The appellant/complainant is a partnership firm, engaged in export of goods. The complainant/appellant supplied goods to an overseas buyer namely M/s QT Dog LLC. The complainant/appellant obtained an insurance cover from the respondent in respect of the consignment of goods sent to the overseas buyer. The overseas buyer having not paid the price of the goods, the complainant/appellant raised a claim with the respondent, in terms of the insurance cover which it had taken in order to cover the risk. The claim was repudiated vide letter dated 12.05.2008 which, to the extent it is relevant, reads as under:This has reference to your above claim filed alongwith connected papers. We regret to inform our inability to consider liability for the claim as following non-compliances of basic policy terms & conditions are observed in the claim-1. Clause (3)(a) act of omission or commission of any insurer of the goods:- M/s International Corporation & M/s Stelco Overseas Pvt. Ltd. are associate companies, as Mr. Ashok Jain and Mr. Anil Jain are the common directors/partners in both of companies, this was not communicated by you while submitting your SSP Proposal.2. Clause (3)(d):- There is dispute raised by the buyer due to non-performing the obligations under the Contract and supply of goods of poor quality by M/s Stelco Overseas Pvt. Ltd. As per records available with the Corporation, since the management of both the companies is common, both are associate companies. The buyer's contention that they are equally responsible to fulfill the earlier pending orders by M/s Stelco Overseas Pvt. Ltd. is in order.M/s Stelco Overseas Pvt. Ltd. was holding SCR Policy from SME Delhi Branch and not paid the premium of the shipment declarations for the period April 2002 to Jan 2004, there is a shortage of RRs.57,995.00, which was called vide letter dated 24.05.2004 (copy enclosed).Thus our experience with your group concern has also not been good.2. Being aggrieved from the rejection of the claim, the complainant approached the concerned State Commission by way of a Consumer Complaint. The complaint was resisted by the respondent primarily on the grounds on which the claim had been rejected. The State Commission having dismissed the Consumer Complaint, the complainant/appellant is before this Commission.3. It would thus be seen from a perusal of the repudiation letter that the claim was repudiated on two grounds. The first ground was that STELCO Overseas Pvt. Ltd., through which the transaction was entered into by the complainant with the overseas buyer, was a sister concern of the complainant and this fact was concealed by the complainant while obtaining the insurance coverage. The second ground on which the claim was repudiated was that the buyer had claimed that the quality of the goods was poor and therefore, it was not liable to pay for the said goods.4. As regards the connections between the complainant and STELCO Overseas Pvt. Ltd., the submission of the learned counsel for the complainant/appellant is that STELCO Overseas Pvt. Ltd. is a company whereas the complainant is a partnership firm and both being independent legal entities, STELCO Overseas Pvt. Ltd. cannot be said to be a sister concern of the complainant. The case of the respondent as stated in the repudiation letter is that Mr. Ashok Jain and Mr. Anil Jain are Directors of STELCO Overseas Pvt. Ltd. as well as the partners of the complainant and therefore, these are the associate concerns. The learned counsel for the respondent has drawn my attention to a reply sent by the complainant to the legal notice received from the overseas buyer. In the reply dated 12.12.2007, sent to the overseas buyer through Takkar & Co., it was clearly stated in para 3 of the reply that STELCO Overseas Pvt. Ltd. was a sister company of the complainant M/s International Corporation. In view of the aforesaid admission contained in the reply to the legal notice, it is not open to the complainant/appellant to even claim that STELCO Overseas Pvt. Ltd. was not its sister concern.5. The case of the respondent is that STELCO Overseas Pvt. Ltd. being a defaulter in payment of the premium for the shipments made by it, the outstanding amount being Rs.57,975/-, it might not have granted the insurance cover had the complainant disclosed that STELCO Overseas Pvt. Ltd. was its sister concern. It is therefore, evident that the insurance coverage was obtained by concealment of a material fact which influenced the decision of the respondent on the question whether to accept the proposal for grant of the insurance coverage or not. The insurance coverage having been obtained by concealment of a material fact, the insurer is entitled to avoid the contract of insurance at its option and refuse to reimburse the complainant for the loss alleged to have been suffered by it.6. The legal notice dated 14.11.2007 sent by the overseas buyer to the complainant to the extent it is relevant, reads as under:9. That the terms and conditions of the agreement and the understanding between us was not respected by you from your very first delivery (third container cargo of the original contract) as it was much behind the schedule date and, on the top of it due to the faulty packaging, products were also damaged and crushed. Though my client had the right to reject the products but acting benevolently my client did not pressed upon the issue, as it was your very first delivery. But even your later deliveries also contained damaged products, which our client had to bear, as you did not take back the damaged products.10. That during the course of the business you have refused to comply with the conditions of the agreement. You the noticee never cared about the orders placed by our client and the agreement, which is evident from the fact that the full quantity of ordered products were not supplied and products supplied were of different description than ordered placed. That you did not meet the deadlines for delivery and time and again asked for time extension for Delivery by giving one excuse or the other, thus delaying the delivery substantially.It would thus be seen that according to the overseas buyer, the goods supplied by the complainant/appellant were damaged goods which the complainant did not take back. The legal notice also shows that the products supplied by the complainant were of different description than the goods ordered by them and the complainant had even failed to meet the deadline for delivery of the goods.7. Clause 3(d) of the insurance policy reads as under:3 (d) the failure or refusal on the part of the buyer to accept the goods and/or to pay for them due to his claim that he is justified in withholding payment of the contract price or the gross invoice value of the said goods or any part thereof by reason of any payment, credit, sell-off or counterclaim and/or due to his claim that, for any other reason he is excused from performing his obligations under the contract, unless, except where the Corporation agrees in writing to the contrary, the insured has, for the amount of his loss, obtained by legal proceedings in a competent court of law in the country of the buyer a final judgement enforceable against him;It would thus be seen that in the event of the buyer refusing to pay for the goods, claiming justification for withholding the payment, the insurer is not liable to reimburse the insured unless the insured is able to establish his claim by way of legal proceedings to be instituted in the country of the buyer. In the present case, the overseas buyer had sought to justify the withholding of payment on the grounds given in the legal notice mentioned above and admittedly, no legal proceedings were instituted by the complainant/appellant against the said buyer to enforce the claim in the country of the buyer. Therefore, in view of the exclusion contained in clause 3(d) of the policy, the respondent is not liable to reimburse the complainant/appellant for the loss alleged to have been suffered by it on account of non-payment by the overseas buyer.8. The terms and conditions of the policy taken by the complainant/appellant from the respondent are mandatory in nature and the breach of the said terms and conditions would relieve the insurer of its obligations under the said policy.In M/s BHS Industries Vs. ECGC, (2015) 9 SCC 414, the Hon'ble Supreme Court inter-alia held as under:-"35.1. Clauses 8(a) and 19(a) deal with declarations and the exclusion of liability respectively. They are absolutely specific. Clause 2 deals with disclosure of facts. Clause 10 deals with incidence of premium and payment of additional premium and Clause 30 with uncovered risks. Clauses 8(a) and 19(a), which we have reproduced hereinabove are absolutely clear as crystal and as per the stipulations therein the insured has been cast an obligation under the policy. He is obliged under the policy to deliver to the Corporation a declaration on or before the 15th day of each calendar month in a prescribed format details of all shipments made during the previous month and even he is required to give a "NIL" declaration if no shipment has been made. Clause 19(a) refers to the declaration in terms of Clause 8(a). It also uses the words "without any omission". It adds a further postulate relating to payment of the premium in terms of Clause 10. The prescription of twin requirements in Clause 19(a) is cumulative. They cannot be read in segregation. The insured has to declare the shipments in terms of Clause 8(a) without omission and also pay the premium in terms of Clause 10. Premium of payment alone does not make the Corporation liable to indemnify the loss or fasten the liability on it. It is also required on the part o
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f the insured for the purpose of sustaining the claim to show that there has been compliance as regards the declaration. To construe Clause 8(a) that the insured has a choice to declare which shipment he would cover and which ones he would leave, would run counter to the mandate of the policy. It has to be borne in mind that these are specific clauses relating to the obligations of the insured. The attempt on the part of the appellant to inject the concept of payment of premium and the risk covered to this realm would not be acceptable.35.2. The general clauses basically convey which risks are covered and which risks are not covered and how the premium is to be computed and paid. What eventually matters is where the liability of the insurer is exclusively excluded, the said clauses of the policy are absolutely clear unequivocal and unambiguous. The insured after availing a policy in commercial transactions is to understand the policy in entirety."9. For the reasons stated hereinabove, I find no merit in the appeal which is accordingly dismissed with no order as to costs.