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2026 Supreme(Online)(NCDRC) 125
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
A. P. Sahi, President, Bharatkumar Pandya, Member
SHREE RENUKA SUGARS LIMITED – Appellant
Versus
THE UNITED INDIA INSURANCE COMPANY LIMITED – Respondent
NC / CC / 281 / 2011
For the Appellants/Petitioners: Mr. S. M. Tripathi
For the Respondents: Mr. Amit Kr. Singh, Ms. Rokono Meyase
For an insurance policy to be effective, premium must be paid in advance; retrospective coverage is legally impermissible, particularly when misrepresentation is alleged.
Headnote:(A) Marine Insurance Act, 1963 - Section 64-VB - Insurance contract - The complaint against repudiation of insurance claim concerning General Average arising from losses during marine transit - Insurance Company claimed policy was obtained through misrepresentation of fact, as the complainant had knowledge of a prior casualty before the policy's issuance. The insurer illustrated that the policy's coverage could not operate retrospectively before the premium payment. The complainant argued no suppression of facts occurred since it was unaware of the loss at the time of acquiring the policy. (Sections 11.2, 16.2 of relevant contract). (Paras 1-75)
(B) Contract principles - The principle of uberrimae fidei requires full disclosure of material facts; however, the complainant contended they lacked knowledge of a prior happening necessitating disclosure. The court held that the burden of proving misrepresentation lay on the insurer. (Paras 45-70)
(C) General average claim - The court discussed the nature of General Average and the responsibilities imposed upon the insurer, concluding the repudiation was based on valid grounds linked with timing of events and disclosures. (Paras 71-75)
| Table of Content |
|---|
| 1. repudiation of insurance policy due to misrepresentation. (Para 1 , 2) |
| 2. arguments presented concerning the knowledge of loss. (Para 3 , 4 , 5) |
| 3. court's observations on timing and effectiveness of policy. (Para 6 , 9 , 10) |
| 4. details of contract between parties regarding shipment. (Para 12 , 21 , 22) |
| 5. claim of general average adjustment upheld. (Para 71 , 74) |
ORDER
A. P. SAHI, J (PRESIDENT)
1. This Complaint raises interesting questions arising out of peculiar facts that has been very ably argued by Mr. Tripathi, learned Counsel for the Complainant and have been equally responded to with no less ability by Mr. Amit Kumar Singh, learned Counsel for the Insurance Company. The claim arising out of a declaration of General Average after a loss of goods in a marine transit, that has been repudiated by the O.P. vide letter dated 26.12.2009, is the subject matter of this Complaint. The contest put forth by the Insurance Company is that the question of applying the General Average does not arise inasmuch as the policy has been breached by the complainant by having obtained the policy on misrepresentation of facts regarding the casualty which had already taken place. The Insurance Company has taken a stand that the fact of the loss due to the accident and its occurrence which was in the knowledge of the Complainant that had been deliberately withheld to somehow the other obtain the policy and coverage for the loss which in fact had occurred within the knowledge of the Complainant even prior to the grant of policy. He further submits that the alleged Held Cover endorsement dated 03.12.2009 was also obtained in breach of good faith and is of no legal consequence nor can any benefit be claimed by the Complainant in as much as the premium of the policy which is the consideration of the contract had been paid one day after the accident, and as such there was no coverage existing as on the date of the incident, which is 02.12.2009. The Insurance Company has therefore contended that the repudiation is valid and that the benefits of the declaration of General Average cannot be availed of.
2. The policy had been taken through the broker M/s Edelweiss Insurance Brokers Limited and the facts regarding the acquisition of the policy and the issuance thereof apart from the endorsement needs to be analysed in the background that it is the consistent stand of the Insurance Company that the Complaint had not only the knowledge of the loading of the goods on the vessel, but they had also knowledge of the fact that it had already sailed, and in effect the accident of the vessel was well known to the Complainant. Instead, they with held the said information with a deliberate intent to cover up their latches of not having obtained the insurance immediately upon the declaration of the Vessel in the Sugar Charter-Party dated 17.11.2009. Mr. Amit Kumar Singh has also elaborated his submissions which we shall deal with later on stating that the charter of parties categorically requires the declaration of a vessel and the insurance coverage has to be taken on such declaration. He has argued that the declaration was made long back in November, 2009 but the Complainant failed to acquire the Insurance policy on such declaration which they were obliged to do. This was yet another breach and such a conduct coupled with the hurried manner with which the communications ensued through mails, demonstrates that the Complainant in order to overreach their own defects and deficiencies attempted to overcome the same by acquiring the policy without disclosing material and relevant facts of the accident that had already occurred.
3. Accordingly this matter was taken up and heard on 02.09.2025 when the following order was passed:
“Heard Mr. S. M. Tripathi, learned counsel for the complainant who has, in brief, advanced his submissions contending that the issue involves the issue of General Average Contribution which claim has been declined by the opposite party –
