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2025 Supreme(Online)(NCDRC) 3059
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Mr. Subhash Chandra, Presiding Member, AVM J. Rajendra, AVSM VSM (Retd.), Member
Louis Dreyfus Commodities India Private Limited – Appellant
Versus
The New India Assurance Company Limited – Respondent
Consumer Complaint No. 259 of 2012 | Consumer Complaint No. 396 of 2014
For the Appellants/Petitioners: Mr. Joy Basu, Ms. Akshita Totla, Ms. Priya Gupta, Mr. Anoop K. George
For the Respondents: Mr. Salil Paul, Mr. Sahil Paul, Mr. Sandeep Dayal
Insurers cannot repudiate claims after accepting premiums, including for additional turnover, and must adhere to their representations.
Headnote:These consumer complaints are filed under Section 21 of the Consumer Protection Act, 1986 by the complainant against the insurer for allegedly rendering deficient service and failing to settle the claim due to the loss of goods. The complainant asserted that they had adhered to all policy terms, while the insurer contended that a premium for excess turnover was not duly paid, citing Section 64VB of the Insurance Act, 1938. The court held that there was no breach of policy provisions as the insurer had accepted the premium including for the additional turnover and had subsequently repudiated the claim. The court emphasized that the insurer's acceptance of the additional premium without objection indicated that coverage was valid at the time of loss. The insurer was directed to pay the insured amount along with interest.
| Table of Content |
|---|
| 1. validity and acknowledgment of insurance coverage despite turnover exceeding initial estimates. (Para 1 , 2 , 3) |
| 2. contestation of claims relating to premium obligations and procedural compliance with the insurance act. (Para 4 , 5 , 6) |
| 3. insurer's duty to justify repudiation of claims necessitating clarity on premium and turnover disclosures. (Para 7 , 8) |
| 4. court’s determination on liability and premium payment timing in relation to the fire insurance claim. (Para 9 , 10 , 18 , 20 , 21) |
JUDGMENT
1. These Consumer Complaints have been filed under Section 21 of the Consumer Protection Act, 1986 (“the Act”) by Louis Dreyfus Commodities India Pvt Ltd against The New India Assurance Co. Ltd. Since the facts and questions of law involved in both complaints are substantially similar, these complaints are being disposed of by this common Order. For ease of reference, CC No.259/2012 is considered as the lead case, and the facts outlined below are derived therefrom.
2. The Complainant in Consumer Complaint No. 259/2012 has sought the following relief:
A. Declare that the Opposite Party has rendered deficient service to the Complainant.
B. Award a sum of Rs. 22,01,29,271 /- being the claim amount due to the Complainant together with interest at 18.25 % per annum from 25 December 2011 till the filing of the Complaint and further to pay this sum with interest at 18.25% per annum from the date of this complaint till the date of realisation.
C. Award costs connected with these proceedings to the Complainant.
D. Such other and further orders as may be necessary in the interests of justice.”
3. Brief facts of the case, as per the Complaint are that the Complainant had engaged K.M. Dastur Reinsurance Brokers Pvt. Ltd. to procure an insurance cover on its behalf for its assets. Vide letter dated 16.12.2009, the said Broker persuaded for insurance to cover all commodities that are dealt with by the Complainant and outlined its annual insurance requirements. It was represented in the quote request that the Complainant‟s estimated annual turnover was Rs.1200 crores and that the premium would be adjusted annually based on actual sales figures recorded in the Balance Sheets. After discussions amongst the Broker, Complainant and OPs, the OP agreed to extend insurance coverage for the period 01.01.2010 to 31.12.2010. Accordingly, on 31.12.2009, the OP issued a „Risk Covering Letter‟ confirming that coverage would be extended under the Sales Turnover Policy with an expected annual turnover of Rs.1200 Crores and the premium to be paid in two half-yearly instalments. Pursuant thereto, OP issued Policy No. 350200/21/09/14/ 00000369 for one year commencing from 01.01.2010, covering commodities traded by the Complainant. The policy was titled “Marine Cargo Annual Turnover Policy” and specified an “Expected Turnover” of Rs.1200 Cr, with premium payable on a half-yearly basis. The Complainant, vide email dated 14.05.2010, sought clarifications from its broker regarding whether the turnover limit of Rs.600 Cr for the first six months required enhancement, if exceeded. The Broker forwarded this query to the OP on 15.05.2010, and in response, the OP vide mail dated 17.05.2010 confirmed to the Broker and in turn to the Complainant that, once the second premium instalment was paid, all transits would be covered till the end of the policy period, even if the turnover exceeded Rs. 1200 Cr. Accordingly, in line with the policy requirements, the Complainant paid the first premium instalment in January 2010 and the second instalment in July 2010. The OP had acknowledged by email dated 17.05.2010 that coverage would remain valid notwithstanding turnover exceeding Rs. 1200 crores, as long as both premium instalments are paid. On or around 07.11.2010, the Complainant received and stored 41,481 cotton bales at Contrans Logistic Pvt. Ltd., Container Freight Station (CFS) near Pipavav Port. Of these, 6,600 bales were already exported, and the remaining 34,881
