State Consumer Disputes Redressal Commission
M/S Alembic Ltd. vs The New India Ass. Co. Ltd. on 16 February, 2022
Details DD MM YY
Date of Judgment 16 02 2022
Date of filling 23 03 2009
Duration 24 10 12
BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION,
GUJARAT STATE AT AHMEDABAD.
Court-3
Complaint NO. 9 of 2009 Dt: 16.02.2022
M/s. Alembic Ltd.
Alembic Road,
Baroda. ...Complainant
Vs.
The New India Assurance Co. Ltd.
Divisional Office-IV,
7th Floor, Suraj Plaza,
Sayajiganj, Vadodara. ...Opponent
Appearance: Mr. Bhargav Pandya, Ld. Advocate for the Complainant
Mr. Palak H. Thakkar, Ld. Advocate for the Opponent
Coram: (Shri S. N. Vakil, Judicial Member)
(Smt. J. Y. Shukla, Member)
Order by Shri S.N. Vakil, Judicial Member
1. The complainant - M/s. Alembic Ltd. has filed this complaint against the New India Assurance Co. Ltd., alleging that it is a very old company engaged in business of various kind of medicines/drugs within and outside the country. It had taken Marine Open Cover Policy from the opponent in June 2000, which issued cover note of the policy premium whereof was paid Rs. 10,752/-. The claimant had given some job-work to M/s. Sislax Pharma Pvt. Ltd., Panchkula, Haryana for manufacturing Amoxicillin Tryhydrated and Ampicillin Tryhydrated for a quantity of K.S.P CC-09-9 Page 1 of 26 1900 Kg and 3500 Kg respectively. The said goods were required to be delivered by the jobber at complainant‟s godown situated at Vadodara. Accordingly the goods were loaded in truck bearing No. HR-38-9595, model TATA-709, the truck was reported to have left the factory of jobber on 05.10.2000, and delivery challan Nos. 15 and 16 dated 05.10.2000 were issued by the jobber along with said goods. On 6.10.2000 at about 2:30 a.m., 3 KM from Saha-Panchkula-Delhi highways the said truck got spark in the engine and it went out of control of the driver. It was reported to have struck against the electric pole gutted in fire with the said consignment. The flames of the fire went about 40 ft. and trees around also got burnt. Driver at the last movement jumped out from the truck and could save himself. The incident was immediately reported to the concerned police station, bearing No. DDR-16 on 6.10.2000 at Saha Police Post, P. S. Mullana, Dist. Ambala. The opponent was immediately informed orally and telephonically as well as in writing with regard to said incident on 6.10.2000 itself. The Regional Office of the opponent deputed the surveyor at Chandigarh who had conducted the survey on 6.10.2000 at 7:15 p.m. The material sent by M/s. Sislax Pharma Pvt. Ltd. before loading into the truck were washed with IPO Propylene Alcohol Solvent which is flammable item. Therefore, at the time of incident the medicine loaded in the truck got burnt immediately and evaporated. Only plastic drums melted due to fire converted into lumps were there at the site of accident in debri of truck. Thus, the whole consignment was damaged totally in fire along with truck and the complainant has sustained huge loss of Rs. 87 lakhs. The detailed claim was submitted K.S.P CC-09-9 Page 2 of 26 with the opponent on 09.10.2000 for an estimated amount of Rs. 87 lakhs. The complainant had provided all the requisite details and documents required series of correspondence containing minute details were exchanged between them after date of accident till the date of filing this complaint. The complainant has surprisingly till date neither rejected the claim nor has paid the money of the claim to the complainant. All the necessary details, documents, information whatever have been sought for, were provided to the opponent or investigator and thereafter also co-operated fully as and when sought for. However, till date the opponent has not came to any conclusion. This is a gross case of negligence and deficiency in services, by the opponent and merely on this ground the complainant is eligible to get sufficient remedy. The claim was lodged in late 2000 however even till 2006-07 the opponent had written the letter to the complainant stating that the claim of the complainant is under consideration with the competent authorities of the opponent shall revert back as and when the said competent authority will decide in finality. Till this 8 long years the opponent could not take any decision neither positive nor negative. This is an excellent example of negligence and deficiency in service in deciding the claim. There is nothing left for which the opponent is taking such a long time in deciding the claim finally. Therefore, there is no option left but to file this present complaint. As mentioned there is no repudiation till date done by opponent and therefore as per the settled position of law the cause of action is still continuing and the complaint is within the limitation. Therefore, for this deficiency in service it claims Rs. 87,06,050/- with 12% interest from K.S.P CC-09-9 Page 3 of 26 6.10.2000 till realization, and such exemplary cost and compensation for negligence and deficiency in services as may be thought fit.
2. The defense vide written version is of denial. The claimant has suppressed the fact. The claim was fraudulent and ridden with irregularities. The claimant and opponent had a long standing business relationship based on which the opponent has entertained the claimant inspite of having addressed their letter dated 3.12.2004 setting out the various deficiencies in claimant‟s claim which on the face of it amounts to multiple instances of fraud and misrepresentation, however no bona fide verifications made with respect to some of this irregularities, amounting to fraud which are material to the very validity of the policy and any obligation of the opponent towards the claimant. Survey report of M/s. Basheer and Associates Surveyors Pvt. Ltd., and investigation report of Mr. Sudarshan Singh Sachar, clearly sets out the fraudulent nature of the claim and speaks volumes of the veracity and nature of the claimant‟s claim. The opponent is not liable to the complainant for their non-compliance of statutory provisions including non-compliance of Section 64 VB of the Insurance Act to the effect that no insurance policy is valid and enforceable unless it is complied with. It is also settled common law that no risk/loss can attach and be accepted under the insurance policy after the said risk/loss has occurred. The insurance agreement requires the existence of an unknown peril at the time of agreement. In the present case the marine open cover is issued by the opponent based on the rates, terms and conditions therein i.e. the insurance issued is subject to an Advance Premium Deposit Account K.S.P CC-09-9 Page 4 of 26 with statutory balance. Further, actual cover commences when the insured when the insured makes a declaration of the Marine Adventure/Peril that he seeks to insure. In the present case not only was there a shortfall or deficit in the statutory balance at the time of commencement of the journey/transport which allegedly and by the admission of the Claimants commenced at 11:00 p.m. on 5-10-2000 through till the time of the loss on 6.10.2000 at 2:30 a.m.; declaration of the transit of the insured goods was made with the Opponent Insurer during the working hours of 6.10.2000 - which was after the commencement of the journey and occurrence of the loss. As a consequence the Marine Insurance Cover was invalid for non- compliance of Section 64 VB i.e. payment of adequate and full premium as required to be done before commencement of the journey and occurrence of the loss; and more importantly the policy/declaration was invalid for the same was done after commencement of the journey and occurrence of loss. Notwithstanding the validity of the policy; the conduct of the claimant wherein they have sought to declare under the policy after commencement of the journey and occurrence of the loss itself is violation of Section 20 of the Marine Insurance Act which imputes a good faith requirement on the insured. The conduct of the Claimant from the perspective of Section 20 of the Marine Insurance Act clearly translates to no liability under the Marine Insurance Policy/Marine Open Cover issued. Insurance Policy being a Marine Insurance Cover Policy was issued for the purposes of export of the insured goods; however the claimant has admittedly incurred loss when they allegedly dispatched K.S.P CC-09-9 Page 5 of 26 goods/raw materials to Ms. Sislax Pharma Pvt. Ltd. - a job contractor for reprocessing, and the same was allegedly being returned to the Claimant. Therefore, since the loss occurred not during transit for export, the insurance policy used for this purpose should have been the Marine Special Declaration Policy also issued to the insured instead of the Marine Open Cover which was issued to the Insured but specifically for exports. The declaration of the transit under the marine open cover was after commencement of the transport and occurrence of loss. Survey report of M/s. Basheer and Associates Surveyors Pvt. Ltd., and investigation report of Mr. Sudarshan Singh Sachar, clearly sets out the fraudulent nature of the claim and speaks volumes of the veracity and nature of the claimants claim. Claimant‟s case that the loss occurred when their goods 3500 Kgs of Ampicillin Tryhydrate and 1900 Kgs of Amoxcillin Tryhydrate were being dispatched by the jobber through Hemkunt Roadways vide G.R. No. 6203, on 05.10.2000 at 11:00 p.m. the said vehicle bearing registration number HR-38-9595 caught fire on 6.10.2000 at 2:30 a.m. enroute to the factory premises of the Claimant. This version of the Claimant is untenable on many counts as (1) An excise raid on jobber factory premises two days prior to the date of the alleged loss revealed that the jobber had only 77 kgs of Ampicillin Tryhydrate as against the balance of 218 kgs and no stocks of Amoxycillin Tryhydrate. It was fined for such shortage. The electricity consumption of the factory of the jobber had started reducing from July 2000 and was at a very low level between September and October 2000 - the period in question. Therefore, there being negligible material K.S.P CC-09-9 Page 6 of 26 combined with absolutely low power consumption, fraud is apparent in the Claimant's submission that 3500 Kgs of Ampicillin Tryhydrate and 1900 Kgs of Amoxcillin Tryhydrate were processed and dispatched by jobber to the claimant's factory. (2) The cargo a Tata 609 tempo, had a maximum carrying capacity of 2810 kgs as set out in its registration certificate, whereas the weight of the cargo was 5892 kgs or 6150 kgs was admittedly an overloading of 114%. The insured cargo was allegedly put in 216 drums, which the TATA 609 tempo could not accommodate as many drums as alleged. (3) The residue of burnt HDPE Drums in which the cargo was allegedly being carried should not in the case of a fire as alleged, have become powder or ash as was observed in the burnt vehicle; but should have melted and crumpled into lumps. The metallic rings allegedly fixed on the HDPE drums should have in the event of a fire stuck to the said lumps from the melting of the drums instead of having come loose as was observed. The metallic rings allegedly affixed on the lid of the HDPE drums should have been different from the ones observed in the burnt truck. And therefore no HDPE drums were actually being carried in the transport vehicle. The insurance policy - a Marine Open Cover issued by the Opponent, clearly indicates the admitted fact that the policy was specifically meant to insure cargo for exports, any consignment meant for export should be dispatched under bond and on the filling up of an "AR-4" form duly certified by a Central Excise Inspector. Neither were the drums sealed under bond before dispatch nor was a Custom's and Central Excise Officer present. Further the transporter in this case was engaged by the said jobber instead of the K.S.P CC-09-9 Page 7 of 26 Claimant, all of which is contrary to the Job Contract Agreement. Further aggravated by material non-disclosure and bad faith which by itself invalidated the insurance policy as per Section 20 of the Marine Insurance Act. In the event the Claimant wishes to dispute any of the conclusions of the Surveyor, then detailed and complicated evidence would have to be led which cannot be adjudicated by this Hon'ble State Redressal Commission, in summary procedure under the Consumer Protection Act. it is denied that the Claimant's cargo was insured at the time of the commencement of the Journey and/or occurrence of loss. The Cargo is denied to have been dispatched by the jobber in the aforesaid transport vehicle the factum of fire originated in the engine of the truck and totally burnt the truck and cargo are denied. In the event of a fire as alleged by the Claimant, the truck would have been damaged very differently. There is no negligence or deficiency in service. It is denied that the complainant is within limitation. The claimant has not acted in good faith. The complaint deserves to be disallowed.
3. Heard Advocate Shri Bhargav Pandya and Shri S. K. Shah for the complainant and Shri Palak H. Thakkar for the New India Assurance Co. Ltd. Read their written arguments.
4. The New India Assurance Co. Ltd., issuing office: Unit 221500, issued at Baroda a Marine Open Cover (Cargo) Schedule (page-565, 13) for the period from 00:01 hours on 3.06.2000 to midnight of 2.06.2001, for journey from anywhere in India to anywhere in India by air, from anywhere in India to anywhere in India by rail, from anywhere in India to anywhere in India by lorry, from anywhere in world to anywhere in world K.S.P CC-09-9 Page 8 of 26 by air, from anywhere in India to anywhere in world by vessel, from anywhere in India to anywhere in world by rail and from anywhere in India to anywhere in world by lorry, the insurance is subject to advance premium deposit account with statutory balance, condition for closing particulars as „to be declared to the company immediately upon receipt of shipping documents‟, for premium: payable against its certificate as stated thereon or as per debit note; Notice of loss or damage to be given and survey arranged and certificate obtained from the company agent at the port of discharge or in case where the company has no agent, from V. K. Webstar‟s agent without which no claim or loss will be paid. The complainant obtained Marine Insurance Certificate (page- 564, 11) issued at Baroda on 6.10.2000 showing „Effective from: 00:01 hours on 6.10.2000, receipt dated/No. 3.11.2000, 177000/13781 with sum insured as Rs. 86,08,050/-, RR/LR/BL/AWB: LR No. 6302 dated 5.10.2000‟ for journey from Chandigadh to Dasrath by mode of transit as road, from Dasrath to to be entered by road, from to be entered to to be entered by road, with commodity description mentioned therein as: (1) AMOXYCILLIN TRIHYDRATE, NET WT. 1988.900 KGS., 76 NO OF DRUMS, [DC NO 15, DATED 85.18.2888] (2) AMPICILLIN TRIHYDRATE, NET WT. 3580.900 KG., 148 NO OF DRUMS, [DC NO 16, DATED 05.18.2880], Terms of insurance: As per the following clauses written hereunder, current on date of sailing or dispatch and/or otherwise stated: Institute Cargo Clause (Air Cargo), Institute Strike Clause (Air Cargo), Institute War Clause (Air Cargo) and Institute Radio-Active Contamination Exclusion Clause, with condition for survey and claims K.S.P CC-09-9 Page 9 of 26 settlement as in the event of loss or damage which may result in claim under this insurance immediate notice must be given to Policy Issuing Office or nearest Branch Office. And Marine Cargo (Open Cover Certificate) copy cum bill (page-562/12) for premium of Rs. 10,752/-.
5. The complainant M/s. Alembic Ltd. gave job work to M/s. Sislax Pharma Pvt. Ltd., Panchkula, Haryana for manufacturing Amoxicillin Tryhydrated and Ampicillin Tryhydrated for a quantity of 1900 Kgs and 3500 Kgs respectively. It dispatched the consignment to the complainant vide LR No. 6302 dated 5.10.2000, vehicle No. HR-38-9595. The vehicle met with an accident during the way to Baroda on 6.10.2000 at 2:30 a.m. The insurance company pointed out (page-58) that „insurance certificate issued was found under "Open Cover" which is meant for "Export or Import" consignment, but the declaration was for Transit Risk from Panchkula to Dashrath (Inland Transit), which was declared under Open Cover. That too, the Insurance Cover was found obtained on 6/10/2000, whilst the consignment had left the premises on 5/10/2000 at 1800 hrs., and thus exposing it to risk prior to the commencement of the cover‟. For the complainant it was answered (page-122) that, "Assistant clerk through oversight declared the consignment under Marine open cover as the consignment was for export. However, The New India has also accepted the declaration, debited our account and certificate was issued covering the consignment from 6/10/2000. In fact damage has also done on 6/10/2000 early morning at 2.00a.m. Therefore it is fully covered". Now, the Institute Cargo Clauses (Air) in its „Transit Clause‟ provides (page-567) "5.1 This insurance attaches from the time the subject-matter K.S.P CC-09-9 Page 10 of 26 insured leaves the warehouse, premises 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, premises or place of storage at the destination named herein, 5.1.2 On delivery to any other warehouse, premises 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 5.1.2.2.2 for allocation or distribution or 5.1.3 On the expiry of 30 days alter unloading the subject- matter insured form the aircraft at the final place of discharge, whichever shall first occur". To the quarry as to requirement of form AR 4, the complainant answers (page-62) "The goods in question were not to be directly dispatched from Sislax Pharma Pvt. Ltd. to Mumbai for export. The goods were to be further processed for which the goods were dispatched to Baroda to our factory for further processing and it is at the time of export only that Excise Authorities are to be called for to supervise for which AR-4 is required. All raw materials of job work done by M/s. Sislax Pharma Pvt. Ltd. for us and received in our factory at Baroda were exported and excise AR-4 records are maintained by us, so question of supervision by Excise Authorities at Panchkula for dispatch to us of the disputed consignment for export purpose does not arise". This answer makes it clear that site of jobber M/s. Sislax Pharma Pvt. Ltd. was not the place wherefrom goods were to be exported nor can it be termed as warehouse, premises or places of storage of the complainant. Besides if the goods were to be delivered to complainant‟s site at K.S.P CC-09-9 Page 11 of 26 Vadodara which again cannot be termed as in the ordinary course of transit of finish goods to be exported, the insurance itself would terminate at Dashrath. This would consequently make the further transmission from complainant‟s site at Dashrath by road to to be entered and therefrom to anywhere to be entered for air as not at all applicable to the Marine Insurance Certificate right from the beginning. Therefore, the material sent from jobber‟s site at Panchkula to complainant‟s site at Dashrath is not the subject matter of this policy or the certificate and thus found to be outside the scope of insurance. Insurance would attach to the goods after it is processed for export at Baroda and then only when it leaves the warehouse, premises or place of storage at Baroda for the commencement of the transit, and not anything prior thereto from jobber‟s place at Panchkula to complainant‟s place at Baroda, vide transit clause of institute Cargo Clauses (Air).
6. As to non-dispatch of the goods. For the insurance company, it is argued (page-55, 56, 57, 58) that the jobber did not at all manufacture the goods. The stock record and the raw material supply forwarded by the insured were not tallying with the invoices No.1 to 97 of the jobber for the period 4.04.2000 to 27.03.2001. The jobber informed insured that they were not getting basic raw material Penicillin-G from the insured since July 2000 as per the jobber agreement dated 25.11.99. M/s. Sislax Pharma Pvt. Ltd. also informed that because of the price increase all imported raw material of Penicillin-G that the insured was unable to meet the ordinary contracted price with the overseas consignment and therefore they were not importing raw material and asked the jobber to K.S.P CC-09-9 Page 12 of 26 slow down their production. The electricity consumption was found low from July 2000 onwards showing hardly any processing of material in August/September 2000. In the custom-raid on jobber factory on 3.10.2000 i.e. 2 days prior to the alleged dispatch of consignment of 5.4 MT of Ampicillin and Amoxycillin, they found only few Kgs of material thereof and that too there was shortage of few Kgs as against recorded quantity, for which director of the firm was fined. The consignment should have been dispatched under Bond, filling 'AR - 4' Form, and an invoice of the Jobber in Triplicate under Rule 52 A, duly certified by the Central Excise Inspector, Panchkula, Range II, for Insured to take credit on material inputs under Rule 57 G. But the same was not found complied with and no Custom and Central Excise person was present nor the drums were sealed by them before the alleged dispatch. However, the Job Contract Agreement and subsequent orders to supply material, it was clearly specified under Para 7 of Page 2 of the Contract that the clearance of consignment under Excise form AR - 4 duly signed by Excise will be organized by the Jobber and that the Insured will claim all benefits like Advance License, DEPB, etc., with Export performance to the insured's account and Jobber should be given necessary declaration to this effect. The insured had not reported the Central Excise Dept. of Vadodara range that the Export consignment of Medicine, dispatched from Panchkula by the Jobber was burnt enroute. It was responsibility of the complainant but the vehicle was selected by the Jobber and it was under capacity by over 100%, in which the number of drums (216 nos.) of the size would not fit in as the vehicle was of Tata 609 Model. The K.S.P CC-09-9 Page 13 of 26 vehicle, did not have MP., Rajasthan and Gujarat State Road permit to ply, though the consignment was planned to be transported from Panchkula (Haryana) to Vadodara (Gujarat). If fire takes place to the packing material reportedly of HDPE/PP they would have the residue of some mould/waxy type substance sticking, together on the cargo deck. The Sealing M.S. Rings would have stuck on it and also they would have been distorted/twisted due to heat. From the photographs of the Light Commercial Vehicle at the accident site taken by the attending Surveyor, we could see only some ash / powdery substance in the vicinity of the tyres and Sealing Metallic Rings lying loose. If one notices carefully, the cross bars of load body of the vehicle and on the sides, the white paint was found intact, without charring or any soot marks. From this it could be inferred that the fire was a localised one and not very intense as alleged and if there was HDPE drums with the consignment, they could have been easily saved / salved. Further, the fire from the engine would not travel to cargo bed, without damage/explosion to Fuel Tank, which was found intact. Even if there was fire on vehicle cargo bed, it could not burn the tyres of the vehicle as they were well separated and insulated. The tyres could burn only if they were poured over with inflammable material and set on fire. Besides, from the photographs it can be noticed that there was some foreign material like White Ash substance lying around the wheel area, which cannot be residue of burnt tyres, but could have been some material used to burn the tyres. Instead of the Annually Contracted Transporter, M/s. Bombay Gujarat Roadlines (P) Ltd. M/s. Chandigarh Hemkunt Roadways (Regd.) was chosen on 5/10/2000, with K.S.P CC-09-9 Page 14 of 26 no valid reason. Further, the Insured's plant representative, Shri Mahesh Patel, Asst. Manager who was a witness to the whole episode was not made available for our enquiry as he had been removed from the employment after the incident for reasons not known. It had also observed from the Transporter's (M/s. Bombay Gujarat Roadlines) record that some consignment which were written in their GRS/record as meant for Vadodara, were delivered at Mumbai and a Mumbai consignment at Vadodara. The Insured's Jobber, M/s. Sislax Pharma Pvt. Ltd., were also making their own sale of some consignment and one such consignment was found dispatched to Mumbai, but the invoice was issued to Vadodara addressed to M/s. Alembic Ltd. The Jobber had no plausible explanation when all the material dispatched by the jobber was based on written order of the insured, except the subject consignment. Based on all these it was argued for the insurance company that no such consignment was ever effected and in order to prove it, he took us through the record. And submits Delhi Assam Roadways Corporation Ltd., IV (2013) CPJ 334 (NC) wherein overloading had direct nexus with the accident, the repudiation was found just. Now, unless the transport receipt, and fine for excessive overloading are also shown to be brought up one, it is clear, that the consignment cannot be held to have never been consigned, and therefore the allegations raised by the insurance company must be held as not proved.
7. For the insurance company, it is argued that the incident is alleged to have occurred at 2:30 a.m. on 6.10.2000 whereas the complainant requested for issuance of Marine Certificate (page-571), during the next K.S.P CC-09-9 Page 15 of 26 working hours of the insurance company, i.e. after the alleged incident occurred. Hence, the certificate is not binding to the insurance company. Section 20 (1) of the Marine Insurance Act, 1963, provides "Subject to the provisions of this section, the assured must disclose to the insurer, before the contract is concluded, every material circumstance which is known to the assured, and the assured is deemed to know every circumstance which, in the ordinary course of business, ought to be known to him. If the assured fails to make such disclosure, the insurer may avoid the contract. ... ..." and that therefore the factum of loss already occurred to have been prior to the requesting for the issuance of certificate was not disclosed, the insurance company is entitled to avoid the contract and not bound to obey it at all. As against this the Marine Insurance Certificate (page-564) is shown to be „effective from 00:01 hours on 6.10.2000‟ and submits New India Assurance Co. Ltd. Vs. Ramdayal & Others, 1990 (2) Supreme Court Case 680, wherein the assurer repudiated its liability by maintaining that the policy has been taken after the accident and therefore it had no liability to meet the award of the compensation against the insurer, it was held that when a policy is taken on a particular date, its effectiveness is from the commencement of that date. The insurance policy obtained on the date of accident became operative from the commencement of the date of issuance i.e. from previous midnight and since the accident took place on the date of policy the insurer became liable. Now, under the Marine Insurance Act contract of marine insurance is deemed to be concluded when the proposal of the assured is accepted by the insured. Whether K.S.P CC-09-9 Page 16 of 26 the policy be then issued or not vide Section 23. Section 20 as aforesaid enjoined upon the complainant, to disclose the factum of loss at 2:30 a.m., if it was known to the assured failing which the insurance company would be within its rights to avoid. The Institute Cargo Clause (Air) provides in its Insurable Interest Clause 8 (page-568) as "8.1 In order to recover under this insurance the Assured must have an insurable interest in the subject-matter insured at the time of the loss. 8.2 Subject to 8.1 above, the Assured shall be entitled to recover for insured loss occurring during the period covered by this insurance, notwithstanding that the loss occurred before the contract of insurance was concluded, unless the Assured were aware of the loss and the Underwriters were not". The contract of insurance concluded during the office hours on 6.10.2000. Therefore, the question is whether the complainant was aware of the loss and the insurance company was not, vide insurable interest clause 8.2 of the Institute Cargo Clause (Air). Now, in joint meeting held at Chandigadh RO in Chamber of Manager Mr. A. S. Chadha to discuss Marine Transit Insurance Claim under investigation by Mr. S. Sachar, director of M/s. Sislax, Mr. Singla was present (Anx: E, page-35) and has signed it also (page-36). The same signature bears on a letter (page-33) signed by him i.e. Mr. J. K. Singla, addressed to the Assistant General Manager New India Assurance Co. Ltd., RO Chandigadh on the subject intimation of marine loss to the consignment of Amphicillin Try Hydrate 3500 Kg and Amoxycillin Try Hydrate 1900 Kg. as aforesaid. Insurance policy No. 221500, wherein he, Mr. J. K. Singla, of the Jobber, writes "with reference to above mentioned subject we have dispatched the K.S.P CC-09-9 Page 17 of 26 consignment vide LR No. 6302, Vehicle No. HR-38-9595. The vehicle met with an accident during its way to Baroda on 6.10.2000 at about 2:30 A.M. The material was insured with New India Assurance Co. Ltd. Baroda vide Policy o. DO-221500 by M/s. Alembic Ltd. Baroda. You are requested to depute the surveyor and reimburse the loss, i.e. 216 drums burnt. Thank you, Yours faithfully, J. K. Singla". Now, the goods were already dispatched on 5.10.2000 in the evening. Therefore, it is clear that no lorry transport receipt has never mentioned about any insurance. From the aforesaid underlined wording as, „material was insured with the New India Assurance Co. Ltd. Baroda vide policy No. DO-221500 by M/s. Alembic Limited Baroda‟ make it quite clear that from the jobber at Panchkula, fact of accident at 2:30 a.m. on 6.10.2000 was actually reported to the complainant at Baroda which then proceeded to file proposal on 6.10.2000 (page-571) and obtained the policy therefrom who in turn informed the consignor at Panchkula, who then gave this intimation of loss to the insurance company at Chandigadh. This clearly proves knowledge with the complainant before it proposed for the insurance on 6.10.2000. It is for the reason that no one would obtain Marine Insurance Certificate, that too with Institute Cargo Clause (Air), for Inland Transit of goods from jobber‟s site at Panchkula to complainant‟s site at Baroda when the goods were yet to be processed for export at Baroda only, wherefrom only, for the transit for export, that insurance attaches as held above, unless to take advantage hurriedly of the Marine Open Cover having „Journey from Anywhere in India to Anywhere in India by lorry as mode of Transit‟. When the receipt date in K.S.P CC-09-9 Page 18 of 26 this Marine Insurance Certificate shows 3.11.2000. it also makes it clear that the insurance company at Baroda was not at all informed of any loss even till 3.11.2000. In the meeting as aforesaid there is no one from the insurance office at Baroda. The transit clause in the Institute Cargo Clause (Air) more particularly 5.1.2.1 makes the insurance to terminate on delivery at Baroda, which again would go to make it clear that the sole purpose of this insurance was to take benefit of Marine Open Cover Cargo Schedule showing journey from anywhere in India to anywhere in India by Lorry. But as held above, it was not contemplated for other than the import export policy. Therefore, the insurance company is found to be within its right to avoid the contract.
8. The accident took places on 6.10.2010, the intimation was also given on 6.10.2000 and the claim was lodged on 9.10.2000. It is argued that in the present case, there is no repudiation till date and hence the cause of action is still continuing. It is argued for the insurance company that it already repeatedly expressed its inability to be of assistance and inspite of its letter dated 3.12.2004 setting out various irregularities, entertained the claimant for business relationship seeking clarification, and that the limitation in any case would start from 3.12.2004. The insurance company at Chandigadh appointed surveyor Mr. Sachar, raised some quarries, the claimant addresses letter dated 4.12.2000, 1.03.2001, 12.12.2001, 5.02.2002 wherein personal discussion was requested for, then surveyor J. Basheer and associates surveyors Pvt. Ltd. writes to the complainant the discrepancies and that inter alia based on findings they would be now submitting their report to the underwriter accordingly. And K.S.P CC-09-9 Page 19 of 26 submitted its final repot accordingly on 15.02.2003 incorporating the same as above. (page no. 255 to 463). The complainant writes explanation to the surveyor M/s. J. Basheer on 3.03.2003. The insurance company conveyed observations verbatim as per surveyor‟s report to the complainant by its letter dated 20.03.2003. and asked for complainant‟s comments on each and every observations of the investigator to enable the insurance company to look into the matter. The complainant submits its comments by letter dated 27.03.2003, again incorporating the clarifications on the points raised by the surveyor including why the goods were sent to Dashrath. Point No.15 of the letter dated 15.04.2003 (page-66) is that „The Insurance Certificate issued by the Divisional Office commenced the cover only from 6.10.2000 while the loss had taken place on 5.10.2000 (page-68); hence not covered by the certificate, and asked for further documents by its letter dated 5.08.2003 from the complainant. The surveyor asked the complainant to keep ready for inspection documents/ records mentioned in and by its letter dated 6.11.2003. The complainant gives point-vise reply on 3.12.2003 and 15.12.2003 of the surveyor E-mail dated 17.11.2003 and 11.12.2003. The insurance company made over further observations to the complainant by E-mail. The complainant writes letter to the surveyor on 23.02.2004 and gives point-vise reply to E-mail dated 15.12.2003 and brought forward certain clarifications pursuant to opponent‟s visit to the complainant on 25 July, 2004. And replied on 27.08.204 to opponent‟s letter dated 5.08.2003 as to original LR. The insurance company by its letter dated 3.12.2004 brings various deficiency in the transit claim. On K.S.P CC-09-9 Page 20 of 26 24.02.2005 the complainant sent copy of its letter dated 3.12.2014 to Baroda DO i.e. complainants point-vise remarks dated 25.02.2005 inter alia stating to the aforesaid point No.15 (page-122) "Assistant clerk through oversight declared the consignment under Marine open cover as the consignment was for export. However, The New India has also accepted the declaration, debited our account and certificate was issued covering the consignment from 6/10/2000. In fact damage has also done on 6/10/2000 early morning at 2.00a.m. Therefore it is fully covered". And requested the insurance company at Mumbai by its letter dated 3.06.2005 to look into the matter expeditiously. By letter dated 4.06.2005 the complainant writes to the insurance company at Baroda that the reply sent shall meet to companies‟ fullest requirement and requested to expedite the matter. It writes that since its reply in February 2005, after 3 and half month, it has not heard anything in the matter. The insurance company writes on 9.06.2005 that replies and explanations given by the complainant to all the points raised by letter dated 3.12.2004 is under process and that they shall revert to the complainant as soon as the process of the claims filed is completed by them or RO with a request to bear with them for some more time. This has been pressed by the complainant to argue that the cause of action is continuing. On 27.07.2005 the insurance company writes referring to discussion they had on 11.07.2005 (page-136) that the complainant has not made any arrangement to demonstrate regarding capacity of Tata 609 to carry 216 containers of the size mentioned by complainant and also for such demonstration as to HDPE, PP Drums affected by fire to K.S.P CC-09-9 Page 21 of 26 conclusively prove actual position, and that the „Consignment was declared under Open Cover which is meant for export consignments only and that from description of transit as mentioned on the consignment note, this transit could not be covered under Marine Open cover and asked for complainants observation in this regard that on receipt of complainants reply they shall be able to process the claim further‟. The complainant gives reply thereto by its letter dated 23.08.2005 and dated 5.10.2005. This would show that the matter was live between parties till 5.10.2005 when the complainant clarified as above. Then the complainant by its letter dated 5.10.2005 that the matter be brought to finality latest by 31.12.2005 again. To this the insurance company answered by its letter dated 29.03.2006 (page-144) that the claim is under consideration with the competent authority at Head Office and that they shall revert to on receipt of their advice and requested the complainant to kindly bear for some more time. It is argued that this shows that the cause of action is still continuing. On 8.06.2006 the insurance company writes (page-145) that they are contacting their Baroda Regional Office and ascertaining present status of the claim and on hearing from them, they shall revert to the complainant. On 25.01.2007 the complainant writes referring last meeting with the head executives at Mumbai on 12.12.2006 and that there is no pending submission from their side, the submission dated 25.02.2005 was comprehensive and adequately covered all query raised and requested to quickly settle the claim. The complainant again referring to the said meeting on 12.12.2006 and submission dated 25.02.2005 to settle the K.S.P CC-09-9 Page 22 of 26 matter to expedite early settlement of the claim. Again by its letter dated 24.03.2008, 19.09.2008, 8.01.2009 the same. Then there is legal notice dated 16.02.2009. Therefore after 12.12.2006 there was no movement from the insurance company and deficiency in service from the opponent can clearly be complained of from 12.12.2006 onwards. Kandimalla‟s case (infra) also says that "cause of action" is cause of action which gives occasion for and forms foundation of the Suit. Accordingly, the case continued till 12.12.2006 only. The complainant letters following are only request to expedite the matter, there is nothing from the opponent side which could have effect of keeping the matter alive. Therefore, the complaint at all should have been filed within 2 years from 12.12.2006 and it having been filed on 23.03.2009, without any delay condonation application, is clearly beyond limitation.
9. The complaint dated 23.03.2009 claims Rs. 86,08,050/- along with 12% interest thereon from 6.10.2000 till payment. AmbrishKumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd., I (2017) CPJ 1 (NC) is cited to the effect that interest has to be taken into account for the purpose of determining the pecuniary jurisdiction, and argued therefore this commission has no jurisdiction, it being more than 1 crores. Now, the contention should have been pursued right from the beginning.
10. Principles of D. Srinivas Vs. SBI Life Insurance Co. Ltd., Manu/SC/0128/2018, submitted by complainant, that dealy in informing that policy was not accepted was held to be unreasonable and accordingly concluded that the policy was accepted by the insurer, and of following citations cited for the insurance company are also kept in mind. K.S.P CC-09-9 Page 23 of 26 Kandimalla Ragavaiah & Co. Vs. New India Assurance Co. Ltd., III (2002) CPJ 259 (NC) where the fire took place in March, 1988, the Insurance Company was informed in November, 1992, limitation with reference to fire insurance policy undoubtedly the date of arising of cause of action has to be the date on which the fire breaks out, and accordingly the complaint was held time bared. State Bank of India Vs. B. S. Agricultural Industries, II (2009) CPJ 29 (SC), wherein the bank was to return documents for collection of payment and remittance of proceeds if not honoured by drawee by June 7, 1994, the complainant neither received demand draft, nor documents, and limitation was held to have begun to run from June, 1994. Letters sent to bank and bank‟s reply of no help, limitation cannot be extended by bank‟s reply, the complaint was held time bared. Haryana Urban Development Authority Vs. B. K. Sood, (2006) 1 SCC 164, the complaint filed 10 years after taking possession, 8 years after cause of damage, 3 years after the cause of action ceased, the complaint was held time bared, there being no prayer for condonation of delay. Babubhai Bhagvanji Tandel Vs. New India Assurance Co. Ltd., F. A No. 516 of 2012 (NC), wherein the vessel sank on 29.12.1999, letter of repudiation was dated 21.10.2013 and confirms on 24.02.2004. Following Kandimalla‟s case, it was held that insurance claim has been filed and if it continues to be delayed at the hands of the insurance company, the complainant would ordinarily take recourse of law sooner rather than later, mindful of the period of limitation, it is therefore not clear at all as to why the complainant waited for the claim to be repudiated, first on 21.10.2003, followed by confirmation on 24.02.2004. K.S.P CC-09-9 Page 24 of 26 It confirms the dismissal of the complaint. Delhi Assam Roadways Corporation Ltd. Vs. United India Insurance Co. Ltd., IV (2013) CPJ 334 (NC), is to the effect that excessive overloading, found to have direct casual link with accident resulting in damage to vehicle, amounts to violation of terms of policy and the repudiation was held justified. United India Insurance Co. Ltd. Vs. Roshan Lal Oil Mills Ltd., 2000 (10) SCC 19, to the effect that report of joint surveyors was important document, the Commission was not justifying in awarding insurance amount without adverting to contents of joint survey report, it has resulted in serious miscarriage of justice. Varalakshmi Starch Industries Pvt. Ltd. Vs. Man Rollo Generations India Pvt. Ltd., I (2013) CPJ 2B (NC) (CN), where there is no averment that four gensets were being purchased for self employment or for earning livelihood, the complainant was held not a consumer. The Oriental Insurance Co. Ltd. Vs. Lalit M. Rajawat, Appeal No. 467/2016 (Guj.), to the effect that when the terms are shown to have been attached with the schedule it has taken to have been supplied with. Kamlesh Gupta Vs. ICICI Lombard Gen. Ins. Co. Ltd., I (2017) CPJ 123 (NC), to the effect that contention regarding non-supply of terms and conditions of policy, deceased being an educated person would have at least written a letter claiming that terms and condition and exclusions had not been supplied to him and therefore it was presumed that they were supplied to him and brought to his notice. Legal Department N.A.I.C.O. Ltd. Vs. Oswal Plastic Industries, III (2019) CPJ 85 (NC), and Sikka Papers Ltd. Vs. national Insurance Co. Ltd. and Ors., III (2009) CPJ 90 (SC), to the effect that complainant is a company hence claim for K.S.P CC-09-9 Page 25 of 26 mental harassment is legally not permissible. Only natural person can claim damages for mental harassment, not corporate entity.
11. For the reason stated, the complaint deserves to be dismissed, for which following order is passed.
FINAL ORDER
i) Complaint No. 9 of 2009 is dismissed.
ii) No order as to costs.
iii) Copy of the judgment be provided to the parties free of charge.
Pronounced in the open Court today on16th day of February, 2022.
(J.Y.Shukla) (S.N.Vakil)
Member Judicial Member
K.S.P CC-09-9 Page 26 of 26