National Consumer Disputes Redressal
Karam Industries And Ors. vs Oriental Insurance Co. Ltd. on 29 May, 2003
Equivalent citations: IV(2007)CPJ104(NC)
ORDER
D.P. Wadhwa, J. (President)
1. There are two complainants, both the consignor and the consignee. They are aggrieved as the opposite party-Insurance Company did not accept their claim in full for the loss suffered by them.
2. First complainant M/s. Karam Industries received an order for export of rice to Russia from the second complainant M/s. Agio Chai and Beverages Ltd. (Agio Chai). The rice to be supplied was of the quantity of 5555.750 MTs. to be packed in 1.11.115 PP bags of 50 kgs. net each. Cargo was insured by. Insurance Company for a sum of Rs. 8,92,25,345 and was shipped through M.V. Blue Baby under policy dated 23.10.1998. Consignment was covered under Bill of Lading dated 15.10.1998. Insurance Company was duly informed of the name of the vessel.
3. The vessel M.V. Blue Baby arrived at the port of destination in the middle of November, 1998. Before the discharge of the cargo it was examined by the surveyor of the Insurance Company, representative of the second complainant and also the port Authorities. Upper layers of the bags were found wetted and covered with yellow spots. Some bags were also found damaged and rice scattered. It is not disputed that the policy covered the loss due to damage to the cargo. After the cargo was discharged it was examined and found that there were 3330 damaged bags and note to this effect was written by the second complainant, the consignee and the Master of the vessel. This was on 2.12.1998. On the same day, second complainant also lodged a letter of protest with the Master, the Ship Owner and the ship's agent. A claim was made for US $ 200,000 towards the damaged rice and expenses incurred. After the discharged was complete of cargo from the vessel, there were more bags in damaged condition and finally a claim was made of US $ 146,284,48.
4. Meanwhile settling agents of the Insurance Company namely, The Ingosstrakh Insurance Company completed their inspection/testing/assessment of the loss. They recommended that the second complainant was entitled to US $ 145,123.27 (equivalent to Rs. 61,51,775 @ Rs. 42.39 per US $ as on 6.12.1998).
5. While recommending this payment settling agents of the Insurance Company in their letter dated 29.5.1999 wrote as under:
Taking into consideration all circumstances of this claim especially that the consignee has duly fulfilled his obligations for ascertaining the cause and extent of damage to the cargo and protecting the recovery rights against carrier we are to state that the claim should be settled in the nearest future as the time bar for lodging the claim against sea carrier is expiring on 6th December, 1999. They also added:
We are forwarding you the copies of the claim documents because the original documents are retained with us for recovery purpose against sea carrier.
6. It is a complaint of the complainants that no action was taken by the Insurance Company in spite of their repeated requests. They were further advised, in the meanwhile, by the settling agents that the Insurance Company had told them that a sum of Rs. 8,92,254 being 1% extra premium for M.V. Blue Baby was required as the vessel was not approved by GIC and that amount would be deducted from the claim amount. Complainant say that in view of the delay in settling the claim they agreed to the deduction of this amount which consent was coercive in view of the compulsive circumstances of delay in settling the claim. This deduction was, however, agreed to in the letter dated 26.6.2000 of the second complainant to the Insurance Company.
7. Still there was delay by the Insurance Company in settling the claim. On 18.1.2001 Insurance Company wrote to the complainants their claim had been approved for Rs. 45,81,807 less Rs. 8,92,254 and Insurance Company wanted certain documents. This was by letter dated 18.1.2001 of the Insurance Company and the documents which they wanted were:
1. Letter of Subrogation.
2. Special Power of Attorney.
3. Discharged voucher.
4. No objection from M/s. Karam Industries for making payment to complainant No. 2 consignee.
8. Certain other documents were also asked for which were supplied to the Insurance Company on 19.1.2001. It is submitted by the second complainant that it had already paid the full price of the rice to the first complainant, the consignor. On 19.1.2001 Insurance Company sent a cheque for Rs. 36,89,553 to the second complainant at his Moscow address and the cheque was drawn on the Bank of Patiala. It would appear that a blank receipt to this effect that this amount was in full and final settlement of the claim was also got signed from the second complainant. The blank receipt bearing the revenue stamp for Re. 1 and signed by the second complainant has been brought on record. Except for the amount of Rs. 36,89,553 in numerical receipt is totally blank. It would appear that only after getting this receipt the cheque for the aforesaid amount was released.
9. On the same day i.e., 19.1.2001 second complainant protested and wrote to the Insurance Company that the surveyor arrived at a loss of Rs. 61,44,829 and there was no occasion for the Insurance Company to deduct any amount from this figure. Since there was no response from the Insurance Company, complaining deficiency in service, a complaint was filed making the following prayers:
1. A sum of Rs. 24,93,676 being the loss suffered by the complainants because of damage to cargo and the actual expenses incurred;
2. Interest on Rs. 24,93,676 @ 18% p.a. from 1.12.1998 upto the date of filing this petition and thereafter up to the date of realisation;
3. A sum of Rs. 2,00,000 towards harassment and mental agony caused by the respondents;
4. Cost of this action in the sum of Rs. 50,000; and
5. Such other or further relief as may be considered just and reasonable in the facts and circumstances of the case.
10. On notice being issued, Insurance Company filed its written version. It is stated that the complainants did not initiate recovery against the carrier and thereby failed to protect the interest of the Insurance Company to recover the loss from the carrier. It also contended that the complainants had suppressed vital facts. It is not clear as to what vital facts the complainants suppressed as these have not been spelt out. As far as the right of the Insurance Company to recover loss from the carrier is concerned we think that delay is entirely on the part of the Insurance Company in not settling the claim of the complainants. Insurance Company was informed of the period of limitation as well to take action against the carrier but it appears it took no notice of the correspondence. It is contended that the claim was settled on the basis of non-standard of claim as there was breach of policy conditions and the provisions of the Marine Insurance Act. The particulars as to what breaches of the policy conditions were there and what are the provisions of law which disentitled to complainants the full amount of loss suffered is not made clear to us.
11. We do not find any defence raised by the Insurance Company which would debar complainants of their claim under the policy. It is submitted that vessel MV Blue Baby was not approved by GIC and, therefore, a sum of Rs. 8,92,254 being 1% extra premium for the vessel was recovered. Prima facie it is difficult to accept this contention as the name of the ship was informed to the Insurance Company and at no point of time it asked the complainants to pay any extra premium. If the vessel was not having the approval of the GIC, Insurance Company would certainly have known this fact from the very beginning. However, we find there is a letter dated 26.6.2000 from the consignee to the Insurance Company stating that the Insurance Company could deduct premium for non-GIC approval for the vessel MV Blue Baby amounting to Rs. 8,92,254 from the claim amount against the policy in question. This letter of the consignee was filed by the Insurance Company and it was not annexed by the complainants in the complaint though this fact did find mention therein. There is no reason why this letter should not have been attached with the complaint. Moreover, in the letter dated 19.1.2001 wherein the complainants protested for deduction of Rs. 24,55,276 from their claim as arrived at by the surveyor there is no mention that premium © 1% was wrongly deducted as the vessel M.V. Blue Baby was not having the approval of GIC. No explanation has been given by the Insurance Company as to why there has been delay in settling the claim under the policy.
12. It also cannot be denied that the complainants have been pursuing their remedy and visited Delhi from Moscow. On this account, complainants have claimed Rs. 26,454 and filed documents in support thereof for which claim, in our view, the complainants are entitled. We are also of the view that complainants are entitled to compensation for deficiency hi service by the insurance in not settling the claim in time and for this, we are not of the view that rupees one lakh to the complainants will meet the ends of justice.
13. Main contention of the Insurance Company has, however, been that the amount of Rs. 36,89,553 was accepted by the complainant in full and final discharge of their claim against the Insurance Company. It is, therefore, contended that complainants are estopped claiming any further amount under the policy. But the fact remains that immediately on getting the cheque for the aforesaid amount complainants protested against the deduction of the amount of their claim. They also contended that it was only on account of delay caused by the Insurance Company that perforce they had to give such a receipt. It is certainly a case of coercion and undue pressure exercised by the Insurance Company on the consignee in not settling its claim and particularly when the consignee had already made full payment of price of the rice to the consignee. As we have noted above, there is no explanation whatsoever from the Insurance Company as to why there has been delay in settling the claim of the complainants. Moreover, as we have noted above, the receipt is totally blank and is merely on the printed form. In fact, it is no receipt in the eyes of the law. We, therefore, reject the contention of the Insurance Company that there was a complete discharge given by the complainants for their claim on the basis of the receipt.
14. Out of the balance amount of Rs. 24,62,222 deducted from the claim of Rs. 61,51,775 we allow the Insurance Company to deduct a further sum of Rs. 8,92,254 being the premium @ 1%. Thus, leaving a balance of Rs. 15,63,022 which the complainants are entitled with interest @ 12% p.a. from 1.8.1999 till payment. It was by a letter dated 29.5.1999 that all the documents pertaining to the claim had been forwarded to the Insurance Company. Two months time was sufficient for the Insurance Company to settle the claim. We, therefore, award as under:
(1) Complainants are entitled to a sum of Rs. 15,63,022.00 with interest @ 12% p.a. from 1.8.1999 till payment. (2) Complainants are entitled to Rs. 26,454 towards expenses incurred by them. This amount is also payable with interest at the same rate for the same period. (3) We further award Rs. one lakh to the complainants on account of deficiency in service on the part of the Insurance Company for unexplained delay in settling the claim.
Complaint is allowed with costs which we assess at Rs. 20,000.