State Consumer Disputes Redressal Commission
M/S. Duratex Silk Mills Ltd. vs United India Insurance Co. Ltd. on 27 February, 2013
BEFORE THE HON'BLE STATE CONSUMER DISPUTES REDRESSAL
BEFORE THE HON'BLE STATE CONSUMER DISPUTES
REDRESSAL
COMMISSION, MAHARASHTRA,
MUMBAI
Complaint Case No. CC/03/16
1. M/s. Duratex Silk
Mills Ltd.
Reg. off at 25/27,
Ovalwadi, Vithal Wadi, 1st floor, Kalbadevi Road, Mumbai 400 002.
...........Complainant(s)
Versus
1. United India
Insurance Co. Ltd.
Divisional Office No.
II, Universal
Insurance Building, 5th floor, Sir P. M. Road,
Mumbai 400 004.
............Opp.Party(s)
BEFORE:
HON'BLE Mr.Justice
S.B.Mhase PRESIDENT
HON'BLE MR. Narendra
Kawde MEMBER
HON'BLE MR. S.B.Sawarkar MEMBER
PRESENT:
Mr.Pravin Desai, A.R.
of the complainant.
Mr.S.K. Shetty,
Advocate, for M/s. Shetty & Associates, Advocate for the opponent.
ORDER
Per Shri Narendra Kawde, Honble Member Complainant is a company incorporated under the Indian Companies Act, 1956 (hereinafter referred to as complainant-company). The complainant-company hired services of opponent/ United India Insurance Company Ltd. (hereinafter referred to as Insurance Company) for covering risk involving in transportation of second hand 32 Sulzer looms from European Port to Nhava-Sheva Port, Navi Mumbai and further to Tarapur at their factory site near Mumbai. It is alleged by the complainant-company that insurance claim payable on account of damage in transit was arbitrarily repudiated by the Insurance Company which was payable under the Marin Cargo Cover Insurance Policy. Aggrieved thereby this consumer complaint alleging deficiency of service against the opponent/Insurance Company has been filed.
2. Salient facts giving rise to file this complaint are that Complainant-company subscribed to Marin Cargo Cover Insurance Policy for providing transit insurance cover to the second hand 32 Sulzer looms for marine shipment from EuropeanPort to Nhava-ShevaPort and further onward transportation to the factory site at Tarapur near Mumbai. Said Insurance Cover Note with a condition to pack three looms in one container was issued by the opponent/Insurance Company, valid for a period 16/09/1998 to 15/03/1999 with sum assured of USD 4,47,068/- equivalent to `1,90,00,000/- (Rupess One Crore Ninety Lakhs). In the first lot, complainant-company transported marine shipment with 16 second hand Sulzer looms in five containers, three looms each in four containers and four looms in fifth container. After marine shipment arrived at destinationPort, pre-dispatch survey was carried out by Surveyor-M/s.Dixit & Co.
appointed by the Insurance Company on 31/03/1999 and submitted its report on 01/04/1999. Both parties very much relied on this pre-dispatch report in support of their contentions which is discussed hereinafter.
3. Insurance Company issued another policy bearing No.120100/21/06/11/1910/98 mentioning the earlier cover note on 15/03/1999 with sum assured of USD 2,91,500/- equivalent to `1,23,88,750/- (One Crore Twenty Three Lakhs Eighty Eight Thousand Seven Hundred Fifty) with imposing condition of cargo clauses as (1) INST. CARGO CLAUSE A ALL RSKS.
(2) INST.
WAR CLAUSE (CARGO). INS. STRIKE CLAUSE (CARGO).
(3) INST.
RADIOACTIVE CON. EXCL. CLAUSE After conducting the pre-dispatch survey by M/s.Dixit & Co. the containers with 16 second hand Sulzer looms were dispatched to Tarapur Factory of the complainant from Nhava-Sheva Port of Navi Mumbai. On consignment reaching to factory site, complainant noticed damage to 7 looms out of 16 looms and this fact was reported to the opponent/Insurance Company. The Insurance Company appointed M/s.J.B. Boda, Surveyor to carry out the survey. Said Surveyor carried out the survey at factory site and submitted his report on 03/04/1999 recommending net liability of `12,76,340/- payable under the Insurance Company with his observations in respect of damaged seven looms as Parts/components of the affected looms comprising of projectile retainer, pressure plate, cloth roll bracket, heald wire frame, centering blade, driving lever, slay bar, beam role flinch, elcumeter etc. found bend, dented and distorted. Further it is observed that.. damage could have been sustained by the Sulzer Projectile Shuttler Looms due to knocks, falls and/or blows received during transit and/or at the time of handling. (page-33to43). Not satisfied with this Survey Report, the Insurance Company appointed second surveyor M/s.M.R. Jhalani & Associates to carry out survey who recommended net extent of liability of `2,54,852/- payable under the policy. Insurance Company again appointed third surveyor M/s.Marulkar & Co., Chartered Engineer, Valuer and Surveyors for offering their technical opinion. Said valuer reported possible repairs and replacement cost of `3,31,304/-. The loss reported by M/s.M.R. Jhalani & Associates and subsequent Valuer M/s.Marulkar & Co. was offered for settlement by the Insurance Company and even payment voucher were sent to the complainant. However, complainant-company declined to accept the offer. Correspondence was exchanged between the parties for long time for settlement of insurance claim and ultimately, the Insurance Company repudiated the claim on 28/05/2001 on the ground that the claim falls under exclusion clause No.4.3 of the insurance policy which reads as :-
4.3 loss damage or expense caused by insufficiency or unsuitability of packing or preparation of the subject-matter insured (for the purpose of this Clause 4.3 packing shall be deemed to include stowage in a container or liftvan but only when such stowage is carried out prior to attachment of this insurance or by the Assured or their servants).
Aggrieved with the repudiation, the complainant-company filed this consumer complaint claiming amount of `20 Lakhs together with interest @ 18% p.a. with cost of litigation.
4. Insurance Company appeared and filed their written version inter alia denying the contentions and claim of the complainant and stated that whenever any policy is issued subsequent to the cover note, terms and conditions of the cover note gets merged in the insurance policy. Further averred that marine shipment of the goods was obviously dispatched on the basis of Cover Note issued by the Insurance Company and Cover Note was in respect of providing marine insurance cover to 32 second hand Sulzer looms. However, the complainant-company then decided to import only 16 secondhand Sulzer looms under the Bill of Lading dated 22/02/1999. The pre-dispatch survey carried out by M/s.Dixit & Co. shows that nature of packing of looms was unprotected in the containers.
On receiving the intimation of damage, opponent/Insurance Company appointed M/s.J.B. Boda Surveyors. Ltd. to carry out survey at factory site. However, not convinced with the report of M/s.J.B. Boda Surveyors Ltd., second Surveyor M/s.M.R. Jhalani & Associates were appointed followed by the appointment of M/s.Marulkar & Co., a Chartered Engineers and Valuers to assess and to quantify the alleged damage. Since as required under the policy terms and conditions referred to above i.e. exclusion clause 4.3, the machineries were shipped in the containers was not packed and was in unprotected condition in violation of the terms of the policy as in one of the containers four looms were shipped as against three as against the stipulation in the policy Cover Note. Further, it is also stated that cover note is not only the provisional document as alleged and the terms and conditions stipulated under the Cover Note are not applicable as presumed by the complainant is ridiculous and such a contention cannot stand to reasons. Issue of voucher for amount of `3,31,304/- against the settlement of insurance claim was inadvertent act on the part of Divisional Office and so also the further settlement offer for `2,54,852/- was withdrawn. Finally, the Insurance Company vehemently tried to justify the repudiation of the claim as not admissible since the falling under the exclusion clause 4.3 of the policy.
5. We heard Mr.Pravin Desai, Authorised Representative of the complainant and Mr.S.K. Shetty, Advocate for M/s.Shetty & Associates, Advocate for the opponent/Insurance Company. Perused the record and also the affidavit evidence and other related documents filed by both the parties.
6. It is the prime contention of the complainant that terms and conditions specified in Cover Note or subsequent insurance policy have not been received by them. Said terms and conditions were not available on record, but only on the direction of this Commission, the opponent/Insurance Company produced the same and appended at page-356 to 368 of this complaint compilation.
However, it is interesting to note that the policy Cover Note and the policy pertained to year 1998-1999.
The policy terms and conditions allegedly supplied along with the Insurance Cover Note and the insurance policy produced on record are of 2004. On inquiry it was submitted by Learned Advocate for the opponent/Insurance Company that these terms and conditions were originally supplied along with policy and it is only reprinted copy produced on the record.
However, he expressed his inability to produce the same original set of terms and conditions allegedly supplied to the complainant along with Insurance Cover Note and insurance policy.
It is obvious that the marine shipment of 16 secondhand Sulzer looms were shipped during the validity period of Marine Cargo Cover Note meant for period 16/09/1998 to 15/03/1999 i.e. for period of six months. Admittedly, shipment of the cargo was transported and arrived at the port of destination prior to issuance of subsequent insurance policy effected from 15/03/1999. Pre-dispatch survey report relied upon by both the parties is an important document required to be scrutinized properly.
7. Insurance Company instructed M/s.Dixit & Co. to carry out pre- dispatch survey of the consignment at port of destination i.e. Nhava Sheva prior to further transport to Tarapur at factory site. Such a request was made on 30/03/1999 and the survey was carried out immediately on the next day i.e. 31/03/1999. It is mentioned against column 7 of the report i.e. Nature of Packing as Unprotected Looms in the containers. Further it is observed in the report that the containers were opened prior to our attendance for customs examination. 16 looms were confirmed to have been shipped in separate five containers, 3 looms each in 4 containers and 4 looms in fifth container. Further, it is also observed in the said report that all these 16 looms were found in apparent sound condition except the normal wear and tear of usage. All the looms were dispatched to factory site in the presence of said surveyor received in the containers as marine cargo. Said surveyor mentioned four containers having dispatched and omitted to mention fifth container. However, thereafter, issued addendum on 19/04/1999 confirming the fifth container having dispatched from Nhava-ShevaPort to Tarapur factory site. Now the issue before us is as to whether report of M/s.Dixit & Co. demonstrates anything about insufficient packing or unprotected packing and what instructions were issued. Though exact word Unpacked is not used, but Unprotected looms in the container was observed by the said Surveyor. Keeping in mind the survey was carried out in pursuance of provisions of policy Cover Note, we do not find that instructions to take corrective steps for safety of Looms were given to complainant-company. There is no observation for violation of policy condition to pack four looms in fifth container as against carrying three looms.
On the contrary, said Surveyor certified about general fitness of looms and allowed dispatch to factory site.
8. Contention of the complainant is that policy condition 4.3 for exclusion of insurance claim on account of insufficiency or unsuitability packing of the consignment was not received by them. Insurance Company relied on the report of M/s.Dixit & Co. since said report speaks about unprotected looms in the containers which proved their point of observance of terms and conditions of the policy.
The complainant also relied upon said report because said report contends that all the 16 looms were found in apparent sound condition except the normal wear and tear of usage.
Undoubtedly, at the time of arrival of the consignment at Nhava-Sheva, it was intact and looms were not damaged as reported in the pre-dispatch survey report though in one of the containers 4 looms were shipped as against the condition to transport only 3 looms in one container endorsed on the Marine Cargo Cover Note.
However, pre-dispatch report of M/s.Dixit & Co. is silent about any instructions given to the complainant to ensure proper packing to avoid any damage in transit from Nhava-ShevaPort to factory site at Tarapur in obeyance of alleged policy conditions.
Had there been such directions or suggestions, complainant could have arranged for proper and safe packing to avoid damage in transit. In absence of such observations or directions or suggestions, balance of convenience goes in favour of complainant.
9. Insurance Company tried to settle the claim by offering `2,54,852/-
and again `3,31,304/- as recommended by second Surveyor & Valuer. It is interesting to note that the offer was again withdrawn though discharge voucher was sent to the complainant, who ultimately did not accept said settlement. There is no convincing evidence on record as to why the Insurance Company did not agree with the Survey Report and recommendations of the first appointed Surveyor Mr.J.B. Boda Surveyors Ltd. However, in utter violation of the provisions, appointed second surveyor and also the Chartered Engineers & Valuers to assess the loss.
Offering small amount of settlement on both occasions and withdrawing the settlement discharge vouchers shows the vagaries of the moods of the Insurance Company and lack of application of mind.
10. Considering the totality of this case, we find that there is no conclusive evidence on record to show that the terms and conditions allegedly accompanied the policy cover note and the policy document were supplied to the complainant and ultimate repudiation of insurance claim as against the report of first appointed Surveyor M/s.J.B. Boda Surveyors Ltd. is an arbitrary action on the part of the opponent/Insurance Company. Awarding amount of claim as recommended by the first surveyor M/s.J.B. Boda Surveyors Ltd. for `12,76,340/-
with interest @ 9% p.a. will meet the ends of justice. This matter pertains to year 2003; therefore, we award interest from the date of filing of the complaint. We find that the complaint has substantive merit. Insurance Company has incurred deficiency of service to the complainant-company by arbitrarily repudiating the insurance claim payable under the insurance policy. We hold accordingly and pass the following order :-
-: ORDER :-
1.
Complaint is partly allowed.
2. Opponent/Insurance Company is directed to pay an amount of `12,76,340/- to the complainant-company together with interest @ 9% p.a. with effect from 10/01/2003 i.e. from the date of filing of the complaint till its realization.
3. Opponent/Insurance Company to bear its own costs and shall pay `25,000/-
as costs to the complainant-company.
4. Copies of the order be furnished to the parties.
Pronounced Dated 27th February 2013.
[HON'BLE Mr.Justice S.B.Mhase] PRESIDENT [HON'BLE MR. Narendra Kawde] MEMBER [HON'BLE MR. S.B.Sawarkar] MEMBER dd