National Consumer Disputes Redressal
Paam Eatables Ltd. vs United India Insurance Co. Ltd. And Ors. on 27 May, 2004
Equivalent citations: IV(2004)CPJ22(NC)
ORDER
B.K. Taimni, Member
1. The complainant M/s. Paam Eatables Ltd. has filed this complaint against opposite party, Insurance Company, alleging deficiency in service.
2. Briefly the facts of the case are that the complainant obtained a policy along with coverage of clauses "Important Clause", "Inland Transit Clause 'A', SRCC Clause and FOB Clause", for a sum of Rs. 6.7 crores.
3. After due declaration, the complainant despatched goods on different dates between 27.1.1995 and 8.2.1995 to Haldia Port for onward export to Bangladesh. On 3.2.1995, coming to know of damage caused to the consignment the matter was brought to the notice of the Insurance Company, who first deputed a spot Surveyor and then Surveyor to assess the loss. The complainant preferred a claim before the opposite party, who after considering the report of the Surveyor as also the terms of the policy paid to the complainant a sum of Rs. 3,51,800/- which was accepted under protest. It is the case of the complainant that they had suffered in a loss of Rs. 2,86,00,538/- break-up of which is as follows:
(a) Actual loss suffered by the Company during transit Rs. 1,15,50,000.00
(b) CWC Storage and Rent paid Rs. 25,36,538.00
(c) Loss of reputation of Company Rs. 50,00,000.00
(d) Mental pain, agony and the amount spent in correspondence and in to and fro journey from Calcutta to Delhi by representative of the company from time-to-time Rs. 10,00,000.00
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Rs. 2,00,86,538,00
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4. This amount is being claimed along with interest @ 24% p.a. from 1.10.1996. Even though the complainant had arrayed the Surveyor and FCI as opposite party Nos. 3 and 4 in the complaint filed but their names were deleted vide order of this Commission dated 14.2.2002. Upon issue of notice to the opposite party, Insurance Company, written version was filed stating clearly that the claim amount is not payable at all as the consignment despatched from Delhi to Calcutta did not adhere to the term of the policy and its schedule. It was also mentioned that the claim has been settled with the complainant based on loss of 630 bags and shortage of 528 bags after deducting 25% for loss of recovery rights as also after deducting 0.3% on whole consignment of the insured value under "Excess clause" after which Rs. 3,58,100/- was found to be payable which has been paid. The gunny bags used were not as per the terms of the policy hence no claim is payable under, the claim made by the complainant. A rejoinder was filed by the complainant rebutting all the points raised by the opposite party in its written version. The parties also filed one affidavit each in support of their contention.
5. We heard the parties at length and found that 4 points emerge for our consideration.
6. First issue relates to the question of bags. While the contention of the complainant in its complaint is that (para 11) "it is submitted here that at the time of insurance policy the stock of rice was packed in brand new bags...." the same stand has also been taken in the affidavit filed by the complainant's Managing Director whereas the report of the spot Surveyor is that "It was found that almost all the gunny bags containing white rice were of second hand quality and all of them bearing evidence of yellowing/fungi and the jute material having little strength to withstand the load/pressure of transport hazardous. The bags were having marks of different companies other than FCI stamp/marking, the bags showing the bursting along the belly. It was noted that maximum bags which were placed at the bottom of the wagons were bursted out due to pressure/load."
7. The Surveyor/Loss Assessor also found the bags were of poor quality and had been used more than once. This they observed after visiting the godown at Chaitanyapur as also CWC warehouse at Dugachak on 14.3.1995 where the stock had been moved from the Railway Station. It is argued by the learned Counsel for the complainant that as per the insurance policy issued to the complainant it is clearly mentioned there that policy cover also is "for one consignment of 10,000 tonne of white rice duly packed in 95 kgs. of Jute Strong Export Standard Bags". There is no material brought on record by the O.P. to state that they were not 'strong export standard bags' especially when the FCI, which is a Government Agency and from whom the petitioner/complainant had purchased the rice, had issued a certificate in following terms:
"This is to certify that Food Corporation of India, Mayapuri (Naraina) issued the rice stocks to M/s. Paam Eatables Ltd., Delhi during the year 1995 against the R.O. 1 to 13 in sound and strong gunny bags."
8. He also relied upon a certificate issued by the Railway Authorities, which is reproduced below:
"Certified that four rakes of rice were loaded from Delhi Kishanganj to Haldia Dock Port by the Paam Eatables Ltd. as per record in our office as under:
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RR No. Date No. of Said to
wagons contain bags
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030033 to 030040 27.1.1995 28 17299 030073 to 030080 2.2.1995 39 24443 030084 to 030090 6.2.1995 35 22302 030094 to 030100 8.2.1995 31 20580
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The contents rice were packed in bags, all bags in sound condition."
9. After perusal of material on record, in our view it will not be enough to read the contents of the policy alone as relied upon by the learned Counsel for the complainant. The policy itself mentions that policy is subject to 'under noted clauses'. Inland Transit Clause 'A' is one of them. Clause 2.3 of the 'Inland Transit (Rail or Road) Clause -A reads as follows:
"2.3. Loss, damage or expense caused by insufficiency or unsuitability or packing or preparation of the subject matter insured for the purpose of this Clause 2.3, 'packing' shall be deemed to include stowage in a container or lift-van but only when such stowage is carried out prior to attachment of this insurance or by the assured or their servants."
10. In order to correctly appreciate the perspective, on our view it is essential that both the 'Terms' are read together and then see if the bags really were in terms of the policy? On the one hand, we have these two certificates from the FCI and the Railway Authorities and on the other hand we have the report of the Surveyor and also the 'Joint Inspection Report' of the bags, carried out by the Surveyor in the presence of the representatives of the complainant. In the rejoinder filed by the complainant they have specifically denied that Mr. Jagjeet Singh, who signed was their representative as he was only a transport contractor and have stated that Mr. Sanjeev Sahni was not assigned for this job, his job was to supervise loading and unloading process only. It is also contended by learned Counsel of the complainant that at the joint memo, at the time of visit in CWC Warehouse on 14.3.1995, the name of Mr. J.P. Aggarwal, General Manager, of the complainant company has been mentioned but he has not signed, hence both these joint memos are not reliable and cannot be taken into consideration. Few other facts were also need to be brought on record. They may be of marginal significance as are reflective of the conduct of the complainant. There is no denying the fact that, in the LC opened for this contract, one of the clauses was use of new bags. In the invoice prepared for the export of Bulk Trading International, Dacca, the invoice mentions packing to be in "new Jute Strong Export Standard Bags." In the complaint as well as in the affidavit also it is the case of the complainant that the rice was packed in brand new bas. There is no material brought on record including two certificates relied upon by the complainant, i.e., from FCI as well as from Railway Authorities that they had issued/ transported the rice bags which were new. In our view this only shows that the complainant has not come with clean hands before us. It is pity that we find that the complainant is short of facts giving no detail whatsoever about the date of despatches date of unloading and also not mentioning their own attempt to export certain quantities which were rejected by the importer. We have no other option but to rely upon the report of the Surveyor to fill this gap. It has been held severally by the Apex Court as also by this Commission, that the report of the Surveyor is an important document and sufficient reasons must be shown to reject it or reasons for not accepting it. It is only from the report of the Surveyor that we gather that the despatches were made from Delhi between 27.1.1995 and 8.2.1995 and most of the wagons/ rakes reached the destination between 2.2.1995 and 11.2.1995 as per Annexure 3 of the Surveyor's report. While it is case of the complainant the loss/damage was not due to poor quality of bagging but 'due to wrong handling during transit by the Railway Department and further loss occurred because of the delay made by the respondent company in appointment and thereafter by Surveyor in inspecting the rice'. We find that the record runs counter to this. The spot Surveyor inspected the material as soon as it was taken out by the free wagons between 4th Feb., 95 and 13th Feb., 95 on 5 different dates and his report about the condition of closed wagon carried through a 'rake' reaching the destination within 4 days does not lead any credibility, that it was a case of mis-handling in transit. This is further strengthened by the Jt. Inspection Memo at least one of which was signed by Mr. Sanjeev Sahni who is an employee of the complainant. The quality of bags as reported by the Surveyor reports (inspection) that they have been used for more than once, proof of which was it carried out 2 to 3 seals/stamps, and this is neither denied nor rebutted by the complainant, it also had manual stitches and they were used bags, thus leading to conclusion that they were used bags up to three times as the seals/stamps corroborated this part. We have no doubt that as per the terms of the policy which include Clause 2.3 of the Inland Transit Clause 'A', that the damage was caused by insufficiency or unsuitability Or packing or preparation of the subject matter insured fell in the Exclusion Clause. The letter dated 28.3.1995 addressed to the then MD, FCI could be said to be last nail to seal this case. This letter is stated as follows:
"It is reiterated that Rice 'Super Fine' purchased from FCI amounting to appox Rs. 6 crore could not be further sold because of its poor and inferior quality. The same rice was also packed in substandard and poor quality damaged gunny bags which resulted in loss of rice due to bursting of the bags and further causing great financial loss. Details of the loss incurred is attached as Appendix.
You are requested to make good this loss amounting to Rs. 1,33,83,600/-."
11. This letter amounts to admission of what the first Surveyor and the second Surveyor had been at pains to explain to the complainant that the bags used were of poor quality. If we go further it is not repeated that certain material in repacked bags when taken to the Ship M.V. Safar, for which invoice and shipping bill was prepared but it was rejected by the Master of the Vessel and as a result of which the consignment were 'shut-out' as a sequel to which, on request of the complainant. Custom cancelled shipping bill on 10.2.1995. As per the report of the Surveyor some quantity which was sent was also rejected by the importer as being neither meeting the standards nor packed in bags as per agreement. All available evidence is against the complainant. In our view no further proof would be required to state that this consignment fell under Clause 2.3 of the transit clause on account of insufficiency of packing. The learned Counsel also drew our attention to 'Colivan's Laws of Insurance' and relies upon para 2-11' Contra Proferentem Rule', which is reproduced below:
"Quite apart from contradictory clauses in policies, ambiguities are common in them and it is often very uncertain what the parties to them mean. In such cases the rule is that the policy, being drafted in language chosen by the insurers, must be taken most strongly against them. It is construed contra proferentes, against those who offer it. In a doubtful case the turn of the scale ought to be given against the speaker, because he has not clearly and fully expressed himself. Nothing is easier than for the insurers to express themselves in plain terms. The assured cannot put his own meaning upon a policy, but, where it is ambiguous, it is to be construed in the sense in which he might reasonably have understood it. If the insurers wish to escape liability under given circumstances, they must use words admitting of no possible doubt.
But a clause is only to be construed contra proferentes in case of real ambiguity. One must not use the rule to create an ambiguity, one must find the ambiguity first. Even where a clause by itself is ambiguous if, by looking at the whole policy, its meaning becomes clear, there is no room for the application of the doctrine. So also where if one meaning is given to a clause, the rest of the policy becomes clear, the policy should be construed accordingly."
12. After going through the material on record, we see no ambiguity in the terms of policy, if once we read the policy as well as terms of clauses attached therewith in this case 'Inland Transit Clause'.
13. Second, issue relates to the delay in appointment of Surveyor. It is the case of the complainant that over a month was taken by the opposite party to appoint the Surveyor as a result of which the goods were lying in the open of the railway platform which also added to the loss/damage to the rice stock. Even at the cost of repetition, we like to state that neither in the complaint nor in the rejoinder and for that matter not even in the affidavit, any chronology of dates has been given by the complainant, thus, not helping us at all in this regard. The complaint is short in details but fat on claim. Be that as it may, from the perusal of the copious material brought on record it transpires that the material was sent from Delhi to Calcutta between 27.1.1995 and 8.2.1995 and most of the wagons arrived between 2.2.1995 and 11.2.1995. it is an admitted position that the complainant informed the O.P. on 3,2.1995 arid as per report of the Surveyor Mr. S. Mukherjee, he reached the spot on 4.2.1995 and carried out the inspections of the wagons on 4.2.1995, 8.2.1995, 9.2.1995, 10.2.1995 and 13.2.1995. Surveyor/ Loss Assessor also carried out assessment from 2.3.1995 to 20.3,1995, even though the complainant is silent about it but the fact remains that certain material was, received as late as between 18.3.1995 and 3.4.1995 totalling 2,633 bags. The Surveyor is not appointed to assess a loss in a truncated form. From the material on record it appears that on 2.2.1995 only about 15% of the material had arrived and there was a cry from the complainant of loss and damage whereas most of the material arrived on 8, 10 and 11.2.1995. It will be very naive on the part of anyone to expect that Loss Assessor should be there regularly attending on the beck and call of the insured. But as per record, in our view, response of the Insurance Company to depute the Surveyor was very prompt and Surveyor was appointed within 24 hours and visited at the time of unloading of each rake load. The fact, as reported in the report of Surveyor/Loss Assessor is that much of the goods were sent/deposited with CWC between 16.2.1995 and 24.2.1995. Only once all the material have reached at particular place, then the Surveyor and Loss Assessor visited these places where these goods were stored with a warehouse keeper. We see no delay on the part of the O.P. in appointing Surveyor or any delay in assessing the loss. We are also unable to accept the contention of the learned Counsel for the complainant that rice is a perishable commodity. On the contrary it ages with the season and with the passage of time carrying a higher market price upto a limit. Keeping in view the facts and circumstances of arrival of the wagons and the report of the Surveyor, we see no delay on the part of the O.P. to appoint the Surveyor and the Surveyor visiting the spot to carry out the jobs assigning to them. There is no merit in this contention either.
14. Third issue made out by the complainant is that since the Insurance Cover was issued after physical verification of the bags and the contents, hence it does not now become of the O.P. to say that bags were not of sound condition. This point was made in the complaint (para No. 4) which has been rebutted by the Insurance Company in its written version in following terms;
"Para 4 of the complaint except the details of Cover Note and R.R. numbers, is emphatically denied. It is categorically denied that the answering respondent physically verified or checked the rice at the time of insurance."
15. The complainant had taken the same plea in the legal notice issued to the O.P. dated 5.2.1997 but they were denied in the reply to the legal notice dated 27.3.1997. There is no mention either of the date, time or place when such an inspection was carried out nor any evidence or affidavit of anyone, in whose presence the inspection was carried out, there is nothing on record to this effect. In the absence of which we are unable to sustain this plea.
16. The fourth plea raised by the parties relates to 'protection of rights of the opposite party'. It is the case of the O.P. that the complainant did not protect their right against the Railways for which they relied upon Clause 8.2 of the Inland Transit Policy, Rail or Road Clause 'A', which is reproduced below;
"To ensure that all rights against carriers, bailees or other third parties "are properly preserved and exercised by loading a monetary claim against railway/road carriers/bailees within six months from the date of railway/lorry receipt of this prescribed by the relevant statute."
17. It is the case of the complainant that they had taken such an initiative by writing to the railways vide their letter dated 5.4.1995. This was filed by way of additional affidavit after filing rejoinder, to which a counter was filed by the opposite party stating that they do not admit this later as it does not bear any stamp either of the Post Office receiving registered article or the Post Office despatching the said article nor does it bear any acknowledgement of the railway authorities. Hence the letter sent by complainant to the Northern Railway has not been despatched and is a mere manipulation.
18. When one sees the material on the subject brought on record (page 194 of the record) it is clear that there is no stamp of any Post Office on it, hence one is inclined to agree with the plea of the O.P. that this letter perhaps was never sent. Least what could have been done by the complainant was to bring an affidavit by the signatory of this letter or some material from the Post Office in support of his contention. This not having been done and without any evidence of proof in support, we are inclined to agree with the contention of the O.P, that their right was not protected in terms of Clause 8.2 of the Inland Transit (Rail or Road) Clause A.
19. Our attention was also drawn to part of our order dated 27.5.2002 in which, "when Mr. Sharda states that the certificate issued by the Food Corporation of India has not been denied by him." It is important to note that this certificate issued by FCI was issued almost after 1 year of the consignment having been sent. We are not to sure, as to on what ground, this certificate was obtained or issued and in any case it does not help the complainant because this certificate does not stand scrutiny of the report of the two Surveyors that within 4 days of despatch of this material in closed wagons and in a rake, reached in torn and unsound condition. Similar is the case with regard to the certificate issued by the Railway Authorities, which is also after almost 1 year after the date of despatch. These documents are neither proved nor any witness examined, in fact our order dated 31.10.2002 reads that "The application for summoning of witnesses filed by the complainant is dismissed as withdrawn...". It is for the complainant to explain as to why they did not decide to examine the witness who had issued the certificate on behalf of the FCI and the Railway Authorities.
20. In view of above discussion, we find that the complainant violated terms and condition of the policy as brought out in Exclusion Clause 2.3 by sending the material in insufficient unsuitable packing material, for which there is ample evidence on record as already discussed, in the light of which, the O.P. was quite correct in not agreeing with the amount claimed except to cover the loss/ shortage of goods as already noted above from which they rightly deducted 25% for not protecting the interest of the O.P. The deduction on account of excess clause is also as per terms of the policy, which is contract between the parties. The balance amount has already been paid in view of above we did not see any merit in the complaint, which is dismissed.
Keeping in view the facts and circumstances, no order as to costs.