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STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Malasri Nandi, President, Chandan Das, Judicial Member, Tapas Kumar Ghosh, Member
Dyna Roof Pvt. Limited – Appellant
Versus
Tata AIG General Insurance Company Limited – Respondent
CONSUMER COMPLAINT NO. 16 OF 2015
For the Appellants/Petitioners: M. Agarwalla
For the Respondents: R.Goswami
An insurance contract is strictly governed by its written policy terms. A party seeking to enforce an alleged modification to an exclusion clause must provide concrete evidence of agreement and consideration; failing this, the insurer is entitled to repudiate claims based on original exclusionary coverage.
Headnote:(A) Consumer Protection Act, 1986 - Section 17 - Marine Insurance Policy - Risk mitigation - Exclusion clause relating to rust, oxidation, and discoloration - Repudiation of claim - Complainant seeking amendment of policy to remove exclusion clause - Burden of proof lies on the complainant to prove modification/agreement to delete exclusion clause - In absence of endorsement or evidence of additional premium payment/acceptance by Insurer, policy terms as issued prevail. (Paras 9, 10, 11)
Facts of the case:
The complainant, a manufacturer and distributor of C.I. sheets, obtained marine cargo policies covering consignments. Upon receipt of a policy, the complainant requested the deletion of an exclusion clause: “Excluding loss arising from rust oxidation discoloration however caused.” The complainant alleged that the opposite parties agreed to the modification, although no official amendment was issued. Subsequently, claims for damages due to rust and discoloration were repudiated by the insurer citing the exclusion clause in the policy coverage(s).
Findings of Court:
The Commission found that the complainant failed to substantiate that the insurer formally agreed to delete the exclusion clause or that the relevant policy governing the damaged consignments had been amended. There was no evidence of payment of additional premium for coverage of excluded risks. The repudiation of claim by the insurer was held to be justified based on the terms and conditions explicitly set out in the issued policy.
Issues: Whether the insurance company agreed to delete the exclusion clause regarding rust, oxidation, and discoloration, and whether the repudiation of claims constituted a deficiency in service.
Ratio Decidendi: A contract of insurance is governed strictly by the terms and conditions of the policy. In the absence of evidence proving mutual consensus on modification or payment of premium for enhanced coverage, the insurer is entitled to enforce the exclusionary terms as stated in the policy.
Result: Complaint dismissed.
| Table of Content |
|---|
| 1. summary of facts involving non-covered damage and disputed policy modification. (Para 1 , 2 , 3 , 4 , 5) |
| 2. court determination that policy exclusions remain valid absent proof of modification. (Para 6 , 9 , 10 , 11 , 12 , 13) |
| 3. final adjudication reinforcing contractual terms and upholding repudiation. (Para 14 , 15 , 16 , 17 , 18) |
JUDGMENT
BY MR. TAPAS KUMAR GHOSH,
Heard Mr. M. Agarwalla, learned counsel appearing for the complainant, M/s Dyna Roof Pvt. Limited. Also heard Mr. R.Goswami, learned counsel appearing for all the opposite parties.
1. This complaint petition is filed by M/s Dyna Roof Pvt. Limited under Section 17 of the Consumer Protection Act, 1986 for repudiating the claims of the complainant by the opposite parties on the ground that the policy issued to the complainant had ITC B clause coverage for damages caused by rust oxidation discoloration and as per terms and conditions of ITC B, the liability arises only if the damage has been caused by the fire, lightning, breakage of bridges, collision with or by the carrying vehicle, overturning of carrying vehicle and derailment or accidents of like nature to the carrying railway wagon /vehicle. It was further stated that the rust may have been caused by ingress of water; however, same having been caused by operation peril covered under ITC B is not substantiated.
2. The complainant is a company duly registered under the Companies Act, 1956 which deals in manufacturing and distribution of various types of C.I sheets and a consumer within the meaning of section 2 (1)(d) of the Consumer protection Act, 1986. Complainant states that the Opp. Party No.1 is an Insurance Company with whom the complainant had opened Marine Policies in question and the Opp. Party No. 2 &3 are the authorized representatives of Opp. Party No.1. The complainant two marine cargo policies being No. 0840010807 dtd 19-11-2012 and No. 0840011206 dtd 23-03-2013 with Opp. Party No.1 for the purpose of insurance coverage of its various consignments containing Gal volume coils consigned from JSW Ispat Ltd, Kamleswar, Maharashtra for its destination at the factory of the complainant at 10th Mile, Meghalaya. Policy No. 0840010807 was for the period 20-11-2012 to 19-11-2013 and initially, the sum assured under this policy was Rs 10,000,000/- ( Rupees One Crore) only but later the same was enhanced to 1,20,000,000/- ( Rupees Twelve Crores) only w.e.f 20-03-2013. The Second Policy No. 0840011206 was for the period 23-03-2013 to 22-03-2014 and the sum assured under this policy was Rs 50,000,000/-(Rupees Five Crores) only.
3. As per the complainant, upon receipt of the Policy No. 0840010807, the complainant noticed that some terms of cover/special conditions/exclusions in the said policy which were not suitable for complainant. Accordingly on 19-11-2012, the complainant intimated the said fact of incorporation of the clauses in the policy to the Opp.party No.3 and demanded for removal of the said clauses and to modify the policy. Complainant sought for removal/deletion of the special condition “Excluding loss arising from rust oxidation discoloration however caused”.
4. Complainant states that the Opp. Party No.3, Sr. Nitish Roy accepted the demand and agreed to exclude the aforesaid conditions from the policy in question. As per complainant, Opp. Party No.2, Mr. Kingshook Sengupta also agreed and accepted to make the changes and exclude the condition and assured the complainant that the desired changes would be arranged within a very short period. On the basis of such acceptance, the complainant had been making payment of the premiums regularly and the Opp. Party had been receiving the same. As per the complainant, so many correspondences to Opp. Party No.1 were made but the Opp. Party not shown any response and not issued amended policy with the changes as agreed.
The complainant states that in the meantime, few consignments were dispatched from JSW Ispat Ltd,
