National Consumer Disputes Redressal
Dujodwala Products Ltd. vs National Insurance Co. Ltd. & 2 Ors. on 14 July, 2020
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 575 OF 2012 (Against the Order dated 13/07/2012 in Complaint No. 14/2003 of the State Commission Maharashtra) 1. DUJODWALA PRODUCTS LTD. 812, TULSIANI CHAMBERS, 212, NARIMAN POINT, MUMBAI-400021 ...........Appellant(s) Versus 1. NATIONAL INSURANCE CO. LTD. & 2 ORS. DIVISIONAL OFFICE NO. 12, SHEEL CHAMBERS III, FLOOR 10, KAWASJI PATEL STREET, MUMBAI-400023 2. CONSOLIDATED MARINE SERVICE PVT LTD., 5B, H.V.S. Apartments, 1, Edward Road Bangalore - 560 052 3. CONSOLIDATED MARINE SERVICE PVT LTD., 5B, H.V.S. Apartments, 1, Edward Road Bangalore - 560 052 ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE DR. S.M. KANTIKAR,MEMBER For the Appellant : For the Appellant : Mr. Karan Mehra, Advocate For the Respondent : For the Respondents : Mr. Kishore Rawat, Advocate Mr. L.K. Tyagi, Advocate, R-1 R-2 & R-3 already deleted Dated : 14 Jul 2020 ORDER R.K. AGRAWAL, J., PRESIDENT < > present Appeal has been filed against the Order dated 13.07.2012 passed by the State Consumer Disputes Redressal Commission Maharashtra, Mumbai (hereinafter to be referred to as "State Commission"), whereby the Complaint filed by the Complainant had been dismissed.
Brief facts of the case as narrated in the Complaint are that the Complainant obtained Marine Insurance Policy bearing No. No.260500/21/99/42/1729 dated 30.03.99 with Certificate No.260500/21/99/42/ 39 dated 01/12/1999 for covering the Ocean Freight and Value of Goods in transit by the shipment under the Bill of Lading No. SSZMB 1007 dated 20/10/1999 containing Oleo Pine Resin to the tune of 1188 Drums (240 MT.) valued at ₹50.02 Lakhs. The said shipment was to be brought by Respondent No.2 -Consolidated Marine Services Pvt. Ltd. - as Carrier from the Port Santos in Brazil to Mumbai Port. Respondent No. 3 is the Branch Office of Respondent No. 2 in Mumbai. It is averred that freight from Brazilian Port to Mumbai Port was prepaid by the Complainant to their Suppliers, M/s. Planebras Commercio E Planesamentos Florestais S/A Sao Paulo Brazil through Letter of Credit who in turn paid the same to the Carrier. However, Respondent No. 2 Carrier, unloaded the said shipment at Durban Port instead of Mumbai Port. Subsequently, when the Complainant inquired about not reaching of the said shipment at Mumbai Port, it was revealed that the said shipment was unloaded at Durban Port by Carrier. Complainant requested several times to Respondent No. 2 Carrier for getting the consignment at Mumbai Port from Durban, but Respondent No. 2 pretended that the entire freight for the consignment has been paid but due to financial crisis, it did not have enough money to get the consignment at Mumbai port from Durban. Ultimately, Complainant paid additional freight of ₹6,66,556.80 vide Pay order No.004926 dated 07/01/2000 to Respondent No.2 for carrying this shipment from Durban to Mumbai. Respondent No.2 agreed to repay the said amount to the Complainant and issued a post-dated cheque No.392616 dated 05/03/2000 against the repayment of said amount. However, the post-dated cheque issued by Respondent No.2 was dishonoured and they failed to refund the said amount to the Complainant despite repeated requests, It is the contention of the Complainant that Marine Policy was purchased by them form the Respondent Insurance Company to cover the risk of non-delivery of the consignment and since the additional freight/charges of ₹6,66,556.80 was paid to ensure delivery of consignment, the Respondent No. 1 Insurance Company in terms of Clauses 12, 16.1 and 16.02 of the Marine Policy is liable to indemnify the loss and as such a claim was lodged with the Insurance Company. Had this additional amount not been paid to the Carrier, the consignment wrongly unloaded at Durban would not have reached Mumbai and in such a situation, the Insurance Company was under an obligation to pay the entire claim of goods worth ₹50 lakhs. But the Insurance Company did not consider the claim of the additional payment in respect of shipment and repudiated the claim of the Complainant on the ground that it was beyond the purview of the Marine Insurance Policy. Aggrieved by the repudiation of insurance claim of additional payment of ₹6,66,556.80 the Complainant filed a Consumer Complaint before the State Commission seeking a direction to the Opposite Parties for payment of ₹12,32,103.40 which included the basic payment of ₹6,66,556.80 alongwith interest @ 18% to the tune of ₹4,40,546.59, ₹1,00,000 towards compensation and ₹25,000/- towards legal charges.
The Respondent No.1, Insurance Company contested the Complaint by filing its written version before the State Commission.Respondent No. 2 & 3/ Carriers were proceeded exparte as they did not contest the case before the State Commission.
The Insurance Company admitted that they had issued Marine Insurance Policy covering the risk of cargo for carrying the goods from Brazil to Mumbai Port.It was submitted that the Appellant / Complainant hired the services of Respondent No. 2 Carrier for shipping the goods from Brazil to Mumbai Port, but due to financial crisis, Respondent No. 2 Carrier unloaded the goods at Durban Port instead of Mumbai Port.Respondent No. 2 Carrier was not in a position to bear expenses for carrying the goods from Durban to Mumbai.The arrangement of making additional payment of ₹6,66,556.80 for carrying said shipment from Durban to Mumbai was made between Appellant/Complainant and Respondent No.2 and Respondent No. 2 agreed to repay the said amount to the Complainant and issued post-dated cheques to the Complainant. The said arrangement/agreement was a part of advancement of loan to Respondent No. 2. It was submitted that the Complainant has withheld the empty containers and also filed a Civil Suit against the Carriers for recovery of the loan advanced to them. The consignment reached at Mumbai Port in good condition and as such the Complainant has not suffered any loss. The dispute of additional payment of ₹6,66,556.80 was not covered under the provisions of the Marine Insurance Policy and the claim made by the Complainant was rightly repudiated by the Insurance Company. Hence, there is no deficiency in service on their part and the Complaint is liable to be dismissed.
After hearing Learned Counsel for the Complainant and the Insurance Company and perusal of the material available on record, the State Commission came to the conclusion that the claim of the Complainant for recovery of loan amount of ₹6,66,556.80 from the Carrier was not a Consumer Disputes and as such the Complaint was not maintainable before the Consumer fora. It was observed as under:-
"....The policy condition Nos.12 & 16.2 relied upon by the Complainant, are not relevant in as much as there is no grievance made by the Complainant about time of the delivery or damage to goods, if any. Moreover, the arrangement of making extra payment was directly reached between the Complainant and Opponent No.2 in the year 2000 as advancement of loan and only after not receiving refund of said amount by the Complainant after making frantic efforts for almost three years, the Complainant after-thought filed this Consumer Complaint against Opponent No.1-Insurance Company including Opponent Nos.2&3. What we observe is that the claim of the Complainant is to recover the loan amount from Opponent No.2 which is not the Consumer Complaint as defined in Section 2(1)(c) of Consumer Protection Act, 1986. Therefore, the Complainant cannot be held to be a 'Consumer' within the meaning of Section 2(1)(d) of Consumer Protection Act, 1986. Since, it is a money suit for recovery, the remedy lies elsewhere and not before the Consumer Fora. In any case, the claim of the Complainant for recovery under the Marine Insurance Policy as against Opponent No.1-Insurance Company is not tenable for the reasons recorded earlier. We therefore find that Opponent No.1-Insurance Company is not liable for making payment of additional amount of Rs.6,66,556.80 paid to Opponent No.2-Carrier by the Complainant. We therefore hold that opponent No.1-Insurance Company did not incur 'deficiency of service' in repudiating the claim of the Complainant and as observed by us for recovery of money, remedy lies elsewhere against Opponent Nos.2&3. We do not find any merit in the Complaint and therefore, Complaint is liable to be dismissed......"
Aggrieved by this order, the Appellant/Complainant has filed the present Appeal.
Mr. Karan Mehra, Learned Counsel appearing for the Appellant strenuously argued that the additional freight of ₹6,66,556.80 was paid to the Carrier in order to safeguard the cargo which was wrongfully unloaded at Durban Port instead of the destination at Mumbai and the Insurance Company is liable to pay the extra charges for unloading of the shipment in terms of clauses 12, 16.1 and 16.2 of the Marine Insurance. He further contended that if the said additional freight charges had not been paid to the Carrier, there would have been a loss of the complete cargo amount of over ₹50.02 lakh and in that situation the Insurance Company would have been liable to pay the full value of the consignment for non-delivery of the goods under the Insurance Risks for which premium was paid to them. The Complainant had ensured the delivery of the goods in good condition by paying the additional fright charges. The claim of the Complainant has been wrongly repudiated by the Insurance Company by placing reliance on Clause 4.6 of the policy and treating the amount of ₹6,66,556.80 as loan to the Carrier by the Complainant.
Per contra, Mr. Kishore Rawat, Learned Counsel for the Insurance Company supports the order passed by the State Commission as according to him the State Commission had passed a well-reasoned order which is based on a correct and rightful appreciation of evidence and material on record and does not call for any interference.
We have heard Learned Counsel for the Parties, perused the Impugned Order passed by the State Commission, the Complaint, the Written Statement and also other documents on record.
It is not in dispute that the Consignment of 1188 Drums (240 MT) of Oleo Pine Resin valued at ₹50.20 lakhs was insured with the National Insurance Company Ltd., Respondent No. 1 herein and a Marine Insurance Policy was issued. The Consignment was to be delivered at Mumbai Port from Port Santos in Brazil by Consolidated Marine Services Private Limited, Respondent No. 2 herein. For reasons best known to the Respondent No. 2, instead of unloading the shipment of 1188 Drums of Oleo Pine Resin at Mumbai Port it was unloaded at Durban (South Africa) Port. In order to ensure that the Consignment of Oleo Pine Resin is safely unloaded at Mumbai Port, the Complainant had to incur an expenses of ₹6,66,556.80ps. which was paid by the Complainant to the Shipper, Respondent No. 2. Due to some misunderstanding, earlier it was treated by the Complainant and the Respondent No. 2 as Loan and for recovery the Complainant had preferred a Suit which was subsequently withdrawn. Thereafter a claim of ₹6,66,556.80ps. was made by the Complainant on 04.03.2002 from the National Insurance Company Ltd., Respondent No. 1, which was repudiated by the National Insurance Company Ltd. on 23.12.2002. Thereafter, the Complainant had approached the State Commission under Section 17(a) of the Consumer Protection Act, 1986. The said Complaint has been dismissed by the State Commission by the Impugned Order.
In order to decide the controversy we deem it appropriate to reproduce the Clause Nos. 12, 16, 16.1 and 16.2 of the Insurance Policy, which are as follows:-
"12. Where as a result of the operation of a risk covered by this insurance, the insured transit is terminated at a port or place other than that to which the subject-matter is covered under this insurance, the underwriters will reimburse the Assured for any extra charges properly and reasonably incurred in unloading, storing and forwarding the subject-matter to destination to which it is insured hereunder.
16. It is the duty of the Assured and their servants and agents in respect of the loss recoverable hereunder.
16.1 To take such measures as may be reasonable for the purpose of averting or minimising such loss, and 16.2 To ensure that all rights against carriers, bailees 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."
From a bare reading of Clause 12 of the Insurance Policy reproduced above, we find that the underwriters were under an obligation to reimburse the Assured for any extra charges properly and reasonably incurred in unloading, storing and forwarding the subject-matter to destination to which it is insured.However, under Clause 16 a duty has been cast upon the Assured, their servants and agents in respect of the loss to be recovered.Clause 16.1 provides that the Assured shall take such measures as may be reasonable for the purpose of averting or minimizing such loss and Clause 16.2 provides that all rights against the carriers, bailees or other third parties are properly preserved and exercised and the underwriters in addition to any loss recoverable, reimburse the assured for any charges properly and reasonably incurred in pursuance of these duties.
Thus, on a combined reading of Clause Nos. 12, 16, 16.1 and 16.2 of the Marine Insurance Policy issued by the Respondent No. 1 to the Complainant in respect of the Consignment, in question, we find that the expenses of ₹6,66,556.80ps. incurred by the Complainant for getting the Consignment delivered at Mumbai Port from Durban Port was to minimise the loss, otherwise the Respondent No. 1 Insurance Company would have been liable to pay the value of entire Consignment, i.e., ₹50.20 lakh and the liability of the Respondent No. 1 would stand reduced to ₹6,66,556.80ps. Filing of Suit and treating it as a Loan though under some mistake, was an effort made by the Complainant under the provision of Clause 16 and 16.1 of the Marine Insurance Policy. By no stretch of imagination, it can be said that the Respondent No.1 Insurance Company is not liable to pay / compensate the Complainant a sum of ₹6,66,556.80ps. incurred by it for getting the Consignment from Durban Port where it was unloaded by the Shipper Respondent No. 2, to Mumbai Port for which the Respondent No. 1 had issued Marine Insurance Policy from Port Santos in Brazil to Mumbai Port.
In view of the foregoing discussions, we are of the considered opinion that the Respondent No. 1 is liable to pay the entire amount of ₹6,66,556.80ps alongwith interest @12% p.a. from the date of filing the Complaint, i.e., 09.01.2003 till it is paid.The Complainant shall also be entitled for cost of ₹25,000/- towards litigation expenses.The Respondent No. 1 Insurance Company shall pay the entire amount within six weeks from today.
In the result, the Complainant succeeds and the Appeal is allowed.The impugned order dated 13.07.2012 passed by the State Commission is set aside.The Complaint is allowed in aforementioned terms.
......................J R.K. AGRAWAL PRESIDENT ...................... DR. S.M. KANTIKAR MEMBER