National Consumer Disputes Redressal
Nayana Emporium Pvt. Ltd. vs The Oriental Insurance Co. Ltd. on 25 March, 2010
This appeal is directed against the order dated 03 NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL No. 663 of 2006 (From the Order dated 03.03.2000 in SC Case No. 104/0/98 of the West Bengal State Consumer Disputes Redressal Commission, Kolkata) Nayana Emporium Pvt. Ltd. C/o Seacom Cargo International Pvt. Ltd. Five Star Market, 4th Floor Appellant Room No.9A 26, Karl Marx Sarani Kolkata 700 023 versus The Oriental Insurance Company Ltd. Orient House Respondent A/25/26, Asaf Ali Road New Delhi 110 002 BEFORE: Honble Mr Justice R. C. Jain Presiding Member Honble Mr Anupam Dasgupta Member For the Appellant: Mr. Prasanta Banerjee and Mr. Subrato Dass, Advocates For the Respondent: Mr. Rajvinder Singh, Mr. S.K. Gupta and Mr. Manish Gupta, Advocates Dated 25th March 2010 ORDER
Anupam Dasgupta This appeal is directed against the order dated 03.03.2000 of the West Bengal State Consumer Disputes Redressal Commission, Kolkata (hereafter, the State Commission) in complaint case no. SC 104/0/98.
2. The appellant was the complainant before the State Commission. It placed an order for supply of 1248 pieces of bearings on a supplier in the U.A.E. The supplier, on receipt of payment through the bank concerned, arranged shipment of a consignment of 46 boxes of bearings from Dubai Port for delivery at Kolkata Port. The consignment was to be transported from Kolkata Port to the final destination at Biratnagar, Nepal by road transport. The consignment was insured with the opposite party (OP) Oriental Insurance Company Ltd. (under a marine policy subject to institute Cargo Clauses (ICC)). The risk coverage clause of the policy was as under:
The risk covered during the entire period of journey from Dubai to Kolkata in transit to Nepal, viz., Biratnagar, Customs. The risk covered under the said policy reads as under:
RISK COVERED, ICC (A)/WAR/SR COVERING: MARINE, WAR, TPND, SRCC, FIRE, A.WPA ROAD TRANSIT BREAKAGE, CRACKAGE, LEAKAGE AND ALL RISKS FOR FULL CIF VALUE PLUS MINIMUM 10 PERCENT UPTO FINAL DESTINATION, EXCLUDING RUSTING, OXIDATION AND DISCOLORATION OF THE INSURED MATERIAL UNLESS CAUSED BY ANY PERIL COVERED UNDER THE POLICY. [Emphasis supplied]
3. It is the case of the appellant/complainant that the consignment arrived in good condition at Kolkata Port from where it was transported by road to Biratnagar, Nepal. However, when the appellant/complainant took the delivery of the consignment, it found that the bearings in all the packages were damaged by way of discoloration and/or oxidation. This was intimated to the respondent/OP insurance company, which appointed Nepal Claims Bureau, Nepal as the surveyor. The surveyors report of 16.07.1996 read as under:
In compliance with the verbal instruction dated 17.06.1996 of the Oriental Insurance C. Ltd., Kantipath, Kathmandu, one of our surveyors from Kathmandu office visited at Nepal Customs premises at Biratnagar on 17.06.1996 in order to attend the survey of above consignment. But at the customs it was noticed that several consignments of bearings all imported from Dubai and belonging to different consignees of same business group were fond huddled at two places. Due to improper handling several cases were found partially broken with contents part exposed.
For proper inspection of the damages, we asked the consignees to arrange segregation of packages consignment-wise which when done, we asked the consignees to open up individual cases. However, in view of the restrictions of the customs authority to open only a few cases in their premises and have the cases properly repacked before taking a fresh one, we advised the consignees to clear and take these consignments to a spacious place for a detailed examination of the contents in each cases of the corresponding consignment. However, the consignees insisted on non-clearance of such heavily damaged consignments from Customs until a compromise is reached between parties concerned.
Because of the situation and as almost all the cases looked almost same outwardly, we had no choices left but to work out an average of (illegible) and for the purpose, we randomly selected 12 cases of the above and opened up each of them in presence of the consignees. On our detailed inspection no shortages whatsoever were noticed, but contents were found completely discoloured / oxidized / rusted to various contents. In view of the nature and extent of loss, it is difficult to dispose of the quantity in local market and hence, we recommend 50% allowance by way of compensation on the entire consignment although the consignee demanded full compensation of the loss.
Cause:
From the onward appearances of the cases and on close examination of the contents in particular, it appears that somehow the cases have come into contact with rain/fresh water and/or seawater causing extensive damages to bearing contents.
Note:
- A few parts of photographs taken during survey are enclosed herewith.
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Consignee to furnish independent documentary evidences in support of the loss.
4. Though the surveyor recommended indemnification of the loss at 50% of the insured amount, the insurance company repudiated the claim by its letter of 26.11.1996, stating as under:
Pursuant to the discussions that the undersigned had with your Companys Managing Director when he visited Dubai on 2nd November 1996, the matter has been examined in detail and we regret to advise you that the claims are not tenable under the terms and conditions of the policy as any loss or damage due to rusting or oxidation was specifically excluded under the policy issued by us. A notation to this effect was appended on the face of the policy as well. Further, the surveyor has attributed the loss due to poor packing, which again is an exclusion under clauses no.4.3 of Institute Cargo Clauses (A). We, therefore, regret to inform you that no liability devolves on the company and we are constrained to file away the papers as No Claim.
5. After considering the pleadings, material and evidence brought on record, the State Commission dismissed the complaint by holding as under:
With regard to the objection that the risk covered under the policy does not include damage due to rusting, oxidation and discoloration of the insured material, it may be stated that the contention of the learned lawyer for the OP has substance. We have earlier quoted the terms under which the risk during transit was covered. It has been specifically mentioned that damage due to rusting, oxidation and discoloration is excluded. We have earlier noticed that the surveyor found defective packing and in consequence thereof the articles in question suffered rusting, oxidation and discoloration. Therefore, in accordance with the terms of the policy of insurance the present complainant is not entitled to get any compensation.
It is clear that the damage occurred either during transit by ship or in transit by road. The complainant has not made the carrier from Kolkata Port to Nepal a necessary party. The carrier, in our opinion, is a necessary party. In the absence of the carrier the dispute cannot be properly determined. Therefore, the objection raised by the OP in this regard is sustained. Since we hold that the claim cannot be entertained because the damage is not covered under the terms of the policy, the complainant is not entitled to get any relief in this case. The case fails.
6. We have heard Mr. Prasanta Banerjee learned counsel on behalf of the appellant/complainant and Mr. Rajvinder Singh, Mr. S.K. Gupta and Mr. Manish Gupta, learned counsel for the respondent insurance company.
7. In our view, the findings of the State Commission, both in respect of interpretation of the exclusion clauses in the insurance policy and non-joinder of the carrier (at least, the road transporter from Kolkata Port to Biratnagar) as a necessary party are entirely valid. Learned counsel for the appellant has merely relied on the fact that it was the surveyor appointed by the respondent insurance company which had recommended indemnification of the loss to the extent of 50% after taking into account the ground realities. We are not persuaded by this contention. While the report of the surveyor is expected to be an independent assessment of loss under the provisions of sub-sections (2) and (3) of section 64 UM of the Insurance Act, 1938 and should, as such, be generally given due weightage, it cannot be so in this case because of the specific exclusion of damages to the insured stock of steel bearings due to rusting, oxidation and discoloration of the insured material.
The surveyor took no note of this important clause. Moreover, the appellant/complainant did not establish before the State Commission the stage at which the damage actually occurred, i.e., whether during the marine transit of the insured material or during its road transport from Kolkata Port to Biratnagar. There was no record of any joint inspection of the consignment at the time of its loading in the ship at Dubai, unloading from the marine vessel at Kolkata and reloading on the road transport carrier. As rightly observed by the State Commission, it was necessary for the appellant/complainant to implead at least the road transport carrier if its contention was that the consignment had been received in good condition at Kolkata Port and it was loaded as such on the road transport for the onward journey.
8. Thus, we find no error in the impugned order of the State Commission, which could call for our interference. The appeal is accordingly dismissed. No order as to costs.
[R. C. Jain, J] ..
[Anupam Dasgupta]