policy” but they committed mistake and issued “Commercial General Liability Policy” and in spite of repeated request the mistake was not corrected and the claim has been illegally rejected and there was deficiency in service.

The opposite parties filed their written reply on 24.12.2009 and contested the complaint. They stated that the complainant engaged Mr. V.K. Grover, an Insurance Consultant and under his advice, vide letter dated 03.09.2006, specifically mentioning their requirement, approached opposite party-2, for the insurance policy. M.M.S. Beg, the then Divisional Manager, Muzaffarnagar, discussed the matter with the director, executives of the complainant in presence of Mr. V.K. Grover. According to need of the complainant, he suggested to take “Information and Network Technology Error and Omission Policy” or “Computer Service and Software Developers Professional Liability Policy”. As desired, M.M.S. Beg, sent the proposal form of “Computer Service and Software Developers Professional Liability Policy” to the complainant on 22.09.2006. The complainant filled up the Proposal Form of “Computer Service and Software Developers Professional Liability Policy” and sent it through fax on 22.09.2006. It has been denied that M.M.S. Beg had personally received Proposal Form. After sending Proposal Form, the complainant discussed with M.M.S. Beg, for the premium of different policies. Premium of “Computer Service and Software Developers Professional Liability Policy” was much higher than the premium of “Commercial General Liability Policy”, as originally desired in the letter dated 03.09.2006. After comparing the amount of premium, the complainant asked for issue of insurance policy as desired in the letter dated 03.09.2006, irrespective of Proposal Form dated 22.09.2006. The opposite parties then gave invoices dated 25.09.2006, in respect of three risks as desired. The complainant gave a D.D. of Rs.370392/- dated 26.09.2006. Thereafter, opposite party-2 issued Cover Note on 27.09.2006. The competent authority issued the Insurance Policy on the same day, i.e. 27.09.2006. In Cover Note and Insurance Policy both “Commercial General Liability Policy” was mentioned. The complainant, vide letter dated 07.11.2006, asked for enhancement of insurance coverage and gave a cheque of Rs.1199277/- dated 07.11.2006, without raising any objection that correct policy was not issued. On deposit of this amount, insurance coverage was enhanced on 30.11.2006. Terms and Condition was sent to the complainant in last week of March, 2007 as at the time of issuing policy on 27.09.2006, the Terms and Conditions of the policy were not readily available with Divisional Office. It is denied that the policy was issued ante-dating it, in last week of March, 2007. The schedule attached to the Terms and Conditions is manually prepared and reflects the same date i.e. 27.09.2006, when the system generated policy was issued. Outlines of the insurance policies and its terms and conditions were fully discussed before submission of the Proposal Form by the complainant, however, the amount of premium was informed after submission of Proposal Form. It is denied that officers of opposite party-1 were not clear about the Terms and Conditions of the policy. If the letter of the complainant dated 03.09.2006 be read along with Cover Note dated 27.09.2006, then it is clear that Cover Note was fully in consonance of letter dated 03.09.2006. After occurring loss, the complainant realised that the loss would not be covered in the policy, then he started to write letters for changing the Terms of the Policy, which was not possible. The opposite party vide email dated 16.04.2007, forwarded a format of “Information and Network Technology Error and Omission Policy” to the complainant. The complainant instead of obtaining this policy went on insisting to correct/make endorsement in the earlier policy or issue “Information and Network Technology Error and Omission Policy” with retrospective date. The complainant, vide letter dated 20.08.2007, sought to register its insurance claim for INR 9.55 crores, as his liability towards M/s. Opodo Ltd. and gave reminders dated 30.08.2007 and 18.09.2007. The opposite party, vide letter dated

19.10.2007, informed that such a claim was not admissible in the policy obtained by the complainant. There was no deficiency in service on their part and the complaint is liable to be dismissed.

The Insured filed Affidavit of Evidence of Ankur Bhatia and Additional Affidavit of Evidence of Ankur Bhatia. The opposite parties filed Affidavit of Evidence of M.M.S. Beg, Divisional Manager. Both the parties filed their documentary evidence and short synopsis.

The arguments of the complainant are that Proposal Form was submitted for “Computer Service and Software Developers Professional Liability Policy”, but due to confusion about the proper wording in respect of the insurance policy, opposite party-2 issued Cover Note and Insurance Policy for “Commercial General Liability Policy”. Insurance Policy was not in consonance with the Proposal Form. Therefore, the opposite parties are bound to issue correct policy with retrospective effect and reimburse the claim of the complainant. The opposite parties denied above arguments and submitted that the complainant with due consultation of Mr. V.K. Grover, an Insurance Consultant, vide letter dated 03.09.2006, specifically mentioning their requirement, approached opposite party-2, for the insurance policy. M.M.S. Beg, the then Divisional Manager, Muzaffarnagar, discussed the matter with the director, executives of the complainant in presence of Mr. V.K. Grover. According to need of the complainant, he suggested to take “Information and Network Technology Error and Omission Policy” or “Computer Service and Software Developers Professional Liability Policy”. As desired by the complainant, M.M.S. Beg, sent the proposal form of “Computer Service and Software Developers Professional Liability Policy” to them on 22.09.2006. The complainant filled up the Proposal Form of “Computer Service and Software Developers Professional Liability Policy” and sent it through fax on 22.09.2006. After sending Proposal Form, the complainant with Mr. V.K. Grover discussed with M.M.S. Beg, for the premium of different policies. Premium of “Computer Service and Software Developers Professional Liability Policy” was much higher than the premium of “Commercial General Liability Policy”, as originally desired in the letter dated 03.09.2006. After comparing the amount of premium, the complainant asked for issue of insurance policy as desired in the letter dated 03.09.2006, irrespective of Proposal Form dated 22.09.2006. The opposite parties then gave invoices dated 25.09.2006, in respect of three risks as desired. The complainant gave a D.D. of Rs.370392/- dated 26.09.2006. Thereafter, Cover Note and Insurance Policy were issued on 27.09.2006.

We have considered the arguments of the counsel for the parties and examined the record. The complainant, vide letter dated 03.09.2006 (Exhibit-C-4), approached opposite party-2, for the insurance policy. Relevant part of the letter is quoted below:-

“We are providing to one of our airline customer reservation and ticketing services through call centre and from city ticketing offices in Delhi, Mumbai, Bangalore and Chennai. Under the terms of the agreement with the said customer, BIS is required to obtain certain insurance covers. Extract of relevant clause of the agreement are given herein below:-

Insurance: The Handling Company shall procure and maintain during the term of this Agreement with insurers of recognised financial responsibility, the following insurance:

a. Comprehensive General Liability Insurance (including premises, products and completed operations, contractual liability and personal injury coverage) covering all services performed by the Handling Company under this agreement. Such coverage shall be in an amount of not less than US$ 1000000/- bodily injury and property damage combined.

b. Workers compensation-Statutory limits.

c. A fidelity bond with premium limit of not less than US$ 1000000/- specifically covering the services performed by the Handling Company under this agreement.”

The opposite parties issued three Invoices dated 25.09.2006, relating to premium of three risks i.e. (i) Comprehensive General Liability Insurance of Rs.370392/-, (ii) Workman Compensation Insurance (premium depends upon annual salary of all the employees/cashier) and (ii) Fidelity Guarantee Insurance of Rs.108031/-. The complainant along with letter dated 26.09.2006 gave D.D.No.889411 dated 26.09.2006 of Rs.370392/- i.e., Insurance premium as demanded Invice No. (i). These negotiations were done subsequent to their filing of Proposal Form on 22.09.2006. Had the complainant not insisted to issue invoices of premium in respect of risks as mentioned in the letter dated 03.09.2006, then there would have been no reason for opposite party-2 for not giving invoices of premium in terms of Proposal Form dated 22.09.2006, which was supplied by him through fax on 22.09.2009. As such the argument of the complainant that opposite party-2 was under confusion in respect of wording of the policy is not liable to be believed. Rather the reply of the opposite parties that after comparing the amount of premium of different policies, the complainant insisted for issue of the policy in terms of their letter dated 03.09.2006, appears to be more convincing and probable. The application of the complainant dated 03.09.2006, invoices issued by the opposite parties, in respect of premium and Proposal Form dated 22.09.2006 were clear and there appears no confusion in respect of two policies i.e. one issued to the complainant and the other suggested and for which the Proposal Form was given by the complainant.

The argument of the complainant that Policy document was not issued on 27.09.2006 rather it was issued in last week of March, 2007 is also not liable to be accepted. The complainant, in its letter dated 07.11.2006 (Exhibit-C-8), for enhancement of insurance coverage, has mentioned Policy number with date 27 th September, 2006. If Policy document was not issued by that time, from where the complainant had obtained the policy number.

Paragraph-13 of Proposal Form (Exhibit-C-5) submitted by the complainant, required to give list of live larges projects during past three years. The complainant has given following lists:-

(a) HHS Trading (PCC) UK- Call Centre Services.

(b) BT Germany GmBh & Co.- Remote Management and Monitoring at IT Infrastructure.

(c) Kingfisher Airlines-Call Centre & IT Enabled Services.

(d) American Airlines- Call Centre & IT Enabled Services.

(e) Go Airlines- Call Centre & IT Enabled Services.

In this list, name of M/s. Opodo Ltd. is not mentioned. As such allegations made in paragraph-5 of the complaint that to perform its obligations in the terms of said agreement dated 03.07.2006 to its customer M/s. Opodo Ltd., required to seek coverage of its losses, the complainant approached opposite party-2 for issue of insurance policy, also do not inspire confidence. For aforesaid reasons, it appears that after occurring the loss to M/s. Opodo Ltd., the complainant tried to take advantage of its Proposal Form dated 22.09.2006. Although at that time he did not agree for payment of premium on that Proposal Form. Insistence of the complainant to make endorsement in the existing Insurance Policy issued on 27.09.2006 or to issue fresh Insurance Policy with retrospective effect, in consonance of the Proposal Form was legally not possible. In view of aforesaid discussions, we do not find any deficiency in service on the part of the opposite parties.

ORDER

In view of the aforesaid discussions, the complaint is dismissed.