2018 (5) TMI 1969 - SC - Indian Laws

Compensation for loss - execution of awards - Section 25 and 27 of the Consumer Protection Act 1986 - whether the interpretation adopted is in the process of giving a true effect to the decree or they have gone beyond the decree by drawing a new decree? HELD THAT - In a contractual matter when the decree is silent with regard to the reckoning date of conversion of foreign currency in to Indian rupees what would be the methodology to be followed by the executing court is no more res integra as this court has an occasion to deal with elaborately in the case of Forasol v. ONGC 1983 (10) TMI 234 - SUPREME COURT the facts of that case revolved around a contract entered into between ONGC and Forasol for carrying out structural drilling in relation to the exploration of oil in the Jaisalmer area. The contract mandated a part payment in the foreign currency i.e. French francs. Due to belligerent situation prevalent between India and Pakistan in 1965 the contract was suspended. We are unable to agree with the contentions of the learned counsel for the appellant that the NCDRC has gone beyond the decree and the NCDRC ought not to have gone into clause 17 are meritless hence rejected. In a case of this nature the only remedy available to the court is either to look at the terms of the contract or in the absence of the same to follow the procedure laid down by this court in the above stated judgment. The order passed by NCDRC is strictly in accordance with the settled legal position and we do not find any infirmity with the order. Without undertaking a piece meal approach as suggested by the appellant herein interpreting the decree in a manner which may amount to substitution of a new decree is not countenanced under law. Therefore it is clear that as per the insurance contract the respondent insurer was required to pay the insurance claim in accordance with the conversion rate of the invoiced foreign currency in Indian rupee as per the bank buying rate of interest at Mumbai on the date of subject shipment for which the invoice was issued. There are no grounds to interfere with the order of the NCDRC which is based on sound principles of law - appeal dismissed.

Summary

Issues Involved:
1. Deficiency in service by the insurance company.
2. Calculation of compensation based on the conversion rate of foreign currency.
3. Execution of the decree and interpretation of the relevant date for currency conversion.

Issue-wise Detailed Analysis:

1. Deficiency in Service by the Insurance Company:
The appellant purchased an insurance policy from the respondent to cover risks involved in the export of goods from India. The policy stipulated that the respondent would pay 90% of the accrued loss. The appellant exported goods valued at 11,875.75 Euros but did not receive payment from the buyer. The respondent offered to compensate only 79.5% of the loss, leading the appellant to file a complaint alleging deficiency in service.

The District Forum ruled in favor of the appellant, directing the respondent to pay 90% of the value of the goods along with interest and litigation expenses. This order was upheld by the State Commission and attained finality.

2. Calculation of Compensation Based on the Conversion Rate of Foreign Currency:
Clause 17 of the insurance contract specified that payments under the policy would be in Indian Rupees, with the conversion rate based on the bank buying rate at Mumbai on the date of shipment. The appellant argued that the conversion should be based on the rate at the time of payment, leading to a dispute during the execution of the decree.

The District Forum and State Commission interpreted the order to mean that the conversion rate should be as of the date of payment. However, the NCDRC, on remand from the Supreme Court, concluded that the conversion rate should be as per the date of shipment, in line with Clause 17 of the contract.

3. Execution of the Decree and Interpretation of the Relevant Date for Currency Conversion:
The appellant filed an execution petition when the respondent failed to make the payment as per the decree. The respondent paid a sum calculated based on the conversion rate at the time of shipment. The appellant disputed this, claiming the conversion should be based on the rate at the time of payment.

The Supreme Court noted that the execution of a decree involves enforcing the court's judgment without altering its terms. The Court emphasized that the executing court cannot go beyond the decree but must interpret it to give true effect to the judgment. The Court referred to the precedent set in Forasol v. ONGC, which outlines the procedure for determining the relevant date for currency conversion in the absence of a contractual clause.

In this case, Clause 17 explicitly provided the conversion rate based on the date of shipment. The Supreme Court found that the lower forums had misinterpreted the decree by not adhering to this clause. The NCDRC's interpretation was consistent with the contract terms, and the respondent had complied by paying the amount calculated based on the shipment date conversion rate.

Conclusion:
The Supreme Court dismissed the appeal, upholding the NCDRC's order. The Court clarified that the insurance contract required the conversion rate to be based on the date of shipment, and the respondent had fulfilled its obligation by paying the amount as per this rate. The judgment reinforces the principle that executing courts must adhere to the terms of the decree and the underlying contract, ensuring that the enforcement of judgments aligns with the agreed contractual provisions.