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2023 Supreme(Online)(Del) 18132
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
C. Viswanath (Presiding Member), Subhash Chandra, MEMBER
Ratnagiri Gas & power Pvt. Ltd. v. ICICI Lombard General Insurance Co. Ltd.
Complaint under S.21(a)(1) of the Consumer Protection Act, 1986
Insurance claims must disclose all material facts; failure to do so can result in claim repudiation.
Headnote:(A) Consumer Protection Act, 1986 - Section 21(a)(1) - Insurance Claim - Complainant sought indemnity for damages under insurance policy but claim was repudiated by Opposite Party on grounds that damages were pre-existing. The legality of the repudiation was analyzed. (Paras 1, 11, 12)
(B) Principles of Indemnity and Disclosure - The court reiterated that non-disclosure of pre-existing damages voids insurance claims under the principle of utmost good faith. (Paras 11, 12)
(C) Jurisdiction - The Complainant's standing as a consumer was affirmed based on previous rulings emphasizing consumer rights in insurance contracts. (Paras 7, 8)
Findings of Court:
The claim was rightly repudiated as the damages existed prior to policy commencement and the Complainant failed to substantiate claims within the stipulated notification period.
Issues: The central issues addressed were the notification delay and the existence of damages prior to the policy period.
Ratio Decidendi: The court concluded that the loss was pre-existing and that the insurance company did not assume risk for such conditions at policy inception.
Result: Complaint dismissed with no order as to costs.
| Table of Content |
|---|
| 1. insurance policy details and claim initiation. (Para 1 , 2 , 3) |
| 2. opposite party's repudiation basis and complainant's arguments. (Para 4 , 5 , 6) |
| 3. court's analysis on consumer status and claim validity. (Para 7 , 8 , 9 , 10 , 11) |
| 4. final ruling on claim dismissal. (Para 12) |
1. The present Complaint is filed under S.21(a)(1) of the Consumer Protection Act , 1986.
2. The Complainant in order to secure its properties from loss or damage floated a tender for insurance. Opposite Party, on the basis of tender and site inspection, sold an All Risk Policy for erection of LNG Storage and Regasification facility for a sum of Rs.2,000 Crores known as Special Project Insurance Cover (Erection All Risk Policy), vide Policy Nos. 5011/0000118, 5011/0000119 & 2002/0008354 for which a sum of Rs.5,60,07,760 was charged as premium. The period of insurance was initially from 1.7.2006 to 31.8.2007. The Policy was extended by Opposite Party on the request of the Complainant for a further period of 9 months, i.e. till May 2008, by issuing an endorsement to the above Policy, charging a further premium of Rs.3,40,64,101. Opposite Party had 80% share in the Insurance and the remaining 20% share was with the Reliance General Insurance Co. Ltd and United India Insurance Co. Ltd.
3. The case of the Complainant is that the Joint Venture of M/s. Whessoe of UK and M/s. Punj Lioyd Ltd, New Delhi, (hereinafter 'Contractors') were entrusted with the revival activity of the LNG storage and regasification plant of LNG block. At the revival stage, a health study was conducted by them with respect to the LNG block to assess the condition of the equipment, facilities, stored items etc. Opposite Party, after inspection and on the basis of the health study, having found no damage to the plant or any other abnormality, sold the Policy to the Complainant. In July 2006, the Contractors started working in the Plant. After working for 4 months in the Plant, the Contractors reported damage to the insulation of Tank T - 200 on 1.12.2006. The Contractors also reported ingress of moisture in Tank 200 on 18.12.2006. The matter was, thereafter, taken up with the Contractors for repair of the damage in order to minimize the loss, as per terms of Policy but the Contractors did not own their negligence and insisted that the loss was pre - existing and not due to their fault. The estimates were submitted by them on 18.10.2007, after their refusal to repair the damage. After receiving the estimates from the Contractors, the Complainant informed Opposite Party about the loss and requested them to indemnify the loss accordingly, vide email dated 17.11.2007. Opposite Party appointed M/s. Cunningham & Lindsey as Surveyor and Loss Assessor who visited the site on 19.11.2007. All queries were replied immediately and documents were made available by the Complainant. The Complainant also submitted the claim form as required by Opposite Party. In the first and second week of March 2008, the Surveyor informed the Complainant about the non - admissibility of the claim and called for further clarification. The Complainant appointed Sh. Milind Bhatwedeker, a registered Surveyor with IRDA on 18.6.2009, to give his opinion as Consultant to Complainant and to discuss the matter with the Surveyor of Opposite Party. The Surveyor requested him to submit a written note, which was duly submitted on 3.9.2009, but was rejected by the Surveyor. Opposite Party repudiated the claim of the Complainant on 25.1.2010 without attaching copy of the Survey Report. Aggrieved by the wrongful repudiation by Opposite Party, the Complainant filed Complaint with the following prayer :
"(a) That this Hon'ble Commission, may be pleased to pass an award of Rs.12 Crores with interest @ 18% p.a. from 1.12.2006 i.e. the date of intimation of loss till the recovery of the amount.
(b) That a cost of Rs.10.00 lakh may please be also awarded.
(c) Any other relief which this Hon'ble Commission may deem fit and prope
