Overseas Trading Corporation vs National Insurance Co.Ltd

THE complainant, a partnership firm, imported 260.78 M/T. PVC packed in 10502 bags from M/s. Alwynco, Kowloon, Hongkong as per their invoice No. ALW 0049 to ALW 0054 dated 3.1.91. THE consignment was despatched from Dalain (China) to Bombay as per bills of lading No. DLN/BBY-1 to DLN/ BBY-6. THE consignment was insured with the National Insurance Co. Ltd., the respondent, for US Dollars 2,25,267.96 as per their policy No. 350507/21/11/90/00073 dated 16.1.91. THE consignment of one of the bills of lading was found in damaged condition on arrival at Bombay on 20-2.91. THE complainant requested the respondent for survey of the goods. Capt. Y.W. Joshi, the surveyor, was appointed to inspect the consignment. He assessed the loss at 32,845 Kg. vide his report dated 4.4.91. THE complainant lodged a claim for US Dollars 28,281.95 being the insured value of the loss of material plus a sum of Rs. 1300/- paid to the surveyor as survey fee. THE respondent settled the claim and paid an amount of Rs. 5,09,254/- to the complainant on 13.8.91.

THE complainant has alleged that according to the insurance policy the respondent was under a contractual obligation to pay the claim of the complainant in US Dollars 28,281.95, however, Regulation No.32(A)i. (iii) (a) issued by the Reserve Bank of India under the Foreign Exchange Regulation Act, 1973 in respect of Marine Insurance stipulates that "Claims against marine policies when payable to persons, firms, companies etc., in India should be paid in rupees, irrespective of the currency in which the policies had been issued...". It is further contended by the complainant that the conversion rate applicable on the date of payment should have determined the total amount of the claim payable in Indian rupees. THE prevalent exchange rate was Rs. 25.67 per US Dollar on 13.8.91. Accordingly the amount of US Dollar 28,281.95 payable to the complainant works out to Rs. 7,25,997.65 at the exchange rate prevalent on 13.8.91 on the date of payment plus Rs. 1300/- towards survey fees. Against the total amount of Rs. 7,27,297.65 due to the claimant, the respondent has paid a sum of Rs. 5,09,254/- only and has not informed the complainant as to how this figure had been arrived at. As such the balance amount of Rs. 2,18,043.65 was still due to him. He has further agitated that the non-payment of the full amount as calculated by him amounts to deficiency in service and has prayed that an amount of Rs. 2,18,043.65 being the difference between the amount due and the amount received by him from the respondent be paid to him. He has also claimed interest @ 18% p.a., a sum of Rs. 13,083/- from the date of payment of the claim i.e. 13.8.91 to 14.2.92, the date of filing the complaint and a further interest of 18% p.a. from the date of filing the complaint alongwith a sum of rupees 10,000/- towards the cost of filing the complaint. The complaint has been contested by the respondent National Insurance Co. Ltd. It is interalia pleaded by them that the claim of the complainant was settled and the amount paid in full and to the satisfaction of the complainant who had accepted the amount after submitting the discharge vouchers to the company in full and final settlement of the claim. There was no deficiency or negligence on the part of the respondent in the settlement of the claim. The claim had arisen in February 1991. It was intimated to the company in March 1991, and was settled by the respondent on 13.8.91.

The facts of the case and quantum of loss is not disputed by the respondent who has averred that as per the regulations and guidelines of the Reserve Bank of India the claim was payable in Indian rupees. The claim was settled and paid for Rs. 5,09,254/- and the same was duly accepted by the complainant. The respondent has denied that the dollar conversion rate into Indian rupee is to be taken on the date of payment. The claim had arisen in the month of February 1991 and it was to be settled on the invoice value of the consignment as on the date of the loss. The conversion rate of US Dollars into Indian rupee as prevalent on the date on which the claim had arisen was to be taken which was Rs. 18.26 per US Dollar. The respondent had calculated the amount accordingly and finally settled and paid the claim.

THE respondent has further denied the contention of the complainant that he was not informed as to how the claim amount paid to him was arrived at. THEy have referred to the complainant''s letter dated 21.8.91 and 21.9.91 in support of their claim that the complainant was duly informed and had accepted the claim amount of Rs. 5,09,254/.- in full and final settlement after they were convinced about the settlement of the claim. As such no further amount is due to the complainant. THE complaint is misconceived and is an abuse of the process of law. THE respondent has prayed that the complaint be dismissed with special costs under Section 26 of the Consumer Protection Act. We heard the parties, perused the record and considered the written arguments submitted by Sh. R.K. Aggarwal, agent for the complainant, in respect of the points raised in the pleadings. The factum of the quantum of loss and the date of occurrence of the loss is not disputed. The loss occurred on 20.2.91 and was assessed by the surveyor at 32.844 Kg. per his report dated 4.4.91 for US Dollars 28,281.95 being the insured value of the loss of material. The respondent vide their letter dated 31.7.91 informed the complainant that his claim has been settled for Rs. 5,09,254/-. They sent the loss voucher for this amount for signatures of the complainant in full and final settlement of the claim. This was to be returned to the respondent alongwith certain other documents. The complainant vide his letter dated 12.8.91 sent the relevant documents and the loss voucher after signature and requested that the cheque for the amount of Rs. 5,09,254/- be delivered to the bearer of the letter. The respondent settled the claim and paid an amount of Rs. 5,09,254/- to the complainant on 13.8.91.

AFTER receiving the claim amount in full and final settlement the complainant in his letter dated 21.8.91 to the respondent stated that the amount of the claim received by them was much less than that payable to them under the policy. It is claimed in this letter that the amount of the claim payable for US Dollars is to be calculated on the exchange rate prevalent on the date of payment and the claimant has quoted para 1.24 of the Exchange Control Manual in support of this contention. Para 1.24 of the Exchange Control Manual deals with the subject matter of exchange rates and it provides as under: "(I) Section 8(2) of FERA 1973 lays down that all transactions in foreign exchange shall be done at rates for the time being authorised by Reserve Bank of India. In pursuance of this provision, Reserve Bank has authorised that the rates of exchange for inter-bank as well as merchant transactions in all currencies may be fixed by authorised dealers on the basis of prevailing market conditions subject to the guidelines that may be framed by the Foreign Exchange Dealers Association of India (FEDAI) from time to time. The terms and conditions laid down by FEDAI with the approval of Reserve Bank for transacting foreign exchange business will govern all business transacted by authorised dealers."

The complainant has claimed that since the payment was made on 13.8.91 the conversion from dollar to rupees should also be done at the rate of exchange as fixed by the Reserve Bank of India for that date i.e. 13.8.91. This comes to Rs. 7,25,997.65 and alongwith survey fee of Rs. 1300/- total amount payable to the complainant comes to Rs. 7,27,297.65. The complainant has requested that the balance amount of rupees 2,18,043.65 be paid to him. This was followed by another letter dated 21.9.91 by the complainant where it is stated that, "if you still feel that the rate of exchange applicable is not that prevailing on the date of payment but on some other date we would suggest that, to resolve the controversy, we should made a friendly reference on the issue to the Consumer Grievances Redressed Forum. This procedure will enable a solution of this issue on a permanent basis and to the satisfaction of all concerned."

A perusal of the correspondence cited in the precedings paragraph makes it abundantly clear that the only issue to be determined in this case is the rate of exchange applicable to a claim of Marine Insurance Policy payable in Indian rupees on conversion from US Dollars. We note that the respondent settled the claim expeditiously after receiving the surveyor''s report and there has been no deficiency in service. The Reserve Bank guidelines clearly stipulate that the claims arising in US Dollars in case of Marine Insurance Policies will be payable in India in Indian rupees. We have considered the arguments of the agent for the complainant regarding coversion rate on the date of transaction as per Section 8(2) of FERA 1973. We find that these are not applicable in this case. This is not a business transaction which took place on 13.8.81 as averred by the complainant but a payment of a loss claim under the Marine Insurance Policy which became payable on 20.2.91. We are of the view that the liability of the Insurance Company is a fixed liability to be determined at the time of the occurrence of the loss and not a flexible liability which would vary with the exchange rate of the conversion of the US Dollar to the Indian rupee from day to day. We are inclined to, accept the pleadings of the respondent that the claim had to be settled on the invoice value of the consignment as on the date of the loss i.e. 20.2.91. The conversion rate of US Dollars into Indian rupees as prevelant on that date on which the claim had arisen was Rs. 18.26 per US Dollar. The respondent has calculated the amount accordingly as Rs. 5,09,254/- and paid the claim amount on 13.8.91, in full and final settlement.

IT is interesting to note that the complainant had discharged the loss voucher sent to him by the respondent on 31.7.91 for his claim for Rs. 5,09,254/- without any protest and in full and final settlement of the claim. The contention of the complainant in his letter of 21.8.91 appears to be an afterthought. He can not be permitted to raise any objection after he received the claim amount without any protest and in full and final settlement of the claim. We are of the view that the conversion rate from US Dollar to the Indian rupee in respect of Marine Insurance Policy has to be determined on the conversion rate applicable on the date of the occurrence of the toss. As the liability of the insurance company is a fixed liability and not a fluctuating liability. We are fortified in our view by the Marine Insurance Technical Manual which stipulates that the conversion rats applicable will be the one prevalent on the day on which the policy becames a claim. This technical manual has been adopted by General Insurance Council (GIC) which is a statutory body.

IN view of the foregoing discussion we hold that for a claim arising from Marine INsurace Policy when payable in INdian rupees after conversion from US Dollars the date for determining the claim amount will be the date on which the policy becomes a claim i.e. the date of occurrence of the loss. We note that the complainant has not come before us with clean hands. He accepted the claim without protest in full and final settlement and after accepting the claim he made a demand on the respondent for payment of additional amount calculated on the basis of exchange rate prevalent on the date of payment. The claim was settled by the respondent expeditiously. There was no deficiency in service. The claimant is not entitled to any further amount. The complaint is dismissed, with Costs Rs. 2.000/-. Complaint dismissed with costs.