Avm J Rajendra Avsm Vsm (Retd), Member

The present Consumer Complaint has been filed under Section 21 of the Consumer Protection Act, 1986 (for short "the Act") against the Opposite Parties seeking to direct the OPs:

                   "a) (i) Holding that the 2nd extension of the First EARI Policy and the issue of 2nd EARI policy as defective and non-est as was issued during the total cessation of work with the general exclusion of total cessation of work and refund the entire premium of Rs.29,75,53,310 collected by the respondents or in the alternative refund of Rs.19,69,98,310/- by subtracting the estimated premium for SFSP Policy Rs.10,05,55,000 from Rs.29,75,53,310 treating the risk as silent risk during the complete cessation of work.

                   (b) Interest @ 18% on the refund amount with effect from the date of receipt of last premium instalment till date of payment.

                   (c) Pay compensation Rs.1.50 Cr for the deficiencies in service rendered by the respondents as mentioned in para 125+ of the complaint.

                   (d) Cost of the proceedings before the Hon'ble Commission.

                   (e) Pass any other order as it deems fit under the circumstances of the case."

2. Brief facts of the case, as per the complaint, are that the Complainant, Nagarjuna Oil Corporation Ltd. (NOCL) undertook the installation and commissioning of a 5.9 MMTPA petroleum refinery project at Thiruchopuram Village, Tamil Nadu. The project involved relocation of an existing 5.0 MMTPA Mobil refinery from Germany along with refurbishment and installation of new equipment. To cover risks during erection, testing and commissioning of the said project, the Complainant, through its insurance broker OP-2, obtained an Erection All Risks Insurance (EARI) Policy No. 710400/44/08/04/40000001 from OP-1 as the lead insurer, with OPs 3 to 6 as co-insurers. During pre-placement negotiations, OP-2 informed the Complainant on 19.07.2007 that reinsurers were required to be informed of any cessation of work beyond four weeks and that continuation of cover during such cessation would require negotiation. After reinsurance discussions, OP-2 sought advance premium to bind reinsurance and advised that risk would commence from the date of such advice vide communication dated 13.05.2008. OP-1 agreed to act as lead insurer on 21.05.2008. Pursuant to which, the Complainant paid a deposit of Rs.1,00,00,000 on 04.06.2008. The co-insurance arrangement was confirmed on 29.07.2008 and a written quotation dated 27.08.2008 was issued, separating "Cover" from "Conditions" and referring to multiple endorsements, though placing an aggregate limit of indemnity of Rs.200 crores for losses due to storm and flood under the "Conditions" section. The First EARI policy was reflected in a schedule signed on 24.12.2008 for the policy period from 10.12.2008 to 09.12.2011, with a Sum Insured of Rs. 3,273.59 Crores and total premium of Rs.31,96,28,430 (exclusive of service tax), payable in eleven instalments. The Complainant alleged that although the policy was presented as an "all risks" cover, a sub-limit of Rs.200 Cr was imposed for Storm, Cyclone, Flood and Inundation (STFI) risks, which substantially reduced the scope of coverage. Upon expiry of the original period, a short extension from 10.12.2011 to 09.03.2012 was granted on payment of additional premium.

3. On the intervening night of 30/31.12.2011, Tropical Cyclone "Thane" struck Cuddalore, causing extensive damage. Pursuant to orders of the District Collector, total cessation of work commenced from 01.01.2012. In view of the complete standstill, the Complainant sought "silent risk" cover for idle assets under a Standard Fire and Special Perils (SFSP) policy. However, OP-1 declined such cover and insisted that EARI cover be continued, representing that reinsurers would not support testing and commissioning if the project was shifted to SFSP cover. Relying on these representations and under pressure from lending banks, the Complainant sought a further 12-month extension by letter dated 23.02.2012 and paid Rs. 9,37,14,941 (exclusive of service tax), whereupon OP-1 issued the second extension for the period from 10.03.2012 to 09.03.2013. Despite admitted total cessation of work and absence of any fixed date for recommencement, OP-1 continued to insist on continuation of EARI cover and collected further amounts between March 2013 and March 2015 aggregating to Rs.24,06,15,859, credited to its CD (advance premium deposit) account, without issuing contemporaneous duly stamped policy documents or endorsements except for an acknowledgement dated 10.09.2013.

4. On 26.03.2015, OP-1 generated a new EARI policy bearing No. 710400/44/12/04/00000005, which, according to the Complainant, was back-dated by adjustment of CD account entries and disclosed that STFI cover had been made void ab-initio and that the co-insurance structure was altered by transfer of IFFCO-TOKIO's share to National Insurance Company without the Complainant's knowledge or consent. The Complainant alleged that OP-1 failed to issue signed proposal forms, unilaterally introduced and deleted STFI and Act of God cover in an all-risk policy, withheld brokerage information in breach of IRDAI norms, and collected premium despite knowledge that total cessation of work since 2012 was excluded under EARI cover, as admitted in OP-1's letter dated 01.10.2015. Claiming that excess premium amounting to Rs. 29.75 Cr (excluding service tax), and more particularly Rs. 33.29 Cr in relation to the second extension and second EARI policy, had been wrongfully collected, the Complainant pursued representations with OPs-1 and 2, held meetings including with the CMD of OP-1 on 25.02.2016, approached the IRDAI on 24.03.2016, and, having failed to obtain redressal, instituted the present consumer complaint seeking refund of excess premium with interest and consequential reliefs.

5. The complaint was resisted by OP-1 by filing its written statement contending that the complaint was not maintainable as the dispute did not constitute a consumer dispute and no deficiency in service has been made out. It was also contended that the Complainant, being a commercial entity which obtained the policy for commercial purposes, was not a "consumer" under the Act. On merits, OP-1 contended that the insured obtained an Erection All Risks (EAR) policy for its refinery project at Cuddalore through OP-2, a broker. OP-1's quotation was accepted and the policy was issued for the period 10.12.2008 to 09.12.2011, which was subsequently extended till September 2015. It was contended that the policy and its extensions were issued strictly in terms of the accepted quotation and that the insured accepted the terms, paid the premiums and sought repeated extensions, without raising any objection whatsoever. After enjoying the insurance cover for over six years, the Complainant could not resile from the concluded contract and seek refund of the premium on grounds never raised during the subsistence of the policy. The grievances raised by the complainant at this stage regarding proposal forms, policy terms, sub-limits for Act of God perils and the cessation of work clause were belated and an afterthought allegations, particularly when correspondence between the parties showed that the insured was fully aware of the policy terms and had voluntarily sought extensions. OP-1 further contended that the project delays and requests for policy extensions were initiated by the insured itself and the extensions were granted on the same terms as the original policy. It was clarified that changes in co-insurers were effected with the knowledge of the insured and its broker and that there was no break in coverage. The allegations of fraud, coercion, backdating of the policy or violation of Section 64VB of the Insurance Act, 1938 were denied as being devoid of merit. OP-1 contended that the demand for refund of premium, after the expiry of the policy terms was completely untenable since the insurer had already run the risk during the entire policy period and the premium had already been apportioned among the co-insurers. The Complainant cannot seek to rewrite or retrospectively alter the EAR policy terms merely because no claim had arisen, and therefore no deficiency in service could be attributed to OP-1.

6. The complaint was also resisted by OP-2 by filing its written statement. It was contended that the Complainant had abused the process of law by filing a speculative complaint under the summary jurisdiction of the Consumer Protection Act, 1986 without establishing that it qualified as a "consumer." It was contended that the dispute involved complex questions of fact, including allegations of fraud, requiring detailed evidence and cross-examination, and therefore was not amenable to summary adjudication. The complaint suffered from mis-joinder of parties, as the allegation of deficiency had been attributed to OP-1 while OP-2 had been unnecessarily impleaded. On merits, it was contended that the premiums had been paid directly by the Complainant to The New India Assurance Company Limited and that the allegation of any connivance between the insurer and OP-2 was wholly unfounded. The policy had been issued after detailed discussions and upon acceptance of the terms by the Complainant, and that the extensions were affected only at the request of the Complainant to satisfy the requirements of its lenders. The Complainant had misinterpreted the "cessation of work" clause as well as the terms of the Erection All Risks policy, and that the deductibles stipulated in the policy were clearly accepted at the time of issuance and could not be questioned subsequently. Denying any allegation of fraud or liability, it was contended that OP-2 could not be held jointly or severally responsible for the alleged loss and that the burden of proving the allegations lay entirely upon the Complainant.

7. OP-3 in its written statement contended that the complaint did not fall within the jurisdiction of this Commission and that the Complainant, being a large commercial entity could not be treated as a "consumer" within the meaning of the Act. On merits, it was submitted that the insurance cover was an Erection All Risks (EAR) Policy obtained through OP 2, with OP-1 as the lead insurer and OP-3 participating as a co-insurer with 25% share, and that the policy issued for the period 10.12.2008 to 09.12.2011 was extended from time to time up to 09.09.2015 at the request of the complainant and upon payment of the premium. It was contended that the insured, having repeatedly sought extensions and enjoyed the benefit of the policy for over six years without raising any objection regarding the policy terms or coverage, cannot subsequently resile from the concluded contract and seek refund of premium by raising belated grievances. No deficiency in service was made out against it and it was prayed that the complaint be dismissed.

8. OP 4 in its written statement argued that the complaint was not maintainable under the provisions of the Act, 1986, as the dispute raised did not constitute a consumer dispute and no deficiency in service had been established. It was submitted that the Complainant, being a commercial entity did not fall within the definition of a "consumer" It was further submitted that OP-4 was only a co-insurer with a share of 12.5% under the policy with OP-1 as the lead insurer and had participated only up to 09.03.2013, and therefore adopted the reply filed by OP-1 to the extent of its share. It was affirmed that the complaint was frivolous and sought the same be dismissed with costs.

9. OP-5 in its written statement contended that the complaint was not maintainable as the dispute neither constitutes a consumer dispute nor discloses any deficiency in service. It was contended that the Complainant being a commercial entity did not fall within the definition of a "consumer". OP-5 was merely a co-insurer having a 12.5% share under the co-insurance arrangement with OP-1, the lead insurer, and neither negotiated the insurance contract nor received any premium directly from the Complainant. Its rights and obligations are governed solely by the co-insurers' agreement. Adopting the reply filed by OP-1, it was contended that no cause of action or deficiency in service was made out against OP 5 and prayed that the complaint be dismissed.

10. OP-6 in its written statement contended that the complaint is not maintainable as the Complainant did not qualify as a 'consumer'. The complaint was liable to be dismissed for want of locus standi. On merits, it was contended that the Insured approached insurers through OP-2 for obtaining Erection All Risks (EAR) insurance in respect of its refinery project at Cuddalore, and the quotation issued by OP-1, the lead insurer, was accepted, pursuant to which the policy was issued from

10.12.2008 to 09.12.2011 and subsequently extended from time to time till September 2015, upon payment of premium. OP-6 held 7.5% coinsurance share through its Hyderabad Office and, with effect from 10.03.2013, its Mumbai Office also participated as co-insurer to the extent of 12.5% share under the extension of the EAR and ALOP policy, and accordingly adopted the reply and documents filed by OP-1. It was contended that the present allegations were belated and an afterthought, and since no deficiency in service could be attributed to OP-6, the complaint deserved to be dismissed as being devoid of merit.

11. The Complainant filed its Rejoinder and reiterated the facts of the complaint. He filed evidence on Affidavit in support of his contentions and relied on Original Board Resolution Extracts dated 28.02.2011 (Exhibit C-1), Original Letter dated 19.07.2007 (Exhibit C-2), Original Printout mail of OP-2 to the complainant on 13.05.2008 (Exhibit C-3), Note of approval for lead Insurer of the project by the Board of Directors dated 14.05.2008 (Exhibit C-4), Letter dated 21.05.2008 (Exhibit C-5), letter dated 04.06.2008 (Exhibit C-8), Co-Insurance Arrangement (Exhibit C-7), Letter dated 29.07.2008 (Exhibit C-8), Quotation dated 27.08.2008 (Exhibit C-9), email dated 05.09.2008 (Exhibit C-10), email dated 08.09,2008 (Exhibit C-11), email dated 04.10.2008 (Exhibit C-12), note for approval for payment of premium dated 04.10.2008 (Exhibit C-13), 1st Instalment of premium (Exhibit C-14), Cover Note dated 06.10.2008 (Exhibit C-15), Policy of EARI signed on 24.12.2008 for the period 10.12.2008 to 09.12.2011 (Exhibit C-16), Copy of letter dated 07.12.2011 (Exhibit C-17), copy of additional endorsement document dated 09.12.2011 (Exhibit C-18), copy of letter dated 23.02.2012 (Exhibit C-19), second extension of the policy vide endorsement no.710400/44/11/04/830000002 dated 14.03.2012 and letter of cover dated 15.03.2012 (Exhibit C-20), letter dated 28.01.2015 (Exhibit C-21), Copy of CD account (Advance Premium Deposit Account) (Exhibit C-22), letter dated 23.03.2015 (Exhibit C-23), copy of mail dated 24.03.2015 (Exhibit C-24), original copy of the first 2 pages of the EARI policy from March 2013 to September 2015 (Exhibit C-25), copy of letter dated 21.05.2015 (Exhibit C-26), letter dated 05.06.2015 (Exhibit C-27), copy of letter dated 28.09.2015 (Exhibit C-28), original letter dated 01.10.2015 (Exhibit C-29), letter dated 31.10.2015 (Exhibit C-30), copy of letter dated 24.12.2015 (Exhibit C-31), letter dated 07.01.2016 (Exhibit C-32), letter dated 12.01.2016 (Exhibit C-33), letter dated 20.01.2016 (Exhibit C-34), letter dated 22.01.2016 (Exhibit C-35), letter dated 25.02.2016 (Exhibit C-36), policy document from March 2013 to September 2015 (II Policy) (Exhibit C-37), policy document of 1st Policy for the period between 2008 to 2011 (Exhibit C-38), letters dated 14.03.2016 and 15.03.2016 (Exhibit C-39), letter dated 20.04.2016 (Exhibit C-40), copy of letter dated 29.04.2016 (Exhibit C-41).

12. OPs filed their evidence on Affidavit and relied on copy of EAR policy with terms and conditions, additional endorsement and extension of policy (Annexure R1 Colly), The OP1 was the leader with 42.5% share and M/s. ICICI Lombard, National Insurance, IFFCO TOKIO and HDFC Ergo were shown as Co-Insurers for 25%, 7.5%, 12.5% (Annexure R2), copy of mail with policy wordings for their approval (Annexure-R3), copy of mail with copy to the insured requesting for revised drawdown (Annexure R4), Copies of policy (Annexure R5), copy of mail dated 06.03.2009 (Annexure R6), copy of complainant's letter dt. 28.05.2011 (Annexure R7), copy of mail dated 27.02.2012 (Annexure R8), copy of letter dt. 27.02.2012 (Annexure R9), copy of mail dated 04.05.2013 (Annexure R10), copy of mail dated 16.05.2013, (Annexure R11), copy of extension of policy (Annexure R12), copy of letter dt.14.08.2015 (Annexure R13).

13. The learned counsel for the Complainant reiterated the contentions made in the complaint and rejoinder and argued that the policy in question obtained from the OP is an Erection All Risks Insurance Policy, which is a project-specific insurance covering all risks during erection, testing and commissioning of plant and machinery. The duration of such policy commences from the arrival of materials at site and continues until successful commissioning and handing over. It was contended that the policy operates on an "all risks" basis covering perils such as fire, explosion, storm, cyclone, flood, riot, strike, burglary, mechanical and electrical breakdown, human error and other unforeseen accidental damages, and that the sum insured is ordinarily equivalent to the fully erected value inclusive of freight, customs duty and erection cost. The learned counsel argued that an EARI Policy is not a year-to-year renewable policy but is co-terminus with the project period. In case of temporary breaks, limited allowance is provided under the policy conditions; however, in case of prolonged cessation beyond the permissible period, the project insurance automatically ceases unless extension is sought specifying fresh dates of resumption and completion, enabling the insurer to reassess risk and charge appropriate additional premium. According to the Complainant, in the present case there was total cessation of work with no resumption date, and therefore, there was no subsisting erection risk. Consequently, OP 1 could not have validly extended the EARI Policy during the period 2012-2015. The learned counsel asserted that insurance premium is consideration for a subsisting risk of indemnification, and if no risk exists, the basis of consideration fails. Therefore, collection of premium for an EARI Policy during a period when there was no erection activity amounted to unjust enrichment. It was further argued that instead of extending the EARI Policy, OP-1 ought to have issued a named peril policy at silent risk rates for the standstill project. The failure to do so and continued collection of premiums from the complainant to the extent of nearly Rs. 30 Crores was asserted to be arbitrary and deficient in service. In rejoinder to OP-1's contention that the policy extensions were granted at the request of the Complainant, the learned counsel argued that even if such requests were made, OP-1, being an expert insurer, could not have issued or continued a project insurance policy in the absence of any erection risk. He relied on Swiss Re v. United India Insurance to contend that total cessation of work results in change of nature of risk. The learned counsel further alleged other deficiencies on the part of OP-1, including violation of the principle of uberrima fides which binds both insurer and insured, non-supply of a stamped policy document despite repeated requests, inconsistencies between proposal, schedule and policy; issuance of an extended policy after cessation of work containing exclusion of "cessation of work", extension of ALOP (Advance Loss of Profit) cover despite complete stoppage of work, which according to the Complainant was impermissible; and receipt of premium from 2013 to 2015 without issuing endorsements, followed by issuance of back-dated policy documents. The learned counsel also relied on Texco Marketing Pvt. Ltd. v. Tata AIG General Insurance Co. Ltd., (2023) 1 SCC 428; Hanil Era Textiles Ltd. v. Oriental Insurance Co. Ltd., (2001) 1 SCC 269; the IRDA (Protection of Policyholders' Interests) Regulations, 2002; and the IRDAI (Insurance Brokers) Regulations 2018 (as amended up to 30.10.2019) in support of his arguments and sought that the Complaint be allowed and OPs be directed to refund the premium collected towards the EARI Policy during the period of total stoppage of the project, along with consequential reliefs as prayed in the Complaint.

14. Per contra, the learned counsel for OP-1 argued that the complaint was not maintainable as the Complainant was not a Consumer' under the Consumer Protection Act, 1986 and no deficiency in service was established. It was contended that the dispute arose from a concluded commercial insurance contract and was beyond the jurisdiction of this Commission. The complaint was frivolous and an abuse of process. On merits, it was argued that the complainant, through OP-2, a professional broker, invited quotations for an Erection All Risks (EAR) Policy for its refinery project. Ther learned counsel for OP-1 argued that a detailed quote specifying coverage, sub-limits and premium, which was accepted by the Complainant. Upon receipt of premium, OP-1 issued the stamped policy for 10.12.2008 to 09.12.2011 and shared the premium with co-insurers. No grievance was raised at the time regarding policy terms or coverage. The learned counsel further argued that the complainant itself sought enhancement of sum insured and repeated extensions, including ALOP cover, from December 2011 onwards. Each extension was requested with full knowledge of the project status and was granted on the same terms upon payment of additional premium. The policy continued without break up to September 2015. It was contended that for over six years the Complainant never objected to the policy terms, sub-limits, exclusions or alleged non-supply of documents. The correspondence showed full awareness and acceptance of the terms, and the present objections were described as an afterthought. He argued that the "cessation of work" exclusion applied only to losses directly caused by such cessation and did not nullify the policy. The coverage remained effective during the extended period. Allegations of back-dating or wrongful renewal were denied, and any fresh policy issuance was stated to be due only to change of co-insurer while maintaining continuity. It was finally argued that after voluntarily seeking and enjoying continuous EAR coverage for over six years, the Complainant could not resile from the concluded contract and seek refund of premium merely because no claim arose or the project was delayed. OP 1 had run the risk in good faith, and the demand for refund amounted to an impermissible attempt to rewrite a completed contract.

15. The learned counsel for OP-2 argued that the Complaint failed to establish any deficiency in service. The dispute involved complex questions of fact and allegations of fraud not amenable to summary jurisdiction under the Consumer Protection Act, 1986. The complaint was bad for mis-joinder, as allegations were primarily against OP-1, whereas OP 2 was merely an insurance broker and not a party to the contract of insurance. The premiums were paid directly to the insurer, and all extensions were arranged strictly on the Complainant's express instructions, particularly in view of lenders' requirements; the allegation of any connivance between OP-1 and OP-2 was denied. The learned counsel asserted that the Complainant had misconstrued the scope of the EAR Policy and deliberately misinterpreted the "cessation of work" exclusion. The said clause excluded only losses directly or indirectly caused by cessation of work and did not render the entire policy void during any suspension period. It was argued that deductibles imposed by the underwriters did not make the policy void ab initio and that the terms, including deductibles and sub-limits, were clearly communicated and accepted by the Complainant before issuance of the policy. The contention that the original policy was not issued was vehemently denied, and it was asserted that the copies were also provided to the Complainant's lenders. It was further contended that at no stage the Complainant informed OP-2 of any "total cessation" of work. On the contrary, the correspondence showed that the Complainant had sought extensions based on revised Commercial Operation Dates and lender requirements. Each extension was arranged with the knowledge and consent of the Complainant. He specifically denied the allegation that STFI cover was removed surreptitiously. The learned counsel also submitted that the Complainant had not approached this Commission with clean hands. It was pointed that although the Complaint was filed in May 2016, the Complainant subsequently claimed that several original documents had been lost in floods in December 2015 and sought permission to lead secondary evidence, without disclosing such alleged loss in the original Complaint. He argued that the application lacked material particulars regarding the alleged loss of documents and reflected suppression of material facts. It was asserted that there was neither any case nor cause of action against OP-2, as it had merely acted as a broker facilitating placement and extension of insurance at the Complainant's request. After having availed insurance coverage for several years, the Complainant could not seek refund of premium under expired contracts, particularly in view of Section 64VB of the Insurance Act, 1938. Reliance was placed on Suraj Mal Ram Niwas Oil Mills v. United India Insurance Co. Ltd. (C.A. No. 1375 of 2003, decided on 08.10.2010) and SGS India Ltd. v. Dolphin International Ltd. (C.A. No. 5759 of 2009, decided on 06.10.2021) to contend that policy terms must be construed strictly and that the onus of proof lay on the Complainant. Accordingly, dismissal of the Complaint with costs qua OP 2 was prayed for.

16. The learned counsel for OP-3 argued that this Commission had no jurisdiction to entertain the dispute and no deficiency in service had been made out against the OPs. He further argued that the complainant did not fall within the definition of "consumer" under Section 2(1) of the Act and that the complainant lacked locus standi to initiate the case. On merits, he argued that the insured had approached the insurers through OP-2, a professional broker, for obtaining an Erection All Risks (EAR) Policy for its refinery project at Cuddalore. After evaluating various quotes, the offer of OP-1 was accepted, and the policy was issued upon receipt of premium. He argued that the original policy was issued for the period 10.12.2008 to 09.12.2011 and was thereafter extended from time to time until 09.09.2015 at the request of the insured. The learned counsel asserted that OP-3 was only a co-insurer with a limited share while OP-1 was the lead insurer. Therefore, OP-3 adopted the reply and documents filed by OP-1. He further argued that the policy and its extensions were granted upon receipt of premium and at the request of the insured through OP-2. The insured had knowingly entered into the insurance contract and continued for several years and, therefore, could not subsequently resile from the contract and seek refund of premium. He contended that the objections now raised by the complainant regarding proposal form, policy terms, sub-limits and other conditions were never raised during the subsistence of the policy and were merely afterthoughts. He argued that the insured, being a large corporate entity assisted by a professional broker, could not claim ignorance of the policy terms including coverage under the EAR policy. The insured had repeatedly sought extensions of the policy and had paid the required premium each time, thereby clearly accepting the terms of insurance. He relied on the correspondence between the parties demonstrating that the insured was aware of the policy terms and had even sought increase in the sum insured and extensions of the policy. The insurance coverage continued without any break from 2008 to 2015 and the insurers undertook the risk throughout the period. He argued that the allegations regarding backdating of the policy, non-issuance of policy terms and fraudulent conduct were false and unsupported by any material. He further argued that the grievance raised by the complainant after expiry of the policy was clearly an attempt to reopen a concluded contract of insurance. The issues relating to sub-limits, exclusions and other terms were part of the policy from the beginning and had been accepted by the insured. The complainant cannot seek to rewrite the terms of the policy or demand refund of premium after having enjoyed the benefit of the insurance. He asserted that the complaint was devoid of merit and deserved to be dismissed as frivolous and vexatious.

17. The learned counsel for OP-4 contended that the complaint was not maintainable as the dispute did not constitute a consumer dispute under the Consumer Protection Act, 1986 and no deficiency in service had been made out. He further argued that the complainant was not a consumer within the meaning of the Act and that the complaint was liable to be dismissed. On merits, he submitted that OP-4 was only a co-insurer with a 12.5% share under the policy, whereas OP-1 was the lead insurer. He further stated that OP-4 adopts the reply and arguments of OP-1. He asserted that the insurance contract was between OP-1 as the lead insurer and the complainant, and that OP-4 merely shared the risk and liability as per the co-insurers agreement. He asserted that OP-4 was never involved in the negotiations of the insurance contract with the complainant and therefore, no cause of action arose against OP-4. Also, as premium was paid directly to OP-4 by the complainant and that the rights and obligations of OP-4 arose only under the co-insurance arrangement with OP-1 as lead insurer, OP-4 has no liability.

18. The learned counsel for OP-5 argued that the complaint was not maintainable and this Commission lacked jurisdiction as the dispute did not fall within the ambit of the Act, 1986. No deficiency in service was made out and the Complainant did not fall within the definition of Consumer' and the proceedings initiated were without jurisdiction. He asserted that OP-5 was initially a co-insurer with a 12.5% share along with OP-1, the lead insurer, and adopted the reply and annexures filed by OP-1 to the extent of its share. OP-5 remained a co-insurer only up to 09.03.2013 and did not participate in the subsequent extensions. Therefore, the allegations pertaining to the period after 09.03.2013 were not relevant so far as OP-5 was concerned.

19. The learned counsel for OP-6 contended that the dispute did not fall within the ambit of the Act, 1986 as no case of deficiency in service was made out. The Complainant did not qualify as a "consumer" within the meaning of the Act. The insurance for the Cuddalore refinery project was obtained by the insured through the broker OP-2 under an EAR policy issued by OP-1, with several co-insurers including OP-6 holding a limited co-insurance share of 7.5% with an additional 12.5% share in the extended policy period. Thus, OP-6 adopted the reply and records filed by OP-1 as the lead insurer. He asserted that the insured had voluntarily accepted the terms of the insurance policy, paid the premium and repeatedly sought extensions from 2008 to 2015, thereby enjoying the benefit of the coverage for several years. After the policy had run its course, the Complainant could not resile from the concluded contract and seek refund of premium, particularly when no objection regarding the policy terms, coverage or sub-limits was ever raised during its subsistence. The correspondence between the parties clearly showed that the insured was aware of the policy terms and voluntarily sought extensions, and that the allegations regarding non-issuance of policy terms, proposal form and other deficiencies were belated afterthoughts. Accordingly, he contended that the contract of insurance had been fully performed and the complaint was frivolous and liable to be dismissed.

20. We have carefully examined the pleadings and the associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned counsels for both the Parties.

21. The main issues to be decided in the present case are as follows:

                   A. Whether the Complainant qualifies as a "consumer" under Section 2(1)(d) of the Consumer Protection Act, 1986 and whether the present Complaint is maintainable?

                   B. Whether the extension of Erection All Risks Insurance (EARI) Policy and issuance of the subsequent EARI Policies during the period of total cessation of work at the Complainant's refinery project constituted deficiency in service on the part of the OPs?

                   C. Is the Complainant entitled to refund of the premium amount along with consequential reliefs as prayed?

22. The OPs raised a preliminary objection that the Complainant is a large commercial entity engaged in the business of petroleum refining and that the insurance policy in question was obtained for a commercial project. It was therefore, contended that the Complainant does not fall within the definition of "consumer" under Section 2(1)(d) of the Consumer Protection Act, 1986 and consequently the present complaint is not maintainable. We have considered the said objection and arguments advanced by both the parties. The grievance raised in the present complaint pertains to the alleged deficiency in insurance service rendered by the OPs, particularly with regard to the extension of the Erection All Risks Insurance (EARI) Policy and collection of premium during the period when, according to the Complainant, there was no subsisting erection risk. The issue as to whether procurement of an insurance policy by a commercial entity would fall within the definition of "consumer" is no longer res integra. The Hon'ble Supreme Court in National Insurance Co. Ltd. v. Harsolia Motors, 2023 SCC OnLine SC 409, has held that procurement of insurance for protection of assets or risks, even in the course of business, does not amount to hiring services for a "commercial purpose", when insurance is obtained for indemnification and not for profit generation. The relevant portion of the said judgment reads as follows:

                   "44. We further reiterate that ordinarily the nature of the insurance contract is always to indemnify the losses. Insurance contracts are contracts of indemnity whereby one undertakes to indemnify another against loss/damage or liability arising from an unknown or contingent event and is applicable only to some contingency or act likely to come in future.

                   45. This Court in United India Insurance Company Limited v. Levis Strauss (India) Private Limited10 has held as under:

                   "53.A contract of insurance is and always continues to be one for indemnity of the defined loss, no more no less. In the case of specific risks, such as those arising from loss due to fire, etc. the insured cannot profit and take advantage by double insurance.

                   Long ago, Brett, LJ in Castellain v. Preston [Castellain v. Preston, (1883) 11 QBD 380] said that : (QBD p. 386)

                   " ...the contract of insurance ... is a contract of indemnity.

                   ... and that this contract mean that the assured, in the case of loss .shall be fully indemnified, but shall never be more than fully indemnified."" (emphasis added)

                   46. Thus, it can be concluded that in the instant case hiring of insurance policy is clearly an act for indemnifying a risk of loss/damages and there is no element of profit generation and still what has been expressed by this Court is illustrative; it will always open to be examined on the facts of each case, as to the transaction in reference to which the claim has been raised has any close and direct nexus with profit generating activity.

                   47. We do not agree with the submission made on behalf of the appellant that if insurance claims are covered under the Act, 1986, then virtually all insurance matters will come within the purview of the Act, 1986 and this will render the Act, 2015 nugatory. In our view, both these Acts have different scope and ambit and have different remedial mechanism, are in different sphere having no internal co-relationship."

23. In light of the above authoritative pronouncement, it is clear that the procurement of an insurance policy for safeguarding assets or risks cannot be treated as a service hired for a commercial purpose, since the object of insurance is indemnification against loss and not generation of profit. In the present case, the Complainant had obtained the EARI policy to cover risks arising during erection, testing and commissioning of its refinery project. The service hired was thus, an insurance service intended to indemnify potential losses arising out of uncertain events during the project period. Accordingly, applying the ratio of the aforesaid judgment, we are of the considered view that the Complainant falls within the definition of "consumer" under Section 2(1)(d) of the Consumer Protection Act, 1986 and the present complaint is maintainable before this Commission. The first issue is, therefore, decided in favour of the Complainant.

24. As regards the second issue, it is not in dispute that the original EARI policy was issued for the period 10.12.2008 to 09.12.2011 for the refinery project of the Complainant. It is also not disputed that the policy was extended from time to time thereafter upon specific requests made by or on behalf of the Complainant, including the extensions from 10.12.2011 to 09.03.2012 and thereafter for further periods. The correspondence placed on record by the OPs indicates that the Complainant, through OP-2, sought continuation of the policy owing to delays in completion of the project and revised commercial operation dates. Admittedly, the Complainant paid the additional premium required for such extensions and the insurers accordingly continued the policy without interruption until 2015. It is also significant that during the subsistence of the policy and its extensions, the Complainant did not raise any contemporaneous objection to the continuation of the EARI cover or to the collection of premium. The insurance policy as per the agreement between the parties was allowed to run for several years and the insurers accordingly carried the insured risk during the entire period. The contention of the Complainant that the policy automatically became non-est upon cessation of work also cannot be accepted by any stretch of imagination. As contended by the OPs, the "cessation of work" clause in the policy did not render the policy void in its entirety. The policy, therefore, remained operative during the extended period unless specifically terminated or replaced by another form of coverage. It is settled law that, insurance is fundamentally a contract of indemnity whereby the insurer undertakes to assume risk during the policy period in consideration of premium. Once the insurer carried the risk liability between the parties for the agreed period, the premium paid cannot be reclaimed merely because no loss occurred or because the insured subsequently considers that a different form of insurance might have been more appropriate.

25. In the present case, admittedly the Complainant is a large corporate entity assisted by a professional insurance broker, was fully aware of the nature of the policy it wanted, and the terms offered by the OP-1 insurer in the quotations. The Complainant after due deliberations not only accepted the initial policy but also repeatedly approached the OPs seeking extensions of the same as per the terms agreed between the parties and paid the required premium for such extensions. Having voluntarily approached the OPs for continued insurance cover under the policy and enjoyed continuous insurance coverage for the project for multiple years, the Complainant cannot resile from the concluded contract and seek refund of the premium for which the insurance cover was already provided and concluded, merely on the ground that the project had remained without progress or that a different form of insurance cover could have been obtained.

26. At every stage during the course of the insurance contract, which was entered into between the parties as per the terms agreed, the Complainant had scope to seek alteration of the terms for the future period and accordingly demand the same. Whereas, it is undisputed that the Complainant never had any grievance whatsoever as regards any of the terms of the contract with the OPs at any stage throughout the initial period as well as the subsequent extensions that were sought and were issued by the OPs. Admittedly, the policy and the extensions were issued only after the request and requisite premium, as agreed between the parties, was deposited by the complainant from time to time. The contentions and grievances with respect to the overall policy terms and premium were raised for the first time only after the lapse of the entire policy period during which the Complainant enjoyed the insurance cover.

27. In view of the foregoing and after due consideration of the entire facts and circumstances of the case, including the arguments advanced by both the parties, we are of the considered view that the policy as well as the extensions of the instant EARI policy were issued by the OP at the specific request of the Complainant. This policy and extensions were as per the terms agreed between the parties and on payment of premium by the Complainant, as agreed between the parties. Undisputedly, the insurers undertook the risk cover liability as per the policy terms agreed during the entire relevant protracted period. It is also not in dispute that the grievances and demand for refund of the paid premium was raised only after the lapse of the entire policy period. In any case, other than seeking refund of premium after the conclusion of the contract, the Complainant has no grievances with respect to the compliance with contract terms per-se. In such circumstances, no deficiency in service on the part of OPs is made out in the complaint.

28. Accordingly, the Complainant seeking refund of premium paid to the OPs along with interest and compensation is not sustainable. The Consumer, Complaint No.897 of 2016 is accordingly dismissed.

29. Considering the nature of the case, there shall be no order as to costs.

30. All pending applications, if any, stand disposed of accordingly.