State Consumer Disputes Redressal Commission
Nahar Textiles Private Limited, vs Reliance General Insurance Company ... on 17 January, 2014
C-151-2011
BEFORE THE
HON'BLE STATE CONSUMER DISPUTES REDRESSAL
COMMISSION,
MAHARASHTRA, MUMBAI
Complaint
Case No. CC/11/151
NAHAR TEXTILES PRIVATE LIMITED,
NIVADA HOUSE,
148 MAROL CO-OP. IND. ESTATE, SIR M.V. ROAD,
ANDHERI (EAST), MUMBAI 400 059.
MAHARASHTRA
...........Complainant(s)
Versus
RELIANCE GENERAL INSURANCE COMPANY LTD.,
HAVING BRANCH OFFICE AT VEENA CHAMBERS, GROUND
FLOOR, DALAL STREET,
OPPOSITE BOMBAY STOCK EXCHANGE,
FORT, MUMBAI 400 001.
AND REGISTERED OFFICE AT:
19, RELIANCE CENTRE,
WALCHAND HIRACHAND MARG,
BALLARD ESTATE, MUMBAI 400 038.
............Opp.Party(s)
BEFORE:
HON'ABLE MRS. Usha S.Thakare PRESIDING MEMBER
HON'ABLE MR. Narendra Kawde MEMBER PRESENT:
Adv.V. Verma i/b Adv.D.S. Mishra ......for the Complainant Adv. S.R. Singh ......for the Opp. Party O R D E R Per Honble Mr.Narendra Kawde Member:
1. Complainant Nahar Textiles Private Limited (hereinafter referred to as the Insured) is a Company incorporated under Companies Act 1956, engaged in manufacturing and export of textile fabrics and garments.
Second hand Sulzer Shuttles Projective Weaving Machines totaling 24 were imported by sea route from the Port of Louis (Mauritius) to JNPT India. First such lot of fourteen machines was shipped through MC Easy Freight & Co. Ltd., the forwarding Agents through the ocean vessel Voyage No. MAERSK WINDHOEK\0918 on 02.07.2009. Insured with a view to avail Letter of Credit (hereinafter referred to as L/C in short) facility with Bank of India, Chakala Branch, Andheri East, Mumbai, approached the Bankers, who imposed condition to insure the machines and deposit risk Cover Note with them. Therefore, for providing insurance cover to the imported machines was availed under Marine Policy Cover Note to insure risk upto `2,40,00,000/-
(Rupees 240 lakhs) by paying premium of `26,472/- by cheque to the Opponent Reliance General Insurance Company Ltd. (hereinafter referred to as the Insurer). After depositing the cheque of `26,472/-
dated 23.05.2009 against the premium the Insurer issued Risk Cover Note (Marine Cargo) to extend insurance to all 24 machines, which clearly endorses as:
Premium Details This is to confirm that we have received the required premium of `26,472/- Via Cheque no.005951 date 23/5/2009, Hypothecation with Bank of India (Andheri Chakala Branch).
2. First lot of 14 machines was shipped through vessel MAERSK WINDHOEK\0918 on 02.07.2009 from Port Louis to JNPT, Mumbai. Out of this shipment reportedly two machines were damaged due to bad weather while during voyage from Toamasina to Salalah port. All the containers were discharged at Port Salalah Port. The incidence of damage was reported through e-mail on 17.07.2009 to the Insurer with a request to appoint a Surveyor. On advice of the Insurer the Complainant contacted M/s.W.K. Webster & Co.
Ltd., UK, with a request to conduct spot survey at Salalah Port. However, the said surveyors expressed their inability to carry out survey for want of Insurance Policy. On reporting this fact to the Insurer, Complainant requested to issue Insurance Policy against the risk Cover Note. However , the Complainant came to know to their surprise that Insurer had not presented the cheque of premium paid on 23.05.2009 against the risk Cover Note.
Repeated requests for issue of insurance policy in place of the risk Cover Note was never entertained and on knowing the fact of the claim likely to be arisen cheque for premium paid in advance was returned by letter dated 07.07.2009 and declared risk Cover Note dated 23.05.2009 as null and void in absence of bill of lading. Surprisingly, the said returned cheque was never received by the Complainant though Insurer claimed to have sent it by the said letter and also relied on receipt through a Professional Courier which is overwritten by scratching earlier name of the Consignee at Serial No.8.
3. Since the Insurer failed to act as averred in the complaint, joint inspection was carried out by the Surveyor appointed by the Complainant and the Surveyor of the Carrier of the goods. The joint report is with remarks please note that the exact damage/parts missing to be known, ascertained after de-stuffed the machinery from the container . Joint Surveyors also observed since the cargo was not de-stuffed, thorough inspection of the machinery goods was not possible, however, apparent scratch marks from R/side of the container were possible. Spare parts in wooden/foam boxes and accessories were found in loose condition lying on floor. This report is dated August 13, 2009. On constant persuasion the insurer appointed Trans Ocean Marine and General Survey Agencies to carry out detailed survey at factory site. The claim in respect of damage to the two sulzer machines arising out of encountering with bad weather was submitted by letter dated 17.08.2009.
However, the Complainant shocked and surprised on receiving reply that the Insurers have cancelled the risk Cover Note and therefore, the processing of any claim payable under null and void risk Cover Note was not entertained. Complainant alleged that action of the Insurer for retaining the cheque for long time without encashing the same was unwarranted and on knowing the loss on account of the damage sustained to two sulzer machines during transit Cover Note was cancelled. The claim submitted for `41,22,157/- is neither rejected nor accepted by the Insurer till filing of the consumer complaint. The consumer complaint, therefore, has been filed with multiple prayers for directions to issue insurance policy in place of risk Cover Note and compensation of `40,56,726/- together with interest @18% per annum with ancillary relief of `55,431/- as a professional fees and `1,39,154/- on account of custom duty, `50,000/- as costs of litigation.
4. Initially the complaint was filed against Opponent No.1 - Reliance General Insurance Co. Ltd. and Opponent No.2 - M/s.Safemarine Containers Lines Maersk India Pvt. Ltd.. However, on request of the Complainant Opponent No.2 was deleted by an order dated 10.10.2012 of this Commission.
Therefore, the complaint is proceeded against Opponent No.1 Reliance General Insurance Co. Ltd. only.
5. Insurer vehemently denied the claim of the Insured by filing written version.
The first and foremost ground is that there was no contractual relationship whatsoever between the parties as risk Cover Note dated 23.05.2009 was duly cancelled and the cheque received on account of premium was returned to the Complainant. The risk Cover Note was the requirement of the Bankers of the Complainant for availing L/C facility and therefore, there was no question of further extending the insurance cover for want of furnishing details of the shipment.
The Complainant failed to submit the documents, viz. bill of lading, voyage, packing list, vessel name etc., prior to uploading the goods for shipment and commencement of voyage. Failure of the Complainant to intimate required details forced the Insurer to declare the risk Cover Note as null and void and the fact not only intimated but the premium cheque also returned to the Complainant by letter dated 07.07.2009. Complainant never submitted the requisite details prior to shipment of the goods and falsely relied upon the fabricated letter dated 01.07.2009 to suggest that they had supplied the purported shipping details as pleaded in written version.
Cover Note was subject to terms and conditions of ICC-A Clauses as agreed between the parties. The Surveyor was appointed to assess the damage at factory site after arrival of the consignment. The Surveyor observed that the damage caused to the machineries was on account of improper stuffing and internal lashing within the said container.
There is no plausible reason that the machineries contained only in the affected two containers have been damaged, while machineries contained in other six containers were absolutely intact.
The claim arising out of alleged damage is excluded under Clause 4.3 of ICC-A Clauses.
6. Heard Ld. Advocate Mr.V. Verma i/b Advocate D.S. Mishra for the Complainant and Ld. Advocate Mr.S.R. Singh for the Opponent at length.
7. It is argued by the Ld.Advocate of the Complainant that the Insurer did not take any notice of various requests made for issue of policy in place of Cover Note and arbitrarily cancelled risk Cover Note. It was failure on the part of the Opponent Insurer not to encash the cheque on account of premium and therefore, the Complainant should not be made to suffer for the folly of the Insurer. The act of cancellation or declaring the risk Cover Note as null and void and is unilateral, arbitrary and inconsistent with the legal provisions meant for contract. The cheque for premium was dated 23.05.2009 and the risk Cover Note was issued on the same day having made it clear with an endorsement about receipt of the premium of `26,472/-. The date of intimation of cancellation of contract and allegedly return of the said cheque is dated 07.07.2009. The cheque which was not encashed for adjustment of premium has never been received by the Complainant. After thought actions of the Insurer are attributed to avoid claim on account of damage sustained due to bad weather in course of voyage. Onus of receipt of the said returned cheque has not been proved by the Opponent by leading documentary evidence. The courier Daily Delivery Statement dated 09.07.2009 is not in respect of the said cheque which was initially recorded in the name of Good morn.. and later on by scratching the name of Complainant Company name was inserted without any attestation. The signature and stamp in token of the said courier receipt is not legible and not identifiable. Ld.Advocate for the Complainant rightly relied on the provisions of Section 23 of the Marine Insurance Act 1963, which speaks about the concluded contract as Cover Note is a documentary evidence under the Provisions of the Marine Insurance Act.
8. Admittedly, the risk Cover Note (Marine Cargo) was issued by the Insurer on receiving the cheque of `26,472/- by cheque No.005951 dated 23.05.2009. Said Cover Note was for providing insurance cover to the shipment in transit for all 24 sulzer machines in two installments. Obviously the voyage of the shipment was covered from the Port Louis (Mauritius) to the Port of JNPT, Mumbai. Cover Note was issued with the standard terms of Marine ICC-A Clauses. The shipment of first 14 Sulzer machines took off on 02.07.2009 through the Ocean Vessel MAERSK WINDHOEK\0918 from Port Louis (Mauritius). The dispute is limited only to damage on account of rough weather that was encountered by the Vessel while voyaging from Toamasine to Salalah Port.
M/s.W.K. Webser & Co. Ltd., UK, did not carry out the survey of damage in transit reportedly for want of insurance policy. However, there is nothing on record to show their denial. The joint survey carried out by the Complainants Surveyor and the Surveyor of Carrier could not assess and quantity the damage. First Survey Report of the Complainant Surveyor is dated 25.01.2010 which was carried out at the Port of destination i.e. JNPT, Nhava Sheva and the other survey report of the Opponent is dated 30.09.2010 carried out at Factory site after the consignment reached its final destination.
9. Cover Note is a documentary evidence to show that contract exists between parties. A useful reference be made to Practice of General Insurance published by Insurance Institute of India (authored by Mr.V.A. Pai and Mr.M.G. Diwan) which reads as under:
A Cover Note is a document issued in advance of the policy. After the negotiations re completed it may take some time before the policy is issued. Pending the preparation of the policy, the Cover Note is issued as evidence of protection for a temporary period of time and prove that cover is in force. It gives brief details of cover. The Cover Note is temporary and will be superseded once the policy is issued. Sometimes, insure issue a letter confirming the cover instead of Cover Note.
10. The issue of Cover Note is not under challenge but the cancellation thereof.
In the case on hand, as rightly pleaded by the Ld.Advocate for the Insurer the Cover Note was issued with terms and conditions incorporated in ICC-(A) Clauses. The point in issue before us is, whether the said Cover Note before issuing the policy was validly revoked/declared null and void by the Insurer.
11. The Cover Note was issued on 21st May, 2009 whereas voyage of shipment of the machines as admitted by the Complainant commenced only on 02.07.2009 from Port Louis and that too without furnishing details of shipment, bill of lading, route of the voyage, packaging list, name of the vessel etc., which is necessary condition in conformity with Section 44 of the Marine Insurance Act as rightly pleaded by Ld.Advocate of Opponent Insurance Company. We are in agreement with the Ld.Advocate of the Opponent Insurance Company that the Insurer were well within their right to avoid the contract of insurance for failure of the Insured party to intimate date of commencement of voyage with requisite details though the risk Cover Note was primarily issued. No malafides therefore can be attributed to Insurance Company for cancelling risk Cover Note as the Complainants have failed to establish compliance of Section 44 (2) of the Marine Insurance Act, 1963. Therefore argument of Complainant to attributed malafides to cancel Cover Note and avoid risk cover are not enable.
12. Admittedly, the voyage (sea route) was required to be changed from the Port of Salalah due to rough weather which amounted to trans-shipment from that point.
There is nothing on record to demonstrate that Complainant ever took necessary steps to inform consumer, observed reasonable time for shipment of the consignment after issue of the risk Cover Note, nor complied the provisions of Section 44 of the Marine Insurance Act as rightly pointed out by the Ld.Advocate of the Insurer. No documentary evidence is adduced by the Complainant to show that non-intimation of the implied conditions prior to undertaking voyage by the Complainant were will within the knowledge of the Insurer as provided under sub-section 2 of Section 44 of the Marine Insurance Act, 1963. The dispute relating to issue of policy in pursuance of the Cover Note cannot now be raised by the Complainant for serious breach on their part for non-compliance of the Provisions of Section 44 of Clause Nos.1 and 2 of the Marine Insurance Act and therefore this prayer cannot be entertained by us. Nevertheless, going into the validity of the Cover Note and governing conditions thereunder ICC(A), non-intimation of change of sea route and off loading consignment for further dispatch by another vessel amounts to breach. There is no report on record of weather conditions prevailed from Port Toamasina to Salalah and even the exact date of damage of goods. Considering all these lapses on the part of the Insured no liability for honouring the claim on account of damage as reported by the Complainant can be fastened against the Insurer, even presuming the Cover Note issued in favour of the Complainant was treated to be valid at the relevant time.
Directions therefore sought for settlement of claim, compensation as prayed with ancillary relief, cannot be entertained. Complainant failed to establish the deficiency in service against the Insurer.
We hold accordingly and pass the following order:
O R D E R Complaint stands dismissed.
No order as to costs.
Pronounced on 17th January, 2014.
[HON'ABLE MRS.
Usha S.Thakare] PRESIDING MEMBER [HON'ABLE MR.
Narendra Kawde] MEMBER ep