State Consumer Disputes Redressal Commission
Jain Irrigation Systems Ltd. vs United India Insurance Company Ltd., on 7 January, 2013
C.C.No.:8-10
1
MAHARASHTRA STATE CONSUMER DISPUTE REDRESSAL
COMMISSION, MUMBAI, CIRCUIT BENCH AT AURANGABAD
Date of filing : 05.04.2010
Date of Order: 07.01.2013
COMPLAINT CASE NO.: 08 OF 2010
Jain Irrigation Systems Ltd.
Jain Food Park, Jain Valley, P.O.Box No. 20,
Jalgoan 425001, Through its Vice President,
Dongarmal s/o. Inderchand Desarda,
R/o. Jalgaon. ...Complainant
-Versus-
United India Insurance Company Ltd.,
Division Office No. 13,
Union Co-operative Insurance Building,
2nd Floor, Sir P.M. Road, Mumbai 400001,
through its Sr. Division Manager, ...Opposite Party
... Respondent
Coram : Mr. B. A. Shaikh, Hon'ble Presiding Judicial Member
Mr. K. B. Gawali, Hon'ble Member Present: Adv. Shri. D. P. Deshpande, for complainant.
Adv. Smt. D. S. Chapalgaonkar for opposite party.
- :: ORAL ORDER ::-
Per Mr. B. A. Shaikh, Hon'ble Presiding Judicial Member
1. This is a complaint filed under section 12 of the Consumer Protection Act by which compensation of Rs. 35,14,481/- with cost and interest is claimed from the opposite party.
2. The case of the complainant in brief is as under:
The complainant is a duly registered company and it is engaged in trading of agricultural inputs, manufacturing and supplying of agri inputs. It is a producer in agri produce processing. The selected varieties of onion powder, banana, mango, guava, goose berry and papaya for export and domestic consumption. The complainant had taken "Marine Cargo Insurance Policy" on C.C.No.:8-10 2 estimated Annual Sales turnover basis from opposite party for the period from 01.04.2009 to 31.03.2010. There was balance of Rs. 315 crores sum insured at the time of loss. On 12.05.2009 the complainant booked for shipment of consignment of the dehydrated powder of onion and accordingly it was loaded from complainant's unit of Jalgaon on 15.05.2009 and it was to be sent to Nestle Venezuela. The consignment was valued for Rs. 492,15.60 Euro (Exchange rate 1 Euro = Rs.65.15). The net weight of the consignment was 20088 kg and gross weight was 21607 kgs. The consignment was packed in customary and standard packing conditions. Mr. Rajesh Kumar Vishwakrma was the driver of the container and trailer which carried the said consignment on 15.05.2009 from Jalgoan via Mumbai Agra road. The said container met with an accident in Kasara Ghat on 19.05.2009 at about 4.00 a.m. as it suddenly fell and side safety tank was damaged and it want 50 to 60 feet down under valley. The information of the said accident was given to the police authority by the aforesaid driver on 19.05.2009. As per the said settlement of driver, the said accident was due to brake failure and in order to avoid major accident with another vehicle on the road. The opposite party was also informed about the said loss caused due to the accident. The opposite party appointed surveyor namely Shri. V. A. Gowarikar.
The said surveyor visited Jalgaon unit of the complainant on 11.06.2009 and collected necessary information and documents from the complainant. The said surveyor submitted his report on 30.09.2009, wherein he assessed the loss of Rs.15, 33,312.90. He in that report expressed cause of loss and accident as over loading. Only 7 kg was excess loading. The complainant had taken full care while loading the material in Cargo. Over loading can not be result in sudden failure of brake. The sudden failure of brake is due to wear and tear over a period or to avoid major accident and loss of human lives. The opposite party repudiated the claim of the complainant solely on the ground of over loading of the vehicle which is not legal and proper. There is no exclusion clause in the policy terms and conditions that if the accident takes place due to negligence of the driver by over loading of the vehicle, the claim shall not be payable. The goods were brought to the factory premises, the same were tested in laboratory C.C.No.:8-10 3 for analysis and it was reported that it has becomes unfit for human consumption. The complainant assessed loss of Rs.35,14,481/-. It therefore submitted that direction may be given to the opposite party to pay to it the said amount with interest @ 15 % p.a. from the date of loss till its realization.
2. The opposite party filed its written version and thereby denied the claim. It admitted that the insurance policy was taken by the complainant for the period from 01.04.2009 to 31.03.2010 from it. It also admitted that the complainant had booked for shipment of consignment dehydrated powder of onion and it was loaded from Jalgaon on 15.05.2009 and the container and the trailer containing the said consignment was started from Jalgoan on 15.05.2009 and it met with an accident in Kasara Ghat on 19.09.2008 at 4.00 a.m. The driver of the vehicle informed the police about the accident. His statement was recorded on 19.05.2009. Cause of accident is brake failure as stated by the driver in the report. It admitted that the information about accident was immediately given to it and that it appointed a surveyor for spot survey. It is the case of the opposite party that the surveyor carried out the spot survey on 23.05.2009. The seal of the container was intact. The surveyor could not inspect the consignment which was inside the container. The complainant had told the surveyor that container will be opened in its premises at Jalgaon. Therefore the goods were taken to Jalgoan and another surveyor was appointed who visited the premises of the complainant at Jalgaon on 11.06.2009 and carried out survey and submitted report on 29.06.2009. The surveyor did not recommend the claim in view of the exclusion clause in the insurance contract. The cause of accident was a result of over loading of the trailer and it attracts the exclusion clause No. 4.3 of Insurance Contract. The trailer was overloaded by 3957 k.g. at the time of accident. It is denied that only 7 kg was overloading. The claim made by the complainant falls in exclusion clause Nos. 4.1, 4.3 and 4.4 and 4.5 of Insurance Contract, and therefore the claim is rightly repudiated on those exclusion clauses. The loss on account of inherent vice of the product is excluded under Insurance Contract. The complainant has not submitted laboratory report and analysis in support of its contention that goods were unfit for human consumption. The 414 bags were C.C.No.:8-10 4 torn due to their mishandling from the spot of accident to the unit of the complainant after the accident. The opposite party therefore submitted that the complaint may be dismissed with cost.
3. The complainant filed affidavit of Mr. Dongarmal Desarda and Premchand Thombre. The complainant also filed various documents relating to the accident, policy and letter correspondence made in between it and the opposite party. The opposite party filed affidavit of Shri. Rajkar Sainappa Waghmare and Shri. A. M. Gowarikar. The advocate of both the parties also filed written notes of argument after both the parties had closed their respective evidence.
4. Following issues arise for our consideration. We record our findings against them, for the reasons given next there under.
SR. No. ISSUES FINDINGS
1. Whether the complainant is consumer defined as u/s 2 (1) (d) (ii) of Consumer Protection Act 1986? Yes.
2. Whether the complainant has proved that there is deficiency in service provided by the opposite party to it? Yes.
3. What order? - As per final order.
REASONS:
Admittedly the complainant had obtained the policy from the opposite party for the period from 01.04.2009 to 31.03.2010 to recover risk of its goods during the course of transit subject to exclusion clause by making placement of premium. Therefore the complainant is a consumer as defined u/s. 2(1)(d) (ii) of C.P. Act and accordingly the issue No.1 is decided in affirmative.
As to Issue No.2:
The admitted facts of the present case are that, the insurance policy called as "Marine Cargo Open Policy" was issued by the opposite party in favour of the complainant for the period from 01.04.2009 to 31.03.2010 and as per the said C.C.No.:8-10 5 policy insurance cover was available to the goods of the complainant during the course of transit subject to exclusion clauses mentioned in the said insurance contract. The goods belonging to the complainant were carried under container through trailer from Jalgoan on 15.05.2009, via Mumbai Agra road and the said vehicle met with an accident in Kasara Ghat on 19.05.2009 at 4.00 a.m. The driver of the said container informed the police authorities about said accident stating the cause of accident as break failure. Surveyor was appointed by the opposite party to assess the loss and accordingly he visited to Jalgoan unit of the complainant and after inspection submitted the report on 30.09.2009. Thereafter opposite party repudiated the claim on the ground that the claim falls within a exclusion clause Nos. 4.1, 4.3, 4.4, 4.5 and 5.1 of the insurance policy. The said exclusion clauses read as under:
In no case shall this insurance cover:
4.1) loss, damage or expense attributable to willful misconduct of a assured. 4.3) Loss, damage or expense caused by insufficiency or unsuitability of packing or preparation of the subject-matter insured (for the purpose of this Clause 4.3 "packing" shall be deemed to include stowage in a container or life-van but only when such stowage is carried out prior to attachment of this insurance or by the assured or their servants.) 4.4) Loss damage or expense caused by inherent vice or nature of the subject-matter insured.
4.5) Loss damage or expense proximately caused by delay, even though the delay be caused by a risk insured against (except expenses payable under Clause 2) 5.1) In no case shall this insurance cover loss, damage or expense arising from:
Unseaworthiness of vessel or craft.
Unfitness of vessel, craft, conveyance, container or lift van for the safe carriage of the subject matter insured.
Where the assured or their servants are privy to such unseaworthiness or unfitness at the time of the subject-matter insured is loaded therein."
5. It is submitted by the learned advocate of the complainant that the weight of the container can not be considered while considering the actual weight of the C.C.No.:8-10 6 trailer. Thus according to him the weight of the container was wrongly taken into account while repudiating the claim on the ground of over loading. He further submitted that there was no exclusion clause about over loading, in the insurance policy and it can not be said that there was misconduct on the part of the complainant only because there was excess of weight by 7kg only. He further submitted that reasons given for repudiation are not legal, proper and they are not based on material. He further submitted that there is no exclusion clause to the effect that if the accident takes place due to negligence of driver as a result of over loading, the claim shall not be enforceable. The exclusion clause No. 4.3 as stated while repudiating the claim is not covered in the case of over loading.
There is no inspection of breaks of the vehicle either by surveyor or any other expert agency. He further submitted that cause of accident is not over loading. He therefore submitted that repudiation is based on unjustified and unwarranted ground. He relied upon the observations made in the following cases:
1. New India Assurance Co. ltd., Vs. Kotlu Brahamana Ex-servicemen's' Transport Coop. Society Ltd. (1) 2012 CPJ 262 (NC)
2. New India Ass. Co. ltd. Vs. Rajkumar Chaudhary (3) 2009 CPJ 191 (NC)
3. National Ins. Co. Ltd. Vs. Chandrappa Veerappa Karadagi 2001 (3) CPR 191 (NC) = 2009 STPL (CL) 1621 NC
4. Oriental Ins. Co. ltd. Vs. Smt Sunaina Garg, 2009 (3) CPR 446 (HP)
5. New India Ass. Co. ltd. Vs. Surinder Singh (1) 2006 CPJ 43 (NC)
6. National Ins. Co. Ltd. Vs. Munnilal Yadav, 2001 (2) CPJ 53 (NC)
7. Iffco Tokio Gen. Ins. Co. Ltd. Vs. Manjinder Singh, 2011 (2) CPR 364 (U.T. Chandigarh)
8. Puneet & Company Pvt. Ltd Vs. National Insurance Co. Ltd., 2007 (3) CPJ 54.
Relying of the aforesaid cases the learned advocate of complainant submitted that, from the evidence brought on record the complainant has proved that there is deficiency in service provided by the opposite party to the complainant.
C.C.No.:8-10 7
6. On the other hand, the advocate of the opposite party submitted that carrying capacity of the vehicle was 21600 kg, whereas the vehicle was loaded with the weight of 2557 kg (Cargo + Container) and therefore it is proved that there was over loading of the container by 3957 k.g and hence the complainant committed willful misconduct as covered under exclusion clause No. 4.1 of the Insurance Contract. He further submitted that the accident took place due to over loading of the vehicle. He also submitted that over loading raises the centre of gravity of the truck and the break failure was because of overloading of the vehicle. He further submitted that there was no visible damage to the container in the accident. The damage is not caused on account of accident but it is caused while unloading the goods, either in the factory premises or while bringing it back from the place of accident. Therefore he contended that the complainant is guilty of willful misconduct. He also submitted that the claim is rightly repudiated on exclusion clause No.4.3 also. The container was unsuitable/insufficient for carrying the goods. He further submitted that the onion powder had not suffered any damage or loss on account of the accident, and that the loss is also not on account of any transit hazardous. He also contended that the loss has to attributable to the inherent vice and the nature of the subject matter of insured and there is no laboratory report to show that the goods were unfit for human consumption or absolutely useless. He also submitted that the exclusion clause No. 4.4 is also applicable to the present case and that the insured has failed to take proper care and precaution and wasted time for more than 17 days for taking product to the factory from the place of accident. The exclusion clause No. 4.4 is applicable on account of the said delay. He also submitted that exclusion clause No. 5.1 is also applicable to the present case as the vehicle was unfit for carrying the consignment. He therefore requested that complaint may be dismissed. He also relied upon observations made in the following cases:
i. Oriental Insurance Company Ltd., Vs. B. A. Nagesh, 2010 (3) CPL 421 (NC).
C.C.No.:8-10 8 ii. Deokar Exports Pvt. Ltd. Vs. New India Assurance Co. Ltd., 2009 STPL 871 SC.
iii. Polymat India P. Ltd & another Vs. National Insurance Co. ltd., & others, AIR 2005 SC 286 iv. Oriental Insurance Co. Ltd., Vs. Rishi Jaiswal & another, 2007 STPL (CL) 678 NC.
v. Paam Estables Ltd., Vs. United India Insurance Co. Ltd., & others, 2004 STPL (CL) 38 NC.
vi. United India Insurance Co. Ltd., Vs. Harchand Raichand Lal, AIR 2004 SC, 4794.
7. We have perused the papers placed before us by both the sides and the case laws produced before us by both sides. As discussed above it is not disputed that the goods loaded under container carried by trailer from Jalgaon on 15.05.2009 via Mumbai-Agra Road met with an accident on 19.05.2009. At that time the said goods were insured with the opposite party under Marine Cargo Open Policy as discussed above. The opposite party has repudiated the claim on the ground that, there is breach of the terms and conditions of the policy as per exclusion clause Nos. 4.1, 4.3, 4.4., 4.5 and 5.1. We now proceed to consider as to whether the aforesaid exclusion clauses are attracted in the present case.
8. The exclusion clause No. 4.1 of the contract of policy is attracted when there is loss, damage or expense attributable to willful misconduct of assured. According to opposite party, the said clause is attracted as the vehicle carrying the goods was overloaded by 3957 kgs weight. However, the said over weight of 3957 kgs also includes the weight of the container of the goods i.e. 3950 kgs which was attached to the trailer for carrying the said goods. The unleaden weight of that trailer was 13600 kgs and its weight carrying capacity was 21600 kgs. The gross weight of the Cargo was 21607 kgs only. Therefore we are of the view that the actual over weight of the goods was only 7 kgs. The weight of the container which was attached to the trailer can not be taken into account while considering the over weight. Therefore it can not be said that the vehicle carrying C.C.No.:8-10 9 the goods was over loaded amounting to willful misconduct on the part of complainant.
9. If for the sake of arguments, it is accepted that, the weight of the container of the Cargo i.e. 3950 kgs is also required to be counted for considering the load of the trailer then also it can not be said that there is breach of any policy condition. The aforesaid Marine Cargo Open Policy produced on record does not show any such condition that vehicle carrying the goods shall not be over loaded.
10. An over loading of the vehicle also does not fall within the preview of expression willful misconduct of the complainant, particularly when there is no expert opinion to prove that because of over loading of the vehicle, it met with an accident.
11. The Hon'ble National Commission in one of the aforesaid National Insurance Company Vs. Chandrappa Virappa Karudagi (2009) STPL (CL) 1621 (NC) relied on the ratio of the case of B. V. Nagaraju Vs. Oriental Insurance Company and held that, there is no reason to interfere with the order of the District Forum. In that case there was no credible evidence to indicate that, the accident occurred because the bus was carrying more than permissible number of passengers. The reliance was placed by the Hon'ble National Commission on the judgment of the Hon'ble Supreme Court in the case of B. V. Nagaraju Vs. Oriental Insurance Company Ltd. (AIR 1996 SC 2054) wherein it has been ruled that if the overloading is not cause of accident, the Insurance Company can not repudiate the claim.
12. In the present case, the vehicle was not examined by any expert to show that the overloading was the cause of failure of the brakes and that hence accident took place. Merely on the basis of conjectures and surmises no interference can be drawn that because of overloading there was failure of the brakes and resultantly accident took place.
C.C.No.:8-10 10
13. Moreover it can not be said that because of any delay on the part of the complainant in taking the goods from the factory premises or because of mishandling of the cartoon of those goods, the complainant sustained loss. In our view willful misconduct can not be attributed to the complainant so as to repudiate its claim as per exclusion clause-4.1 of contract of policy. Said clause No. 4.1 is thus not applicable to the present case.
14. The exclusion clause No. 4.3 is applicable only when loss or damage is caused by insufficiency or un-sustainability of packing or preparation of the subject matter insured. As per the opposite party, the said clause is attracted because the cause of the accident as overloading of the trailer. The said clause can not be attracted on account of alleged over leading of the vehicle of the goods. It is attributed only when there is insufficiency or unsustainability of packing or preparation of the subject matter insured. Therefore the claim can not be repudiated as per said exclusion clause No. 4.3.
15. The exclusion clause No. 4.4 is attracted only when there is loss or damage caused by inherent vice or nature of subject matter of insured. It is not disputed that the dehydrated onion powder was packed in polythene bag inner and outer and they were further packed in cartoons and divided into 31 wooden palates. Thus goods were loaded into the container. There is no material of show that the loss or damage has been caused to the complainant due to inherent vice or nature of the dehydrated onion powder. It is the case of the complainant that even a small pinhole may create bacterial contamination in material making it unsafe for human consumption as it may expose the material to atmosphere and it is having hygroscopic property, lumps are formed as well as bacterial contaminations risk increases. It is further the case of the complainant that when the goods were brought to the factory premises, same were tested in laboratory for analysis and it was found that it has become unfit for human consumption. Under these circumstances it cannot be said that the dehydrate onion powder was damaged due to inherent vice or due to its own nature. Thus we are not inclined to accept that the exclusion clause No. 4.4 is attracted in the present case.
C.C.No.:8-10 11
16. The exclusion clause No. 4.4 is attracted only when loss or damage is caused by delay. There is no evidence showing that the delay was caused by the complainant and due to that reason the complainant sustained damage or loss. In such a case, only on the basis of expert opinion it could have been said that only because of delay as stated by the opposite party, the goods sustained damage. Therefore we hold that the exclusion clause No. 4.5 is also not attracted to the present case.
17. The exclusion clause No. 5.1 is attracted if the vehicle carrying the goods is unfit i.e. the trailer and the container carrying the goods were unfit. The overloading of the vehicle does not attract expression unfitness of the vehicle. The opposite party in para No.9 of its written version has admitted that, the complainant obtained fitness certificate dated 16.10.2008 in respect of aforesaid vehicle. Therefore we hold that the exclusion clause No. 5.1 is also not attracted in the present case.
18. The judgment relied upon by the learned advocate of the opposite party are not applicable to the present case, as the facts and circumstances of the present case are totally different from those cases. In case of Oriental Insurance Vs. B. A. Nagesh there was breach of condition as the goods carrying vehicle was used for commercial purpose. In case of Deokar Exports Pvt. Ltd, Vs. New India Assurance Co. Ltd., it is observed that no exception or relaxation in contract of insurance can be made on the ground of equity. In case of Polymat India P. Ltd., and another Vs. National Insurance Co. Ltd., it is observed that it is not open for Court to interpret policy de hors the contract. In case of Oriental Insurance Co. Ltd., Vs. Rishi Jaiswal and another, it is observed that complainant can not take advantage of its own wrong. In case of Paam Eatables Ltd., Vs. United India Insurance Co. Ltd. & Ors, the consignment was sent in insufficient/unsuitable packing material as proved by evidence on record. Thus the facts of those cases are not identical to those of present case. Hence the said cases are of no assistance to the opposite party herein.
C.C.No.:8-10 12
19. We therefore hold that, the repudiation of the claim of the complainant on aforesaid exclusion clauses is illegal and can not sustained under law. Therefore the complainant has proved that there is deficiency in service provided by opposite party to it and hence the aforesaid issue No.2 is decided in affirmative.
20. As to Issue No.II In view of our finding regarding issue Nos. 1 & II in affirmative we hold that, the complainant is entitled to compensation from the opposite party. The complainant has claimed total compensation of Rs. 35,14,481 with interest @ 15% p.a. from the date of loss till its realization. Admittedly, the surveyor who was appointed by the opposite party inspected the goods in question and submitted report on 30.09.2009 to the opposite party. The said surveyor Mr. A. N. Gowarikar in that report assessed the total loss of Rs.15,33,312.90 sustained by the complainant, due to damage of dehydrated onion powder goods in the aforesaid accident. The complainant has claimed the compensation of Rs.35,14,481/- which is total value of the said goods. In our view in the absence of any independent evidence, the said compensation of Rs. 35,14,481/- can not be granted to the complainant. We also find that the report of the surveyor dated 30.09.2009 is sufficient to come to the conclusion that, the complainant sustained loss of Rs.15,33,312.90 due to damage caused to its dehydrated onion powder goods in the aforesaid accident. Hence we are inclined to grant compensation of Rs.15,33,000/- (rounded figure) to the complainant. The complainant is also entitled to interest @ 9 % p.a. over the said compensation from the date of repudiation i.e. from 07.01.2010 till its realization. The complainant has not claimed compensation on any other count. Therefore we hold that the complaint deserves to be partly granted.
-:: ORDER ::-
1. The complainant is partly allowed.
C.C.No.:8-10 13
2. The opposite party shall pay to the complainant compensation of Rs. 15,33,000/- with interest @ 9 % p.a. from 07.01.2010 till its realization.
3. The opposite party shall also pay to the complainant Rs.5000/- towards cost of the complainant.
4. Copies of the judgment and order be sent to both the parties.
(K. B. Gawali) (B. A. Shaikh)
Member Presiding Judicial Member
Kalyankar