National Consumer Disputes Redressal
National Insurance Co. Ltd. vs Mithijam Vanaspati Ltd. on 16 February, 2006
Equivalent citations: II(2006)CPJ55(NC)
ORDER
P.D. Shenoy, Member
1. The short point to be decided in this case is whether the insured who failed to declare the dates of the consignment can claim compensation, even though there is no dispute about the factum of accidents and the consequential loss suffered?
Facts of the Case:
2. The complainant who is the respondent before us and is a manufacturer of Vanaspati Oil used to transport Degummed Soyabean Oil as raw material from various parts of the country to his factory site by oil tankers. Therefore, he had taken a Marine Cargo Insurance Policy with maximum value of goods in transit upto Rs. 1 crore at any one time and the value of any one transist was between Rs. 3.25 lakhs to Rs. 3.75 lakhs covering a period of one year from 12.7.1995 to 11.7.1996 by paying the premium in advance. There were three episodes of accidents during the currency of the policies resulting in loss to the complainant as detailed below.
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Tanker Regis- Date of Loss suffered tration No. accident in Rupees ------------------------------------------------- (a) WB 23-4065 14.8.1995 1,71,675 (b) WB 23-2198 30.9.1995 4,16,115 (c) WMK6060 5.12.1995 1,90,417 -------------------------------------------------
3. The complainant informed the Insurance Company about the accidents which appointed M/s. Bhadra and Associates to investigate and assess the loss. The Surveyor submitted the report assessing the loss in each case. This report was not made available to the District Forum or to the State Commission. Initially the Insurance Company delayed the response stating that the claim could not be processed because of continuous absence of the Branch Manager due to illness. After three years from the dates of accident, the claims were repudiated on the ground that the alleged consignments were not covered under the declared consignment in terms of the contract. The District Forum after hearing the parties granted relief in each case upholding the claimed amount with 9% cumulative interest from the date of accidents till the date of payment with Rs. 50,000 as compensation for mental agony in each case.
4. Dissatisfied by the order of the District Forum, the Insurance Company filed an appeal. The State Commission clubbed all three appeals and passed a common order confirming the order with following modifications:
(a) Compensation was reduced to Rs. 10,000 from Rs. 50,000 with the following observations:
Before we part with the cases, we direct the appellant Insurance Company to comply with the modified order of the District Forum within three weeks from the date of receipt and/or production of copy of this order failing which the complainant will be at liberty to execute the order in accordance with law including the remedy available under 27 of the Act and in that event, the complainant will be entitled to interest at the rate of 18% per annum from the date of this order till the date of realization.
Aggrieved by this order, the Insurance Company has filed these Revision Petitions before us.
Case of the Insurance Company:
5. The learned Counsel for the Insurance Company submitted that they had requested the insured to send them a copy of the assignment note directly before commencement of the journey and accordingly advise his supplier, which has not been complied with by the insured. Hence, if the company sends 10 consignments without the knowledge of the Insurance Company and if they only inform about that consignments which are lost, how the Insurance Company will be liable to reimburse the loss suffered by the insured?
6. The learned Counsel analysed each case of the accident and submitted as follows:
7. That on 14.8.1995 a tanker No. WB 23-4065 while carrying Degummed Soyabean Oil met with an accident as a result of which the complainant suffered a loss of Rs, 1,71,675. There is no dispute.
8. As far as other claims are concerned, the Insurance Company disputes the claims. On 30.9.1995, tanker bearing Registration No. WB 23-2198 while carrying Degummed Soyabean Oil met with an accident as a result of which the complainant suffered a loss of Rs. 4,16,115. As per the survey report the loss was to the tune of Rs. 2,49,669 only. Accordingly, as against the claim of Rs. 4,16,115 only Rs. 2,49,669 is payable.
9. Further the Insurance Company did not dispute that on 5.12.1995 a tanker No. WMK b 6060 while carrying Degummed Soyabean Oil met with an accident as a result of which the complainant, suffered a loss. According to the survey report the loss was to the tune of Rs. 1,80,141 as against the claim of Rs. 1,90,417. Therefore, the Insurance Company is liable to pay only the amount assessed by the Surveyor.
10. Without prejudice to their contention that the insured had failed to declare all the three consignments in terms of the proposal before the commencement of its transit from the place of its origin, he has also submitted that the rate of interest i.e. @ 18% as directed by the State Commission is very high.
Case of the Respondent:
11. The learned Counsel for the respondent argued that the Insurance Company had been dilly-dallying and caused mental agony to them by repudiating their claim after three years of accidents. Though the Surveyor has assessed the loss but they were not informed about the same which itself is a gross negligence and deficiency in service, hence, the order of the State Commission needs to be upheld.
Findings:
1. Contention of the Insurance Company is that the insured had failed to declare all the three consignments in terms of the proposal from before the commencement of its transit from the place of origin. This issue has been discussed by the District Forum as well as by the State Commission. In this connection, it is relevant to quote the letter dated 12.7.1995 of the complainant addressed to the Insurance Company enclosing the cheque towards the Deposit Premium in advance for the Open Marine Policy wherein it is stated categorically: "This is for your kind information that we are receiving few tankers of above goods on F.O.R. basis and as such insurance for those consignments will not be declared to you, other consignments will be declared to you on 'weekly basis'." Further, this letter is the 1st step in the issue of the Open Marine Policy in question.
2. The OP accepted the premium in advance and impliedly also accepted the terms of the complainant. While issuing the policy the Insurance Company has sent a communication stating that "We would like to request you to send us a copy of the consignment note directly before commencement of journey accordingly advise your supplier."
3. Thus a 'request' cannot be termed as terms and condition of the policy, because no such terms and condition were prefixed by the OP and even the prescribed proposal form of the policy also does not have such a condition. Besides in between the date of policy 12.7.1995 and the dates of accident many more tankers moved to factory premises of the complainant and consignment were declared at later stage and accordingly premium for those were adjusted by the OP out of total deposit prima without any objection at any stage.
This analysis has further been strengthened by the State Commission by quoting the relevant provisions of the Marine Insurance Act.
4. Further the Insurance Company wrote to the insured stating that the Branch Manager was ill as such the insurance claim could not been processed. This argument does not hold water as it is a very big company which can easily find a replacement or make alternative arangements in the absence of Branch Managers. When a post falls vacant in a Public Sector/Company the organization continues to take decisions by making alternate arrangements. Further deficiency of the Insurance Company is very clear and is self evident from the fact that it delayed the communication of its decision for three long years after the date of accident.
Compensation:
12. The State Commission has categorically mentioned that Surveyor's report was not placed before the District Forum. However, the Surveyor has assessed the loss as follows:
(a) Accident relating to Tanker No. WB 23-4065, the Surveyor has assessed the loss to the tune of Rs. 1,71,675 which is not disputed by the Insurance Company.
(b) In the accident relating to tanker bearing Registration No. WB 23-2198 the Surveyor has assessed the loss to the tune of Rs. 2,49,669 against the loss claimed by the complainant as Rs. 4,16,115.
(c) Further, with regard to tanker No. WMK 6060 the Surveyor has assessed the loss to the tune of Rs. 1,80,141. The loss claimed by the complainant is Rs. 1,90,417.
13. We have no cogent evidence before us to disprove the assessment made by the independent Surveyor. Accordingly we direct the Insurance Company to pay a sum of Rs. 1,71,675, Rs. 2,49,669 and Rs. 1,80,141 as assessed by the Surveyor in these three cases along with 9% interest in each case from the date of accident till the date of payment. The Insurance Company shall also pay Rs. 10,000 as compensation towards deficiency in service as ordered by the State Commission. The Insurance Company shall further pay cost to the complainant which we fix at Rs. 5,000.
14. All these payments shall be made within a period of six weeks of passing of this order.
15. Revision Petition stands disposed of in above terms.