Case: Export Credit Guarantee Corpn. of India Ltd Vs. M/s. Garg Sons International

2. Facts and circumstances giving rise to these appeals areThe appellant herein, Export Credit Guarantee Corporation of India Ltd., (hereinafter referred to as `theis a government company, which is in the business of insuring exporters. Respondent, M/s Garg Sons International, on 23.3.1995 purchased a policy for the purpose of insuring a shipment to foreign buyers i.e. M/s Natural Selection Co. Ltd. of UK, and the said buyer committed default in making payments towards such policy from 28.12.1995 onwards, with respect to the said consignment.B. The insured, that is M/s Garg Sons International, sought enhancement of credit limit to the tune of Rs.50 lakhs with respect to the said defaulting foreign importer. Subsequently, he presented 17 claims.C. The insurer rejected all the abovementioned claims on the ground that the insured did not ensure compliance with Clause 8 (b) of the insurance agreement, which stipulated the period within which the insurer is to be informed about any default committed by a foreign importer.D. Thus, the insured then filed several complaints before the State Disputes Redressal Commission, to which the insurer filed replies. The State Disputes Redressal Commission adjudicated upon the case and disposed of the said complaint, vide order dated 4.6.2001, directing the insurer to make various requisite payments due under different claims, with 9 per cent interest and litigation expenses etc.E. Being aggrieved against the orders passed in all 17 claims, the insurer preferred appeals under Section 19 of the Consumer Protection Act, 1986, before the National Consumer Disputes Redressal Commission, wherein the impugned judgment and order was disputed, stating that it was evident from the said judgment that 11 claims had been rejected and that 5 claims made by the insured were accepted. Hence, both the parties preferred these appeals.

Court's reasoning:
8. It is a settled legal proposition that while construing the terms of a contract of insurance, the words used therein must be given paramount importance, and it is not open for the Court to add, delete or substitute any words. It is also well settled, that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed in order to determine the extent of the liability of the insurer. Therefore, the endeavour of the Court should always be to interpret the words used in the contract in the manner that will best express the intention of the parties. (Vide: M/s. Suraj Mal Ram Niwas Oil Mills (P) Ltd. v. United India Insurance Co. Ltd., (2010) 10 SCC 567 ).9. The insured cannot claim anything more than what is covered by the insurance policy.terms of the contract have to be construed strictly, without altering the nature of the contract as the same may affect the interests of the partiesThe clauses of an insurance policy have to be read as they are…Consequently, the terms of the insurance policy, that fix the responsibility of the Insurance Company must also be read strictly. The contract must be read as a whole and every attempt should be made to harmonize the terms thereof, keeping in mind that the rule of contra proferentem does not apply in case of commercial contract, for the reason that a clause in a commercial contract is bilateral and has mutually been agreed upon. (Vide : Oriental Insurance Co. Ltd. v. Sony Cheriyan AIR 1999 SC 3252 ; Polymat India P. Ltd. v. National Insurance Co. Ltd., AIR 2005 SC 286 ; M/s. Sumitomo Heavy Industries Ltd. v. Oil & Natural Gas Company, AIR 2010 SC 3400 ; and Rashtriya Ispat Nigam Ltd. v. M/s. Dewan Chand Ram Saran AIR 2012 SC 2829 ).