National Consumer Disputes Redressal
M/S. Key Floppy, A Partnership ... vs The New India Assurance Co. Ltd.,Mr. ... on 22 May, 2006
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 116 OF 2001 (From the order dated 14.3.2001 in Complaint No. 74 of 1991 of the State Commission, Andhra Pradesh) M/s. Key Floppy, a partnership firm. Rep:Sri B.N. Trehan, H.NO.10, Kaityanagar, Habshiguda, Hyderabad-500 007 Appellant Versus The New India Assurance Co. Ltd. 2413, 206 & 207, II floor, Chennoy Trade Centre, Park Lane, Secunderabad Respondent BEFORE: HONBLE MR. JUSTICE M.B. SHAH, PRESIDENT MRS. RAJYALAKSHMI RAO, MEMBER For the appellant : Mr.D.Bharat Kumar, Advocate For the respondent : Mr. Kishore Rawat, Advocate Dated the 22nd May, 2006: O R D E R
M.B.SHAH, J. PRESIDENT:
This appeal is filed against the Judgment and Order dated 14th March, 2001 passed by the Andhra Pradesh State Consumer Disputes Redressal Commission in C.D. No. 74 of 1991. By the impugned Judgment and Order, the State Commission dismissed the complaint filed by the Appellant praying for reimbursement of loss or damage caused to the computer parts, electronic components, accessories, etc. imported from Tiwan to Bombay and thereafter to Hyderabad. The insurance coverage was for a sum of Rs.2,90,363/-. It is the case of the Complainant that after taking delivery of the consignment when they opened the packages in their warehouse, they found that the first 20 packages were in original condition, but, in the 21st cartoon they noticed some blank containers.
Admittedly, the relevant facts for deciding the dispute are as under:
.25.10.1988- Issuance of open insurance policy with marine extra endorsement for the period 19.10.1988 to 18.10.1989.
.7.4.1989 A consignment of computer components was received under Invoice dated 7.4.1989, from Tiwan.
.12.4.1989 consignment was received by the Air India and the same was forwarded to Cargo complex vide Challan dated 15.4.1989.
.17.4.1989 The Insurance Company issued a Marine Cetificate-cum-Bill for this consignment.
.28.4.1989. The consignment was sent to Hyderabad by Indian Airlines through Air Consignment Note dated 28.4.1989. But, actually the consignment arrived at Hyderabad on 4.5.1989 .4.5.1989 The goods were delivered, when shortage was found in cartoon No.21.
.5.5.1989 The Insurance Company was informed of the fact on telephone followed by letter.
8th and 9.5.1989 The Surveyor was nominated and had had conducted the survey.
26.6.1989 The report of the Surveyor. According to him, the consignment was intact at Bombay Airport. But, the shortfall had occurred during repacking of the cartons immediately after customs check before handing over to Indian Airlines for onward transit to Hyderabad.
.27.6.1989. On the basis of the Surveyors report a regular claim was filed before the Insurance Company.
Thereafter, it is the say of the Complainant that he wrote a number of letters to the Insurance Company, but there was no response. Hence, legal notice dated 18.7.1990 was issued claiming Rs.1,74,938/- with interest at the rate of 18% p.a. from 4.5.1989 till the date of its payment.
Subsequently, the complaint before the State Commission was filed in the year 1991. The State Commission dismissed the complaint on 14th March, 2001.
At the time of hearing of this appeal, learned Counsel for the Appellant submitted that the policy (Cargo AIR) and the Certificate-cum-Bill stipulates that all risks are covered under the insurance policy. Similarly, Clause (1) of the Institute Cargo Clause under heading Risk covers confirms the above as under:
This Insurance covers All Risks of loss or damage to the subject matter insured.
It is contended that the loss includes pilferage which is wide spread in case of electronic components. Such components are very small in size and have a good high value. Secondly, reliance is placed on the opinion of the Surveyor which, inter alia, states as under:
As results of my above finding besides detailed study of the relevant documents, I confirm the short receipt of various items mentioned above and also state that the relevant cartons had adequate suitable place to hold the missing items.
In this regard, I would conclude that the shortage noted above as per my opinion should have occurred during repacking of the cartons immediately after customs check before handing over to Indian Airlines for further transit to Hyderabad.
This may be seen by the actual weight of the total consignment as entered in Indian Airlines consignment note which is 307 kgs, inclusive of additional Hessian packing provided for 3 cartons as against 307 kgs. (The same weight) mentioned in the air consignment note of Air France. This clearly indicates the shortage which may be worked out by the additional weight of Hessian cloth which was weighed in my presence accounted for 3.550 kgs. This indicates the approximate weight of the items short received which perhaps were not put back by oversight due to their very small size after customs check before repacking the cartons.
In this case, it is not disputed that the consignment of computer components consisting of 23 packets meant for the Complainant, were booked from Tiwan to Bombay by Air France vide Airway Bill dated 8.4.1989 and on clearance from the customs at Bombay, the same was booked from Bombay to Hyderabad through Indian Airlines on 28.4.1989 by the Clearing Agent of the Complainant, namely, M/s. Om clearing Agency. The Clearing Agents of the Appellant by letter dated 23.5.1989 confirmed that packages were intact when they (the packages) reached Bombay and during the customs clearance. In that letter it was also mentioned that they had provided the reinforcement of gunny bags so as to withstand further journey to Hyderabad as advised by the Appellant insured.
Therefore, admittedly, no shortage was found at Bombay from where consignment was booked for Hyderabad by their Agents.
On 4.5.1989, the Complainant while taking delivery, asked for the open delivery from the carriers, i.e. the Indian Airlines at Hyderabad, but that request was turned down and they had taken the delivery of the consignment on 4.5.1989 and it was confirmed by the Complainant to the Airlines that the packets were received intact. The India Airlines also vide their letters dated 4.5.1989 and 19.5.1989 confirmed that since the delivery was taken with the remarks packets intact, as per rules the open delivery cannot be permitted as the shipment was received intact/good condition.
On 5.5.1989, when the packets were unpacked and opened at the warehouse of the Complainant, it was noticed that there were some blank containers and the Insurance Company was informed on 5.5.1989, after the packets were already opened by the Appellant. The Insurance Company appointed one Mr.K.A.Narasimhacharylu, Surveyor, who had submitted his report on 26.6.1989. The Complainant filed a formal claim 27.6.1989. Keeping in view the facts that the packages were received by the Complainant in intact condition from the Indian Airlines and the Company was informed after the packages were opened, the matter was also referred for detailed investigation.
Thereafter, an Investigator was appointed, who submitted his report dated 3.11.1989 and raised doubts about the genuineness of the claim. In his report dated 21.12.1989 he had referred to the other two claims reported by the insured under similar circumstances and exactly same modus operandi. The survey reports of the other two claims would reveal the similarity of facts as in the present case.
The Investigator, Commander P.M. Mohan Rao (Retd.) B.E., M.I.E., M.B.I.M.A.M.A.S.I.M.I.I.S.A., in his report dated 3rd November, 1989, inter alia, stated as under: (Volume II, Pages16-C-D, 16F-G, 16-L,M) CONCLUSION:
The whole lot of inferences and conclusions referred to above were drawn on the premises that 307 kgs. was the gross weight. The same has been reflected in various communications from AIR INDIA and IAC.
In fact on the master Air Way Bill No. TRE-8815186 dt.8.4.89 issued by Regency Express Co. Ltd. Taiwan there were two corrections which were duly stamped as indicated below:
(a) Gross weight 307 is struck off and an arrow stamped.
(b) Flight No.KL 882 of 8.4.89 has been corrected by a similar arrow. (The actual flight was AF 179 of 12.4.89 and the correct gross eight was obviously what was reflected in the packing slip i.e. 303.4 and not 307 which was scored off.
FROM THE FOREGOING, ONE COULD LOGICALLY CONCLUDE THAT THE LOSSES, IF ANY, HAD OCCURRED AFTER COMPLETION OF THE VOYAGE OF THE CONSIGNMENT IN THE PREMISES OF THE INISURED EXCEPT FOR a.
A chip found short at Bombay and certified by the customs b.
Plastic part costing Rs.8 confirmed by the surveyor in carton No.16.
There is no plausible explanation by the insured for the convenient casting away of all the caution in opening the cartons. The insured himself claims to have opened them without any independent witness; and by a very strage coincidence that all the shortages listed have only been found in the package open by the insured; it leads one to the inevitable conclusion that the report of the insured cannot be relied upon.
OTHER FEATURES:
It is also pertinent to record that presently the cargo complexes of Airports are under tight security surveillance and it is almost impossible to pilfer item by carefully opening and closing the packages. That much time would not be available for any person to indulge in such surreptitious activity.
The investigator also recommended that:
a. Since the voyage of the consignment is complete when it had reached its destination at Hyderabad i.e. premises of M/s. Kay Floppy, the underwriters do not see to have any liability whatsoever for the losses reported by the insured on his own.
b. There is convincing reason advanced by the insured at any stage why he did not obtain the services of a surveyor before opening any carton. Though he is said to have insisted on open delivery with IAC. The underwriters may consider as a special case to reimburse Rs.8/- towards the cost of shortages confirmed by the surveyor and the fees paid to the surveyor to the insured as a special case. A definite consent be obtained from the insured to preclude him to seek other avenues since Rs.6/- liability is being admitted by the underwriters.
c. It is strange that the liability is being attempted to be passed on to the underwriters for a patently indiscrete and inconscionable act of the insured after completion of the voyage of the consignment.
d. The insured may be informed that the claim is not payable under the terms and conditions of the policy.
On the basis of the aforesaid report, the learned Counsel for the Insurance Company submitted that the repudiation of the claim was justified because the Complainant received the consignment from the Indian Airlines by making an endorsement to the effect that packets intact. At the time of receiving of the delivery from the Indian Airlines, no open delivery was given. It is to be stated that the Indian Airlines by letter dated 4th May, 1989 informed the Complainant that 23 parcels weighing 307 kgs were received in good and satisfactory condition, and at the time of delivery, it was confirmed that Complainant had made an endorsement packets in tact on the documents. Hence, there was no question of effecting the open delivery.
Further, it would be difficult to accept that some articles would be picked up for pilferage and thereafter a carton would be repacked on this aspect. On this aspect the State Commission has discussed that out of more than 40,000 items consigned in 23 cartoons nearly 75% of the consignment was concentrated in cartoon No.21 which consists of 47 items. From the said cartoon the alleged pilferage items account for 85% in value and 17% in number. Therefore, it was impossible to pilfer those items in such a selective process except by the persons who were in possession of the copy of the invoice which displayed the value and the description of those articles. Those documents were in possession of the insured or its clearing agent. The State Commission, therefore, held that there was no proof that any pilferage or damage occurred during the transit either from Tiwan to Bombay or from Bombay to Hyderabad.
The State Commission has also referred to other evidence, Exhibit A-15, i.e. the letter written by the Clearing Agency, that 3 packages bearing Nos. 21, 22 and 23 of the consignment contained a number of different packets sometimes very small components in hundreds. The packages themselves had wear and tear though intact during their shipment to Bombay and customs handle. Gunny bags cover was provided to them to enable them to withstand further journey to Hyderabad. Therefore, the Clearing Agents expressed surprise for finding fault with them for providing such further enforcement in packages. This also indicates that there was no whisper of any breakage or damage to any of the packages at Bombay. In these circumstances, the State Commission disbelieved the ipsi dixit of the Complainant that there was pilferage from Cartoon No. 21. This finding cannot be said to be in any way erroneous.
In any case, if the Complainant was having any doubt with regard to pilferage, before opening the cartoons, he ought to have informed the Insurance Company. This is required to be stated because, at the time of taking delivery from the Indian Airlines, it is his say that he had requested for open delivery which was not granted by the Indian Airlines on the ground that he had received the consignment in good and satisfactory condition.
Further, as per the Institute Cargo Clauses (AIR), the duration of the insurance cover is as under:
(Page 49, Volume-I) DURATION 5.1 The insurance attaches from the time the goods leave the warehouse or place of storage at the place named herein for the commencement of the transit, continues during the ordinary course of transit and terminates either.
5.1.1 On delivery to the consignees or other final warehouse or place of storage at the destination named herein.
5.1.2 on delivery of any other warehouse or place of storage, whether prior to or at the destination named herein, which the assured elect to use either 5.1.2.1 for storage other than in the ordinary course of transit or 5.1.2.2 for allocation or distribution, .5.1.3. on the expiry of 30 days after completion of discharge overside of the goods hereby insured from the overesea vessel at the final port of discharge, whichever shall first occur.
This clause specifically provides that insurance coverage continues during the ordinary course of transit and terminates on delivery to the consignees or other final warehouse or destination. Admittedly, the consignee has taken delivery on 4th May, 1989, and therefore, the insurance coverage terminated at that point of time. It appears that surveyor has wrongly relied upon Clause 5.1.3 which provides that insurance terminates on the expiry of 30 days after completion of discharge overside of the goods insured from the overseas vessel at the final port of discharge, whichever shall first occur. A reference to Art.5.1.3 was made by the Surveyor by omitting the phrase whichever shall first occur. The Duration clauses provided in Institute Cargo Clause provides different dates, i.e. till which date the insurance coverage continues and at what time it would terminate. On that wrong premise, the Surveyor submitted his report, on which reliance is placed by the Complainant. From the facts of the present case, it is apparent that once the delivery of cargo was taken the insurance coverage would stand terminated, and, there was no question of continuing till 30 days further. As such, Clause 5.1.3 has no application to the present case.
In the result, there is no substance in this appeal and is dismissed. There shall be no order as to costs.
Sd/-
.J. (M.B.SHAH) PRESIDENT Sd/-
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(RAJYALAKSHMI RAO) PRESIDENT