 "Nectar Life Sciences claim of Rs 1,430 crore not payable: IRDAI")
The surveyor has said that the claim is not payable as the loss occurred due to delay in transit which is an exclusion in the policy and not due to fire. Nectar Life Sciences was covered for the marine cargo transit with New India Assurance for a sum insured of Rs 1,430 crore.
The company, engaged in pharmaceutical business, had received a supply order of menthol to be delivered to a company in China. However, shortly after leaving the Nhava sheva Port, fire broke out on MV Amsterdam Bridge, the vessel carrying the consignment. The loss was intimated to insurer in September 2012 and later September 21, 2012. The insured informed the insurer that the consignment reached Nhava Sheva, Mumbai, which was not true because the said container remained on board of the affected vessel and sailed to China.
The insurer was told that the consignee refused to accept the consignment and the said consignment, therefore, was brought back to India. After receipt of intimation of arrival of the container at insured’s premises in India in December 2013, the consolidated insurance surveyors and loss assessors were deputed to carry out a survey.
Here, the surveyor attributed the reason for loss as deterioration in purity of consignment material due to delay in transit, as the consignment remained in transit for almost one and half year and was exposed to vagaries of weather and that it was not because of fire in the vessel. It also said the major loss suffered by insured was a trading loss, as the prices of menthol in the international market crashed by 30 per cent during the period it remained in transit. Thus, there was 30 per cent loss in the consignment due to crash in its price in international market which is trading loss and the policy does not cover the same. So, they observed that the loss is out of the scope of the Marine Cargo Insurance policy.
Later, a case was filed in the Punjab High Court which was disposed by the Court giving the insurer six weeks’ time to process the claim. The insurer repudiated the claim saying the reason that the loss is out of the scope of the Marine Cargo Insurance Policy. Nectar Life Science again filed a writ petition alleging that the surveyor and insurer breached regulations. The High Court of Punjab and Haryana asked Irdai to decide on the appointment of a second surveyor.
Irdai looked into the case and said that it is confirmed that the loss did not occur due to fire in the ship, but due to delay in transit, which is an exclusion under the policy. Therefore, they have decided not to appoint a second surveyor in this case.
