State Consumer Disputes Redressal Commission
Arvind Mills Limited. vs The New India Assurance Co-Ltd. on 18 November, 2021
Details DD MM YY
Date of Judgment 18 11 2021
Date of filing 14 09 2006
Duration 04 02 15
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, GUJARAT
STATE AT AHMEDABAD.
Complaint No. 2006/25
Court No.1
Arvind Limited
Naroda Road,
Ahmedabad-380025. ...Complainant
Vs.
The New India Assurance Co. Ltd.
8th Floor, Central Bank of India Building,
Lal Darwaja, Ahmedabad-380021. ...Opponent
Complainant- Learned advocate Mr. Parth Contractor,
Opponent- Learned advocate Mr. V. P. Nanavaty.
Coram : Hon'ble Mr. Justice V. P. Patel, President
Smt. Usha P. Jani, Member,
Order by Hon'ble Mr. Justice V. P. Patel, President
1.The complainant has filed the consumer complaint u/s. 17 of the Consumer Protection Act, 1986 (For short "The Act) against the opponent insurance company claiming main relief in terms of para 22 which reads as under:
(A) That the Honorable State Commission be pleased to pass an appropriate order, holding the Opposite Party as liable to the Complainant for all the claims raised by the Complainant in respect of the insurance policies, the description whereof is given vide para graph 5 of the complaint , amounting, in all, to Rs.40,63,049/-, along with the interest accrued thereon at the rate of 18% per annum, to be compounded quarterly with effect from 1st January, 2003, till the date of realization thereof by the Complainant from the Opposite Party and, thereupon, as a consequence there to, the Honorable State Commission be pleased to direct the Opposite Party to effect the payment of the said amount of Rs.40,63,049/-, to the Complainant, along with the interest accrued thereon, with effect from 1st January, 2003 at the rate of 18% per annum, to be com pounded M. B. Desai CC-06-25 Page 1 of 24 quarterly till the date of realization thereof by the Complainant from the Opposite Party;
(B) That the Honourable State commission be pleased to award the the present proceedings to the complainant ;
(C)That Honourable State Commission be pleased to pass such other and further orders as the nature and circumstances of the case may demand.
2. Heard ld. advocate Mr. P. M. Buch for ld. Advocate Mr. Parth Contractor for the complainant and ld. advocate Mr. Darshil Parikh for ld. Advocate Mr. V. P. Nanavaty for the opponent.
Facts of the complaint:
3. Short facts giving rise to the present complaint are as under: The Complainant, in the year 2002 approached the opponent, with a request to issue the requisite insurance policies for the purpose of safeguarding the goods, comprised of cotton denim rolls of a specified quantity undertaken to be exported to Spain as a specified foreign country by the complainant from Its manufacturing plant at Naroda Road, en route sea, from Mumbai Port. In view the above opponent has issued five insurance policies in favour of the complainant as mentioned below:
Policy No.21/2/00089 dated 12thApril,2002;
Policy No.21/02/00243 dated 27th April, 2002; Policy No.21/02/00244 dated 27th April, 2002;
Policy No.21/02/00367 dated 9th May, 2002;
Policy No. 21/02/00365 dated 9thMay, 2002.
3.1 The aforesaid insurance policies were issued by the opponent
covering the risk of goods comprised of cotton denim rolls of a specified quantity which were dispatched by the complainant from the manufacturing plant at Ahmedabad, for export to Spain as a specified foreign country en route sea from Mumbai Port. The said insurance policies were covering all kinds of risk, under the heading of "specific voyage policy", in respect of the said goods comprised of cotton denim rolls of a specified quantity in favour of the complainant. The risk M. B. Desai CC-06-25 Page 2 of 24 covered under the said insurance policies was in the category falling under "ICC (A) Clause", as it is popularly known in insurance jargon.
3.2 When the aforesaid goods were received by the consignee at Spain on respective dates, the concerned containers containing the said goods were found by the consignee in an intact position, with all locks and seals properly applied thereon. In view of this, the delivery of the concerned containers, containing the said goods, was accepted by the consignee thereof at the destination on the respective dates. However, after opening of the said containers by the consignee at Spain on respective dates, it was noticed by the consignee that the said goods were deficient in quantity. In view of this, the consignee immediately informed the agent of the opposite party at Spain and brought to the notice of the said agent of the opponent that the said goods were deficient in quantity.
The agent of the opponent at Spain has carried out the survey at the premises of the consignee and, thereupon, recorded the factum of deficiency in quantity of the goods in the hands of the consignee. The concerned consignee brought the fact to the notice of the Complainant and complainant give reduction in the consideration fixed for the export of such goods in favour of the consignee at Spain on account of shortfall in the quantity agreed to be exported in favour of the consignee as per the agreement between the consignee and complainant. Therefore, complainant has to suffer in terms of money.
3.3 Therefore, complainant has lodged the claim before the opponent for the loss which can be said to have occasioned to the complainant on account of shortfall in the quantity of the said goods upon its receipt by the consignee thereof at Spain upon export of the same. The claims lodged by the complainant in respect to insurance policies are as under:
Date of Net claim amount (Rs.)
Sr. Claim No. Policy No.
Intimation
1. 21/2/2013 21/02/00089 10.6.2002 Rs. 4,84,232/-
2. 21/2/2017 21/02/00243 3.7.2002 Rs. 14,37,961/-
21/02/00244
21/2/2018 3.7.2002 Rs. 21,40,856/-
3. 21/02/000367
21/2/2019 5.7.2002
21/02/000365
M. B. Desai CC-06-25 Page 3 of 24
3.4 However, the complainant did not receive any positive response
from the opponent without any cogent reason for considerably long length of time for the said claim of the complainant and as a result thereof, the complainant was constrained to enter into a protracted correspondence with the opponent reiterating its request for honouring the said claims under the said insurance policies for the of purpose making good the loss occasioned to the complainant. The complainant received communications dated 29.10.2004 from the opponent conveying to the complainant that opponent would not be agreeable to accept the said claim of the complainant and, thereupon, no amount, much less amount claimed by the complainant would release in favour of the complainant accepting the liability of the opponent for the same under the said insurance policies.
3.5 That the fivefold reasons mentioned by the opponent in the said communication dated 29.10.2004 for the purpose of repudiating the said claim of the complainant. The said fivefold reasons are narrated in the complaint.
3.6 It is further submitted that the complainant issued a notice dated 18.6.2005 and requested the opponent that if the opponent was not prepared to accept the said claims of the complainant to treat the same as a dispute by and between the complainant and the opponent and to refer the same to arbitration under the provisions of the Arbitration and Conciliation Act, 1996 as per the policy prevalent in the set up of the opponent in respect of all insurance policies. In response to the aforesaid notice complainant has received a letter dated 19.6.2005 by the opponent wherein, it is stated that opponent is not at all liable for any loss occasioned to the complainant for the reasons indicated in the communication dated 29.10.2004 and further, that, as there is no arbitration clause in the concerned insurance policies issued at the relevant time in favour of the complainant, the question of resorting to the mechanism of arbitration by way of resolution, as requested for by the complainant, vide the said notice dated 18.06.2005 would not arise . Thus, opponent has denied to accept its liability in respect of the said M. B. Desai CC-06-25 Page 4 of 24 claims of the complainant and also declined to agree for an appropriate arbitration for resolution of the dispute. That the above act on the part of opponent is nothing but deficiency of service within the meaning of Consumer Protection Act, 1986 therefore, complainant has filed present complaint for Redressal of its grievances.
Defense of the opponent:
4. The complaint was admitted and the notice was duly served to the opponent insurance company. It appeared through learned advocate and filed written statement. It is stated that the complainant has obtained the services from the opponent for commercial purpose and therefore, complainant is not a consumer. That the complainant is a company registered under the Companies Act, 1956 and therefore, it cannot be said to be a consumer as defined in the Consumer Protection Act, 1986.
Therefore, the Consumer Courts have no jurisdiction to try and decide the present complaint.
4.1 It is further submitted that complainant has not notified the present dispute as dispute items in its balance sheet as per the Provisions of Companies Act, 1956 therefore complainant has no right to claim amount under the policy from the opponent. It is further submitted that complaint is not maintainable before the Commission as Commission required to interpret skilful pilferage during voyage of export consignment from Ahmedabad to various places in Spain. It is further submitted that the policies in question were subject to warehouse to warehouse basis.
4.2 It is further submitted that on 10.6.2002 complainant has sent claim intimation under the policy No. 210400/21/02/00089 that there was shortage of 33 cotton denim febric rolls. That the complainant has also informed that complainant has lodged Marine Insurance claim due to short delivery received by the consigner. As per the importer at Spain, the container as received intact condition on 31.5.2002. The opponent submits that under policy No. 21/243 and 21/224, the company has respectively insured 137 and 126 cotton denim febric rolls. Out of said 262 rols it has been alleged that the customer of the complainant M. B. Desai CC-06-25 Page 5 of 24 received short delivery of 92 rolls. According to the survey report, the customer of the complainant informed that the container arrived duly sealed with four seals and padlocks and there was no any hole though which it could have been possible to take out the said cotton denim fabric rolls and it is also difficult to handle each roll of fabric weighing 80 kgs.
4.3 It is further submitted that complainant did not provided opportunity of inspection of the container; on the contrary the customer has informed that he received container in sound condition. It is observed by the surveyor that at the time of un-stuffing of the container less rolls than those manifested were received. Thus, complainant has alleged that there was skilful pilferage of the insured consignment during its voyage. That the surveyor has concluded that it was evident that shortages determined are not due to circumstances or incidents during the transit but due to an error in loading.
4.4 That the complainant has intimated short delivery of 33 rolls under policy No. 210400/21/02/00089, 08 rolls under policy No. 210400/21/02/00365 and 92 rolls under policy No. 210400/21/02/00243 and 00244 however, complainant has not produced any claim intimation sent by the customer of the complainant as envisaged by letter dated 10.6.2002.
4.5 It is further submitted that as the complainant has failed to prove the claim regarding skillful pilferage and there was delay on the part of the complainant in filing criminal complaint and further complainant has not issued statutory legal notice under Section 9 of the Carrier's Act to the carrier of the complainant therefore, opponent has repudiated its liability by its letter dated 19.10.2004.
Argument of the complainant:
5. Ld. advocate for the complainant considering the repudiation letter has argued that the first reason was that there was delay on the part of the complainant in sending the intimation to the opponent with regard to the shortfall in the quantity of the goods insured under the said insurance policies when the same were received by the consignee thereof M. B. Desai CC-06-25 Page 6 of 24 a specified foreign country as an importer of the said goods. That as and when the question of loss is finalized the claim was submitted before the insurance company.
The second reasons was that criminal complaints in respect of the said incidents of shortfall were preferred by the complainant after a lapse of a period of more than one-and-a-half-years and thereafter, for a considerably long length of time, even the investigation reports of the Police did final not come to be filed by the complainant with the opponent. It is submitted that there is no provision in the terms and conditions of the policy.
That the third reason was that the concerned containers were not provided for inspection to the Surveyor of the opponent at the destination and thereupon the surveyor of the opponent, at the destination, informed was about the shortfall in the quantity of the said goods only after the same were de-stuffed by the consignee thereof at the destination and even the empty containers, containing the said goods, were not provided for inspection to the surveyor of the opponent. It is argued that surveyor was appointed as and when the consignee has informed to the complainant. It was his duty to carry out inspection.
The fourth reason was that, at the time of survey by the surveyor of the opponent at the premises of the consignee, it was confirmed by the consignee that at the time of the receipt the concerned containers upon of its arrival at the destination, all the seals applied thereon, were found to be intact and there was not a single hole on any of the containers, making it possible for anybody goods remove there from any portion of the said stuffed therein and hence, it was the case of an error of loading by the consignor, rather than shortfall in the quantity of the said goods in the hands of the consignee. It is also argued that the shortfall, damage, etc. are covered under the policy.
The fifth reasons was that the complainant was not in a position to prove and identify the exact date and place of shortfall in the quantity of the said goods and, therefore, it would be a case where the complainant was not in a position to establish and, thereupon, prove that the loss occasioned to it was during the transit of the said goods for which the insurance policies were obtained by the complainant. That the loss M. B. Desai CC-06-25 Page 7 of 24 occurred to the complainant is required to be compensated by opponent insurance company. He has requested to allow the complaint and direct the opponent insurance company to pay the claimed amount. He has cited some judgments, which will be referred at the appropriate stage.
Argument of the opponent:
5.1 Ld. advocate for the opponent has argued that the deficiency of service is not established by the complainant. That the complainant has intimated about the loss of merchandise rolls belatedly therefore, no opportunity was given for the investigation. It is further argued that the complainant has not join carrier in spite of that there is provision in the terms and conditions of the policy even the complainant has not issued notice to the carrier therefore, complaint is not tenable in the eye of law.
It is also argued that the complainant has not produced documentary evidence as regards final report of the FIR therefore, the claim is required to be dismissed with cost. It is also argued that the complainant itself responsible for loss therefore, the complaint is required to be dismissed with cost. He has cited some judgments, which will be referred at the appropriate stage.
Merits of the case:
6. The complainant has purchased five policies. The description of the policies are as under:
Sr. Description Date Risk for rolls Page
1. Insurance Policy bearing 12.4.2002 65 1-10
No.21/02/00089.
2. Insurance Policy bearing 27.4.2002 137 11-19
No.21/02/00243.
3. Insurance Policy bearing 27.4.2002 126 20-28
No.21/02/00244.
4. Insurance Policy bearing 9.5.2002 228 29-38
No.21/02/00365.
5. Insurance Policy bearing 9.5.2002 115 39-48
No.21/02/00367.
6.1 The claimant has made claims as under:
Date of Net claim Shortage of
Sr. Claim No. Policy No.
Intimation amount (Rs.) rolls
M. B. Desai CC-06-25 Page 8 of 24
1. 21/2/2013 21/02/00089 10.6.2002 Rs. 4,84,232/- 33
2. 21/2/2017 21/02/00243 3.7.2002 Rs. 14,37,961/- 92
21/02/00244 7
21/2/2018 3.7.2002
3. 21/02/000367 Rs. 21,40,856/- 115
21/2/2019 5.7.2002
21/02/000365
7. The opponent has repudiated the claim for the policy no.
210400/21/02/243 and 244. The repudiation letter is produced at page 82 wherein it is stated as under:
We have perused your claim regarding short shipment of insured cargo at the destination. As per the survey report, the documentary evidence furnished by you and terms and condition of the policy we are repudiating your claim under subject policy on the following counts:
There is violation of policy condition stated as face of the policy that in case of loss immediate notice must be given but in this case there is delay in intimation with regards to loss/shortages.
You preferred private criminal complaint after more than one and half year of incident and further failed to submit the police final investigation report to us till this date.
The container was not provided for inspection to the surveyor at destination. The Surveyor was intimated and survey conducted after 17 days from the date of 31.5.2002 on which date container was delivered into the consignees custody as per survey report. The empty container was also not provided for inspection of the surveyor.
According to survey report your buyer confirmed that at the time of containers reception at destination all seals applied on the containers were found intact the containers did not have any hole. It is not possible to take out merchandise rolls each of 80kgs of weight, on its voyage and ultimately surveyor concluded that it was an error in the loading.
Thus you failed to prove, and identify the exact date & place of loss and thereby failed to prove and establish the cause of loss during the transit.
Therefore, in view of the reasons as explained above, we regret our inability to entertain the claim.
7.1 The insurance company has also repudiated the claim for the policy No. 210400/21/02/00365 and the same is produced at page 83 and repudiated the claim for the policy No. 210400/21/02/367 and the same is produced at page 84. The contents of the repudiation letters at page 83 and 84 are the same as per repudiation letter at page no. 82. Therefore, there is no need to repeat the contents of the repudiation letters.
M. B. Desai CC-06-25 Page 9 of 247.2 On perusing the repudiation letters insurance company has given five reasons.
(a) The violation of policy condition regarding delay in intimation.
(b) Failure to submit police final investigation report.
(c) The container was not provided for inspection to the surveyor.
(d) Error in loading of merchandise rolls.
(e) Failed to prove identify the exact date & place of loss.
8. It will be useful to refer important events happened during the process of sending the merchandise rolls till the repudiation of the claim which reads as under:
Sr. Date Event Page
1 14/04/02 Loading of merchandise rolls from the factory 240
26/04/02
08/05/02
2 31/05/02 Date on which consignee states goods 124
delivered into consignees custody (as per
survey report column No. 16.b)
3 13/06/02 The date of goods arrival on the place of survey 122
(as per survey report column No. 3.b)
4 17/06/02 The date of application for survey and date of 123
survey (as per survey report column No. 6.c) and
126
5 10/06/02 Intimation to the Insurance Company 49
3/07/02 55
5/07/02 60
6 29/11/02 Insurance company has asked for information 249
on certain queries (No such letter is produced
but it is reflected in letter dated 20.12.2002) 7 20/12/02 The information given by the complainant to 249 the insurance company 8 29/11/02 Insurance company has requested to lodge FIR 240 immediately against transporter driver of the truck 9 18/04/03 The insurance company has again requested 238 the complainant to lodge the FIR 10 22/04/03 The letter of the complainant stating that the 236 police authority has apparently refused to accept/registered our complain of pilferage on the grounds that incidents were notice outside the India (that is the place of incident is not finalize) 11 19/06/03 M/s. total Solution, surveyor was appointed by 234 the opponent insurance company M. B. Desai CC-06-25 Page 10 of 24 12 25/07/03 Interim survey report is submitted by the 215 surveyor 13 1/10/03 Criminal Complaint bearing No.148/03, 64 149/03 and 150/03 in the Court of 70 Metropolitan Magistrate, Ahmedabad. 76 14 9/01/04 The surveyor has intimated to the insurance 200 company that the investigation has not begun as nobody from Arvind Mill has given statement 15 21/04/04 survey report submitted by M/s. Total 200 Solution surveyor
9. Delay in intimation: It is appeared from the record that the goods were delivered to the consignees/customer of the complainant on 31.5.2002 whereby, the customer has intimated to the complainant. On 17.6.2002 the application was made by the complainant for survey (Survey was made at the instance of complainant the survey was done by the lloyd's agents and sub-agents).
9.1 Opponent insurance company was intimated through claim on 10/6/2002, 3/7/2002 & 5/7/2002. The complainant has not produced any documentary evidence in respect of the date on which the customer/consignees has reported the loss. No correspondence are produced explaining the circumstance from the date of consignment reached to Spain till claimes made before the Insurance Company. It appears that the complainant has not intimated to the opponent insurance company promptly.
Consumer-commercial transaction.
10. ld. advocate for the opponent has argued that the complainant is not consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986 as the whole transaction is done as a commercial activity. Therefore, the complaint is not tenable in eye of law.
10.1 Ld. Advocate for the complainant has relied upon the judgment of Hon'ble NCDRC in case of Harsolia Motors vs. M/s. National Ins. Co. Ltd. Wherein, it is held as under:
Therefore, the two fold classification is commercial purpose and non-commercial purpose.M. B. Desai CC-06-25 Page 11 of 24
If the goods are purchased for resale or for commercial purpose then such consumer would be excluded from the coverage of Consumer Protection Act, 1986. Such illustration could be that a manufacturer who is producing one product A', for such production he may be required to purchase articles, which may be raw-material, then purchase of such articles would be for commercial purpose. As against this, the same manufacturer if he purchases a refrigerator, a television or an air-conditioner for his use at his residence or even in his office, it cannot be held to be for commercial purpose and for this purpose he is entitled to approach the consumer forum under the Act.
Similarly, a hospital which hires the services of a medical practitioner, it would be a commercial purpose. But, if a person avails of such services for his ailment it would be held to be not a commercial purpose.
Further, from the aforesaid discussion, it is apparent that even taking wide meaning of the words for any commercial purpose it would mean that goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose. But, in a case where goods purchased or services hired in an activity which is not directly intended to generate profit, it would not be commercial purpose.
In this view of the matter, a person who takes insurance policy to cover the envisaged risk does not take the policy for commercial purpose. Policy is only for indemnification and actual loss. It is not intended to generate profit.
10.2 In view of the ratio laid down by the Hon'ble National Commission as above, applying the facts of the present case we are of the view that the complaint is maintainable before the Consumer Commission.
Deficiency in service:
11. Ld. Advocate for the opponent has argued that in this case complainant has not shown how the deficiency in service is made by the opponent. In absence of the specific averment the deficiency of service the damage cannot be compensated.
11.1 He has relied upon the judgment reported in AIR 2020 Supreme Court 2237 in case of Bajaj Allianz Gen. Ins. Co. Ltd. Vs. State of Madhya Pradesh wherein, it is held as under:
M. B. Desai CC-06-25 Page 12 of 24"Para 35. In terms of Clause 8, for the respondent to prove its case, the basic and fundamental fact which needs to be proved is that: (i) the respondent must have an insurable interest in the subject matter insured at the time of loss; and (ii) the loss insured against occurred during the period covered by the policy. The position has been formulated in MacGillivray on Insurance Law21:
"20-006 The burden of proving that the loss was caused by a peril insured against is on the assured. It is not necessary for him to prove precisely how the casualty occurred, but he must show the proximate cause falls within the perils insured against..."
In Rhesa Shipping Co S A v Edmunds22, the plaintiff‟s cargo ship sank in calm weather in the Mediterranean Sea. The plaintiff sought to recover damages under two identical marine insurance policies that covered losses incurred by perils of the sea. While discussing the burden of proof on the plaintiff to prove its case, Lord Brandon, speaking for the House of Lords held:
"In approaching this question it is important that two matters should be borne constantly in mind. The first matter is that the burden of proving, on a balance of probabilities, that the ship was lost by perils of the sea, is and remains throughout on the ship owners. Although it is open to underwriters to suggest and seek to prove some other cause of loss, against which the ship was not insured, there is no obligation on them to do so. Moreover, if they chose to do so, there is no obligation on them to prove, even on a balance of probabilities, the truth of their alternative case. The second matter is that it is always open to a court, even after the kind of prolonged inquiry with a mass of expert evidence which took place in this case, to conclude, at the end of the day, that the proximate cause of the ship's loss, even on a balance of probabilities, remains in doubt, with the consequence that the ship owners have failed to discharge the burden of proof which lay upon them.
...
... It requires a judge of first instance, before he finds that a particular event occurred, to be satisfied on the evidence that it is more likely to have occurred than not. If such a judge concludes, on a whole series of cogent grounds, that the occurrence of an event is extremely improbable, a finding by him that it is nevertheless more likely to have occurred than not, does not M. B. Desai CC-06-25 Page 13 of 24 accord with common sense. This is especially so when it is open to the judge to say simply that the evidence leaves him in doubt whether the event occurred or not, and that the party on whom the burden of proving that the event occurred lies has therefore failed to discharge such burden."
Para 36. For the respondent to prove its case, a mere assertion that the loss incurred during the course of transit is not sufficient. The burden of proof lies on the respondent to show that the loss incurred was covered within the terms of the policy and that on a balance of probabilities there existed a proximate cause between the loss incurred and the helicopter being in transit. The respondent has adduced no evidence to supports its case."
12. Ld. Advocate for the opponent has argued that the complainant has not proved his case the deficiency in service by supporting evidence. That happening of event against which insurance cover has been taken does not by itself entitle assured to claim the amount.
He has relied upon the judgment reported in III (2010) CPJ 14 (SC) in case of United India Ins. Co. Ltd. Vs. Kantika Colour Lab.& others. Wherein it is held as under:
Contracts of Insurance are generally in the nature of contracts of indemnity. Except in the case of contracts of Life Insurance, personal accident and sickness or contracts of contingency insurance, all other contracts of insurance entitle the assured for the reimbursement of actual loss that is proved to have been suffered by him. The happening of the event against which insurance cover has been taken does not by itself entitle the assured to claim the amount stipulated in the policy. It is only upon proof of the actual loss, that the assured can claim reimbursement of the loss to the extent it is established, not exceeding the amount stipulated in the contract of Insurance which signifies the outer limit of the insurance company's liability. The amount mentioned in the policy does not signify that the insurance company guarantees payment of the said amount regardless of the actual loss suffered by the insured. The law on the subject in this country is no different from that prevalent in England; which has been summed up in Halsbury's Laws of England - 4th Edition in the following words:
"The happening of the event does not of itself entitle the assured to payment of the sum stipulated in the policy; the event must, in fact, result in a pecuniary loss to the assured, who then becomes M. B. Desai CC-06-25 Page 14 of 24 entitled to be indemnified subject to the limitations of his contract. He cannot recover more than the sum insured for that sum is all that he has stipulated for by his premiums and it fixes the maximum liability of the insurers. Even with in that limit, however, he cannot recover more than what he establishes to be the actual amount of his loss. The contract being one of indemnity only, he can recover the actual amount of his loss and no more, whatever may have been his estimate of what his loss would be likely to be, and whatever the premiums he may have paid, calculated on the basis of that estimate."
13. This Commission has come across the judgment delivered by the Hon'ble Supreme Court in case of SGS India Ltd. vs. Dolphin International in Civil Appeal No. 5759/2009 dated 6/10/2021 wherein, it is held as under:
19. The onus of proof of deficiency in service is on the complainant in the complaints under the Consumer Protection Act, 1986. It is the complainant who had approached the Commission, therefore, without any proof of deficiency, the opposite party cannot be held responsible for deficiency in service. In a judgment of this Court reported as Ravneet Singh Bagga v. KLM Royal Dutch Airlines & Anr. (2000) 1 SCC 66, this court held that the burden of proving the deficiency in service is upon the person who alleges it.
"6. The deficiency in service cannot be alleged without attributing fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be performed by a person in pursuance of a contract or otherwise in relation to any service. The burden of proving the deficiency in service is upon the person who alleges it. The complainant has, on facts, been found to have not established any wilful fault, imperfection, shortcoming or inadequacy in the service of the respondent.............."
20. This Court in a Judgment reported as Indigo Airlines v. Kalpana Rani Debbarma & Ors.5, held the the initial onus to substantiate the factum of deficiency in service committed by the opposite party was primarily on the complaint. This Court held as under:-
"28. In our opinion, the approach of the Consumer Fora is in complete disregard of the principles of pleadings and burden of proof. First, the material facts constituting deficiency in service are blissfully absent in the complaint as filed. Second, the initial onus to substantiate the factum of deficiency in service committed by the ground staff of the Airlines at the airport M. B. Desai CC-06-25 Page 15 of 24 after issuing boarding passes was primarily on the respondents. That has not been discharged by them. The Consumer Fora, however, went on to unjustly shift the onus on the appellants because of their failure to produce any evidence. In law, the burden of proof would shift on the appellants only after the respondents/complainants had discharged their initial burden in establishing the factum of deficiency in service."
22. The onus of proof that there was deficiency in service is on the complainant. If the complainant is able to discharge its initial onus, the burden would then shift to the respondent in the complaint. The rule of evidence before the civil proceedings is that the onus would lie on the person who would fail if no evidence is led by the other side. Therefore, the initial burden of proof of deficiency in service was on the complainant, but having failed to prove that the result of the sample retained by the appellant at the time of consignment was materially different than what was certified by the appellant, the burden of proof would not shift on the appellant. Thus, the Commission has erred in law to draw adverse inference against the appellant."
Proof of deficiency in service:
(i) Failure to submit police final investigation report:
14. Ld. advocate for the complainant has argued that there is no provision in the terms and conditions of the policy to file police complaint therefore, they have not provided the final report of the investigation.
14.1 It is provided in para 13 and 14 of the terms and conditions of the policy at page 5 that it is the duty of the assured to take such measures as may be reasonable. The said provision is provided as under:
"Minimizing losses:
13. It is the duty of the assured and their servants and agents in respect of loss recoverable hereunder.
13.1 To take such measures as may be reasonable for the purpose of averting or minimizing such loss, and 13.2 to ensure that all rights against carriers, bailess or other third parties are properly preserved and exercised and the underwriters will, in addition to any loss recoverable hereunder, reimburse the assured for any charges properly and reasonably incurred in pursuance of these duties.M. B. Desai CC-06-25 Page 16 of 24
14. Measures taken by the Assured or the underwriters with the object of saving, protecting or recovering the subject-matter insured shall not be considered as a waiver or acceptance of abandonment or otherwise prejudice the rights of either party."
14.2 The complainant has intimated to the opponent insurance company about the occurrence vide letter dated 10.6.2002 (Page No. 49), vide letter dated 3.7.2002 (Page No. 55), vide letter dated 5.7.2002 (Page No.
60). In all these three letters the complainant has stated that "Please let us know what exact documents required by you and also advise us what action to be taken by us with consignee's/buyer to enable us submit required documents at the earliest and oblige."
14.3 The complainant has produced letter dated 29.11.2002 (page 240) written by the opponent address to the complainant wherein, it is requested to lodge FIR immediately against the transporter and driver of the truck so that police can investigate into the matter. It is also stated that in the past FIR was lodged and police authority were able to find out 61 rolls out of total 89 missing rolls. Thus, the complainant was requested to lodge FIR.
14.4 The insurance company has again written a letter to the complainant on 18.4.2003 (Page 238). In the said letter it was requested to send FIR and panchnama against the transporter.
The complainant has produced copy of complaint(Criminal enquiry) being No. 148, 149 and 150 at page 64, 70 and 76 on the record.
14.5 It is admitted fact that complainant has not filed criminal complaint promptly before the police station in spite of repeated instruction was given by the insurance company. The incident was taken place in May, 2002 and the criminal complaint was lodged on 01.10.2003 before Metropolitan Magistrate Court that was almost 16 months later. Complainant has not produced any of the documentary evidence on record, to show progress of criminal complaint filed by the complainant.
It appears from the correspondence that the complainant has not acted as per the terms and conditions of the policy more particularly to M. B. Desai CC-06-25 Page 17 of 24 take such measures as may be reasonable for the purpose of averting or minimizing loss etc.
(ii) Error in loading of merchandise rolls
(iii) failed to prove identify the exact date and place of loss:
15. On perusing the record of the case it transpires that the complainant has not placed on record the survey report of the lloyd's agency at the first instance. Therefore, the opponent insurance company has taken stand about the non-production of survey report.
15.1 The opponent has stated in para 5 of the written statement that the complainant is to put strict proof with the respect to the entire procedure explained by it in its complaint. It is also stated in para 6 of the written statement that as per the conditions, surveyor was to be appointed by the customer of the complainant at spain. It is also stated in para 7 of the written statement that the complainant has not produced any claim intimation sent by customer of the complainant as envisaged by letter dated 10.6.2002 therefore, complainant is put to strict proof thereof.
15.2 The complainant has stated in further affidavit at page 118 in para 4 that "During the course of the hearing of the present complaint an attempt was made for an on behalf of the opposite party to create an impression as if there is no report of the surveyor in respect of the claims raised by the complainant. Apropos the same, again with a view to place on record the facts as they stand in their true perspective it would be relevant to place on record the reports of the survey carried out by the surveyors of the opposite party at Spain, pursuant to the shortfall in the quantity of the concerned goods reported by the consignee of the complainant."
15.3 It is the say of the opponent insurance company that surveyor at Spain at place of consignee is required to be appointed by the insured. Against this statement of the opponent, complainant has submitted that the surveyor is required to be appointed by the insurance company. We have to considered the terms and conditions of the policy. It is stated at page 10 of the terms and conditions of the policy that "4. To apply immediately for survey by carriers or other bailess representatives if any M. B. Desai CC-06-25 Page 18 of 24 loss or damage be apparent and claim on the carriers or other bailess for any actual loss or damage found at each survey."
15.4 No documentary evidence is produced by whose instance the survey was conducted at Spain but in the survey report at page 122 in the Colum No. 1 (b) name of the applicant for survey is mentioned as VILAR Comercio Exterior. Considering this fact and documentary evidence on record we come to the conclusion that the survey was conducted at the instance of complainant. Therefore, it has placed the said report before this Commission.
16. The some of the observation are required to be noted from the survey report of the lloyd's agent at page 122-127 which are read as under:
Sr. Column Description Reason
No.
1 3.b If so, give date of commencement 13.6.02
of transit and date of arrival at
place of survey
2 5.b Was container seen by surveyor Container not seen
before or after being de-stuffed by surveyor
3 5.f Condition of container and cargo Container Ok but a
at that time shortage was found
4 8.a Description of loss/damage Storage of contents
5 8.b After examination, cause Wrong during load
attributed by surveyor to... operations.
It is stated in the report that on being questioned by the surveyor, he was told that the container had arrived duly sealed with four seals and a padlock.
16.1 The said surveyor has submitted the survey report at page 122-127. The lloyd's agents surveyor has concluded as under:
"The surveyor, after the information gathered and from the evidence that at the time of the container's reception, this was found to be duly sealed with FOUR seals from origin, ONE SEAL FROM the TERMINAL and a padlock from origin, and that according to the declarations collected at the unloading place, the container did not have any hole through which is could have been possible to take out the merchandise, and taking into account that each roll of fabric weighs 80 Kgs, which makes its handling difficult, finds in that case that if is evident that the shortages determined are not due to circumstances or incidents during the transit but to an error in the loading."M. B. Desai CC-06-25 Page 19 of 24
17. The opponent insurance company has appointed the Total Solutions Insurance Investigation & Cargo Tracing as surveyor. After investigating the claim, the surveyor has submitted its report on 24.4.2004 which is produced at page no 370 to 375. On perusing the same following facts are emerged.
17.1. 2. Points for investigation 2.1 To check the geniuses of the claim 2.2 To investigate and establish the material facts.
17.2 3.2 Visit to Arvind Mills It is thus highly probable that shortages in shipment arose from Arvind Mills as also noted by the surveyor. Also for the fact that the entire consignment of 115 rolls of stretch denim failed to reach.
Another thing noted was that each denim roll weighed anywhere between 53 to 80 Kg and such its handling was difficult by a single person and also 2 people. It needed a group of people knowing and waiting with full preparations to open the container and take out this material. However as the seals were found intact by the warehouse surveyor so that possibility also did not exist.
17.3 3.5 Visit to ICD As no FIR was lodged in this claim even though this was such a large loss and hence it surprised us. Vide our preliminary report of 23/07/2003 we had asked the insurers to ask the insured to lodge an FIR. The insureds after much pressurizing agreed to lodge an FIR and finally lodged the FIR through the court on 01/10/2003 vide M case numbers 148/2003, 149/2003 and 150/2003 (almost a year and a half after the said incident) 17.4 4. Conclusion From the investigations carried out and keeping in mind everything which has come to light during investigation we agree with the opinion of the surveyor and conclude that in all probability the goods which were reported short were short shipped by the insured. AS such huge shortages cannot be pilferages when the seals of the containers are intact, no outward damages have been reported in containers and each roll of denim is about 80 kg in weight which makes it's handling very cumbersome and difficult with naked hands.
M. B. Desai CC-06-25 Page 20 of 2418. Considering the discussion hereinabove, there is no reason to believe the finding of both survey reports, we come to the conclusion that repudiation letter about failure to submit police final investigation report and failed to prove identify the exact date and place of loss is established by the insurance company.
Non-joining of party:
19. Ld. Advocate for the opponent has taken objection that here in this case the carrier was not made party to the proceedings therefore, in absence of carrier the claim cannot be decided. He has relied upon the judgment reported in II (2010) CPJ 199 (NC) in case of Nayna Emporium Pvt. Ltd. Vs. Oriental Insurance Co. Ltd.
"Para 5. The state Commission dismissed the complaint by holding as under:
It is clear that the damage occurred either during transit by ship or in transit by road. The complainant has not made the carrier from Kolkata Port to Nepal a necessary party. The carrier, in our opinion, is a necessary party. In the absence of the carrier the dispute cannot be properly determined. Therefore, the objection raised by the OP in this regard is sustained. Since we hold that the claim cannot be entertained because the damage is not covered under the terms of the policy, the complainant is not entitled to get any relief in this case. The case fails."
Para 7. In our view, the findings of the State Commission, both in respect of interpretation of the execution clause in the insurance policy and non-joinder of the carrier (at least, the road transporter from Kolkata Port to Biratnagar ) as a necessary party are entirely valid.
Moreover, the appellant/complainant did not establish before the State Commission the stage at which the damage actually occurred, i.e., whether during the marine transit of the insured material of during its road-transport from Kolkata Port to Biratnagar. There was no record of any joint inspection of the consignment at the time of its loading in the ship at Dubai, unloading from the marine vessel at Kolkata and reloading on the road transport carrier. As rightly observed by the State Commission, it was necessary for the appellant/complainant to implead at least the road transport carrier if its contention was that he consignment had been received in good condition at Kolkata Port and it was loaded as such on the road transport for the onward journey.
M. B. Desai CC-06-25 Page 21 of 2419.1 The procedure of event of loss and damaged for which underwriters may be liable and the liability of carriage/bailees or other third parties are provided in the policy at page 10 which reads as under:
"It is the duty of the assured and their agents in all cases to take such measures as may be reasonable for the purpose of averting or minimizing loss and to ensure that all rights against carriers, bailess or other third parties are properly preserved and exercised. In particular the assured or their agents are required.
1. To claim immediately on the carriers port authorities or other bailess for any missing packages.
2-
3. When delivery is made by container, to ensure that the container and its seal is examined immediately by their responsible official. If the container is delivered damaged or with seals broken or missing or with seals other than as stated in the shipping documents to clause the delivery receipt accordingly and retain all defective or irregular seals for subsequent identification."
4. To apply immediately for survey by carriers or other bailess representatives if any loss or damage be apparent and claim on the carriers or other bailess for any actual loss or damage found at each survey.
5. To give notice in writing to the carriers or other bailess within 3 days of delivery if the loss or damage was not apparent at the time of taking delivery."
19.2 Section 10 of the carriers Act, 1865 provides the notice of loss or damage or injury to be given within six months. The carriers Act, 1865 is repealed by the Carriage by Road Act, 2007. The provision as regards to the notice is incorporated under Section 16 of the Carriage by Road Act, 2007 which reads as under:
"16. Notice for institution of a suit:
No suit or other legal proceeding shall be instituted against a common carrier for any loss of, or damage to, the consignment, unless notice in writing of the loss or damage to the consignment has been served on the common carrier before the institution of the suit or other legal proceeding and within one hundred and eighty days from the date of booking of the consignment by the consignor."
19.3 It is stated in the written statement of the opponent insurance company in para 8 at page 100 that "Opponent submits that in view of the above facts and circumstances and further the complainant has failed to prove the claim regarding skilful pilferage and further there was willful negligence and delay on the part of the complainant in filing criminal M. B. Desai CC-06-25 Page 22 of 24 complaint and further it has not issued statutory legal notice under Section 9 of the Carrier's Act to the carrier of the complainant and therefore the opponent has repudiated its liability by its letter dated 19.10.2004. The opponent relies on the true and correct interpretation of the said repudiation letter dated 29.10.2004."
19.4 On perusing an affidavit in rejoinder on behalf of complainant at page 106-115 and a further affidavit on behalf of complainant at page 116-120 nothing stated about the notice issued to the carrier under the Carriers Act, 1865. Nothing is stated in the complaint also about the notice issued to the carrier.
19.5 Admittedly, that the complainant has not joined carrier as a party in this case. No notice was issued to the carrier as provided under the Carriers Act, 1865 (Now, The Carriage by Road Act, 2007) and no notice was issued to the carrier under the terms and conditions of the policy at page 10. As held by the Hon'ble National Commission that the carrier is necessary party, in absence of necessary party opponent insurance company cannot be held liable.
20. We have considered the contents of the complaint, documentary evidence on record, objection raised in the written statement filed by the opponent, arguments advanced by the ld. Advocate for the parties, ratio laid down in the above referred judgments, we are of the view that the complainant has not produced on record about correspondence made by it with the consignee about the intimation of loss in the goods by the consignee to the complainant. The complainant has also not produced all the correspondence between complainant and opponent. Whatever documentary evidence produced on record. We are of the view that the complainant has not intimated to the insurance company promptly about loss of rolls. We are also of the opinion that the reason best known to the complainant, in spite of repeated instruction given to the complainant about to lodge police complaint (FIR), the complainant has not taken care to file police complaint but it was lodged after almost 16 months later. Not only that but also complainant has not produced and place on record any documentary evidence about the progress of criminal M. B. Desai CC-06-25 Page 23 of 24 complaint filed by it. We have also noted that as per the ratio laid down by the Hon'ble National Commission in the above referred judgments that deficiency in service is required to be establish by the complainant. The burden lies on the complainant to establish deficiency in service made by the opponent. Herein this case, complainant has only stated about loss of merchandise rolls but it has not established on which date and place the loss is occurred.
In view of the above, we are of the opinion that the complainant has not established and proved his case and the opponent has rightly repudiated the claims therefore, complaint is required to be dismissed. Hence in the interest of justice following final order is passed.
ORDER
(i) The complaint No. 25 of 2006 is hereby dismissed.
(ii) No order as to costs.
(iii) Copy of the judgment and order be provided to the parties free of
costs.
Pronounced in the open Court today on 18th November, 2021.
[Smt. U. P. Jani] [Mr. V. P. Patel]
Member President
M. B. Desai CC-06-25 Page 24 of 24