National Consumer Disputes Redressal
M/S. J.K. Dall Mill vs New India Assurance Co. Ltd. on 1 July, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 503 OF 2016 (Against the Order dated 29/10/2015 in Appeal No. 288/2001 of the State Commission Maharashtra) 1. M/S. J.K. DALL MILL THROUGH ITS PARTNER,SH. ASHOK KUMAR VASUDEO GUPTA, R/O G-89, MIDC, AJANTA ROAD, JALGAON-425003 MAHARASHTRA ...........Petitioner(s) Versus 1. NEW INDIA ASSURANCE CO. LTD. THROUGH ITS BRANCH MANAGER, KHANDESH MILL COMPLEX NEHRU CHOWK JALGAON MAHARASHTRA ...........Respondent(s)
BEFORE: HON'BLE MR. DR. S.M. KANTIKAR,PRESIDING MEMBER
For the Petitioner : Mr. Vikas Nautiyal, Advocate For the Respondent : Mr. R. B. Shami, Advocate
Dated : 01 Jul 2019 ORDER
1. This dispute relates to the repudiation of complainant's insurance claim in 1997, now we are in 2019.
2. The subject matter is the respondent - opposite party (insurance co.) has repudiated the insurance claim of the petitioner-complainant who sustained loss of grains at Mumbai port which were transported from Myanmar to Mumbai.
3. Brief facts relevant for the disposal of this revision petition; that on 15.01.1997 complainant took a 'Marine Policy (cargo) ' from the OP for a consignment of 150 metric tons (3000 bags) of Mung dal from Myanmar to Mumbai, for sum insured of Rs. 21,97,000/-. The policy was effected from 16.01.1997 and valid for six months. As per complainant the consignment was unloaded at the Mumbai Port on 20/21.1.1997 and due to mishandling during unloading out of 3000 bags 1400 bags were spoiled-damaged, torn resulting in to spillage of contents admixed with dirt and other material. Complainant informed the incidence to the insurance co.- OP, the Bombay Port Trust and the agent involved in the deal. The OP's surveyor M/s P.M.Patel & Co. assessed the loss amounting to Rs.4,01,881/-. Accordingly, the claim was submitted by the complainant ,but it was repudiated by the OP on 22.12.1997. Being aggrieved by the repudiation and deficiency in service from the OP, the complainant filed a complaint No 118/2000 against the OP before the District Forum, Jalgaon on 22.02.2000.
4. The OP filed its written version and denied any deficiency on its part. OP's contention was that the repudiation of claim was as per law. It was repudiated on the ground that the policy was issued after the consignment was dispatched from the foreign port. The ship had started its voyage on 11.01.1997 so , the marine insurance cover note issued on 16.01.1997 becomes void.
5. On the basis of pleadings and evidence, the District Forum partly allowed the complaint and directed the OP to pay a sum of Rs. 3,01,410/- towards cost of losses incurred and an amount of Rs. 1,725 per annum per hundred interest @ 6 % from 15.9.1999till the complainant receives the monies. . Against the order of District Forum, OP preferred first appeal 288 of 2001 before the State Commission. The appeal was allowed and the complaint was dismissed. Being aggrieved by the order of State Commission, the complainant filed the instant revision petition.
6. I have heard the learned counsel for both the sides. Both the learned counsel made their respective submissions as stated in their affidavit of evidence. Perused the material on record and gave a thoughtful consideration to the arguments from both the parties.
7. Firstly, as per the affidavit evidence of complainant the insurance policy was taken on 16.01.1997 for safety to the consignment dispatched from Mynmar to Jalgaon via Bombay. The complainant received fax message from Agrocorp International Pte Ltd on 11.01.1997 that the material was dispatched by sea. The next day 12.01.1997 was Sunday; therefore complainant could not complete the govt. formalities. On 13.01.1997, complainant approached United Western Bank for opening the Letter of Credit (LC), accordingly on 14.1.1997; LC account was opened in foreign exchange department at Mumbai. Immediately thereafter on 15.1.1997 insurance premium of Rs.11859/- was paid to OP by cheque towards insurance policy , having sum insured of Rs.21, 97, 000/- covering all the risks to the said consignment.
8. Secondly, the repudiation of claim was on the ground that OP issued a cover note dated 16.1.1997 with the risk effective from 16.1.1997. The risk was covered subject to the clauses, endorsements, conditions and warranties. The warranted are conditions reproduced as below:
i) Warranted that the shipment be under owner's Bill of Lading only ,
ii) Warranted Condition Survey of the commodity immediately prior to the loading thereof be conducted by experienced / authorized agency like SGS,
iii) Warranted loading certified by a recognized Cargo Supervisor or Surveyor and quantity certified by them,
iv) Warranted the vessel is approved by GIC, V) Warranted the loading of Ship after the issue of Cover Note.
9. Admittedly , as per the fax message inter-aila a shipment advice sent by the Agrocorp International Pte Ltd indicates that 3000 bags of Green Mung Beans- (gross weight 151.881 MT,) shipment from Yangon to Mumbai, by vessel M.V."FENG DE SHAN". The commodity was checked and sent with a Certificate of Fumigation and Phytosanitary Certificate. There was no fault or damage at the time of loading of the consignment. It was certified at the time of loading by the SGS (Mynmar) Limited as :
"This is to certify that, loading of goods done under our supervision and loaded on vessel M.V.Feng De Shan, in good and proper condition."
Therefore, the ground taken by the OP that insurer has not arranged survey at the time of loading is insignificant. In my view, there was neither damage nor any violation at the time of loading of the material at Myanmar.
10. Thirdly, the complainant had informed about the damage which occurred at the time of unloading of the bags to the Bombay Port authority and the OP- insurance co. As instructed by the OP, the surveyor M/s P M Patel & Co carried out the survey. On careful perusal of survey report, the surveyor stated that 1400 bags were found containing sweeping contents admixed with dust, dirt and other foreign matter. The net weight was 69580 kgs. Thus, the loss was amounting to Rs. 4, 01,881/-
11. It is pertinent to understand to the time as to when an assured must be interested in the subject - matter insured under the Marine Insurance Act , 1906. The section 6 (2) read with sections 4 (2) (a) and 5 gains more importance at this juncture. An assured must be interested in the subject- matter insured at the time of loss, though he is not required to have insurable interest at the time when the insurance was effected .
4 Avoidance of wagering or gaming contracts.E+W+S+N.I. (1)Every contract of marine insurance by way of gaming or wagering is void.
(2)A contract of marine insurance is deemed to be a gaming or wagering contract--
(a)Where the assured has not an insurable interest as defined by this Act, and the contract is entered into with no expectation of acquiring such an interest; or
(b)Where the policy is made "interest or no interest," or "without further proof of interest than the policy itself," or "without benefit of salvage to the insurer," or subject to any other like term:
Provided that, where there is no possibility of salvage, a policy may be effected without benefit of salvage to the insurer.
5. Insurable interest defined.E+W+S+N.I. (1)Subject to the provisions of this Act, every person has an insurable interest who is interested in a marine adventure.
(2)In particular a person is interested in a marine adventure where he stands in any legal or equitable relation to the adventure or to any insurable property at risk therein, in consequence of which he may benefit by the safety or due arrival of insurable property, or may be prejudiced by its loss, or by damage thereto, or by the detention thereof, or may incur liability in respect thereof.
6. When interest must attach.E+W+S+N.I. (1)The assured must be interested in the subject-matter insured at the time of the loss though he need not be interested when the insurance is effected:
Provided that where the subject-matter is insured "lost or not lost," the assured may recover although he may not have acquired his interest until after the loss, unless at the time of effecting the contract of insurance the assured was aware of the loss, and the insurer was not.
(2)Where the assured has no interest at the time of the loss, he cannot acquire interest by any act or election after he is aware of the loss.
12. After a bare reading of the sections, it is clear that the complainant stands in a legal position to the insured property. Loss or damage to the insured property due to perils of the sea will injure the complainant/insured. The Marine Insurance Act, 1906 also clearly states that the insured should have 'insurable interest 'at the time of the loss. So, in the present case, it is seen that the complainant had insurable interest at the time of unloading the consignment at Mumbai port. Therefore, OP - insurance co. cannot recede itself from paying the insurance claim.
13. Section 18 of the Marine Insurance Act, 1906 has placed a limit upon the obligation of disclosure by the assured; the assured is required to disclose only 'material' circumstances. Section 18 (4) further provides that whether any particular circumstance is material or not, in each case, is a question of fact. It would be commercially impracticable if the assured were required to disclose virtually everything to his insurer. This was recognized by Blackburn J in Ionides and Another v. Pender (1874) LR 9 QB 531 where he said '...We agree that it would be too much to put on the assured the duty of disclosing everything which might influence the mind of an underwriter. Business could hardly be carried on if this was required'.
14. In the present case, the fact that the ship was in transit while the policy was effectuated is not a 'material fact'. Disclosure of material fact would include the name of the ship, details of the goods, 'to and from' port, value of the moong dal, quantity of bags etc. It can be concluded that the assured, in the present case has not concealed any 'material fact'.
15. Therefore, in my view it wherever there is a breach of policy conditions, a claim can be settled as non standard claim. I rely upon the decision of the Hon'ble Supreme Court of India in the case : Amalendu Sahoo v. Oriental Insurance Co. Ltd. II (2002) SLT 672 (paragraphs 11- 15).
16. On the basis of forgoing discussion, the repudiation of the claim of complainant by the OP-insurance co. is not justified. The impugned order of the State Commission is set aside and the order of the District Forum which allowed the claim on non- standard basis is affirmed.
17. The revision petition is allowed. The OP- insurance co. shall comply the order within four weeks from the receipt of copy of this order, failing which entire amount shall carry interest @ 12% per annum till its realization.
18. Needless to add in the contingency the complainant shall proceed for the execution as per law.
...................... DR. S.M. KANTIKAR PRESIDING MEMBER