Calcutta High Court
Formerly Export Credit Guarantee Corp. ... vs Mittal Technopack Private Limited And ... on 29 November, 2023
Author: Rajarshi Bharadwaj
Bench: Rajarshi Bharadwaj
ORDER OD - 1
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
APO/246/2018
WITH
WPO/94/2015
ECGC LIMITED
[FORMERLY EXPORT CREDIT GUARANTEE CORP. OF INDIA LTD.]
VERSUS
MITTAL TECHNOPACK PRIVATE LIMITED AND ANR.
BEFORE:
The Hon'ble Justice SURYA PRAKASH KESARWANI
The Hon'ble Justice RAJARSHI BHARADWAJ
Date : 29th November 2023.
Appearance:
Mr. Dhruba Ghosh, Sr. Advocate
Mr. Soumajit Ghosh, Advocate
Mr. Amitava Mitra, Advocate
Ms. Antara Choudhury, Advocate
... for appellant.
Mr. Soumya Majumder, Advocate
Mr. Debraj Sahu, Advocate
Ms. Susrea Mitra, Advocate
Mr. Avik Kundu , Advocate
... for respondents.
1. Heard Sri Dhruba Ghosh, learned senior advocate, assisted by Sri
Soumajit Ghosh, learned counsel for the appellant/respondent and Sri
Soumya Majumder, learned counsel, assisted by Sri Debraj Sahu, learned
counsel for the respondents / writ petitioners.
2. Briefly stated, facts of the present case are that the respondents / writ
petitioners took a Multi-buyer Exposure Policy No. MBE0050008485
which was issued by the appellant to the respondents / writ petitioners on
16.01.2012 covering the period commencing from 28.12.2011 to
27.12.2012, for an aggregate loss limit of Rs.5 crore. The insurance
premium was to be paid in four equal quarterly instalments of
Rs.2,27,500/- each quarter, falling due on 28.12.2011, 28.03.2012,
28.06.2012 and 28.09.2012. The third instalment which fell due on
28.06.2012 was not deposited by the respondents / writ petitioners. A
shipment was made by the respondents / writ petitioners on 27.07.2012
to one M/s. Techpack Tanzania Limited, but the consignment was neither
received by the consignee nor its payment was made. Therefore, the
respondents / writ petitioners submitted an application dated 20.11.2012
before the appellant/respondent for permission for re-import of the
shipment dated 27.07.2012. Approval to the aforesaid request was
granted by the appellant/respondent by a letter dated 29.11.2012, subject
to terms of the policy and verification. Subsequently, the respondents /
writ petitioners made payment of third instalment on 03.12.2012 and the
last instalment on 06.12.2012. Thereafter, the respondents / writ
petitioners lodged a claim on 25.04.2013 which was rejected by the
appellant/respondent on 15.05.2013 on two grounds, as under:-
"1) Section 64VB of Insurance Act, 1938 regarding payment of advance
premium was not complied with.
2) Report of Default was submitted with a delay of 67 days."
3. Against the aforesaid rejection, the respondents / writ petitioners
submitted representations including the representation dated 23.12.2013.
The representation was rejected by the competent authority by order dated
24.03.2014, observing as under:-
"The Committee decided to reject the claim as there was no premium
available to cover the exports in question since the installment due
to be paid on 28.06.2012 was paid by the Company only on
03.10.2012."
4. Aggrieved with the aforesaid rejection order, the respondents / writ
petitioners filed Writ Petition No.94 of 2015 [Mittal Technopack Private
Limited & Another v. ECGC Limited], which was allowed by the impugned
order dated 27.01.2017 passed by the Learned Single Judge.
5. Aggrieved, the appellant/respondent has filed the present appeal.
6. Both the learned counsel for the parties jointly submit that the following
questions need to be answered in the present appeal:
(a) "Whether under the facts and circumstances of the case there was
a valid insurance cover under the Policy for the period from 28.06.2012
to 03.12.2012 to cover the shipment made on 27.07.2012 when the
third instalment due and payable by 28.06.2012 covering period from
28.06.2012 to 26.09.2012 was paid by the writ petitioners on
03.12.2012?
(b) Whether under the facts and circumstances of the case and in
view of the provisions of Section 64VB of the Insurance Act, 1938, the
Writ Court has lawfully allowed the insurance claim of the writ
petitioners?"
7. Submissions on behalf of the appellant:-
(i) Learned counsel for the appellant submits that the policy was for
one year and the premium was payable in four equal quarterly
instalments on dates specified in the policy itself. The respondents
/ writ petitioners did not pay the third instalment on due date i.e.
28.06.2012. Therefore, the shipment in question dated 27.07.2012
was not covered under the policy. The refusal to receive goods or
not to make payment by the consignee happened sometime in
August 2012. Both the events were not covered under the policy
since the premium was not paid by the respondents / writ
petitioners. Under the circumstances and in view of the legislative
mandate of Section 64VB of the Insurance Act, 1938, the insurance
claim of the respondents / writ petitioners was lawfully rejected by
the appellant but it has been incorrectly allowed by the impugned
judgment.
(ii) The legislative mandate of Section 64VB of the Insurance Act, 1938
has neither been waived nor it can be waived by an insurance
company, particularly when the Section itself starts with prohibitory
words.
(iii) There was no coverage during the period the insurance premium in
advance was not paid by the respondents / writ petitioners and as
such, the claim of the respondents / writ petitioners could not have
been allowed by the impugned judgment.
8. In support of the submissions, learned counsel for the appellant has relied
upon a judgment of Hon'ble Supreme Court in Deokar Exports Private
Limited v. New India Assurance Company Limited [(2008) 14 SCC 598
(Paras 10, 11, 13 and 14)] and a judgment of Delhi High Court in Indusind
Bank v. Export Credit Guarantee Corporation of India Limited [2016 SCC
OnLine Del 5152].
9. Learned counsel for the appellant has also carried us through the
provisions of Section 64VB of the Insurance Act, 1938, the insurance
policy in question and the rejection orders.
10. Submissions on behalf of the respondents / writ petitioners:-
(i) Learned counsel for the respondents / writ petitioners submits that
as per clauses 10 and 20 of the insurance policy read with the
schedule, respondents / writ petitioners have paid the entire
installment before lodging the claim and as such, the claim of the
respondents / writ petitioners has been lawfully allowed by the Writ
Court. The respondents / writ petitioners have complied with the
conditions of the policy which requires that entire insurance
premium has to be paid before lodging the claim. Therefore, the
claim of the respondents / writ petitioners could not have been
rejected by the appellant. Therefore, the order of rejection of claim
has been lawfully quashed by the Writ Court.
(ii) Failure to make payment of one instalment on the due date shall
not invalidate the policy cover, which was for 12 months. It was the
yearly contract and not a quarterly one. Therefore, on account of
non-payment of the third instalment, it cannot be said that the
shipment in question shall not have coverage during the default
period of payment of the instalment.
11. In support of his submission, learned counsel for the respondents / writ
petitioners has relied upon a judgment of the Hon'ble Supreme Court in
New India Assurance Co. Ltd. v. Rula and Others [(2000) 3 SCC 195
(Paras 2, 7, 11 and 13)].
12. Both the learned counsels for the parties have concluded their
submissions.
13. Both the learned counsels for the parties have concluded their
submissions.
14. Judgment reserved.
(SURYA PRAKASH KESARWANI, J.)
(RAJARSHI BHARADWAJ, J.)
s. kumar
