State Consumer Disputes Redressal Commission
Indosin Limited vs The United India Insurance Co. Ltd on 3 October, 2007
IN THE STATE COMMISSION : DELHI IN THE STATE COMMISSION : DELHI (Constituted under Section 9 clause (b)of the Consumer Protection Act, 1986 ) Date of Decision: 03-10-2007 Complaint Case No. C-203/1998 Indosin Limited Complainant Regd. Ofice at 1313, Ansal Tower, Through 38, Nehru Place, Mr. Prem Prakash, New Delhi-110019. Advocate. Versus 1. The United India Insurance co. Ltd. Opposite Party No.1 Regd. & Head Office, 24, Whites Road, Chennai-600 014. 2. The United India Insurance Co. Ltd. Opposite Party No. 2 Divisional Office No. 12, Flat No. 42, IIIrd Floor, Moolchand Commercial Complex, Ew Delhi. CORAM : Justice J.D. Kapoor- President Ms. Rumnita Mittal - Member
1. Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
JUSTICE J.D. KAPOOR, PRESIDENT (ORAL) Complainant is public limited company incorporated under the provisions of Companies Act, 1956. The complainant had taken a marine Insurance Policy for his cargo from the OP-Company covering CIF value + 10% (i.e. US $ 13,875 + 10% = US $ 15,263/-) vide Policy NO. 47991 dated 01-10-1997. An amount of Rs. 1,884/- was paid to the OP towards the premium for the said insurance policy. The name of the vessel was declared as Golden Sunlight in the said policy.
2. Complainant had imported 50 MT of Calcium Carbide (being 25 MT of size 15-25 MM & 25 MT of size 2-4 MM) from Romania. The said goods were shipped by M/s Govcrest International S.L.R. Romania vide Bill of lading No. 7 & 8 dated 03-10-1997 by vessel M.V. Golden Sunlight from Constanta Port to Mumbai Port.
3. Since the complainant did not receive the cargo, it on 30-12-1997 filed its claim of US $ 15,263 being the policy amount (CIF value + 10% with the OP No.1- Insurance Company for non-delivery of the aforesaid cargo. It sent a reminder on 13-01-1998 requesting the OP to inform the status of the said claim and the formalities, if any, to be completed by them. The OP-Company inspite of regular telephone calls and follow-up and sent several other reminders i.e. dated 20-01-1998, 22-01-1998, 24-01-1998, 27-01-1998 and 28-01-1998 by registered post requesting the OP to process the claim at the earliest. The OP despite repeated reminders failed to process the said claim.
4. Thereafter the OP vide letter dated 10-02-1998 called upon the complainant to take all such measures as may be necessary and reasonable for the purpose of minimizing loss under the aforesaid policy. In the circumstances and as per the OPs request, complainant deputed Mr. A.P. Chharia, Sr. Vice President to Ningbo Port, China, where the said material was detained unlawfully. Accordingly Mr. A.P.Chharia visited Ningbo Port along with clearing and shipping agents from 12-05- 1998 to 21-05-1998 and physically verified the stock at the Port with a view to take all such measures as may be necessary for minimizing the loss. Complainant also appointed a Surveyor i.e. M/s ISM Maritime Agency Ltd., Dalian, China for this purpose.
5. That as per report of the Surveyor and the report sent by Mr. A.P. Chharia, based on discussions with officials in Maritime Court, officials of Port authorities and with lawyer Mr. Tang Deng Yong of Boning Law Firm, Ningbo Port6, the goods has lot commercial value due to multiple handling, loading and unloading, age of the cargo and on account of getting moisture contents from air.
6. That as per estimate forwarded by the surveyors at Ningbo, China the expected expenses for taking delivery of this cargo and taking to Mumbai, an approximate amount of US $ 12,758 had to be paid in advance towards port charges, custom charges, freight from Ningbo Port to Mumbai Port, loading charges, documentation charges and legal fee.
Further as per report received from Surveyor, the value of the cargo was US $ 1,800 for the said entire stock of 50 MT of Calcium Carbide lying at the said Port. It was estimated that the resaleable value of this cargo will not be more than US $ 2000 to 2500 in India..
7. The aforesaid facts were promptly brought to OPs notice by complainant vide letter dated 15-05-1998 and by the said letter the OP were called upon to advise on further course of action to be taken by the complainant in the facts and circumstances of the case. The said letter was duly received by the OP on 15-05-1998 itself. However, in as much as no instructions whatsoever were received from the OP, complainants representative thereafter returned back from China. Complainant took all necessary actions as desired by the OP and in doing so, have incurred expenses of Rs. 2,27,373/- for minimizing the loss. These expenses were incurr3ed towards sending their representative to China, paying professional fees to lawyers (appointed by the complainant on the OPs advice to take all necessary action in the proceedings before the Ningbo Maritime Court) and towards professional charges to the Surveyor.
8. Complainant vide letters dated 23-02-1998 and 27-02-1998 had made it clear to the OP that the cargo detained at Ningbo Port is duly insured with the OP-Company for safe delivery upto India Port as per Bill of Lading and Insurance Policy and that it is the duty of the OP-Company to take all necessary steps for proper safety of the cargo as well as to take necessary steps to recover the salvage value of the goods.
9. On finding persistent and deliberate failure on the part of the OP in processing the claim of the complainant a legal notice dated 16-06-1998 was sent calling upon the OP to make payment of a sum of Rs. 12,76,001/- against cost of the goods insured, insurance premium paid, interest from 03-10-1997 to 30-06-1998 and expenses incurred in taking actions as per advice of the OP and loss of production caused by loss of consignment. However, the said legal notice also fell on deaf ears as the OP did not pay any heed to the same. The OP by insuring the goods has undertaken to render service within the meaning of section 2(1)(o) of the Consumer Protection Act and there was deficiency in the service which has been undertaken to be performed by the OP in pursuance of the contract of insurance within the meaning of section 2(1)(g) of the Act and as a result there is a consumer dispute withint he meaning of section 2(1)(e). The complainant has through this complaint sought compensation of Rs. 12,76,011/- as to the following components:-
1.
Cost(value) of goods insured US $ 15,263 (calculated @ Rs. 43,00 prevailing market rate.
Rs. 6,56,309/-
2. Insurance premium paid Rs 1,884/-
3. Interest from 03-10-1997 to 30-06-1998 @ 27.18% (calculated on the prevailing Bank rate for such Bills) Rs. 1,32,445/-
4. Expenses incurred in taking actions as per advice of the OP-Company.
Rs. 2,27,373/-
5. Loss of production payable @ US $ 120 per MT (calculated @ Rs. 43.00 the prevailing market rate.
Rs. 2,58,000/-
Total Rs. 12,76,011/-
10. While denying its liability, OP-Company raised the following pleas:-
(i) That the complaint is barred by limitation. (ii) There is
no deficiency of service attributable against the OP. Claim preferred is not payable under the terms and conditions of the policy as revealed by the investigation conducted by International Maritime Bureau (for short IMB) to the full knowledge of the complainant which clearly attracts exclusion clause 4.6 of the institute cargo clause 16 of the policy it is the duty of the insured to ensure that losses be minimized. The exclusion clause of the policy is loss damage or expenses arising from insolvency or financial default of the owners, managers charters or operators of the vessel and from the investigations made by M/s International Maritime Bureau London it was revealed that the cargo was available on a vessel of similar description but with the changed name Elizabeth plying in Greece, steps were taken to save the cargo for the insured.
(iii) That the claim under the policy is also not maintainable as the complainant had refused to accept the goods on the grounds that the cargo is valueless because, owing to passage of time, the chemical properties of cargo would have changed. Assume that the change has occurred, the proximate clause of the change occurring would be either due to:-
(a) the inherent nature of the cargo or
(b) delay.
(iv) That under Institute Cargo Clause (A) (for short ICC (A)) loss/damage/expenses caused by inherent vice (exclusion clause 4.4 is irrecoverable. Similarly any loss/expenses proximately caused by the delay even though the delay be caused by a risk insured against clause 4.5 is irrecoverable.
(v) That the insured informed that they are not interested in taking the cargo even if the same is retrieved and offered for delivery.
(vi) That it was revealed from the investigation that due to financial default of the charterer to pay demurrage charges demanded by vessel owners the owner has diverted the vessel to Chinese Port and attempted to sell the cargo and the deviation and sale of cargo is due to financial default of the charterers of the veseel, no liability devolves upon the OP in terms of the exclusion clause 4.6 and accordingly the claim was rightly repudiated.
(vii) That since various claims as duly mentioned in para 7 arising out of the same MV Golden Sunlight Vessel are pending adjudication before the Honble National Consumer Disputes Redressal Commission, New Delhi. The judicial propriety demands that to avoid conflicting decisions, all cases arising out of the same event be tried together and accordingly to transfer the instant complaint to the Honble National Commission.
11. While challenging the stand of the OP invoking clause 4.6 of Institute Cargo Clauses (A) of the policy the complainant has averred that the object of this clause is to protect the Insurance Company from any loss suffered from the conspiracy in collusion with the shippers of the goods and consigner of the cargo but in the instant case no such allegation has been made by the OP. Clause 4.6 of the policy provides as under:-
4.6 Loss damage or expenses arising from insolvency or financial default of the owners managers charterers or operators of the vessel
12. Other clauses invoked by the OP are clauses 4.4 and 4.5 which are as under:-
Exclusions In no case shall this insurance cover-
4.4 Loss damage expenses caused by inherent vice or nature of the subject matter insured.
4.5 Loss damage or expense proximately caused by delay, even though the delay be caused by a risk insured against (except expenses) payable under clause 2 above.
13. According to us the aforesaid conspectus of rival contentions of the parties lead to the following facts which are more or less not in dispute:-
(i) That the complainant had obtained a Marine Insurance Policy from the OP on payment of Rs. 1,884/- towards premium covering risk to the tune of US $ 13,875/- + 10% = US $ 15,263.
(ii) That the goods with the value of US $ 15,263 as mentioned in the complaint were duly shipped on 03-10-1997 through M/s Govcrest International S.L.R. Romania by vessel M.V. Golden Sunlight from Constanta Port to Mumbai Port.
(iii) The cargo did not reach Mumbai Port at any point of time.
(iv) After nine months in May 1998 the goods were found at Ningbo Port China where the goods were detained unlawfully.
(v) That the OP has not produced any evidence or material to show that the loss damage or expenses arosed from insolvency or default of the owners managers charterers or operators of the vessel.
(vi) That as per report of the Surveyor and the report sent by Mr. A.P. Chharia, based on discussions with officials in Maritime Court, Officials of Port Authorities and with Lawyer Mr. Tang Deng Yong of Boning Law Firm, Ningbo Post, the goods has lost commercial value due to multiple handling, loading and unloading, age of the cargo and on account of getting moisture contents from air.
(vii) That the investigation made by M/s ISM Maritime Agency Ltd. Dalian, China revealed that the cargo was available on a vessel of similar description but with the changed name Elizabeth and steps were taken to save the cargo for the insured but the complainant informed that they are no more interested in taking the cargo for the reasons by the time the value of the goods reduced to US $ 1800 as the goods had lost commercial value due to loading and unloading.
(viii) Further that the cost of the goods to be taken from Ningbo to Mumbai Port would have been 36,200 US $.
14. Taking over all view of the rival claims of the parties and the report of the Surveyor based on the discussions with officials of Maritime Court, Officials of Port Authorities and with Lawyer Mr. Tang Deng Yong of Boning Law Fir, Ningbo Port that the goods had lost commercial value due to multiple handling, loading and unloading, age of the cargo and on account of getting moisture contents from air coupled with the fact that it was after 9 months i.e. in May 1998 the goods were detained unlawfully at Ningbo Port,China, we find that OP No.1-Insurance Company is liable to indemnify the loss against Marine Insurance Policy though the contributory negligence of the complainant was as to the time taken by it due to which the goods were damaged because of the moisture contents from air. We deem that a lump sum compensation of Rs. 2.5 lacs besides Rs. 50,000/- as compensation towards mental agony and harassment and cost of litigation would meet the ends of justice.
15. Aforesaid order shall be complied with, within one month from the date of receipt of this order.
16. Complaint is disposed of in aforesaid terms.
17. A copy of this order as per the statutory requirements, be forwarded to the parties free of charge and thereafter the file be consigned to Record Room.
18. Announced on the 3rd October, 2007.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member jj