State Consumer Disputes Redressal Commission
Nectar Lifesciences Ltd. vs New India Assurance Co. Ltd. on 2 June, 2017
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
Consumer Complaint No. 296 of 2016
Date of institution : 19.09.2016
Date of reserve : 26.05.2017
Date of decision : 02.06.2017
Necter Lifesciences Ltd., having its Office at SCO 38-39, Sector 9-
D, Chandigarh - 160009 through its Manager-Legal Affairs Sh.
Madan Gopal
....Complainant
Versus
1. The New India Assurance Co. Ltd. through its Managing
Director, Corporate Office, 87, M.G. Road Fort, Mumbai 400 001
2. Senior Divisional Manager, The New India Assurance Co.
Ltd., Bharat Nagar Chowk, Ferozepur Road, Ludhiana - 141 001
3. The Deputy General Manager, The New India Assurance
Company Ltd., Regional Office - Claims Hub, 4th Floor, Survya
Tower, Bharat Nagar Chowk, Ludhiana, Punjab
4. The Manager, The New India Assurance Company Ltd.,
Claims Hub - Chandigarh, 4th Floor, SCO-36-37, Sector 17-A,
Chandigarh - 160 017
5. Jaykay Freighters Pvt. Ltd., Costom House Agent &
International Logistics Services, White House, 1/18-20, Rani Jhansi
Road, New Delhi - 110055 (India) through the Managing Director.
....Opposite parties
Consumer Complaint No. 296 of 2016 2
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr. Gurcharan Singh Saran, Judicial Member.
Present:-
For the complainant: Sh. A.P. Singh, Advocate
For OP Nos.1-4 : Sh. Sukhdarshan Singh, Advocate
For Op No. 5 : Sh. Vivek Gupta, Advocate
GURCHARAN SINGH SARAN, JUDICIAL MEMBER
ORDER
Complainant has filed this complaint against the opposite parties (hereinafter referred as Ops) under Section 17 of the Consumer Protection Act, 1986 (for short the Act) on the averments that the complainant Company is body incorporated under the Companies Act, 1956 and is carrying on its business of preparation and supply of pharmaceutical products. Complainant received the order for supply of 18,000 Kgs. Of Menthol Crystal USP, worth 3,03,300 USD, required to be delivered at Hong Kong based consignee, Hawley & Hazel Chemical Company (HK) Ltd., Hong Kong Plant 45, Wong, Chuk Hang Road, Aberdeen, HK. This product is generally used in the processing of perfumes analgesic balms, cosmetics and ointments. The consignment was got insured from Ops No.1 to 4 vide policy No. 360100/21/13/05/00000001/ Certificate No. 2013/NLL/1432. The said consignment contained 720 fibre drums having gross weight of 20,754 Kgs. The bill of lading dated 6.4.2014 was prepared. The consignment was stuffed into 1 x 40 ft. HC container at New Delhi ICD and was Consumer Complaint No. 296 of 2016 3 subsequently transported and shipped on board. The shipping vessel Northern Guard V.0036 at Pipavav as per bill of lading No. HJSCDEL402219700. On 6.4.2014, when the vessel was en-route to its destination via Colombo, Sri Lanka, it experienced fire and explosion in Holed 1 & 2 of Mumbai in West Cost of India. The vessel was then diverted to Mumbai, the port of refuge. The matter was reported to the Local Authorities. The consignment remained at the said Port upto 26.8.2014 and then it was transported to another shipping vessel Hoechst Express and it arrived at Hong Kong on 4.9.2014. The container was delivered to the consignee on 8.9.2014 and survey/inspection was conducted on the same day. During inspection, the drums stored at the bottom 2 tiers were accepted by the consignee as sound and those on 3rd and 4th tiers, the contents had melted. The total of 85 drums stored on the upper tier 4 were subject to check and the Surveyor picked up 8 drums at random and observed that contents melted to varying degrees. The claim of USD 80,037.50 was submitted by the consignee. On 5.9.2014, the consignee moved an application for undertaking survey of Intertek Testing Services Hong Kong. The survey was conducted on 8.9.2014 and report was submitted on 3.11.2014. The aforesaid claim was duly served upon the Op, however, the Op vide its repudiation letter dated 22.9.2015 repudiated the claim on the ground that the proximate cause of damage was delay and as per the terms and conditions of the Insurance contract, damage caused by delay was not covered under the policy. It was based on report of WK Webster (International) Pte Ltd. The complainant Consumer Complaint No. 296 of 2016 4 assailed the stand taken by the Ops. The repudiation order is bad in the eyes of law that the material insured had a shelf life of 5 years from the date of manufacturing i.e. March, 2014. The survey report relied upon by the Ops failed to explain as to how out of the entire consignment, few drums alone of menthol crystals got damaged. The report of WK Webster relied upon by the Ops shows that the nature of loss was due to temperature variation whereas the report sent by email dated 10.2.2015 shows that the cause of damage to consignment was allegedly prolonged storage and temperature higher than cargo pre-determined range. Alleging deficiency in service on the part of Ops this complaint has been filed before this Commission seeking directions against Ops to pay to the complainant a sum to the tune of USD 80037.50 equal to INR 52,28,245.59 alongwith interest @ 18% p.a. and also pay compensation and litigation cost to the tune of Rs. 10,00,000/-.
2. Upon notice, opposite parties appeared and contested the complaint. Op Nos. 1 to 4 in their joint written reply took the preliminary objections that the complaint is not maintainable before the Commission as complainant does not fall within the definition of consumer as defined under Section 2(1)(d)(ii) of the Act; the commercial purposes are not covered under the definition of the consumer; the period of storage was 60 days at destination or at intermediary/Port in for shipment sent on CIF or FOB and the consignments were covered from anywhere in India to anywhere in the world and vice-versa. The complainant declared the consignment of 18000 Kgs. of Menthol Crystal BP/USP, packed in Consumer Complaint No. 296 of 2016 5 720 fiber drums containing 25 Kg. material each as per bill of lading dated 6.4.2014. However, the consignment remained at the Mumbai Port till 26.8.2014 and reached Hong Kong on 4.9.2014 and Intertek Testing Services, Hong Kong conducted the survey as per the instructions of M/s W.K. Webster (International) Pte Ltd., Singapore and it came to the notice that container was off loaded from the vessel and kept in storage in India for about 4 months. Due to prolonged storage and temperature, there was damage to the Cargo in the top tiers and proximate cause of damage was delay and cargo was insured under ICC (A) term, therefore, the claim falls under exclusion clause 4.5 of ICC (A) and Ops rightly repudiated the claim of the complainant. There is no report of the Master/Captain of the ship of the damage to the consignment due to fire in the shipping vessel. On merits, the averments stated in the preliminary objections were reiterated. Insurance/consignment is admitted. However, it was again reiterated that the damage was due to delay of sending the consignment at the destination, which caused damage, which is covered under exclusion clause 4.5 of the policy terms and conditions, therefore, the claim was rightly repudiated by the Ops. There is no deficiency in service on the part of these Ops. Complaint is without merit, it be dismissed.
3. Op No. 5 in its written reply took the legal objections that the complaint of the complainant is not maintainable against this Op as no valid cause of action has arisen against this Op because Op No. 5 is not connected to the present dispute as there is no privity of contract between the complainant and this Op, Consumer Complaint No. 296 of 2016 6 therefore, the complainant has no locus-standi to file this complaint; the Commission did not have any jurisdiction to deal with the present dispute against Op No. 5 as Op No. 5 is alien to the process of contract of insurance between the parties; this Op is an authorized Custom House Agent Company engaged in the custom clearance service at ICD, New Delhi and the Company does not go here and there, rather, works only in the office located at New Delhi. The role of this Company is limited upto the extent of clearance/facilitating of customs documentation at ICD Tughlakabad, New Delhi by submitting the documents for export as provided by the complainant and then handing over to the shipment to the carrier (Shipping Company or their agents) after clearance of the same through Customs Department. In the instant case, the container duly stuffed was arranged to be delivered at ICD Tughlakabad, New Delhi by the complainant. The risk covered is insured by the complainant from Op Nos. 1 to 4, therefore, the claim, if any, be satisfied by Op Nos. 1 to 4. On merits, the averments stated in the preliminary objections were reiterated. It was again reiterated that there is no privity of contract between the complainant and this Op. Whatever was the liability of Op No. 5 that was cleared and in case any damage has been caused to the consignment en-route then this Op is not responsible and only the Insurance Company is to cover the risk, if any. Therefore, there is no merit of this complaint against this Op. Complaint is without merit, it be dismissed.
Consumer Complaint No. 296 of 2016 7
4. To support his contentions, the parties led their respective evidence. Complainant in his evidence has tendered affidavit of Madan Gopal, Manager Ex. CW-1/A and documents Exs. C-1 to C-11. On the other hand, Ops No. 1 to 4 had tendered affidavit of Sh. Tarsem Chand, Manager Ex. Op 1 to 4/1 and documents Exs. Op-1 to 4/2 to Ex. Op-1 to 4/4. OP No. 5 had tendered resolution dated 14.11.16 Ex. Op-5/1.
5. We have heard the counsel for the parties and have carefully gone through the averments made in the complaint, written reply filed by the Ops, evidence and documents on the record.
6. So far as liability of Op No. 5, the job of Op No. 5 was limited for clearance of the consignment at ICD, New Delhi. There was no problem of consignment at ICD, New Delhi and counsel for the complainant has also admitted that the claim is only against Op Nos. 1 to 4 and Op No. 5 just was made a party as the consignment had rooted through Op No. 5, therefore, there is no liability against Op No. 5.
7. Counsel for Op Nos. 1 to 4 has taken the plea that the complaint against Op Nos. 1 to 4 is not maintainable as the complainant does not come within the definition of consumer. The complainant is a limited Company and is running the Company for commercial purposes and the commercial purposes is excluded under the definition given in Section 2(1)(d)(ii) of the Act. However, the claim of the complainant cannot be rejected merely on the ground that it is a Company. Basically nature of services is to be Consumer Complaint No. 296 of 2016 8 taken. It is to be seen whether the nature of transaction between the complainant and Op Nos. 1 to 4 is commercial in nature, only then the claim, if any, lodged by the complainant against Ops will be excluded as provided under Section 2(1)(d)(ii) of the Act. However, in case we go through the facts of the case, the complainant Company had availed only the insurance services from Op Nos. 1 to 4. Op Nos. 1 to 4 were to pay the claim only in case of any damage to the consignment en-route to the destination, otherwise, no claim. Therefore, the transaction between the complainant and Op Nos. 1 to 4 is just to indemnify the claim, if any, damage to the consignment en-route to the destination point, therefore, the transaction is not profit oriented covering under the definition of commercial activity. It was held by the Hon'ble Delhi State Consumer Disputes Redressal Commission, New Delhi in its latest judgment "M.M. Knitwears Pvt. Ltd. versus Bajaj Allianz General Insurance Company Ltd. & Anr.", II (2014) CPJ 24A (CN) that availing of insurance services by firm or company is not hiring services for commercial purpose because insurance is indemnification of future loss whenever it is caused and insurance policy is not taken for making profit. No contrary judgment was cited by the counsel for Op Nos. 1 to 4, therefore, keeping in view the facts of the case and the judgments referred by the counsel for the complainant, we are of the opinion that the complainant had just availed the insurance services from Op Nos. 1 to 4 and no commercial activity with Op Nos. 1 to 4. In case the claim has been wrongly repudiated by Op Nos. 1 to 4 as Consumer Complaint No. 296 of 2016 9 per the version given by the counsel for the complainant then the complaint under the CP Act is maintainable and the complainant comes under the definition of the consumer as defined under the Act, therefore, we do not agree with the plea raised by the counsel for the Ops that the complainant does not come within the definition of consumer.
8. On merits, the complainant had taken marine insurance policy from Ops. The same has been placed on the record as Ex. C-3 and its coverage is upto Rs. 10 Crores. Ex. C-2 is the commercial invoice, Ex. C-1 is the extract from minutes of the Board of Directors of the complainant Company under which the present complaint has been filed. Ex. C-4 is the bill of lading according to which total number of 720 fibre drums having gross weight of 20,754/- Kgs. containing menthol crystal BP/USP worth USD 3,03,300 was consigned from India to Hawley & Hazel Chemicals Co., Hong Kong. The consignment was stuffed in 1 x 40 ft. container at New Delhi ICD and was arrived into vessel voy Northern Guard 0036E PIPAVAV. However, on 6.4.2014, when the vessel was en-route to its destination via Colombo, Sri Lanka, it experienced fire and vessel was then diverted to Mumbai, the port of refuge. The consignment remained there at Port of Mumbai upto 26.8.2014 and then it was transported through another shipping vessel Hoechst Express and it arrived at Hong Kong on 4.9.2014 and it delivered on 8.9.2014. The consignee moved an application for survey Ex. C-5, survey report is Ex. C-6 in which circumstances of fire has been mentioned as under:-
Consumer Complaint No. 296 of 2016 10
"CIRCUMSTANCES From information obtained and documents adduced, we understand that the subject shipment of 720 drums of Menthol Crystal stuffed in 1 x 40' HC container No. DRYU9298579 was shipped in the terms of CY/CY, per M.V. "Northern Guard" Voyage No. 0036E which departed at 00:21 hours on 6th April 2014 from Pipavav, India to Hong Kong. The Vessel M.V. "Northern Guard" was declared General Average as reported to casualty a fire incident on 6th April 2014 during her voyage from Pipavav, India to Colombo, Sri Lanka. Then the vesser anchored in Mumbai, India since 7th April 2014. As such, the 1 x 40' HC container No. DRYU9298579 was then transshipped onboard the vessel "HOECHST EXPRESS" Voyage No. 0023E on 2th August 2014 at Port Klang, Malaysis and arrived at this port of Hong Kong on 4th September 2014.
This matter was then reported to the parties concerned; and in order to ascertain the cause, nature and extent of damage if any to the goods, we were requested to carry out a joint survey on 8th September 2014."
and following findings was submitted by the Surveyor:-
"ATTENDING AND FINDINGS We attended at the Consignee's premises mentioned as above on 8th September 2014 and met with the following parties concerned:-
- Ms. Lennie Li, Consignee's representative. Consumer Complaint No. 296 of 2016 11
- Mr. Peter Kwong, surveyor from Delta Marine Services Ltd., acting on behalf of P & I Club of the carrier. At the Consignee's car park, we sighted the arrival of the trailer carrying with 1 x 40' HC container No. DRYU9298579. Then together with above parties, we carried out a survey and the result as reported as follows:- Marks & No. Description (as per Condition Found document) Container No. : 1 x 40' HC container The container was apparently DRYU9298579 said to contain : 720 sound and the seal intact. Seat No. : drums of Menthol However the seal number 178477 Crystal BP/USP was H685361 not matched (Documental) Under various Batch with the document provided.
Number The container was then
opened. As we observed, the
fibre drums were stowed in 2
to 4 tiers, and lashed/secured
by nylon bands. Then the
drums were discharged from
the containers and tallied as
according to the tier positions
slowed in the container.
Throughout the discharge, 11
drums were opened for
inspection of the contents; as
a result that the drums
stowed in bottom 2 tiers
accepted by consignee and
that in tier 3 and 4 found with
contents having been melted
and then solidified and hence
the drums stowed in tier 3
and 4 needed a further
checking of the contents.
As printed in the label we
learnt that the drum storage
Consumer Complaint No. 296 of 2016 12
temperature as 25'C ± 2.
Then all above drums were
further transported into an air
conditions warehouse in the
premises in which bottom 2
tiers, tier 3 and 4 drums
stacked at different corners.
Together with the parties
above, we carried out a
survey, with the following
results:
527 fibre drums (stowed in
tower 2 tiers) accepted by
consignee as sound.
108 fibre drums (stowed in
upper tier 3) were opened for
inspection and found -
3 fibre drums accepted by
consignee as sound.
105 fibre drums partly stained
with leakage of contents and
each drum found with
contents of menthol crystal
having been melted to
varying degrees and then
solidified.
85 fibre drums (slowed in
upper tier 4) from which a
total of 8 drums were picked
at random and opened for our
survey, and found partly
stained with leakage of
contents and each drum
found with contents of
menthol crystal having been
melted to varying degrees
and then solidified.
Consumer Complaint No. 296 of 2016 13
Clause 11
The claim is substantiated by the consignee's submitted claim letter dated on 21st October 2014. The loss as calculated as:-
190 drums of Menthol Crystal BP/USP with 4,750 kgs x USD 16.85/ per Kg = USD 80,037.50 Hence, the claim is substantiated by the consignee's submitted claim above for the total sum of USD 80,037.50 Without prejudice, we are of the opinion that the above claim is fair and reasonable and recommend that consideration to be given accordingly."
However, the Ops had also appointed WK Webster (International) Pte Ltd., who also corroborated the damage to the consignment but it was mentioned that proximate cause of damage was delay. The cargo was insured under ICC (A) term and is covered under exclusion Clause 4.5 and under the clause, it was repudiated, otherwise, according to their assessment the loss was USD 80037.50 and after excluding the excess clause of USD 1668.15, the loss comes to USD 78,369.35, therefore, the claim was repudiated under Clause 4.5 due to delay, which was the proximate cause.
9. However, it was argued by the counsel for the complainant that under Marine Insurance Act, 1963, Section 50 deals with the delay in voyage and Section 51 excuse for deviation or delay, which reads as under:-
Consumer Complaint No. 296 of 2016 14
"50. Delay in voyage.--In the case of a voyage policy, the adventure insured must be prosecuted throughout its course with reasonable dispatch, and, if without lawful excuse it is not so prosecuted, the insurer is discharged from liability as from the time when the delay became unreasonable.
51. Excuse for deviation or delay.--(1) Deviation or delay in prosecuting the voyage contemplated by the policy is excused--
(a) where authorized by any special term in the policy; or
(b) where caused by circumstances beyond the control of the master and his employer; or
(c) where reasonably necessary in order to comply with an express or implied warranty; or
(d) where reasonably necessary for the safety of the ship or subject-matter insured; or
(e) for the purpose of saving human life or aiding a ship in distress where human life may be in danger; or
(f) where reasonably necessary for the purpose of obtaining medical or surgical aid for any person on board the ship; or
(g) where caused by the barratrous conduct of the master or crew, if barratry be one of the perils insured against. (2) Where the cause excusing the deviation or delay ceased to operate, the ship must resume her course, and prosecute her voyage, with reasonable dispatch." Consumer Complaint No. 296 of 2016 15
Clause (b) of Section 51(1) reveals that where delay caused by circumstances beyond the control of the master and his employer then deviation of delay in prosecuting the voyage contemplated by the policy is excused. The Op had repudiated the claim of the complainant under Clause 4.5 of the Exclusion Clause due to delay. However, in case we go through the facts of the case as stated above, the complainant had taken the goods upto the vessel and vessel was in transit going to Hong Kong from Mumbai and near Colombo, Sri Lanka there was incident of fire and from where ship has to be taken to its place of refuge i.e. Mumbai and from there the goods were loaded on 26.8.2014, it depends upon the booking and availability of the ship. There is no evidence on behalf of the Ops that the ship was available but there was intentional delay on the part of the complainant, otherwise, once the goods have been booked with the Transport Company i.e. through voyage then it depend upon the booking Company how to arrange the alternative. When the goods reached at destination immediately these were received and immediately investigator/surveyor was appointed. The consignee had not refused all the goods, whatever goods were in an intact condition, those were received by the consignee and the goods, which had melted to a great extent were not accepted by the consignee and this fact has been corroborated by the Surveyor also. Since the incident of fire has happened, therefore, possibility of melting the goods in the fire incident. Therefore, there is nothing on the record that the delay was due to any fault on the part of the complainant consignee and the delay, if Consumer Complaint No. 296 of 2016 16 any, is duly covered, subject to Clause (b) of Section 51(1) of the Marine Insurance Act, 1963 referred above.
10. It was argued by the counsel for the Ops that the goods were received by the consignee and payment was received by the complainant from the consignee then how he has a locus-standi to file this complaint. Consignee received the goods in short as is clear from the facts of the case. Ops have not placed on the record any document that the complainant has received the full payment from the consignee, otherwise, the policy was taken by the complainant and then he has a right to file the complaint. Since the consignee will not make the full payment as the goods received are in short, therefore, it cannot be said that the complaint on behalf of the complainant is not maintainable.
11. Another point is that the complainant has lodged the claim for a full amount of USD 80,037.50 whereas the excess Clause has not been taken care while deciding the claim. Excess clause is required to be reduced, which is equivalent to USD 1668.15, therefore, the payable claim is USD 78,369.35.
12. No other point was argued.
13. In view of the above, we accept the complaint and direct Op Nos. 1 to 4 as under:-
(i) pay to the complainant USD 78,369.35 or equivalent amount in INR all as on 22.9.2015;
(ii) pay interest @ 9% p.a. on the amount calculated in Clause No. 1 from 22.9.2015 till the date of payment;
and Consumer Complaint No. 296 of 2016 17
(iii) pay Rs. 1 Lac on account of compensation for harassment and litigation expenses.
The abovesaid directions be complied within 45 days from the receipt of a certified copy of the order.
14. The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.
15. Order be communicated to the parties as per rules.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (GURCHARAN SINGH SARAN) JUDICIAL MEMBER 02.06.2017.
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