Page 51 - Insurance Times September 2023

FEATURE

Reliance General Insurance ordered to

pay Rs. 68.60 Lakh to Shipping Firm by

National Consumer Commission

U pholding the state commission's decision, the Athena. The policy, titled 'Marine Hull Insurance Policy,'

national consumer commission has ordered
covered all risks for its tanker vessel 'MT Crystal' from
November 8, 2006, to November 7, 2007. The insurance
Reliance General Insurance Co. Ltd. to pay Rs.
68.60 lakhs with 12 per cent interest from 2008
to a shipping firm. Reliance General had appealed against coverage amounted to Rs. 14.78 crore, for which Seven paid
Rs. 6.72 lakhs in premiums and stamp duty in four
the state's ruling, arguing that the shipping firm had installments. During a journey to Kandla, Crystal's main
withheld information when applying for an insurance policy engine bearing was damaged in September 2007 due to the
for its vessel. Reliance had sought information about past presence of white metal inside the engine. Athena and
accidents involving vessels owned by the firm. Reliance were promptly informed.

The commission noted that the incident cited by Reliance Rejection reasons cited by Reliance
to deny the claim did not qualify as an 'accident,' and that Reliance rejected Seven's claim in September 2007, citing
this fact had been concealed when the policy was taken.
that in the preceding two years, Seven had filed two
The commission classified the damage to the 'main engine
insurance claims for 'M. T. Twinkle,' a sister vessel of the
turbocharger' as an 'incident,' differentiating it from an Seven Islands Shipping Limited fleet, with a different
accident, which would require external force rather than
insurance firm. Reliance contended that accidents
normal wear and tear, which is typically covered by
encompassed various incidents. Reliance even refunded
insurance policies. It further clarified that for the second
the premium Seven had paid, which Seven later cashed.
instance, the incident occurred after the policy was already Seven Islands protested and served a legal notice to
in effect. The national commission also upheld additional
Reliance.
compensation for mental distress and litigation costs, to
talling Rs. 1.25 lakh. During the hearing, Reliance asserted that 'MT Twinkle' had
been insured with IFFCO Tokio General Insurance Company
The order, dated July 31, was issued by Justice Ram Surat
Limited and had filed two insurance claims. Reliance argued
Ram Maurya, presiding member, and Justice Karuna Nand that due to the nondisclosure of these claims, the policy for
Bajyapee, member of the National Consumer Disputes
Crystal had become void and was thus repudiated.
Redressal Commission (NCDRC). It was made in response to
an appeal by Mumbai-based Reliance General Insurance Co. However, the commission overturned the rejection of the
Ltd. against Seven Islands Shipping Ltd. & another and Crystal claim, highlighting that the Crystal policy form had
Athena Insurance and Reinsurance Brokers P. Ltd. been completed in November 2006, while the IFFCO claims
were submitted later. The commission concluded that the
Marine Hull Insurance Policy concealment of material facts was not substantiated,
Seven Islands, a cargo and tanker shipping company, had thereby upholding the state consumer commission's ruling
acquired an insurance policy from Reliance General through that Reliance General should honor the claim payment.

46 September 2023 The Insurance Times