IMPORTANT POINT
In a summary procedure, National Commission is not required to record statements of witnesses.

J.M. Malik, Presiding Member—One of the benefits of Democracy is that, one Government Department can sue another Government Department. Non-payment of court fee, attracts so many litigants to try their luck, under the Consumer Protection Act, 1986. Can this Commission, arrogate to itself, those powers, which it does not enjoy? A commission of summary jurisdiction cannot make the position explicit to the half-backed case, in absence of solid and unflappable evidence.

2. This common judgment shall decide 36 original complaints, detailed above. These complaints are between the same parties. The questions of facts and law are similar. The amounts of the gold and jewellery differ. We will decide the Case No. 224 of 2010, connected with 35 other similar matters.

3. Export Credit Guarantee Corporation of India (‘ECGC’, in short), the Opposite Party (hereinafter referred to as ‘OP’), was established by Government of India to strengthen the export promotion drive by covering the risk of exporting on credit, which provides the range of credit risk, insuring export, against loss of goods and services, including and not limited to protracted default by the foreign buyers. The complainant, MSTC Limited, is a Government of India Company, involved in trading activities.

4. Vide Resolution No.2/2007-08, it was resolved that the complainant would transact the business of export of gems, gold, jewellery and other products on the basis of collection without LC on post-shipment basis against coverage by OP. The complainant would be the exporter in the transaction and Associates would be engaged, who would be the suppliers as well as the shippers of the gold, jewellery. Accordingly, the complainant entered into a Memorandum of Understanding ( MOU) with all the Associates for the above said parties. The maximum liability provided in the policy was Rs. 300 crores. All the documents were sent through Banking channel to the Buyer’s Bank, Overseas. The antecedents of the Buyers were verified.

5. The ECGC/OP issued an Export Turnover Policy, dated 29.08.2007, covering transactions for the period 29.07.2007 to 31.08.2008, vide Annexure – A. According to the policy, the OP was to cover the risk of the complainant upto 90% of the shipment value, which remained unrealized if a buyer fails to pay by reason of any of the insured perils. Then, MSTC, exported the same to Overseas Buyers who were approved by ECGC and each of whose credit limits were separately fixed by ECGC after due diligence. Prior to such exports, MSTC took insurance from ECGC that covered the risk of non-payment by Overseas Buyers after receipt of goods by the buyers and acknowledgment thereof obtained from buyers without any quantity/quality issues. Clause 8(i) of ECGC Policy, runs as follows :-

“8. INSURED PERILS

(i) PROTRACTED DEFAULT

There is “PROTRACTED DEFAULT” when an INSURED BUYER having accepted delivery of goods has failed to pay to you any part of an INSURED DEBT relating to such goods for a period of 120 days after the DUE DATE”.

6. On 24.04.2008, the OP enhanced the liability in respect of existing policy entered into between the parties from a sum of Rs.300 crores to Rs.600 crores in respect of exports which were to be made in respect of all contracts entered into between the complainant and the foreign buyers for the period 01.09.2008 to 31.08.2009, vide fresh agreement dated 01.09.2008. The amount of premium was also enhanced.

7. Under the terms of the policy, in the event, a buyer willfully defaults or in case of a protracted default, a claim is to be made in the prescribed format within two years from the due date of payment of the insured date. The complainant submitted an application under Form No.144 applying for an approval of the credit limit in respect of foreign buyer, which, in the instant case, is one, Noor Jahan General Trading LLC. The OP approved the credit limit for a sum of Rs.9.00 crores vide Annexure –B. Subsequently, OP enhanced the credit li