JSK Industries Pvt. Ltd. Vs Oriental Insurance Company Limited (Supreme Court of India)
Conclusion: Hon’ble Supreme Court observed that National Commission ought not to have gone beyond the grounds of repudiation of the claim and the matter was remanded to the State Commission for taking a decision afresh on the claim of the appellants on the grounds which formed the basis of repudiation and determine as to whether at the material point of time there was sufficient balance to cover the claim on account of declaration made as regards loss suffered by the appellants.
Facts: The repudiation of a claim in respect of a “Marine CargoOpen Policy” gives rise to this appeal and the appellants were the claimants before Hon’ble Supreme Court. The policy, initially covered a sum of rupees two hundred crores. Under the heading “Risk Details”, against Sl.No. 1 of the policy document, next to the column “Voyage”, it was indicated “from anywhere in India to anywhere in India”. Period of Insurance was from 29th October 2009 to Midnight on 28th October 2010.There was subsequent addition of terms and raising of insurance coverage as well. Fresh endorsement schedules were issued incorporating the changes. These endorsement schedules, however, carried the expression “Attached to and forming part of policy No.12012/21/2010/876” (that being the original policy number). The endorsement schedule dated 25th November 2009 described the policy as “On the Sales Turnover basis”. This endorsement became effective from 14:50 hrs on 25th November 2009. The next endorsement was made on 8th April 2010, also attached to the original policy, by which sum insured was raised by a further rupees two hundred crores.
The appellants were traders and manufacturers of aluminium products. They claim to have purchased, by high seas sale agreement dated 22nd June 2010, eight containers of aluminium ingots. These containers had arrived at Jawaharlal Nehru Port Trust and from there, they were sent to the appellants’ factory unit at Silvassa by a transporter by road. The appellants’ case is that out of the eight containers, one was stolen and the incident of theft took place on 2nd July 2010. According to the appellants, value of stolen goods was rupees thirty four lakhs ninety two thousand and eighty one. Their claim was lodged with the respondent on 18th March 2011 but this was repudiated by the latter. The appellants then approached the State Consumer Disputes Redressal Forum (Maharashtra) against the insurance company which was dismissed. The Appellant then appealed to National Commission, wherein again the Appeal was dismissed.
The appellants submitted the insurance company cannot resist a claim petition on grounds beyond those cited by them while repudiating a claim. In support of this argument, a decision of this Court in the case Saurashtra Chemicals Ltd. v. National Insurance Co. Ltd. [(2019) 19 SCC 70] has been cited. In this judgement, it has been held:
“23. Hence, we are of the considered opinion that the law, as laid down in Galada [Galada Power & Telecommunication Ltd. v. United India Insurance Co. Ltd., (2016) 14 SCC 161: (2017) 2 SCC (Civ) 765] on Issue (2), still holds the field. It is a settled position that an insurance company cannot travel beyond the grounds mentioned in the letter of repudiation. If the insurer has not taken delay in intimation as a specific ground in letter of repudiation, they cannot do so at the stage of hearing of the consumer complaint before NCDRC.”
The Hon’ble Supreme Court observed that the National Commission mainly rejected the appeal of the appellant on the ground that they had converted “from anywhere in India to anywhere in India” policy into the “sales turnover policy” covering transportation of goods only from two locations specified in the endorsement made on 25th November 2009. The repudiation of the appellants’ claim was on the ground of exhaustion of insurance coverage and the State Commission also determined the issue primarily on that ground. Both the National Commission and the State Commission had referred to, in their respective decisions, the nature of the policy but the State Commission did not come to a specific finding as to whether the goods otherwise remained insured from the JNPT port to the appellants’ factory. It was the finding of the National Commission on the other hand that the policy was only applicable on supplies made from the two locations at Silvassa. As regards financial limit of the policy, the appellants’ stand before the National Commission was that there was available coverage of Rs. 3.89 crores to accommodate their claim. On this count, the observation of the National Commission was that if exhaustion of the coverage limit was the sole reason for repudiation of the claim, the matter could have been remanded to the State Commission for the decision of the complaint on merits. Therefore, following the ratio of the decision of the Coordinate Bench in the case of Saurashtra Chemicals Ltd. (supra), the National Commission ought not to have gone beyond the grounds of repudiation and into the nature of coverage, which according to the National Commission had effectively changed from “anywhere in India to anywhere in India” to a “sales turnover policy”, limiting the policy coverage of the subject goods from the points of departure at the two locations at Silvassa.
Therefore, the decision of the National Commission was set aside as also of that State Commission and the matter was remanded to the State Commission for taking a decision afresh on the claim of the appellants on the grounds which formed the basis of repudiation and determine as to whether at the material point of time there was sufficient balance to cover the claim on account of declaration made as regards loss suffered by the appellants.
Accordingly, the appeal stands allowed in the above terms.
