1. The case of the complainant is that it is engaged in the business of manufacturing and export of stainless steel utensils, Sh. Tapan Gupta was the authorised signatory. He has been authorised to institute the complaint vide board resolution dated 16.04.2015. The complainant availed insurance cover for its export, from OP vide insurance policy No.SCR 0510000067 for the period from 01.05.2008 to 30.04.2010 for Rs.25 lacs. The OP undertook risk to all the shipments. Clause (1) (a) of the policy mentioned that OP was under contractual obligation under the insurance to pay invoice amount of any shipment made during the tenure of the policy in the event of buyer not making the payment within four months after the due date of payment.
2. Complainant exported stainless utensils having invoice value of Rs.24,48,495/- to OOO Posuda Opt-Torg Co. Ltd.191023, St. Petersburg, Apraksin Perculok, Dom 20, Russia on 02.12.2019. Vide letter dated 09.11.2009 OP approved credit limit of Rs.24,77,540/- vis-a-vis aforesaid buyer. Copy of the said letter is C-2. The buyer was under obligation to make the payment within 90 days from the date of delivery of shipment. The shipment was delivered to the buyer and land certificate issued by MSC Agency (India) Pvt. Ltd. to this effect is annexure C-3. The buyer did not make the payment. Complainant sent letter dated 10.05.2010 to the OP intimating factum of not receiving the payment from buyer. Complainant received letter dated 12.05.2010 from the OP advising the complainant to initiate steps for recovering the amount through Debt Collection Agency M/s. MAH International Corporation and Embassy of India in Moscow. Complainant sent letter dated 29.09.2010 to OP requesting it to settle the claim as complainant was not able to recover dues from buyer despite of diligent efforts. Complainant received letter dated 30.09.2010 alongwith claim form from the OP whereby the OP requested complainant to submit the claim form with supporting documents. The complainant submitted the claim form vide letter dated 27.11.2010 alongwith all supporting documents.
3. Complainant sent letter dated 22.12.2010 to the OP apprising it that he had entered into Debt Collection Service Agreement with M.A.H. International Corporation. For the first time after a gap of about eight months from the date of default in payment being brought to the notice of the OP, OP sought clarification regarding sending of shipment on 02.12.2009 inspite of the fact that as per order last date of shipment was 10.11.2009. While applying credit limit of buyer, complainant mentioned that it has released full payment on 05.10.2009 for the shipment dated 15.09.2009. The premium was payable in advance but sufficient balance was not available in complainant’s Deposit Premium Account on the date of shipment.
4. Complainant sent letter dated 17.02.2011 clarifying each issue raised by OP. It stated that due to some unforeseen problems the shipment could not be made in time. It informed the buyer regarding minor delay and after buyer agreed to accept shipment, the shipment was made on 02.12.2009 which was delivered to the buyer on 06.01.2010. The buyer had not raised any point relating to delivery of shipment. The complainant was holding policy since January 2006. The shipment was made on 02.12.2009 and complainant deposited the premium of Rs.20812.21 for the said shipment on 06.01.2010. The complainant and buyer has all the right to extend the date of shipment. A little variance in date of making shipment does not and cannot be inferred to affect the contractual liability of the OP to keep the complainant indemnified against the risk covered under the insurance policy. The premium was paid within time prescribed for declaration and well before the payment for the shipment became overdue. The premium was paid much before the date on or before which payment of shipment was to be made by the buyer. The OP accepted the premium without any reservation or condition. This leads to the only conclusion that OP assumed the risk and was responsible.
5. Vide letter dated 07.03.2011, the OP rejected the claim on the ground that on the date of shipment, sufficient balance was not available in the Deposit Premium Account. As per clause 10 (b) of the policy, if sufficient balance was not available in the DP account of the exporter, OP was not to have the liability to indemnify the insured for loss in respect of the said shipment. The second ground was that payment’ for earlier shipment was realised with delay which was not brought to the notice of corporation while applying for the credit limit. The complainant made representation dated 18.04.2011 explaining that the reasons given by OP were not tenable. The OP assessed buyer’s worth independently before issuing the insurance cover. The OP reiterated its stand vide letter dated 11.07.2011.
6. Complainant submitted certificate dated 25.05.2011 issued by the Oriental Bank of Commerce certifying that no payment was received against the shipment dated 02.12.2009. Thus, the finding of the OP that loss was out of preview as no payment was due is falsified. Complainant wrote a letter dated 05.10.2012 requesting the OP to settle the claim. Similar letter was written on 06.04.2013. On 22.04.2013 complainant received email from OP informing that buyer was under bankruptcy process. Pursuant to the request of the complainant, OP opened the case for review and sent letter dated 06.05.2013 requesting to clarify some issues and submit necessary documents. Complainant sent letter dated 19.07.2013 requesting for 60 days for arranging documents and necessary information. Complainant sent letter dated 30.09.2013 addressing all the issues and concerns of the OP. OP examined the same, sent letter dated 20.02.2014 rejecting the claim.
7. Complainant received letter dated 16.10.2014 informing that it would place the case of the complainant before Apex Customer Grievance Committee. To dismay of complaint, the grievance committee rejected the representation of the complainant. Hence, this complaint for directing OP to pay Rs.24,48,495/- with interest @18% per annum from 02.03.2010, directing it to pay compensation of Rs.5 lacs and to pay cost of litigation to the extent of Rs.1,50,000/-.
8. OP filed WS raising preliminary objections that complaint pertains to commercial transaction and is not maintainable. As per Section 2(1) (d) amended w.e.f. 15.03.2003, complainant does not include a person who avails of such services for any commercial purpose. In Avery India Limited Vs. Kaybee Sulphates Limited (2014) 1 CPJ 621 National Commission held that commercial transaction do not raise consumer dispute. For the same purpose, reliance was placed on decision of National Commission in Trio Elevators Company (India) Ltd. Vs. Tansingh Chauhan (2013) 3 CPJ 464. It had approved provisional credit limit on the basis of information furnished by the complainant in its application dated 09.11.2009. The same was subject to payment of premium in advance by the exporter or direct delivery. After receiving the credit information report of the buyer from reporting agency, OP regretted approving of provisional credit limits. Provisional credit limit was cancelled vide email dated 21.12.2009. The complainant furnished wrong information in his application dated 05.11.2009. Complainant had actually made export to other buyer namely M/s. TK Orbita Co. Ltd., Russia vide shipment dated 15.09.2009 for which he wrongly disclosed that full payment of earlier export had been received on 05.10.2009. The name of the buyer as disclosed in application form was different from which the insurance was covered. The payment was not released in one go as disclosed. In fact it was received in two instalments on 05.10.2009 and 23.10.2009, as per bank realisation certificate which is annexure R-6. The complainant requested OP to change the consignee to M/s. OOO Posuda Opt-Torg Co. Ltd.191023, Russia. The changed details were incorporated by the OP in the system in good faith. Complainant received order dated 04.11.2009 wherein no period had been defined. The shipment moved on 02.12.2009. The land certificate dated 11.11.2009 issued by MSC Agency (India) Private Limited indicates the date of discharge of cargo on 06.01.2010. But the same does not reflect exact person/entity to whom the case goods were delivered. The name of the consignee mentioned in the bill of dated 27.11.2009 is M/s AK Bars OISC, Russia. As per credit limit application submitted by complainant, Sobin bank, Moscow was mentioned to be buyer’s bank. The OP relied upon email dated 03.02.2011 annexure R-13 requiring certain clarification. There is no document available on record to prove that buyer agreed for the late shipment. Full advance premium was not available in the account as on date of shipment. The premium was received on 06.01.2010 alongwith monthly declaration of shipment, after the shipment was effected. It amounted to violation of clause 10 (b) of the policy bond.
9. The OP observed from its system records that complainant had sister concerns namely M/s Worldfa Exports Pvt. Ltd. and Trishul Exotic Pvt. Ltd. with the Large Exporter Branch, New Delhi. Said company were also having insurance policy. M/s. Trishul Exotic Pvt. Ltd. submitted a credit limit application on the same buyer for Rs.30 lacs on DA-90 days terms on 09.11.2009 and the same was rejected by the respective branch on 10.11.2009 as no report were available on the buyer. M/s. Worldfa Exports Pvt. Ltd. submitted another credit limit application on 23.06.2015 which was also rejected by the relevant branch as buyer has been placed in BSAL as an underwriting precaution. No document establishing liability of the buyer is available on record.
10. On merits OP took the same defence.
11. Complainant filed rejoinder and affidavit of Sh. Tapan Gupta, AR in evidence. As compared to it the OP filed affidavit of Ms. Prema Sinha, Manager.
12. The complainant filed written arguments. OP filed written arguments at the stage of oral arguments.
13. I have gone through the material on record and heard the arguments. Counsel for complainant submitted that OP has admitted factum of issuance of the policy. The objection regarding complainant not being a consumer as case pertains to commercial transaction is unfounded in much as contract of insurance stand on different footings. Insurance cover indemnifies. This is so as per decision of National Commission in Harsolia Motors Vs. National Insurance Company Ltd. I (2005) CPJ 27 and RR International Vs. National Insurance Company Ltd. II (2013) CPJ 486. The argument is quite forceful.
14. Counsel for complainant vehemently argued that there is no question of issuing a provisional credit limit. Either the credit limit can be issued or it can be rejected. To give a provisional credit limit and then cancel it after shipment is exported amounts to trapping the complainant. The same is not permissible. The shipment was exported on 02.12.2009 and cancellation is alleged to have been done vide email dated 21.12.2009. There was no fun to cancel the credit limit after complainant had sent the shipment.
15. Regarding the objection of the OP that sister concern of the complainant namely M/s Worldfa Exports Pvt. Ltd. and Trishul Exotic Pvt. Ltd. applied for credit limit on the same buyer which were rejected earlier, counsel for complainant contended that firstly as per preliminary objection 17 of the WS, the same were rejected on 09.11.2009 and 23.06.2015. Both applications are subsequent in time to the grant of credit limit to the complainant in 2008. They have no relevance. He appears to be correct in arguing so.
16. Regarding non payment of premium in advance, it is submitted that admittedly the OP accepted the premium on 06.01.2010. It is interesting to note that premium has been accepted even after cancelling the request for credit limit on 21.12.2009. It had no justification for accepting and retaining premium after cancellation of the request for credit limit. It is quite unfair on the part of the OP to do so. Having accepted premium it must be held that OP has waived condition of advance premium. In any event, it is not fundamental breach of the policy. That being so the complainant is entitled to claim as per decision of Hon’ble Supreme Court in Laxmi Chand Vs. Reliance General Insurance 2016 Scale 213.
17. On analogical ground it may be mentioned that as per decision of Hon’ble Supreme Court in Skandia Insurance Co. Ltd. Vs. Kokilaben Chandravadan, AIR 1987 SC 1184, exclusion clause is to be interpreted in a manner so as not to defeat the protection.
18. Counsel for OP pressed upon letters dated 03.11.2009 and 26.10.2009 which are annexure R-7 and pertains to change of buyer. For the same purpose he drew my attention to invoice dated 04.11.2009 copy of which is at page-46 in the bunch of WS and copy of bill of lading which is at page-49 of the bunch of WS. Counsel for complainant suitably replied that same has been brought to the notice of the OP and change done on the request of buyer. The same has not caused any prejudice to the OP. Argument of the complainant appears forceful.
19. Counsel for complainant urged that OP had been improving its defence from time to time. In earlier letters it did not raise objection now being pressed. It issued the claim form meaning thereby that it was ready to process the claim and allow the same. The loss occurred in 2009, initial repudiation was done vide letter dated 03.02.2011. The same
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remained under consideration and reviewed till 2014. Even initial repudiation is after a gap of eight months. The same is against the decision of Hon’ble Supreme Court in United India Insurance Co. Ltd. Vs. M.K.J. Corporation III (1996) 8 SC wherein it was held that reasonable period for taking decision is two months. 20. Non payment by the buyer is established from letter of the bank. 21. Counsel for complainant also highlighted the OP realised that buyer had undergone bankruptcy. This is so as per email dated 22.04.2013 from the OP copy of which is at page-124 of the bunch of the complaint. That advances the case of the complainant. 22. The counsel for the complainant draw my attention towards representation copy of which is at page-135 of the bunch of complaint. The same explains each and every objection raised by OP, at the earliest. Plea appears to be sound. 23. Plea of the OP regarding complainant having received payment is deceptive. Admission by complainant regarding receipt of payment is of previous consignment. The payment was received before despatch of consignment in question. Again plea of OP is baseless. 24. The OP has taken all possible defences just to delay the case and deprive the complainant of its legitimate claim. The complaint is allowed. OP is directed to pay Rs.24,48,495/- alongwith interest @9% per annum from the date of loss till date of payment. 25. Copy of the order be sent to both the parties free of cost.