National Consumer Disputes Redressal
Cts Industries Ltd. vs Oriental Insurance Company Ltd. on 1 March, 2017
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 252 OF 2009 (Against the Order dated 31/03/2009 in Complaint No. 39/2007 of the State Commission West Bengal) 1. CTS INDUSTRIES LTD. S.B. Tower, 3rd Floor, 37, Shakespears Sarani Kolkata - 700 017 ...........Appellant(s) Versus 1. ORIENTAL INSURANCE COMPANY LTD. A 25/27 Asaf Ali Road New Delhi - 110 002 ...........Respondent(s)
BEFORE: HON'BLE MRS. M. SHREESHA,PRESIDING MEMBER
For the Appellant : Mr. Ravi Gupta, Sr. Advocate
Along with Mr. Roshan Santhalia, Advocate
& Mr. Sachin Jain, Advocate For the Respondent : Mr. Vishnu Mehra, Advocate
Dated : 01 Mar 2017 ORDER
M. SHREESHA, PRESIDING MEMBER
Aggrieved by the order in SC Case No. 39/0/2007 dated 31.03.2009, passed by the State Consumer Disputes Redressal Commission at West Bengal (for short "the State Commission"), the Complainant preferred this Appeal under Section 19 of the Consumer Protection Act, 1986 (for short "the Act"). By the impugned order, the State Commission dismissed the Complaint on the ground that the repudiation was justified as the damage was caused due to 'Rain' and there was no evidence of flood or inundation.
2. The brief facts stated in the Complaint are that the Complainant Company, involved in the activity of exporting iron ore fines, took lease of 4,500 sq.mtrs of land at Mangalore Port. To cover the various risks of such iron ore fines, stored in the port, AGL, which, under a Scheme of amalgamation, stood merged with the Complainant Company, took a Standard Fire & Special Perils Policy from the Opposite Party for the period 22.03.2004 to 21.03.2005 for a sum of ₹15.00 crores. It was averred that between January, 2004 to April, 2004, AGL procured materials from various mines and suppliers which were stored in the leased land at Mangalore Port. On 24.07.2000, AGL entered into an Agreement with China Metallurgical Import & Export Baogang Company for export of iron ore fines of Indian origin at a price of 41USD/MT. The loading of iron ore fines in the Ship started on 02.08.2004 and ended on 09.08.2004. During this period of loading of the said cargo, there were rains from time to time at Mangalore Port which interrupted the loading. It was pleaded that in the interim period between 31.07.2004 and 09.08.2004 and also thereafter, due to heavy rains, there were floods and the place where the stock of iron ore fines was lying, was inundated as a result of which, the stock was damaged and washed away.
3. On 18.08.2004, AGL intimated the Opposite Party about the damage and claimed that there was a loss of 6050 MTs of iron ore fines. It was stated that on 31.08.2004, after expiry of about nine days of reporting the matter to the Opposite Party, M/s. J.B. Boda Surveyors Pvt.Ltd., appointed by the Opposite Party, made a preliminary survey. Vide letter dated 20.09.2004, the Appellant Company submitted the relevant documents to the Surveyor indicating that 6050 MTs of stock was washed away due to rain and flood. Vide letter dated 23.09.2004 the Complainant again submitted further documents as required by the Surveyor. Despite repeated requests, as the claim was not settled, a letter was written on 15.12.2004 requesting the Surveyor to expedite the submission of the report. It was stated that on 01.04.2006, the Registered Office of AGL shifted to 37, Shakespeare Sarani, Kolkata - 700 017 and the same was informed to the Opposite Party.
4. After lapse of more than 1½ years, the Opposite Party rejected the claim of AGL vide letter dated 17.05.2006 with the remarks 'claim not admissible'. It was stated that the rejection of the claim was on the ground that the cargo loss was due to operation/transshipment during rainy season and was not due to reason of floods and inundation and therefore, the loss was not covered under the terms of the policy. AGL got issued a legal notice on 31.08.2006 challenging the grounds of rejection and specifically mentioned that the copy of the Surveyor report was not furnished to them. The Opposite Party vide their letter dated 11.10.2006 reiterated their stand and did not entertain the claim. It was pleaded that, it was only after repeated requests that the Opposite Party vide letter dated 19.12.2006 forwarded the copy of the Survey Report dated 01.09.2004 and 08.07.2005.
5. It was averred by AGL/Complainant that the claim was lodged on 18.08.2004, but was rejected after more than one-and-a-half years on 17.05.2006; the rejection was without any basis; in the absence of rains, there was no question of covering the iron ore fines during transshipment in the truck for loading in the ship and therefore without any evidence, it was observed by the Opposite Party that 'some cargo might have been drained away during transportation to the Vessel'; the observation that 'some cargo might have been drained in the rain water' is also without any basis. The conclusion that the cargo loss was due to operation in the rainy season and over a period of time and not due to any flood or inundation in the dumping yard, is contrary to the evidence submitted by AGL in support of their claim. Vexed with the attitude of the Opposite Party, the Complainant Company approached the State Commission seeking direction to the Opposite Party to pay ₹89,94,670.94, being the loss and damage suffered on account of flood and inundation at Mangalore Port between 31.07.2004 and 14.08.2004, together with interest @ 15% p.a., compensation of ₹5,00,000/- and other costs.
6. The Opposite Party filed their Written Version and also affidavit of evidence of the Senior Divisional Manager stating that delay in the repudiation of the claim was beyond their control as the loading occurred during the period from 01.08.2004 to 06.08.2004; the claim was belatedly lodged on 18.08.2004, for the total quantity of iron ore fines loaded in the ship, i.e., 38250MT, after assessing the moisture level in the loaded cargo at 148° F at 10.78%, which was deducted from the loaded cargo of 38250 MTs, as specified in the Bill of Lading. In the preliminary survey report, the Surveyor submitted that they could not collect the relevant documents and also ruled out flood as the cause of loss. It was only on account of non-submission of documents to the Surveyor that there was a delay in the submission of the report.
7. Thereafter, the repudiation was reviewed vide letter dated 12.09.2006, but the Surveyor again reiterated their earlier stand vide Supplementary Report dated 04.10.2006. It was pleaded that the claim was not repudiated due to dumping of material without cover, but it was just opined that due to absence of cover, 'some cargo might have been washed away by rain water' over a period of time and not due to any accident/operation of flood or inundation. It was pleaded that the procurement of cargo commenced from January, 2004 till the end of April, 2004 and the cargo was exported much after the storage, within the port area and hence inevitable storage /rain water losses cannot be ruled out, which was reflected in the repudiation letter, dated 17.05.2006. The loading of the cargo on chartered Vessel M.V. Habibe Ana, commenced on 02.08.2004 and was completed on 08.08.2004 and accordingly, Draft Survey was conducted by M/s. SGS in pursuance of an order received from Shipper, vide letter dated 30.07.2004. As per draft survey report, dated 11.08.2004, the total quantity of iron ore loaded in the ship was 38250MT. As per certificate of quality analysis conducted by M/s. SGS upon an order received from Shipper through their letter dated 30.07.2004, the assessed moisture level in the loaded cargo was declared as 10.78% and hence the assumed quantity (since the invoice was raised much before the draft survey and quality analysis tallying the figures of the draft survey and certificate of quality analysis) of the loaded dry iron ore fines was brought down to 34126.65MT for billing purpose, vide the invoice raised by the insured dated 29.07.2004 promoting the insured to assume the shortage of 3437.97MT (5119.705 less the available iron ore at the dumping yard to the tune of 1681.739 MT) allegedly caused by flood / inundation during the alleged period. However, no concrete proof as to the evidence of loss was produced except some photographs taken by them during this period.
8. It was pleaded by the Opposite Party that the photographs taken by the insured did not conclusively prove that a huge quantity of iron ore was washed away by the alleged inundation.
9. It was stated that there was no deficiency of service on their behalf as the claim was rightly rejected by them.
10. The State Commission, while dismissing the Complaint, has observed as follows :-
"In overall consideration of the materials, we find that the only dispute requiring resolution by us is, as to whether, damage to the cargo was caused by flood and inundation or simply by rain. Admittedly, the policy will not allow claim to be accepted in case damage was by rain and not by flood and inundation. Admittedly, the complainant did not write to the insurer about the damage immediately on happening of the incident. The letter of the insured intimating the damage to the insurer referred only to rain and no mention was made of any flood or inundation. Had there been a flood causing loss or damage, it was expected that when goods were washed away by such flood, the intimation would have been sent by the complainant immediately to the insurer referring to flood. As the damage was caused by rain, the complainant acted late in even reporting the damage as the complainant itself was not satisfied about the claim. The statement of facts referred by the Op shows clearly that loading work continued in the Port during the concerned period for substantial hours of the day which could not have been possible, had there been flood and inundation. Only as the rain was the cause for damage during rain, the loading was possible. Even the data of Indian Meteorological Department produced by complainant do not show flood. There is no material showing damage/loss due to flood/inundation and not even of flood / inundation at all. The report of the Surveyor also supports such view. Therefore, as we find that the damage was caused due to rain and there was no proof of any flood or inundation, the claim under the policy has been rightly rejected and we do not find any ground for interference. In view of such findings on facts, the law cited by the complainant does not help us in deciding the matter. The complaint is therefore, dismissed and there will be no order as to costs".
11. The brief point which falls for consideration is, "whether, the repudiation by the Opposite Party was justified?".
12. The Learned Counsel for the Respondent submitted that the rejection of the claim was warranted, for the following reasons:-
That the policy does not cover 'Transshipment'. The contract does not specify coverage of 'Rain'. Construed strictly, 'Rain' is not covered as 'Peril Insured'.
The learned counsel vehemently argued that there was a breach of condition No.6 of the policy which stipulates that the Insurer should be informed of / given notice within 15 days of the loss.As the insurance company was not informed within 15 days as stipulated in the policy, the claim cannot be considered.
The occurrence of flood or inundation in the stored area is remote as the cargo was stocked in a paved dumping yard with adequate access and drainage.
As the claim was reported after the load left the port, the Surveyor did not have an opportunity to inspect the same during the relevant period.
The claim was lodged after the cargo left the port and during the transshipment, the cargo heap was left exposed on account of which some cargo might have been drained in the rain water.
Tarpaulin was procured only after 12.06.2004 whereas the monsoon commenced from the end of May, 2004 and therefore, the heaps of iron ore were exposed to rain and was damaged.
Nature of the cover of the policy is not contractually covered though this is not reflected in the repudiation letter.
The Counsel argued that the Surveyor's conclusion that the damage happened during a period of time, which both the weather reports and the newspapers prove that there was "heavy rainfall", seems rationale in the given circumstances and contended that damage due to 'Rainfall' is not covered.
13. The learned counsel for the Appellant relied on para 12 of the affidavit of evidence of Mr. Ashok Kumar Tulsyan, Director of AGL in which he had stated that during the period from 31.07.2004 and 09.08.2004 and thereafter, due to heavy rains, there was a flood and the place where the stock of iron ore was lying in the Mangalore Port was inundated, as a result of which, the stock was damaged and washed away. He specifically stated that during this period of time, he was physically present in the Mangalore Port. The Counsel further submitted that the photographs that were furnished in support of the claim were taken after rain and inundation to show the nature of the damage caused by inundation. As loading is never done during rainfall, the Question of covering the iron ore fines during transshipment in truck, while loading the ship, does not arise.
14. There is force in the contention of the Appellant that iron ore fines are ordinarily covered, particularly, because of the practical difficulties in covering huge mountains of iron ore fines and consequently by reason of the fact that substantial quantities of iron ore fines can never be washed by rain, on account of heavy density of the materials. A bare perusal of the letter dated 17.05.2006 written by the Respondent shows that the cargo was stocked in the port yard with adequate drainage, which in itself, evidences that due care and caution, was taken as a precautionary measure by the Appellant in the storage of the goods. To reiterate, the general exclusions in the policy did not provide for either any limitation to, or exclusion of liability in the absence of any specific/special care to the property insured, hence this ground for repudiation is unjustified. The policy also does not specify as to what parameters define 'special care' or 'standard of care' to be taken by the insured under such circumstances.
15. In support of his stand that no goods were transported from the storage site to the Vessel, during heavy rain, the Learned Counsel drew our attention to the Statement of Facts, Report dated 08.08.2004, filed as Annexure E which clearly exhibits that loading was stopped several times during 31.07.2004 to 08.08.2004 on account of Rain. More so, as the possibility of draining away of heavy iron ore fines during transshipment is improbable, particularly, as even heavy rains can lead to shortage of only small quantity of iron ore fines during the course of transportation without resulting in any major loss or damage. A brief perusal of the record shows that there is no provision in the policy that the cargo should be covered during the transshipment and strictly speaking, this does not construe any violation of any particular term of the policy. Therefore, this conclusion by the Surveyor that the loss was caused during operation over a period of time in the rainy season is also not established by way of any authenticated evidence.
16. The point for consideration is, whether, the rain caused 'flood' and 'inundation', leading to loss/damage, and therefore the question, whether, damage occurred was covered by the policy or not is to be addressed to. It is pertinent to note that the policy in question is a Standard Fire and Special Perils Policy covering the following risks :
"Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation, Loss, destruction or damage directly caused by Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood or Inundation excluding those resulting from earthquake, Volcanic eruption or other convulsions of nature (wherever earthquake cover is given as an "add on cover" the words "excluding those resulting from earthquake volcanic or other convulsions of nature" shall stand deleted)".
17. The Learned Counsel for the Appellant drew our attention to the claim letter written by the Director of AGL stating that the open stock of iron ore fines at Mangalore Port for export to China was washed away due to heavy rains. The Learned Counsel emphasized that the word 'rain' has been used in the claim letter and 'rain' per se, was not an insured peril. As against this argument, the Appellant submitted that the insured has used the word 'Rain' as primarily it was 'Rain' that caused the flood and inundation and that the hand-written note was prima facie, a preliminary observation.
18. Subsequent to the repudiation of the claim on 17.05.2006 and the Complainant's representation to review the rejection of claim on 31.08.2006, the Respondent vide letter dated 11.10.2006 stated that the matter was referred to the Surveyor and the relevant extract of his report defining 'flood' and 'inundation' is as hereunder :-
"You would appreciate that 'flood' is usually defined as 'escape' from its normal confines of a body of water due to a rise in its level or to the breakdown of the barriers retaining it by any reasons including inconsistent rain. Thus the essential ingredient of a flood is the rise of water to an abnormal level and may occur due to over-flowing or bursting of the banks of lakes, reservoirs, rivers or other water courses or due to bursting of street water mains or due to over-flowing of sewage pipes; or from Sea water flooding due to abnormally high tides accompanied by high winds.
In the same way, 'inundation' may be defined as the rising of a body of water natural or man-made and its over-flowing into normally dry land due to absence of proper escape route or due to water passing through it, in abnormal quantity or due to an obstruction in its normal way due to any reasons causing damage to the property".
19. To understand whether, the rainfall during that period of time was considered 'Heavy', a brief understanding of the Indian Meteorological Department's definition of 'Intensity of Rainfall' is necessary.
Intensity of Rainfall Descriptive Term used Rainfall in mms No Rain 0.0 Very light Rain 0.1- 2.4 Light Rain 2.5 - 7.5 Moderate Rain 7.6 - 35.5 Rather Heavy 35.6 - 64.4 Heavy Rain 64.5 - 124.4 Very Heavy Rain 124.5 - 244.4 Extremely Heavy Rain >244.5 The record filed shows the rainfall in the nearby area of Bajpe/Panambur as hereunder :-
"GOVERNMENT OF INDIA INDIA METEOROLOGICAL DEPARTMENT WEATHER REPORT STATION : BAJPE/PANAMBUR DATE : 03.08.2004 Rainfall for 24 hrs ending at 0830 hrs. IST Amount (mm) Bajpe Amount (mm) Panambur 03.08.2004 33.4 37.7 04.08.2004 180.4 159.0 STATION : BAJPE/PANAMBUR DATE : 04.08.2004 Rainfall for 24 hrs ending at 0830 hrs. IST Amount (mm) Bajpe Amount (mm) Panambur 04.08.2004 180.4 159.0 05.08.2004 73.6 60.8 It is pertinent to note that this report has not been rebutted by the Respondent. As can be seen in the table of rainfall readings by the Indian Meteorological Department during the relevant period of time, i.e., 03.08.2004, 04.08.2004 and 05.08.2004, the rainfall is 'Heavy' to 'Very Heavy Rain'
20. The Appellant's submission regarding rain water leading to 'inundation' in that area is further supported by the Newspaper reports in the Hindu, dated 04.08.2004 and 05.08.2004, filed before the State Commission. It is reiterated that the rains in the past two days have raised the chances of flood in several areas which is close to the port and most parts were without electricity and trees were also uprooted. Road links were cut off and the waters of Cauvery have inundated to the nearby areas. There is a specific reference to Mangalore reporting that there is heavy rain and gusts of wind which caused havoc in Mangalore and that such heavy rain is uncommon in Dakshina Kannada when the monsoon is on its way out. On 04.08.2004, it was reiterated by The Hindu newspaper that rains have continued in Dakshina Kannada as the down pour and strong winds swept across the district, affecting life. It was also reiterated that floods occurred in several areas of Mangalore Taluk and that there was heavy sea erosion in the interior parts of the District with floods and inundation in several areas. According to the Statistics Department, Bajpe in Mangalore Taluk, received the highest rainfall of 180 mm followed by Bantwal 178.2 mm, Puttur 171 mm, Uppinangady 155mm, Belthangady 144.2 mm, Sullia 144.2 mm and Mangalore 118.8 mm.
21. The afore-mentioned statistics regarding heavy rainfall during the period 3rd, 4th and 5th August, 2004, authenticates the Appellant's stand that there was heavy rainfall during that period. The dictionary meaning of 'inundation' and 'flood' means, rising of a body of water and it's overflowing onto the normally dry land and therefore, by going with the Metrological Department report which shows heavy rainfall, it can be perceived that this heavy rainfall lead to inundation. Also going by the terms and clauses of the policy, there is no exclusion clause of rainfall and specifically when it is rainfall which leads to a situation of 'flood' and 'inundation'. Support of this view can be ascertained from the decision of this Commission in Nawal Kishore Chowdary Vs. New India Assurance Co. Ltd., IV (2016) CPJ 288 (NC), wherein, it was held as under:
"It would thus be seen that the flood water had entered the cold storage through its flooring as well as the side walls and the accumulated water was upto the height of 8 ft. The water had remained in the basement for quite some time as was noted by the Surveyor. The insurance policy taken by the complainant, inter alia, insured the stock in a cause of damage due to flood and inundation. The terms 'flood' and 'inundation' have not been defined in the insurance policy and therefore, one has to look for Dictionary meaning of the said terms.
As per Oxford Advanced Learner's Dictionary, 'flood' means a large amount of water covering an area that is usually dry. The term 'inundation' is defined to mean to cover an area of land with large amount of water.
As per Vocabulary.com, a 'flood' is an enormous amount of water. Primarily, 'flood' is a rising of a body water and its over-flowing onto normally dry land.
As per Merriam Webster Dictionary, 'flood' is a large amount of water covering an area of land that is usually dry.
As per Black's Law Dictionary, 'inundation' means, overflowing or overwhelming or flooding with water.
A similar meaning is given to this term in Merriam Webster Dictionary.
Therefore, if a place, which, by its nature, is expected to remain dry, receives an overwhelming amount of water, which it is not expected to receive, that would amount to 'inundation'. In a case, where the overwhelming water that enters a building, is rainy water, it is not necessary that it should enter the building directly through the gates and doors; in order to qualify as 'flood' or 'inundation', even if the rain water enters through flooring and the walls which are unable to withstand its pressure, that, in my opinion, would also be covered under the term 'inundation'. In the absence of any qualification or limitation to the contrary in the insurance policy, such an 'inundation' would give rise to a valid claim under the said policy".
22. The risk covered under Standard Fire & Special Perils Policy, includes flood and inundation and keeping in view, the weather reports and also the Surveyor's own conclusion that there were heavy rains, ruling out flood and inundation as a cause of loss is contrary to the information drawn from the MET statistics and to what was laid down in the aforenoted judgment.
23. The contention of the Learned Counsel for the Appellant that the intimation was belated and is in violation of Condition No.6(i) of the policy was opposed by the Appellant herein stating that there was heavy rain during the period from 01.08.2004 to 08.08.2004 and that it was only after the assessment of the damage that intimation was made to the Opposite Party vide letter dated 18.08.2004. It is an admitted fact that only after 9 days of reporting the matter that on 31.08.2004, M/s. J.B. Boda Surveyors Pvt. Ltd., made a preliminary visit to the said port.
24. Condition No.6(i) of the Standard Fire & Special Perils Policy which the Respondent is relying on, reads as under :
"(i) On the happening of any loss or damage the Insured shall forthwith give notice thereof to the Company and shall within 15 days after the loss or damage, or such further time as the Company may in writing allow in that behalf, deliver to the Company".
25. In fact, the Senior Divisional Manager of the Respondent Company in his affidavit stated that the claim was lodged within 10 days from the date of sailing of the Vessel. This evidences that intimation was given within 15 days as stipulated in the policy. In the instant case, the intimation was given on 18.08.2004 which is within 10 days of the happening of the loss or damage and therefore it cannot be construed that there was any violation of Condition No.6 of the policy.
26. IRDA has laid down the time period for the Surveyor to file his report, which reads as hereunder :
"9. Claim procedure in respect of a general insurance policy :
(1) to (4) xxxxx (5) On receipt of the survey report or the additional survey report, as the case may be, an insurer shall within a period of 30 days offer a settlement of the claim to the insured. If the insurer, for any reasons to be recorded in writing and communicated to the insured, decides to reject a claim under the policy, it shall do so within a period of 30 days from the receipt of the survey report or the additional survey report, as the case may be".
27. It is pertinent to note that the preliminary inspection was done by the Surveyor on 31.08.2004; the preliminary report was given on 01.09.2004 and the final report is dated 08.07.2005. The delay in the issuance of the final report has been explained by the Respondent that it was only on account of non-submission of the documents by the Appellant herein. A brief perusal of the record shows that the Appellant had replied to all the queries given by the Respondent and the delay of 1½ years in furnishing of the survey report is in violation of afore-noted Condition No.9(5) of the Regulations of the IRDA, which deals with the time period stipulated for the Surveyor to furnish his report.
28. For all the aforementioned reasons, the repudiation of the claim by the Respondent is without any reasonable basis and is unjustified. Having concluded that there is deficiency of service on behalf of the Insurance Company in repudiating the claim on the ground that the loss was not due to Flood and Inundation, now the quantum of compensation is addressed too.
29. It is evident from the record that the Complainant Company in their claim form dated 06.12.2004, claimed ₹1,51,45,552/- for loss of 6050 M.Ts. In their final report dated 08.07.2005, M/s.J. B. Boda Surveyors Pvt. Ltd. has arrived at the net loss taking into consideration the purchase the purchase invoices, quantity of cargo arrived from the C&F Agents, Bills of Transporter M/s.Freightco Transport Corporation, the Moisture Content Analysis Report from M/s.Mitra S.K.Pvt. Ltd., the Sales & Purchase Contract entered into with M/s.China Metallurgical Import & Export Baogang Co., China and also the Physical Measurement of the balance/ existing cargo at the dumping yard. While assessing the net loss, Surveyor noted in his report as follows :-
" VERIFICATION OF DOCUMENTS :
We once again visited the Insured's local office and organised the meeting with insured's representative. Our discussions revealed that they started getting IOF from various locations in Karnataka between January and April, 2004 (vide various invoices enclosed).
During above period the insured purchased 41,015.855 M. Tons two vendors i.e. M/s. Pacific International, Bangalore & M/s. Sathya Granite, Sandoor vide Invoices Pl-10/001/2003-04 dtd. 01.01.2004 and Invoices Pl-10/003/2003-04 dtd. 01.02.2004 and 28.04.2004 respectively.
M/s. Hasan Hajee & Company, Mangalore nominated as a C & F Agents for the above movements,. Transporter M/s. Freightco Transport Corporation, Kolkata nominated for transportation of cargo through various trucks. Before transportation they obtained permit from Government of Karnataka, Department of Mine & Geology, Forest Department, Road Chalan / Purchase Invoice & Way Bills for every Truck.
On receipt o cargo at destination (Mangalore) the C & F Agents, Transporter & insured's Representative weighed the cargo before it was uploaded at dumping yard. We verified the supporting Daily Receiving Report and confirmed the quantity of cargo received at dumping yard, New Mangalore Port Trust between 2nd January, 2004 and 25th April, 2004.
(FOR DETAILS, PLEASE REFER THE TABULATION INDICATING DAYWISE RECEIPT OF IOF AT INSURED'S DUMPING YARD, ENCLOSED AS ANNEXURE-B).
Based on above tabulation the net IOF received at insured's dumping yard 40,699.321M.Tons Less: Moisture @ 3.57% based on the Analysis Report of M/s. Mitra S. K. (Annexure -D) 1.246.355 M.Tons ------------------------- Therefore net Dry IOF received t insured's yard 39,246.355 M. Tons --------------------------
The above tabulation was verified with the bills of Transporter M/s. Freightco and was found in line. Further the insured also made available the supporting certificate dtd. 06.07.2004 from the C & F Agents M/s. Hajee & Co. towards the amount of cargo received at dumping yard before the shipment. The supporting certificate enclosed herewith as Annexure-C. COSTING:
Expenses incurred on receiving cargo 1) Purchase Cost 2)Transportation Charges Purchase cost based on Invoices Rs.4,08,94,997.00 ADD: Transportation charges Rs.6,17,84,334.00 -------------------------- TOTAL Rs.10,26,79,331.00 --------------------------- The procurement cost of 39246.355 M. Tons of Dry IOF Rs.10,26,79,331.00 Therefore procurement cost of one Dry M. Ton of IOF Rs. 2,626.28 SAMPLING ANALYSIS:
During receiving the cargo at dumping yard, Mangalore on various trucks between 1st January, 2004 and 25th April 2004 M/s. Mitra S. K. Pvt. Ltd., Hospet nominated to conduct sample Analysis Report from M/s. Mitra S. K. confirms the moisture contents @ 3.57%.
(FOR DETAILS PLEASE REFER ANALYSIS REPORT OF M/S. MITRA S.K. ENCLOSED AS ANNEXURE-D) SHIPMENT:
M/s. Annapurna Nivas Pvt. Ltd. entered into contract with M/s. China Metallurgical Import & Export Baoging Co., China of for the supply of 40,000 M. Tons. Processed Indian Iron Ore Fines vide Irrevocable Sales & Purchase contract no. IBT-IRF-240704-1 on 24.07.2004.
Accordingly, buyer nominated ship M.V. HABIBE ANA through Charters M/s. Patvolk. Vessel arrived at Mangalore on 31st July,2004. After clearance the vessel commenced loading on 2nd August, 2004. The cargo was lifted from dumping yard by tipper trucks and was loaded on the vessel using the net slings/ship's crane. Insured nominated M/s. SGS for the Draft Survey to quantify the cargo loaded on board of the Vessel as recommended by the Buyer. M/s. SGS conducted Draft Survey before and after the cargo was loaded on board. They also conducted Analysis of cargo at the time of loading. The supporting Draft Survey certificate of Weight No. IN/BGL/MIN/200400901 dated 11.08 2004 and certificate of quality Analysis enclosed as Annexure-E supporting Bill of Lading & Insured's Export Invoice No. AN/MNG/001 dated 29.07.2004 was verified in order to quantify the cargo loaded or exported per M.V. HABIBE ANA.
Bulk Iron Ore fines loaded on above vessel 38250.000 M. Tons (As per above Draft Survey Report, Invoice & B/L) LESS: Moisture @ 10.78% 4123.350 M.Tons (As per Annexure-E & Invoice) -------------------------- Therefore, Dry IOF shipped on M.V. HABIBE ANA 34126.650 M.Tons ------------------------ Dry IOF at dumping yard before shipment 39,246.355M.Tons Dry IOF shipped on M.V. HABIBE ANA 34126.650 M. Tons ------------------------- Therefore balance Dry IOF should have remained at dumping yard 5119.705 M. Tons ------------------------ PHYSICAL MEASUREMENT OF BALANCE/ EXISTING CARGO AT D.YARD:
We organised physical measurement / quantification of existing / balance cargo at dumping yard by M/s. Essen & Co., Bangalore on 14th September, 2004 with presence of insured. The supporting report no. 218/2004 dated 15th September, 2004 issued by M/s. Essen & Co. is enclosed as ANNEXURE-A. Stock of Dry IOF verified as balance at Dumping Yard 1681.739 M. Tons Stock of Dry IOF that should have remained dumping yard after shipment 5119.705 M. Tons
------------------------
Therefore difference/ Loss 3437.986 M. Tons ------------------------ Procurement cost of 3437.966 Dry M.T. of lost IOF as per above costing (Net assessed loss) Rs.89,94,670.94". ----------------------
30. Though the Complainant has claimed loss of 6050MTs, worth ₹1,51,45,552/-, I find it a fit case to award what the Surveyor has assessed. Taking into consideration the Surveyor's report, the net loss is arrived at ₹89,94,670.94/- for loss of 3437.986 MTs.
31. In the result, keeping in view that the repudiation was unjustified, this Appeal is partly allowed and the order of the State Commission is set aside directing the Insurance Company to pay an amount of ₹89,94,670.94/- within six weeks from the date of receipt of this order, failing which, the said amount shall attract interest @ 6% p.a. from the date of filling of the Complaint, till realization. Costs of ₹10,000/- is also awarded.
...................... M. SHREESHA PRESIDING MEMBER