State Consumer Disputes Redressal Commission
Oriental Insurance Company Limited vs Kla Rice India Pvt. Ltd. on 2 February, 2009
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND
DEHRA DUN
FIRST APPEAL NO. 316 / 2006
1. The Oriental Insurance Company Limited
Behind U.P. Roadways, Civil Lines
Rampur through Senior Divisional Manager
The Oriental Insurance Company Limited
47 Rajpur Road, Dehradun
2. The Oriental Insurance Company Limited
Thapar Plaza Building, G.T. Road
Ghaziabad
......Appellants / Opposite Parties
Versus
KLA Rice India Pvt. Ltd.
3-Galla Mandi, Rudrapur, District Udham Singh Nagar
through its Director Sh. Ashok Aggarwal
.....Respondent / Complainant
Sh. M.K. Kohli, Learned Counsel for the Appellants
Sh. M.M. Lamba, Learned Counsel for Respondent
Coram: Hon'ble Justice Irshad Hussain, President
C.C. Pant, Member
Smt. Kusum Lata Sharma, Member
Dated: 02/02/2009
ORDER
(Per: C.C. Pant, Member):
This is insurance company's appeal against the order dated 31.10.2006 passed by the District Forum, Udham Singh Nagar in consumer complaint No. 143 / 2005. Vide its order, the District Forum has partly allowed the complaint and has directed the opposite parties to pay a sum of Rs. 12,10,759/- to the complainant together with interest @6% p.a. from 12.08.2005 till the date of actual payment and Rs. 2,000/- as cost of litigation.
2. In brief, the facts of the case, are that the complainant - KLA Rice India Pvt. Ltd., Rudrapur is an exporter of rice. The complainant 2 had taken a marine insurance policy from the opposite party No. 1 - The Oriental Insurance Company Limited, Branch Office, Rampur for a risk of Rs. 6.00 crores and had paid a premium of Rs. 83,501/- for the same. On 07.05.2004, the complainant consigned 125 M.T. of rice in 2500 bags of 50 kg each, to M/s Accolade Trading Co. (Pvt.) Ltd., Cape Town, South Africa. These bags were loaded in five containers and the bill of lading was issued on 25.05.2004 by MAERSK SEALAND Shipping Company. When the containers were received by the consignee, the consignee found that the goods had damaged. So, the consignee informed the complainant on 29.06.2004 about the condition of the goods and refused to accept the consignment. The buyer at Cape Town, South Africa immediately informed the surveyors - Rennie Murray & Co. (Pvt.) Ltd. (surveyors of W.K. Webster & Co. Ltd., London) appointed by the insurance company, for assessing the loss. The surveyor, after taking necessary steps to minimise the loss, assessed the loss at GBP 14765.35 or Rs. 12,10,578.70/- and recommended to accept the claim. The claim was submitted to the opposite party No. 2 - The Oriental Insurance Company Limited, Regional Office, Ghaziabad. It has been alleged that the opposite parties did not take any action in respect of the complainant's claim, despite several visits to their office and personal meetings with them. In December, 2004, the complainant was called upon by the opposite parties and the complainant was asked to submit certain documents. The documents were also made available to the opposite parties on 29.01.2005. These documents include a letter dated 28.01.2005 issued by the State Bank of India, Commercial Branch, Moradabad, certifying therein that the payment of Bill No. KLA/109/04 dated 07.05.2004 was made by the foreign buyer, but after finding that the goods had damaged, the foreign buyer making a claim of USD 31364, deducted this amount from the proceeds of the other bills of the complainant. Hence, this amount of USD 31364 still 3 remains as unpaid against the above noted collection documents. However, the insurance company repudiated the claim as "NO CLAIM" on 25.02.2005. Upon this, the complainant filed a consumer complaint before the District Forum, Udham Singh Nagar, which was partly allowed by the District Forum and the opposite parties were directed to pay the compensation, interest and cost, as stated above. Aggrieved by the said order, the opposite parties have filed this appeal.
3. We have heard the learned counsel for the parties and perused the material placed on record.
4. The learned counsel for the appellants argued that the District Forum has failed to appreciate that the terms and conditions of the marine insurance policy. Under the policy, the insurance covers the risk of loss or damage to the goods during transit. In the instant case, there is no evidence that containers were not received by the buyer in proper condition. It was only after receiving the containers and even after releasing the payment, that the buyer rejected the consignment. This clearly proves that the goods were of poor quality and, therefore, it did not accept the goods. There is no evidence that cargo had damaged. The learned counsel further argued that the District Forum, Udham Singh Nagar had no jurisdiction to entertain and decide the consumer complaint, because the insurance policy was obtained from the company's branch at Rampur and the consumer complaint has been filed before the District Forum, Udham Singh Nagar.
5. In reply to these arguments, the learned counsel for the respondent - complainant submitted that the documents are sent through the bank. The buyer can get the documents released only after making the payment. On the basis of the documents, the 4 consignment is delivered. It is not possible for the buyer to inspect the goods before taking the delivery. When the buyer found that the cargo was damaged, it informed the surveyor. Further, once the payment has been made, buyer can recover the same from other bills. The appellants' stand that the moment the payment is received, the right to claim under seller's contingency clause ceases, is not just.
6. We considered the submissions made by the learned counsel for the parties. First, we take up the issue of jurisdiction. We find from the perusal of the policy that it covers the movement of insured goods from anywhere in India to anywhere in the world. So, if the goods had moved from the complainant's place in Rudrapur, it will be deemed that the insurance company had started providing its insurance services from Rudrapur. Thus, the cause of action had arisen at Rudrapur and, therefore, the complainant can file the complaint before the District Forum, Udham Singh Nagar. Moreover, the insurer has a branch office in Rudrapur also. Therefore, the objection raised by the appellants in respect of the jurisdiction of the District Forum, is not tenable. Even otherwise, in paragraph No. 27 of the written statement, the insurance company had not disputed the jurisdiction of the District Forum and the issue was also not raised before the District Forum.
7. It is true that the insurance cover under the policy is for the loss of or damage to consignment during transit, but the word "transit" should not be interpreted as port to port. The word "transit" connotes move of goods from seller's place to the buyer's place. The reasoning given by the complainant is quite logical. One can not inspect the goods before taking their delivery. Further, it is also necessary to make the payment in order to get the documents released from the 5 bank. The buyer can find out whether the goods are acceptable or not, only when the containers are opened.
8. We have also gone through the terms and conditions of the policy and the exclusion clauses. Certainly, the complainant's case does not fall under any of the exclusion clauses. Moreover, the policy condition itself defines the duration of transit as from the time, the goods leave the warehouse or place of storage till the delivery of the goods to the consignee's premises or place of storage at the destination.
9. However, after going through the surveyor's report, which is most significant, we find that there appears no cause, which could have damaged the cargo. The bags, 2500 in number, were stuffed in five containers. The investigation conducted by the surveyor, revealed that there were no holes in roof or containers panels. The type of packaging had also not changed from previous consignments. No outer damage, such as torn areas, was observed on any of the bags. The samples of the damaged / rotten rice were tested in a laboratory, which also ascertained that neither of the samples was adversely affected by the introduction of sea water. The moisture content varied between 11.33% to 14.15% for sample affected by fungal growth. It was also observed that the containers were in satisfactory condition.
10. It is, therefore, surprising as to how 1334 bags had got completely rotten and remaining 1165 bags had developed mould formation with rancid odour, if the containers were dispatched in proper conditions and also these were received in proper condition. No damage to the containers was also observed by the surveyor. In such a situation, the surveyor has expressed a possibility that the loading and consolidation of the consignment, could have taken place 6 during unfavourable weather conditions at the complainant's place. This is a possibility that the bags got slightly damp and moist at the time of consolidation and due to such damp and moist bags, moisture might have been introduced into the containers.
11. We are also in agreement with the views expressed by the surveyor. If the consignment was sent in proper condition and was received in proper condition in the containers, then it can not be termed as a damage to the cargo during transit from one port to another. Since the rice was packed in poly propylene bags, there was no possibility of catching moisture during loading and consolidation. The invoice of sale was issued by the complainant on 07.05.2004. On 15.05.2004, TCRC (Therapeutics Chemical Research Corporation) has certified the quality and quantity of the rice and the quality was found as per Indian Export Standard. It was also found that the rice was free from live insects and weevils and from any foreign / bad odour at the time of shipment and it was fit for direct human consumption.
12. A phytosanitary certificate dated 14.05.2004 issued by the Directorate of Plant Protection, Quarantine and Storage, Ministry of Agriculture and Cooperation, Govt. of India, also certifies that the rice to be exported, was free from injurious pests and conform to the current phytosanitary regulations of the importing country.
13. Empty containers were inspected by Unique Marine Technical Services on 15.05.2004 and were found in proper condition and the same agency has witnessed on 15.05.2004 that stuffing was done in normal condition. It has also been certified that the packing was as per international standard and seaworthy.
714. The bill of lading has been issued on 25.05.2004, while the marine insurance certificate has been issued on 31.05.2004. The consignment was received by the buyer on 29.06.2004. Thus, if we look into the packing and forwarding of the consignment in a chronological order, we find that the rice bags were in proper condition till 15.05.2004 and on the same day, these were stuffed in five containers, which were also in proper condition. The containers were also received by the buyer in proper condition and were not damaged in any way. Therefore, it would not be fair on the part of the appellants to say that the rice, to be exported, was of a poor quality and was already subjected to moisture at the time of packing the same in poly propylene bags. Whatsoever be the reason, but the various agencies have certified that the rice to be exported, was in proper condition till the date, it was stuffed in containers. Unless the exact reason of the consignment getting damaged, is ascertainable, the claim can not be repudiated just on certain presumptions and surmises. Therefore, the order passed by the District Forum is perfectly justified and the appeal, being devoid of merit, deserves dismissal.
15. Appeal is dismissed. No order as to cost.
(SMT. KUSUM LATA SHARMA) (C.C. PANT) (JUSTICE IRSHAD HUSSAIN) Kawal