Insurance claim cannot be rejected on the ground of misrepresentation when the insurance company did not ask for full details from the party  

National Consumer Disputes Redressal Commission (NCDRC): A Single Member Bench of V.K. Jain, J., rejected an appeal filed against the order of State Commission whereby it was directed to pay the insurance amount to the respondent.

The respondent, in this case, entered into a contract with an overseas buyer for sale of some goods. As per the terms of the purchase order, the seller (respondent) was supposed to get the goods insured before sending them to seller and hence the respondent purchased an insurance policy from the appellant. The appellant did not ask for invoice or purchase order. As per the insurance policy the goods were insured till the time they reached the destination. The goods were lost in transit and the respondent claimed the insurance amount which was denied by appellant on the ground that the respondent had obtained the policy by misrepresentation.

The main issue that arose before the Commission was whether the appellant company was liable to pay the insurance amount of lost goods to the respondent

The Commission observed that the insurance company did not ask for invoice or the purchase order. Further, as it was clearly written in the purchase order that the seller (respondent) was supposed to get the goods insured before sending them to the buyer so it cannot be denied that the contract was a Cost, Insurance, Freight (CIF) contract. It is also undeniable that the goods were lost in transit, they did not reach their destination and as per the insurance policy itself, the goods were insured till the time they reached their destination.

The Commission held that since the goods had not reached their destination hence the ownership of the goods rested with the respondent and as per the terms of the insurance policy, he was entitled to receive the insurance amount. The Commission upheld the order of the State Commission and rejected the claims put forth by the appellant. [Oriental Insurance Co. Ltd. v. Ganesh Granites Ltd., 2018 SCC OnLine NCDRC 398, order dated 03-10-2018]

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