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Judgment
C. Viswanath, J
Brief facts of the case are as follows:-
Complainant is a company carrying on business of export of Woollen and Silk Carpets and other goods to foreign buyers. The Opposite Party (OP) is a Government of India Enterprise and is engaged in the business of insuring the risks of exporter by issuing insurance policy for a consideration.
The Complainant was having Policy No. 50307 issued by the Opposite Party from July 1993 to July 1995. On 30.10.1998, OP issued fresh Policy covering comprehensive risks No. SCR 9853793 covering the risks involved in the export of goods from India during the period 15.10.1998 to 31.10.2000 and the maximum liability of the OP under the Policy was Rs.40 lakhs.
The Complainant stated that on 30.12.1998, OP issued letter No. 57/533-1/241371/09802190/1998 approving the credit limits in respect of export to M/s. Barakat Rugs Inc., 151, West 30th Street, #503, New York, U.S.A. after verifying the credit worthiness of the buyer from its own sources. The Complainant sent a shipment of Woollen Carpets valuing Rs.6,25,301.20 on 25.02.99 and the premium was adjusted on 17.03.99. The Complainant also submitted the necessary declaration in Form No. 203 regarding this consignment. On 24.03.99, Complainant sent another shipment of Woollen Carpets valuing Rs.9,28,596/- to M/s. Barakat Rugs Inc., USA and submitted the declaration in Form 203 with the OP. On 5.5.09, the Complainant sent another shipment of Woollen Carpets valuing Rs.7,55,000/- to M/s. Barakat Rugs Inc., USA and submitted the declaration Form 203 with the OP. On 25.08.2000, OP issued a letter regretting to accept the liability as the Complainant did not declare the shipments made on 24.03.99 and 5.5.99 and also reported the default with a delay of one year to the Corporation.
Vide letter dated 2.09.2000, the Complainant replied to OP's letter dated 25.08.2000, that they had sent the declarations and in the personal meeting with Mr. B. Prasad they had accepted that declaration was there but the premium was not deposited."
On 19.09.2000, OP replied to the Complainant's letter dated 2.09.2000, and changed its stand from non-declaration of shipments made on 24.03.99 and 5.5.99 and delay in reporting the default to non-payment of premium in respect of shipments dated 24.03.99 and 5.5.99. However the OP did not accept the liability in respect of shipments made on 25.02.99 in respect of which premium was already paid. The claim of the Complainant was, thus, repudiated by the OP on 25.08.2000 and 19.09.2000.
The Complainant has been exporting since 1988 and exported goods worth Rs.4.10 crore as on 26.03.2001. When for the first time they had a problem with their buyers, the OP Company did not settle their claims. They were only interested in collecting Premium amounts. OP covered the export risks of Complainant to M/s. Barakat Rugs Inc. after getting report on credit worthiness of the buyer for Rs.21 lakhs after thorough enquiry and when the amount of shipments made to M/s. Barakat Rugs Inc. were not forthcoming, OP avoided its liability on one pretext or the other. The conduct of OP amounts to deficiency in service. Complainant suffered a loss of Rs.53,08,897/- (Rupees Fifty three lakhs eight thousand and eight hundred ninety seven only) on account of deficient services provided by the OP as per details given hereunder:-
a)
Value of Shipments in respect of which the export proceeds not received from M/s. Barakat Rugs Inc.
6,25,301
9,28,596
7,55,000
23,08,897
(25.02.99)
(24.03.99)
(05.05.99)
b)
Interest on the non-settlement of claims (in lump sum) (in sum) till the date of filing the complaint.
10,00,000
C)
Compensation for harassment & loss for closure of business
20,00,000
53,08,897
The Complainant prayed for relief of Rs.53,08,897/- with 18% interest from the date of filing this Complaint till the date of realisation.
The Opposite Party in its reply stated that the Complainant has not lodged its claim in the prescribed Form 504. The proviso (g) to the Risks Insured of the policy categorically states as follows:
"Provided always that : The Corporation shall not be liable for any loss......
(g) unless a claim for the loss is made by the insured to the Corporation in writing in the form prescribed by it within 2 years from the due date of payment. "
The Corporation is not liable for any loss claim as the claimants failed to submit the claim in the prescribed form.
Under the law of insurance it is absolutely mandatory that the liability of the insurer would arise if and only if premium was paid. It was stated that the Complainant did not pay the premium of Rs.8,3357/36 for the shipment dated 24.3.1999 valued at Rs.9,28,596.00. The Complainant has also not paid premium amounting to Rs.6,795/- for the shipment dated 5.5.1999 valued at Rs.7,55,000/-. Therefore the insurer OP is not liable for the loss incurred on account of the said shipments.
Clause 8(a) of the Policy mandates that the declarations of shipments ought to be made on or before the 15th day of each calendar month in the form prescribed by the Corporation, for shipments made during the previous month. The Complainant in clear violation of the mandate of the Policy failed to submit the shipment declaration prescribed at Form No. 203 within the stipulated period and failed to pay the premium thereon. The Complainant did not submit the shipment declaration in respect of shipment dated 24.3.1999 within the stipulated period and instead filed the same after more than 11 months on 8.3.2000. The Complainant also did not submit the shipment declaration in respect of the shipment made on 5.5.1999 within stipulated time, which in fact was submitted after 2 months from the stipulated date, i.e., on 5.8.1999. The copies of the said shipment declarations were submitted by the Complainant after considerable delay.
Clause 8(b) of the Policy mandates that the insured shall deliver to the OP on or before the 15th of every month a declaration in the form prescribed of all payments which remained partly and wholly unpaid for more than 30 days from the due date of payment in respect of shipment made during the Policy period. The OP in gross violation of the terms and conditions of the Policy submitted default declaration after considerable delay beyond the stipulated period. The Complainant intimated the defaults in respect of the 3 shipments dated 25.2.1999, 24.3.1999 and 5.5.1999 after a long delay on 15.5.2000. This information was very vital for the OP operating such a scheme of credit insurance and dereliction on the part of the policy holders in promptly furnishing the information with regard to overdue payments would result in the OP approving credit limits on defaulting overseas buyers and underwriting further credit risks, being totally unaware of the fact that the said buyer had already become a defaulter and a bad credit risk.
Clause 19 of the Policy expressly excludes liability of the Corporation inter alia in a situation where the declarations required to be submitted under clause 8(a) and/or 8(b) are not furnished. The Complainant has proved to be not only a defaulter in payment of premium but also in not making shipments declaration and not informing defaults committed by the buyers as mandated by the Policy. The Complainant, therefore, became disentitled to recover under the Policy as per condition No. 19 of the Policy.
The OP vide its letters dated 25.8.2000 and 19.9.2000 denied liability towards the claim of the Complainant in respect of the shipments made on 25.2.1999, 24.3.1999 and 5.5.1999 inter alia on the following grounds:
(a) The report of default was submitted late by the Complainant to the OP.
(b) The shipment dated 24.3.1999 and 5.5.2000 were not declared by the Complainant in the prescribed form.
(c) The Complainant had not paid the premium in respect of shipments dated 24.3.1999 and 5.5.1999 despite written demands by the OP which is a serious and non-condonable lapse.
Thus there has been no deficiency in service on the part of the OP.
Heard the Learned Counsel for the Complainant and the Opposite Party. The Learned Counsel for the Complainant reiterated the contents of the Complaint. He also stated that he would press his claim for the shipment made on 25.02.99 as the Premium was paid and the declaration form has been duly submitted. The Learned Counsel for the Opposite Party draw our attention to the non-fulfilment of Policy conditions despite reminders from the OP. We have also carefully perused the record.
The Complainant had filed its claim for 3 shipments made on 25.02.99, 24.3.99 and 5.5.99 and all the claims have been repudiated by the OP vide its letter dated 25.08.2000 and 19.09.2000. OP vide letters dated 11.02.99, 11.01.2000 has reportedly informed the Complainant, inviting attention to Clause 8 of the Policy, to submit on or before 15th of each calendar month, a declaration in form 203 of all shipments made in the previous month; a declaration in Form 205 of all amounts which at the end of the previous month remained wholly or partly unpaid for more than one month; and even if there are no shipments, or no amounts are overdue, a declaration in Form 206 showing this fact. There was an abnormal delay, as admitted by the Complainant in his letter dated 25th April 2000, of informing about the non-payment of invoices for the shipments dated 25.2.99, 24.3.99 and 5.5.99.
Hon'ble Supreme Court in the "Oriental Insurance Company Ltd. vs. Sony Cheriyan; [(1999) 6 SCC 451] held that :
"The insurance policy between the insurer and the insured represents a contract between the parties. 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. The insured cannot claim anything more than what is covered by the insurance policy. That being so, the insured has also to act strictly in accordance with this statutory limitations or terms of the policy expressly set out therein"
In "Deokar Exports Pvt. Ltd Vs. New India Assurance Company Ltd., (2009) 1 CPJ 6SC", the Hon'ble Supreme Court has held :
"In a contract of insurance, rights and obligations are strictly governed by the policy of insurance. No exception or relaxation can be made on the ground of equity"
Vide letter dated 25.08.2000, the OP wrote to the Complainant "we are unable to accept the liability as you have not declared the shipments made on 24.03.99 and 5.5.2000 and also reported the default with a delay of one year. Similarly the OP vide letter dated 19.09.2000 informed the Complainant that "no premium was paid for the shipments dated 24.3.99 and 5.5.99 which is a serious and non-condonable lapse."
In respect of shipment of 25.02.99 for Rs.6,25,301/- OP admits the receipt of declaration on 11.3.1999 and Rs.3752/- was adjusted towards Premium on 17.03.99 in respect of shipment effected on 25.2.99 to Bharakat Rugs Inc., USA. However, the Complainant informed the default in payments by the buyers after a considerable delay. This was in contravention of Condition No. 8 (b) of the Policy. The importance of this condition is that if the insurer gets intimation of the default of the purchasers in making payment, they could take precautions in not covering future consignments of such defaulting purchaser and could also warn other parties so that they could be on their guard in dealing with such a party. The Complainant was fully aware of his obligations to pay premiums, submit declarations and such other conditions required to be complied under the Policy. The rejection of the claim on account of non-payment of premium/not declaring the shipments/and not reporting the defaults by the Complainant is valid and there has been no deficiency in service on the part of the OP.
In view of the above, the Complaint stands dismissed. There shall be no order as to costs.