Insurers must substantiate claims of fraud or non-disclosure to justify repudiation of claims under insurance contracts, with ambiguities interpreted in favor of the insured.

JUDGMENT

AVM J. RAJENDRA, AVSM VSM (RETD.), MEMBER

1. The matter pertains to rejection of two payment claims against Shipments Comprehensive Risk Policy obtained by M/s SLD Enterprises, the complainant from Export Credit Guarantee Corporation, the Opposite Party (OP) wherein two delayed payment claims with respect to M/s Sai Creations NV Belgium for consignments worth Rs.34,93,275 dated 31.03.2008; and consignment worth Rs.13,32,879 dated 04.04.2008 were rejected. The complainant filed Complaint Case No. 138 of 2009 before the learned State Commission, Delhi (State Commission) which was disposed of vide order dated 10.03.2014 partly allowing the complaint and directing the OP to pay the complainants Rs.48,86,144 along with interest @ 7% per annum from the date of filing the complaint till the date of actual payment. The OP was further directed to pay Rs.1,00,000 towards compensation, which shall be inclusive of costs of litigation. This payment shall be made within a period of 30 days from the date of receipt of the order, failing which interest @ 8% shall have to be paid from the date of the order till the date of the actual payment.

2. As against the Order of the learned State Commission in CC No. 138 of 2009 dated 10.03.2014, the OP filed the present First Appeal No. 232 of 2014. The parties in these Appeals are being referred to as stated in the complaint.

3. Brief facts of the case, as per the complainants, are that they are a „Sole Proprietorship‟ firm with Mr Anil Dingra as Sole Proprietor and the firm is engaged in „Export‟ of readymade garments, pure ghee, milk products, pulses etc. The OP is a Govt of India entity established to encourage exports and thus provides for designated insurance policies to protect exporters against losses due to variety of risks involved in export activities. The OP designed certain insurance policy products and thus they submitted a proposal in the prescribed format in the year 2007 for issue of a „Shipments Comprehensive Risk Policy‟ (SCR) from OP. The OP, vide Policy No. SCR 0110011552 provided for a maximum liability of Rs.3 Crores, for the period from 12.12.2007 to 31.12.2009. This policy was issued on 08.01.2008 and a premium of Rs.1,10,833 was paid by the complainant. As part of the applications submitted by the complainant for approval of credit limits in respect of foreign buyers for overall limit of Rs.3 Crores, they also sought a credit limit of Rs.50,00,000 in respect of a foreign buyer viz. M/s Sai Creations NV Belgium for export of readymade garments. OP approved the said credit limits and necessary premium/ fee was also paid. It is the contention of the complainant that the credit limit with respect of M/s Sai Creations NV Belgium was granted on 09.01.2008. Thereafter, further credit limit for M/s Sai Creations was enhanced to Rs.1,00,00,000 on 17.03.2008. The complainant contended that, of the total export goods worth over Rs.4,70,00,000, the export of readymade garments for Rs.1,40,14,647 was made by his firm to M/s Sai Creations. They contended that M/s Sai Creations paid only Rs.91,28,503 and payment for two consignments worth Rs.34,93,275 dated 31.03.2008; and consignment worth Rs.13,32,879 dated 04.04.2008 made to M/s Sai Creations NV Belgium was delayed and not paid.

4. The complainant had provided the delay payment details to the OP vide letter dated 19.08.2008 and the OP advised the complainant to take direct steps for recovery. However, in the absence of receiving payment form M/s Sai Creations NV Belgium, the complainant lodged an insurance claim with the OP with respect to the said two shipments worth Rs.34,93,275 dated 31.03.2008 and Rs.13,32