State Consumer Disputes Redressal Commission
Facets Polishing Works Pvt. Ltd. vs United India Insurance Co. Ltd. on 17 December, 2013
BEFORE THE HON'BLE STATE CONSUMER DISPUTES REDRESSAL
BEFORE THE HON'BLE STATE CONSUMER DISPUTES
REDRESSAL
COMMISSION, MAHARASHTRA,
MUMBAI
Complaint Case No. CC/05/98
Facets Polishing
Works Pvt. Ltd.
K.G. House, Plot
No.1,
Near Umiyamata Temple, Umiya Chowk,
A.K. Road, Surat - 395 008.
...........Complainant(s)
Versus
United India
Insurance Co. Ltd.
Divisional Office IV,
Merchantile Bank Chamber, 19
Cawasji Patel Street, For,
Mumbai-400 001 and
Regional Office No.1,
Stadium House,
5th floor,
Veer Nariman Road,
Mumbai-400 020 and
Registered & Head
Office at United India
House, 24, Whites Road,
Chennai-600 014.
............Opponent(s)
BEFORE:
HON'ABLE MRS. Usha
S.Thakare PRESIDING MEMBER
HON'ABLE MR. Narendra Kawde MEMBER PRESENT:
Mr.Vishal Talsania, Advocate for the Complainant.
Mr.Mehta, Advocate for Opponent.
-: ORDER :-
Per Mrs.Usha S. Thakare, Presiding Judicial Member Complainant-Facets Polishing Works, a private limited company has filed present complaint by alleging deficiency in service on the part of the opponent/United India Insurance Company Ltd. Complainant-Facets Polishing Works Private Limited Company is incorporated under the Companies Act, 1956. It carries on business of polishing, processing, manufacturing and export of diamonds. Opponent is a limited company incorporated under the Companies Act, 1956 and carries on business as Insurer throughout India.
2. Present complaint arises out of non-settlement of claim of the complainant for sum of `46,76,230/- under Specific Voyage Policy issued by the opponent.
For processing of diamonds, the complainant-Company has purchased from a US based Company-Trane India Ltd., a Trane Water Cooled Centrifugal Chiller along with five drums of refrigerant in all weighing 24590 lbs for the price of US $ 1,00,000/-. The suppliers-Trane India Ltd. had entrusted said consignment to the sea carriers in a sound condition at Seattle, WA for carriage to Mumbai Port. On or about 05/11/2003 said consignment landed in Mumbai Port in sound condition. After landing at Mumbai, Omkar Clearing, a clearing and forwarding agent of the complainant completed the Customs formalities.
After landing of said consignment in the docks at Mumbai and prior to loading of the said consignment on to the truck belonging to the road carriers, said consignment was surveyed by P.M. Patel & Co. in the Bombay Docks on 11/11/2003. Said P.M. Patel & Co. had submitted a Survey Report dated 14/11/2003 and reported that consignment was found in sound condition. On or about 11/11/2003 said clearing agent entrusted said consignment to Meena Container Movers (Carriers) in sound condition for safe carriage and timely delivery of the same at the complainants factory at Surat. Said carriers agreed to carry said consignment via truck No.MH-04-AL-18.
After consignment was loaded on to the said truck by the workmen of port agency under the supervision of clearing and forwarding agent of the complainant, said consignment was fastened and mounted by the employees of said carriers. In respect of said entrustment, said carriers had issued goods consignment note bearing No.2191 dated 11/11/2003. In said goods consignment note, complainant has been described as the consignee. The complainant further states that to cover road transit of said consignment from Mumbai to complainants factory at Surat, the complainant had effected with the opponent a Specific Voyage Insurance. In consideration of the premium of `8,991/- paid by the complainant to the opponent, opponent had issued a Specific Voyage Policy bearing No.020400/21/03/04162 dated 11/11/2003 for a sum of `48,25,275/-. Policy was taken out to cover the risk of road transit of the consignment of Trane Water Cooled Centrarac Liquid Chiller dispatch via Truck No.MH-04-AL-18.
Under the said policy, risks covered were basic cover including SRCC. On 13/11/2003 said consignment was delivered by the carriers to the complainants factory at Surat in severely damaged condition. This fact has been admitted by said carriers driver by way of endorsement on goods consignment note that delivered in damaged condition and the damage occurred during transit. Identical endorsement was made by the driver in the Delivery Challan. Immediately, on getting knowledge of the accident to the said vehicle and the consignment being delivered in a damaged condition, the complainant by letter dated 13/11/2003 addressed to Divisional Office of opponent informed the opponent that said consignment was damaged in transit. The carriers driver Mr.Ram Sajiwan informed the complainant on or about 11 or 12/11/2003 that the truck carrying said consignment met with an accident and as a result of which the compressor of the said machine was severely damaged. Carriers driver on 14/11/2003 lodged a complaint in Varaccha Police Station, Surat. In his complaint, said Carriers driver stated that while driving the vehicle, top portion of the machine might have struck some road barrier which damaged the top portion of the machine. Upon receipt of information about damage to said consignment, the complainant immediately contacted the opponent. Opponent, in turn, appointed H. Pandya & Co. to survey and assess the loss caused to said consignment. Said Surveyor issued Survey Report dated 21/01/2004.
According to said Survey Report, there was breakage of outer casing from top portion of the machine. On examination of the said consignment, Surveyor noticed that the extreme top portion of the consignment i.e. Compressor Unit housing joint collar portion of top side of Centravac Chillar Machine was severely impacted and parts of the same were found in broken/cracked/deeply scratched position. The Surveyor has attributed cause of damage to the compressor due to hard object hitting the compressor during transit. According to said Surveyor, total cost of new compressor unit would be `42,43,800/-.
3. It is further alleged that authorized representative of the suppliers, by letter dated 05/12/2003 addressed to the complainant has stated that on inspection of said machine they found damage to the compressor assembly.
Repairs of said assembly would be costly and not feasible. They recommended complete replacement of the compressor including oil filter assy which was broken. Said representative opined that any attempt to repair the unit would render the warranty null and void and the suppliers would not guarantee the performance of the said machine. Said representative of the suppliers by letter dated 15/12/2003 addressed to the complainant again reiterated that compressor assembly of the said machine needed to be replaced and that the cost of replacement would be US $ 60,000/- CIF plus about `7 Lakhs towards engineering services. He further stated that cost of repairs would be US $ 83,597/- and the repairs would not guarantee efficient and continued working of the machine. The complainant by statutory notice dated 09/12/2003 addressed to said Carriers lodged a claim on the said Carriers in the sum of `40 Lakhs and called upon the said Carriers to pay said amount within seven days from the date of receipt of the Notice.
By notice, complainant requested said Carriers to forward damage certificate to the complainant. By letter dated 09/01/2004 Carriers denied their liability to pay the complainants claim on the ground that as transport of the said consignment they were not liable to pay the complainants claim and called upon the complainant to lodge their claim on the opponent. The Carriers further contended that as the said consignment was transported at owners risk, therefore, said Carriers were not liable to pay the complainants claim. The complainant by letter dated 02/02/2004 addressed to the Divisional Office of the opponent lodged a claim in the sum of `46,76,230/-. Along with said letter the documents in support of claim were forwarded to the opponent. By said letter, complainant called upon the opponent to pay to the complainant its claim and requested the opponent to release 90% of the claim as on account payment. On 21/02/2004 opponent repudiated the claim lodged by the complainant on the ground that claim of the complainant was not covered under the policy. Letter curiously states that whilst the consignment was damaged, said damage was not covered under the policy. The letter further stated that according to the Surveyor, the consignment was not damaged. The complainant pointed out to the opponent that the vehicle carrying said consignment met with an accident which was confirmed by the driver and a police complaint to that effect was lodged with Varachha Police Station, Surat. This fact of damage was admitted by Divisional Office of the opponent.
Regional Office of the opponent by letter dated 15/04/2004 addressed to the complainant stated that under the insurance policy taken by the complainant, the complainants claim could only be paid when the vehicle carrying the consignment met with an accident. Opponent contended that from the Survey Report, they noticed that only the consignment was damaged due to height limiting cross bar above the road.
In view of it, the above claim under the policy was not payable. The complainant further alleged that there was accident to the carrying vehicle as the protruding object on the highway hit the consignment which was mounted on the container. By letter dated 24/05/2004 the complainant pointed out to the opponent that there had been an accident and/or accident of like nature to the carrying vehicle. By letters dated 07/09/2004 and 11/02/2005 the complainant requested the opponent to re-examine the claim. Head office of the opponent by its letter dated 22/03/2005 reiterated that the claim under the policy was not payable on the ground that there was no damage to the carrying vehicle albeit the consignment might have been damaged. The complainant states that the complainant is entitled to and opponent is bound and liable to pay to the complainant a sum of `46,76,230/-
together with interest @ 18% p.a. from 13/02/2004 till the date of filing complaint which works out to `12,40,628/-. As a result of delay in settling just and bonafide claim of the complainant he had been put to enormous mental torture. The complainant has claimed amount of `4 Lakhs for mental torture and harassment. Said consignment fetched salvage value of `1 Lakh. Opponent is liable to pay to the complainant a sum of `62,16,858/-
with further interest @ 18% p.a. on the amount `46,76,230/- from the date of complaint till realization. Opponent is grossly negligent and there is deficiency in service on the part of opponent. Therefore, direction may be issued to the opponent to pay `62,16,858/-
with interest. The complainant has also claimed cost of complaint and suitable reliefs.
4. The opponent has resisted the claim of the complainant by filing written version and denied all adverse allegations. It is submitted that the complaint is not at all tenable and maintainable. In present complaint, complicated questions of law and facts have been raised. The claim ought to have been filed in the Civil Court. However, nature of business carried out by the complainant is admitted. It is submitted that Inland Transit (Rail or Road) Insurance Policy covers only the following risks - (a)(i) Fire, (ii) Lighting (iii) Breakage of bridges (b)(i) Collusion with or by the carrying vehicle (ii) Overturning of the vehicle (iii) Derailment of accidents or like nature to the carrying railway wagon/vehicle. In the instant case, the goods got damaged for the reasons unexplained by the complainant which is clearly outside the ambit and scope of the policy. As the damaged have been occurred for the reasons not indemnified under the insurance policy, the claim was rightly rejected by the opponent.
As per the inland transit basic cover clause, the claim related to the damage to the consignment is admissible only when the carrying vehicle meets with an accident. In Survey Report, it was noticed that only consignment has been damaged due to bad road condition and/or due to top portion of machinery hitting some height limiting cross bar on the road. The loss was noticed only after verifying the machinery and there was no damage to the carrying vehicle, the claim was rightly rejected by the opponent applying the terms and conditions of the insurance policy. The opponent has not committed any deficiency in rendering service. Hence, complaint may be dismissed with costs.
5. It is further submitted that the damage was caused by the transporter who ought to have driven the vehicle in a rash and negligent manner and/or due to bad road condition and/or due to top portion of machinery hitting some height limiting cross bar en-route might have caused damage which is clearly outside the scope and ambit of indemnity granted by the opponent.
Therefore, opponent has not committed any deficiency in rendering service to the complainant. Just to cause loss to the opponent, the complainant has created a story of accident leading to damage to the consignment which is totally false and misleading and in fact committed a serious breach by resorting to fraudulent means to bring its claim within scope and ambit of insurance policy. The complaint may be dismissed with costs. The opponent is not at all liable and/or answerable since damage caused is outside the scope and ambit of insurance policy. The insurance cover does not indemnify the loss and/or damage sustained during transit other than perils covered under the Inland Basic Cover Insurance Policy. The complaint has no merit. In fact complainant carrying on commercial activities cannot file present complaint before the Consumer Fora, particularly, when the matters involves claim under the Carriers Act. Therefore, complaint may be dismissed.
6. Mr.Manoj Sharma, Director of the complainant-Company has filed his affidavit in support of claim. Several documents are filed by the complainant in support of the complaint.
Opponent has filed insurance policy with terms and conditions, packing list, report of Surveyor, repudiation letter dated 20/02/2004, repudiation letter dated 15/04/2004, copy of intimation of an accident, copy of F.I.R. Letter correspondence between parties, report of Surveyor dated 13/02/2004 given to Sub-Divisional Manager of opponent/Insurance Company, divisional Office, Mercantile Bank Chamber, Fort, Mumbai, Survey Report of H. Pandya & Co. dated 21/01/2004 and other documents are relied by the opponent. Documents are filed with affidavit of evidence of Mr.M. Danasagaran, Sr. Divisional Manager of opponent.
7. We have heard Mr.Vishal Talsania, Advocate for the complainant and Mr.Mehta, Advocate for the opponent.
8. Complainant-company has purchased from a US based Company-Trane India Ltd., a Trane Water Cooled Centrifugal Chiller along with five drums of refrigerant.
The suppliers-Trane India Ltd. had entrusted said consignment to the sea carriers in a sound condition at Seattle, WA for carriage to Mumbai Port. Said consignment landed in Mumbai Port in sound condition. After landing of said consignment at Mumbai and after completing the Customs formalities, said consignment was loaded in the docks at Mumbai. Said consignment before loading in the truck was surveyed by P.M. Patel & Co. in the Bombay Docks on 11/11/2003. Said P.M. Patel & Co. had submitted a Survey Report dated 14/11/2003. During the inspection, Surveyor found consignment in sound condition. On 11/11/2003 clearing agent entrusted said consignment to Meena Container Movers (Carriers) in sound condition for safe carriage and timely delivery of the same to the complainants factory at Surat. Meena Container Movers (Carriers) agreed to carry said consignment via truck No.MH-04-AL-18. After consignment was loaded on the said truck by the workmen of port agency, said consignment was fastened and mounted by the employees of said carriers. These facts are not disputed. It is admitted that the consignment was to carry at Surat at the factory of the complainant from Mumbai.
9. To cover the road transit complainant had effected with the opponent a Specific Voyage Insurance. For consideration of premium of `8,991/- paid by the complainant to the opponent a Specific Voyage Insurance Policy bearing No.020400/21/03/04162 dated 11/11/2003 for sum of `48,25,275/- was issued. Policy was taken out to cover the risk of road transit of the consignment of Trane Water Cooled Centrarac Liquid Chiller dispatched via Truck No.MH-04-AL-18. Valid insurance policy was in force when the damage was noticed by the complainant on reaching the consignment in its factory at Surat. These facts are not challenged.
10. On 13/11/2003 said consignment was delivered by the carriers to the complainants factory at Surat and at that time damage to the consignment was noticed. According to the complainant said damage was occurred during transit and it is admitted by driver of the truck/carrier in his endorsement in challan and on goods consignment note. Those documents are filed on record by the complainant. Goods Consignment Note bearing No.2191 dated 11/11/2003 finds place on record.
11. The complainant came to know that the consignment being delivered in damaged condition to the complainant. Immediately he wrote a letter addressed to the Divisional Office of the opponent on 13/11/2003. Said letter makes it clear that the complainant informed to the Divisional Office of the opponent that said consignment was damaged in transit. The complainant also requested to opponent to depute Surveyor to assess the loss caused to said consignment. Immediate action was taken by the complainant when the complainant came to know about damaged condition of the consignment.
12. It is not disputed that Mr.Ram Sajiwan was driver of truck No.MH-04-AL-18.
In his statement dated 15/11/2003 he admitted that he took machine from the Mumbai and started journey towards factory of the complainant. He reached at about 12.30 p.m. at Thane Naka.
On 12/11/2003 in the morning at about 10 a.m. he again started his further journey. After taking halts twice for lunch and tea, truck reached at Surat Naka at 9.00 a.m. on 13/11/2003. Information was given to complainant by phone on arrival at said Naka. After payment of octroi, he reached to factory at about 4.30 p.m. Driver admits that on examination of machine, Site Engineer of the complainant-company noticed that there was damage to the machine on its top portion. Driver admitted that damage to said machine was caused during transit.
He further made it clear that when the machine was loaded on truck, same was in sound condition.
Information of Driver Mr.Ram Sajiwan and two officers of complainant-company speak in volume.
13. The complainant gave information to Inspector In-charge of Varaccha Police Station, Surat and requested police to register the crime. Information to Police was given on 14/11/2003. On giving information by the complainant to the opponent; opponent in turn appointed H. Pandya & Co. to survey and assess the loss caused to said consignment.
On 21/01/2004 said Surveyor issued Survey Report. According said Survey Report, there was breakage of outer casing from top portion of the machine. Surveyor noticed that the extreme top portion of the consignment i.e. Compressor Unit housing joint collar portion of top side of Centravac Chillar Machine was severely impacted and parts of the same were found in broken/cracked/deeply scratched position. The Surveyor noticed that the compressor unit housings joint collar portion of top side total three numbers were found damaged, the rear one was broken, second one was deeply scratched/cracked and front one was having scratch marks on the extreme top portion. Survey Report made it clear that the consignment i.e. machine bought by the complainant was damaged. The Surveyor has attributed cause of damage to the compressor due to hard object hitting the compressor during transit.
14. During the survey, Surveyor interviewed the driver of the truck. Driver and Cleaner of the truck stated that the consignment was loaded in Mumbai Docks in sound condition. They confessed before the Surveyor that damage was caused to the consignment due to solid iron channel/guarder of horizontal position hitting said consignment during transit. Surveyor reported that due aforesaid accident, there was displacement of the consignment on the mounting of said truck. The fact that consignment was damaged during transit is not seriously challenged.
15. The complainant-company had purchased costly machine. Surveyor himself stated in Survey Report that total cost of new compressor unit would be `42,43,800/-. Repair of said unit is costly and not feasible. Representative of the supplier of said machinery stated that any attempt to repair the unit would render the warranty null and void and the suppliers would not guarantee the performance of the said machine.
Said representative of the suppliers by letter dated 15/12/2003 addressed to the complainant again reiterated that compressor assembly of the said machine needed to be replaced and that the cost of replacement would be US $ 60,000/- CIF plus about `7 Lakhs towards engineering services.
They further stated that cost of repairs would be US $ 83,597/- and the repairs would not guarantee efficient and continued working of the machine. Letter of representative of suppliers dated 15/12/2003 is not challenged by the opponent.
16. Ultimately, complainant by statutory notice dated 09/12/2003 called upon the carrier to pay `40 Lakhs within seven days from receipt of notice. Carrier denied its liability. Carrier by its letter dated 09/01/2004 called upon the complainant to lodge claim with opponent. Carrier was not ready to incur the liability. Both letters are on record. Due to heavy expenses it was not desirable to repair costly machinery. On 02/02/2004 complainant addressed a letter to the Divisional Office of the opponent and lodged a claim for sum of `46,76,230/- along with supporting documents. The complainant by said letter called upon the opponent to pay their claim and to release 90% of claim i.e. `42,08,607/-. Copy of said letter is on record. Admittedly, Divisional Office of the opponent by letter dated 20/02/2004 repudiated the claim of the complainant on the ground that claim of the complainant was not covered under the policy. Reason is mentioned that Surveyor stated that container did not sustain any damage while the consignment was damaged which is not covered under the policy. Complainant pointed out to the opponent that the vehicle carrying said consignment met with an accident which was confirmed by the driver and police complaint to that effect was lodged. This fact was collaborated by Survey Report. Information was given by letter dated 02/03/2004.
Again by letter dated 15/04/2004, Regional Office of opponent informed the complainant that complainants claim could only be paid if vehicle carrying consignment meets with an accident. Opponent contended that from the Survey Report, they noticed that only consignment was damaged due to height limiting cross bar above the road.
17. The complainant is a consumer of the opponent. Policy taken by the complainant was in force when the machinery was damaged. Claim of the complainant is repudiated only on the ground that truck carrying consignment did not meet with an accident. This version of the opponent cannot be accepted in view of statement of driver of truck and its own Survey Report. Proposition that consignment was damaged during transit and policy was taken for empty container. No prudent person will pay heavy premium just to insure empty container i.e. outer case of the machinery. Under the policy, sum insured was `48,25,275/-. The complainant has paid premium of `8,991/- towards insurance policy. Policy was taken to insure machinery/consignment only.
18. Next objection raised on behalf of opponent is that truck carrying consignment was not met with an accident and the machinery sustained damage by hitting to some object. In Survey Report dated 21/01/2004 Surveyor of the opponent submitted that consignment item i.e. only unpack Centravac Chillar Machine top portion received impact by some solid object during transit. It means that machinery of the complainant was damaged in the accident. Narrow meaning cannot be given to the word accident. The Oxford English Dictionary, Tenth Edition, meaning of word accident means - (i) an unfortunate incident that happens unexpectedly and unintentionally.
(ii) something that happens by chance or without apparent cause.
19. In the case of United India Insurance Co. Ltd. V/s. Pushpalaya Printers, (2004)3 SCC 694, the Honble Apex Court held as under :-
6. The only point that arises for consideration is whether the word impact contained in clause 5 of the insurance policy covers the damage caused to the building and machinery due to driving of the bulldozer on the road close to the building.
It is evident from the terms of the insurance policy that the property was insured as against destruction or damage to whole or part. The appellant Company agreed to pay towards destruction or damage to the property insured to the extent of its liability on account of various happenings. In the present case both the parties relied on clause 5 of the insurance policy.
Clause 5 is also subject to exclusions contained in the insurance policy. That a damage caused to the building or machinery on account of driving of vehicle on the road close to the building is not excluded. Clause 5 speaks of "impact" by any rail/road vehicle or animal. If the appellant company wanted to exclude any damage or destruction caused on account of driving of vehicle on the road close to the building, it could have expressly excluded. The insured possibly did not understand and expect that the destruction and damage to the building and machinery is confined only to the direct collision by vehicle moving on the road to the building or machinery. In the ordinary course, the question of a vehicle directly dashing the building or the machinery inside the building does not arise. Further, "impact" by road vehicle found in the company of other words in the same clause 5 normally indicates that damage caused to the building on account of vibration by driving of vehicle close to the road is also included. In order to interpret this clause, it is also necessary to gather the intention of the parties from the words used in the policy. If the word "impact" is interpreted narrowly the question of impact by any rail would not arise as the question of a rail forcibly coming to the contact of a building or machinery would not arise. In the absence of specific exclusion and the word "impact" having more meanings in the context, it cannot be confined to forcible contact alone when it includes the meanings "to drive close", "effective action of one thing upon another" and "the effect of such action", it is reasonable and fair to hold in the context that the word "impact" contained in clause 5 of the insurance policy covers the case of the respondent to say that damage caused to the building and machinery on account of the bulldozer moving closely on the road was on account of its "impact". It is also settled position in law that if there is any ambiguity or a term is capable of two possible interpretations one beneficial to the insured should be accepted consistent with the purpose for which the policy is taken, namely, to cover the risk on the happening of certain event. Although there is no ambiguity in the expression "impact", even otherwise applying the rule of contra proferentem, the use of the word "impact" in clause 5 in the instant policy must be construed against the appellant. Where the words of a document are ambiguous, they shall be construed against the party who prepared the document. This rule applies to contracts of insurance and clause 5 of the insurance policy even after reading the entire policy in the present case should be construed against the insurer. A Constitution Bench of this Court in General Assurance Society Ltd. vs. Chandumull Jain & Anr. [1966 (3) SCR 500] has expressed that "in a contract of insurance, there is requirement of uberrima fides, i.e. good faith on the part of the assured and the contract is likely to be construed contra proferentem i.e. against the company in case of ambiguity or doubt."
20. In view of above discussion, we are of the view that machinery i.e. consignment of the complainant was damaged during transit. Therefore, opponent is liable to pay compensation to the complainant as said machinery was insured with the opponent/Insurance Company. Claim of the complainant was wrongly repudiated by the opponent/Insurance Company. As a result complaint deserves to be allowed.
21. Complainant on 02/02/2004 had lodged claim with the opponent for a sum of `46,76,230/-. Claim was supported by the documents, particularly, Survey Report of M/s. H. Pandya & Co. Said claim was repudiated by the opponent/Insurance Company by its letter dated 20/02/2004. Repudiation of genuine claim amounts to deficiency in service. As per Survey Report, total cost of new compressor unit would be `42,43,800/-. Therefore, complainant is entitled for amount of `42,43,800/- with interest @ 6% p.a. from the date of repudiation i.e. 20/02/2004 till realization of entire amount. With this view, we pass the following order :-
-: ORDER :-
1.
Complaint is partly allowed.
2. Opponent/Insurance Company is directed to pay to the complainant a sum of `42,43,800/-
with interest @6% p.a. from the date of repudiation of claim i.e. 20/02/2004 till realization of entire amount.
3. Opponent/Insurance Company is directed to pay an amount of `25,000/- to the complainant towards costs of litigation and shall bear its own costs.
4. Copies of the order be furnished to the parties.
Pronounced Dated 17th December 2013.
[HON'ABLE MRS. Usha S.Thakare] PRESIDING MEMBER [HON'ABLE MR. Narendra Kawde] MEMBER dd.