National Consumer Disputes Redressal
Japna Chemicals Pvt. Ltd. vs National Insurance Co. Ltd. on 14 September, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 116 OF 2002 1. JAPNA CHEMICALS PVT. LTD. THROUGH ITS MANAGING DIRECTOR, 186, SAINIK VIHAR, PITAMPURA, NEW DELHI - 110 034. ...........Complainant(s) Versus 1. NATIONAL INSURANCE CO. LTD. BRANCH OFFICE:- 32 COMMUNITY CENTRE , INDUSTRIAL ESTATE, PHASE - 1, NARAINA, NEW DELHI - 110 028. ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE J.M. MALIK, PRESIDING MEMBER HON'BLE DR. S.M. KANTIKAR, MEMBER
For the Complainant : Mr. Shree Prakash Sinha, Advocate
With Mr. Anand Kumar & Mr. Yogesh Goel,
Advocates For the Opp.Party : For the OP No.1 : Mr. Kishore Rawat, Advocate
For the OP Nos. 2 & 3 : DELETED From the Array of Parties
(Vide Order dated 04.09.2002)
Dated : 14 Sep 2015 ORDER
JUSTICE J.M. MALIK
1. Japna Chemicals Pvt. Ltd., the complainant, is a Manufacturer and Exporter of Mosquito repellents, mats and its related products. The complainant obtained a Marine Open Policy from the National Insurance Co. Ltd., the OP No.1. The aforesaid policy was taken for transportation of goods from 'Warehouse to Warehouse', in accordance with Clause 25 of the said Insurance policy. On 20.01.1999, the complainant entered into an Agreement for exporting Mosquito repellents, mats and its related products to Russia, with Blackfield International LLC, a Russian company, vide Annexure A-1.
2. As per the said agreement, the complainant was to supply Mosquito repellents, mats and its allied products to the Buyer. The Buyer was to provide Letter of Credit to the complainant for the above said transaction. However, the Buyer could not provide the Letter of Credit. It was mutually agreed between the parties to substitute the Letter of Credit with the Bank Guarantee. Pursuant to that Agreement, an unconditional Bank Guarantee was furnished by Baltic International Bank, Riga, Latvia, i.e. Guarantor Bank, holding effective banking licence duly confirmed by the Bank of Latvia vide their registration pursuant to Chapter 56 of the "On Credit Institution". The Guarantor Bank provided the Bank Guarantee on 04.02.1999, vide its copy, Annexure A-2.
3. The State Bank of Bikaner & Jaipur, which is arrayed as OP2, extended the financial assistance to the complainant's on the basis of aforesaid Bank Guarantee. All the documents pertaining to the Export Transaction were routed by the complainant's Bank to the Baltic International Bank, being the Buyer's Bank. All the consignments were duly consigned to the destination and were sent to the Buyer at the appointed destination under the Marine Insurance Open Policy as provided by OP1. The details of the said consignments are detailed as below :-
Policy No.
Bill of Lading/AWB No./Date
Pkg.
Insurance No.
Certificate & Date
4200047
AWB No. SAM 12366292/ 30.03.1999
1611
42/003/99,dt. 05.04.1999
4200047
AWB No.SAM 12366281/ 30.03.1999
430
42/004/99,dt.05.04.1999
4200047
AWB No.SAM 12367655/ 16.04.1999
1400
42/023/99,dt,19.04.1999
4200047
AWB No.SAM 12367666/ 16.04.1999
300
42/024/99,dt. 19.04.1999
4200047
AWB No.SAM 12368005/ 07.05.1999
1150
42/073/99,dt. 17.05.1999
4200047
AWB No.SAM 12369405/ 10.05.1999
533
42/074/99,dt.17.05.1999
The OP1 issued confirmation of the complainant's Marine Open Policy No.360201/4203600 & 360201/4200047, vide letter dated 22.07.1999.
4. In respect of the last consignment dated 10.05.1999, valued at US$ 267595.12, the complainant received a payment of US$ 65000 from the Guarantor Bank, but the balance amount, totaling to US$ 202595.12 remains unpaid. OP2 requested the Guarantor Bank to make the payment of the residue amount, but it did not evoke any response from the Guarantor Bank. The complainant also requested the Embassy of India, Stockholm, Sweden to use their good offices and resolve the impasse, which sent letter dated 16.06.1999, vide its copy marked as Annexure A-4. However, all these efforts, did not bring the desired result. The complainant also sent details of export bills and invoked the said Bank Guarantee as provided by the Guarantor Bank vide letter dated 18.06.1999, a copy of which has been placed on record as Annexure A-5. The Guarantor Bank demanded certain documents which were sent by OP2 to them. A copy of the fax dated 29.06.1999, marked as Annexure A-6, was sent by OP2 requesting to settle the matter, either by way of negotiations and alternatively, through a Court of Law. A copy of another fax dated 08.07.1999 was sent in this context, which has been placed on record as Annexure A-7. The Guarantor Bank tried to put off the matter and a collection of various letters in this regard were annexed as Annexure A-8 (colly). When all these efforts made by the complainant could not ring the bell, it initiated litigation for recovery of amount guaranteed together with future and pendente lite penal interest and damages at the "First Instance Civil Cases Collegium of the Riga District Court", Latvia. A case was decided against the complainant, vide judgment dated 13.03.2001. The Guarantor Bank took the plea that the goods did not reach the Buyer and the complainant did not produce certification of the delivery. On that ground, the case of the complainant was dismissed and the translated copy of the said judgment is placed on record as Annexure A-9. That judgment was challenged in the "Civil Case Court Chamber of Supreme Court, which was also dismissed and copy of the said judgment, has been placed on record as Annexure A-10. Thereafter, notice dated 24.09.2001, was given to OP1 to make good the loss, marked as Annexure A-11. The claim of the complainant was repudiated.
5. On the contrary, the Bank, OP2 issued a legal notice, dated 17.11.2001 to the complainant for recovery of the aforesaid amount, copy of which has been placed on record as Annexure A-12. The present complaint was filed before this Commission on 11.10.2002 , with the following prayers :-
"(i) Direct the Respondent No. 1 to pay to the Complainant to a sum amounting to US$ 2,02,595.12 as insured by the Respondent No. 1 under the aforesaid policies along with interest pendent lite.
(ii) Direct the respondent No. 1 to pay an amount of Rs.2,00,000 as a compensation for the mental agony, loss of reputation in business as suffered by the complainant on account of deficiency in service on part of the respondent No. 1,
(iii) Direct the respondent No. 1 to pay the costs towards the litigation expenses in this Hon'ble Commission,
(iv) Pass such further order(s) as this Hon'ble Commission may deem fit and proper in the fact and circumstances of the case".
Defence
6. The Opposite Party listed the following defenses. The buyer Blackfield International LLC, City of New Castle, State of Delaware, USA, M/s OOO Intrutzentr, Tverskaya Zastava, 3, Moscow, Russia- Consignee, Sam Aviation (P) Ltd. New Delhi- Issuing Carrier's Agent, East Line Aviation Co. Ltd., Moscow- Airline and Baltic International Bank, are the necessary parties in this case. The Insurance Company is being unnecessarily dragged into the controversy without any basis. The consignment was dispatched in March-May, 1999 to Moscow. Ultimately, Court of Republic of Latvia dismissed the appeal of the complainants on 26.10.2001. During this entire period, there was no interaction by the complainant with the Insurance Company and the Insurance Company was also not considered a necessary party in any of these proceedings. The cause of action arose during the period March-May 1999 and the claim was lodged with the Insurance Company in September 2001, which is clearly barred by time. It was the duty of the assured that their agent must inform the Foreign Settling Agent, immediately and give notice to Surveyor, whose address was given in the certificates, but the needful was not done.
7. As per the policy, the assured is required to make available supporting documents, without delay, including the original of the carrier certificates of non-delivery or certificate of damage and/or shortage as the case may be, survey report or any other documentary evidence of loss or damage, copies of notices of claim against the carriers and other third parties together with the relevant postal registered receipts and receipted A.D. cards and copies of all subsequent correspondence exchanged.
8. According to the case of the complainant, the alleged loss or alleged damage occurred, whilst the consignment was in the custody of the carriers. Consequently, it was imperative that a proper notice of claim specifying the details of the assignment, full booking particulars, the nature and extent of loss/damage and the amount of compensation with copies of the relative supply invoices and the carriers certificate of non-delivery or certificate of damage and/or shortage must be issued against the air carriers concerned, within seven days from the date of delivery of goods at destination or in the case of non-delivery, within 14 days, from the date of booking. Notice of claim in terms of the above should be served by the actual owners of the goods, along with postal record.
9. It was a part of the agreement that the buyer/consignee was supposed to file claims, in writing, with the local insurance company, but the needful was not done. According to the policy, the claim was to be lodged at the destination i.e. Moscow. The jurisdiction of this Commission has also been called into question in that context. The buyer - consignee in Moscow, should have known about the arrival of the relevant flights carrying the aforesaid consignments, which are supposed to reach there, within a couple of days. If the consignments were not delivered, the matter should have been reported, immediately.
10. The report of M/s. J.B. Boda Surveyors Private Ltd. reveals that the consignments were dispatched to Moscow through carrier's agents, Sam Aviation (P) Ltd., New Delhi, OP 3. They were primarily responsible for the safety and delivery of the consignments to the ultimate consignee at Moscow. They did not take action within reasonable time. The consignee did not institute any legal proceedings against them. Sam Aviation Pvt. Ltd. never informed the surveyors that they received any correspondence from the insured/complainant asking them to provide proof of delivery of the consignment, which are otherwise given, immediately. The complainant should have asked its agent for non-delivery certificate at that time itself. As per the agent, the goods were delivered to the consignee in time. Some discrepancies were also observed in the Airway bills. The air bills were originally issued in favour of the consignee M/s.OOO Inturitzentr, which were subsequently amended by striking off the original name of the consignee in favour of the Baltic International Bank by the carrier's agent namely Sam Aviation (P) Ltd, but the invoices in respect of the said dispatches raised by the seller were issued in favour of M/s.OOO Intrutzentr, Moscow.
11. The said amendment to the agreement was made on 25.03.1999. Shipping documents are routed through the sellers Correspondent Bank under an L/C arrangement with an overseas buyer's Negotiating Bank. After the amendment, the documents were still routed through the seller's bank, State Bank of Bikaner & Jaipur, New Delhi and the buyer's bank namely, Baltic International Bank, Riga, Latvia. The insured/seller could not satisfactorily explain why the arbitration provision in the agreement was not invoked for adjudication. It appears that consignments had been delivered by the carriers against presentation of the original documents received through the above Foreign Bank. Those papers were sent by OP-2. The Surveyor came to the conclusion that physical loss of cargo was not proved. The missing components were actually airlifted from I.G.I. Airport, New Delhi for onward transmit to Moscow.
12. Firstly, the payment was made through Bank of New York but it is not understood what prompted the Seller to agree to an amendment of the payment clause in the agreement and include an alternative provision for a conditional Bank Guarantee in favour of the seller and that too, from Baltic International Bank, Riga, Latvia when the consignee is a Russian entity located in Moscow.
Submissions
13. We have heard the counsel for the parties at length. The key argument urged by the counsel for the Opposite Parties is that the case is barred by time. It is contended that the cause of action, if any, had arisen during the period March-May 1999 and the claim was lodged with the Insurance Company in September 2001, i.e., after the expiry of two years from the date when the cause of action had arisen. It is contended that the case is barred by time.
14. On the other hand, the counsel for the complainant vehemently argued that the above said proceedings go to show that the complainant acted promptly. It has been contested the case with bonafide intention. It was argued that after the conclusive finding of the Courts in Latvia with respect to non-delivery of goods, the complainant filed a claim before the OP/insurance Company on 24.09.2001 in which the entire consequence of events along with the copy of above referred judgments were submitted before the OP-Insurance Company. It may be mentioned here that all the judgments have been placed on the record. The complainant filed its first claim before the First Instance Civil Cases Collegium of Riga District Court, which decided the claim on 13.03.2001, and held as under :-
"Court recognizes that the Guarantor is not obliged to make payment, because JSB "Baltic International Bank", issued a term guarantee to the Claimant, and limited the term of validity of said guarantee by 1st July, 1999 and therefore, according to Article 1715 of Civil Code, if the Guarantor assumes an obligation for certain time period, then it is only liable for the said period, but the creditor's claim against the Guarantor was lodged on 20.12.2000, i.e., after expiration of Agreement on surety term of validity.
The claimant did not prove its claim, and it should be denied as unfounded".
15. Thereafter, Appeal was filed against the said order dated 13.03.2001, before the Civil Case Court Chamber of the Supreme Court of Republic of Latvia, which decided the appeal on 26.10.2001, and held as under :-
"Taking into account circumstances established in the case, the court finds that the claim is unfounded and therefore shall be rejected".
Thus, both the Courts were of the opinion that there was no evidence that the goods had arrived with the consignee. Thereafter, the claim was filed immediately with the insurance company on 24.09.2001.
16. It was argued that the insurance company never denied its liability. The goods were covered as per "Warehouse to Warehouse". As per the Marine Open Policy, the goods were airlifted for onward transit to Moscow. The goods were never delivered to the consignee. That is why, the Latvian Courts declined to enforce the Bank Guarantee issued in favour of the complainant. The foreign settling agent did not exist and this plea taken by the complainant company is false. The name of the foreign settling agent as given in the certificates (Annexure A-15-Colly) ) is Webster-London and further address of Moscow was also given. However, at that address, no agent in the name of Webster could be located even prior to issuance of letter dated 24.10.2001 or even thereafter. It was also argued that OP never denied their liability. They had instructed M/s.J.B. Boda Surveyors Pvt. Ltd., vide letter dated 11.07.2002, to ascertain the losses and the report of the said Surveyor was filed along with the reply of the OP Company. M/s. J.B. Boda Surveyors Pvt. Ltd., clearly stated that they have thoroughly investigated and established beyond any doubt without supporting evidence that the goods were actually airlifted from the IGI Airport, New Delhi, for onward transit to Moscow. As far as Ingosstrakh is concerned, it had clearly stated in the report that the State Custom Committee of Russian Federation confirmed by their letter dated 02.07.2002 that the cargo was delivered under AWB No. SAM-12367655 and did not cross the Russian boundary.
17. The counsel for the OP has further invited our attention towards order passed by this Commission on 05.04.2011. In a very lengthy order, our Predecessor Bench had made an attempt to solve the matter. Its relevant portion, runs as follows :-
"In view of the above, we do not consider it necessary to examine the rival claims put forth by the complainant and the OP/Respondent and to arrive at finding on their relative merits. The complaint petition is kept pending with a direction to OP/Insurance Company to take a final view on the claim of the complainant, on the basis of the outcome of the investigation contemplated in their letter of 4th June, 2002. If the investigation is yet to be completed, it should be brought to its logical conclusion expeditiously, preferably, within three months. Thereafter, a final decision on the claim should be taken, based on the outcome of such investigation. The complaint petition be listed for further directions on 19.08.2011".
18. The record reveals that the claim dated 24.09.2001 was repudiated vide letter dated 24.10.2001. It was mentioned that "............, it is the duty of assured and their agent to inform our foreign settling agents immediately, whose address is given in the certificates for the needful, unfortunately, you have not informed and registered your claim upon them as such our company is not liable for any claim, at this stage". So far as the order dated 05.04.2011 passed by this Commission is concerned, the OP repudiated the same, on the similar ground.
19. Last, but not the least, Counsel for the OP has invited our attention towards the letter dated 16.06.1999, written by First Secretary, Embassy of India at Stockholm (Sweden), wherein, a part of it, requires notice:-
"However, my impression is that the Bank is in connivance with the buyers and some sort of mafia and, as such, they would try their best to escape the payment. I was also informed by the Bank during the discussions that we were free to move the Latvian Court, the Bank of Latvia, the Latvian Government or even use "muscle power". You may, therefore, take appropriate decision in the matter".
Findings:
20. Instead of touching the heart of the problem, the counsel for the Complainant has made a vain attempt to skirt it. The claim is clearly barred by time. It is not the sweet will of the insured to inform the insurer that its goods have been lost at any time, which may suit it. The construction of contract entered into between the parties assumes importance. It is a settled law that court should refrain from any interpretation which would result in injustice and absurdity, AIR 1963 SC 25. The question to be considered is not what was intended, but what has been said. We cannot amend or substitute anything in the contract, as per law laid down in Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd. & Anr., (2010) 10 SCC 567, General Assurance Society Ltd. Vs. Chandmull Jain, 1966 ACJ 267 (SC), Harchand Rai Chandan Lal's case, 2005 ACJ 570 (SC).
21. Consequently, the policy issued by OP deserves a look. In the 1st page of the policy, it clearly, specifically and unequivocally stipulates "in the event of loss or damage which may involve a claim under this insurance, immediate notice thereof and application for survey should be given to - ". On the 2nd page of the policy, under the caption "IMPORTANT NOTICE", the 1st column states "For Ocean Shipments", its para No.1, runs as follows :
"To claim immediately on the carriers Port Authorities on other Bailees for any missing packages".
Further, Para Nos. 4 & 5 run, as follows :
"4. In no circumstances, except under written protest, to give clean receipts where goods are in doubtful condition.
5. To give notice in writing to the carriers or other Bailees within 3 days of delivery if the loss or damage was not appeared at the time of taking delivery".
22. In Kandimalla Raghavaiah & Co. Vs. National Insurance Co.Ltd., & Anr., III (2009) CTP 75 (SC), it was held, as under :-
"19. A bare reading of the impugned order shows that all these factual aspects have been duly taken into consideration by the Commission and we are in complete agreement with the finding by the Commission that the filing of claim by the Bank on 14th July, 1988, would not have, in any way, helped the appellant. On their own showing, for the first time, only on 6th November, 1992 and then again on 26th October, 1995, the appellant had requested the Insurance Company to issue claim form to enable them to prefer a claim which request was declined by the Insurance Company on 21st March, 1996. By no stretch of imagination, it can be said that Insurance Company's reply, dated 21.03.1996 to the legal notice dated 04.01.1996, declining to issue the forms for preferring a claim after a lapse of more than four years of the date of fire, resulted in extending the period of limitation for the purpose of Section 24-A of the Act. We have no hesitation in holding that the complaint filed on 24.10.1997 and that too, without an application for condonation of delay was manifestly barred by limitation and the Commission was justified in dismissing it on that short ground".
23. Again, in New India Assurance Co. Ltd. Vs. Hira Lal Ramesh Chand & Ors., III (2008) CPJ 6 (SC), it was held, as under :-
"36.......... Where there is no effort on the part of the `consignee' to take delivery from the shipping line/ customs warehouse, the duration of insurance cover cannot be infinite or indefinite. In such circumstances the risk cover would terminate on the expiry of 60 days after completion of discharge over-side of the insured shipment from the Overseas vessel at the final port of discharge at Atlanta having regard to clause 8 of Institute Cargo clause. It is not the case of the complainant that within that time (of 60 days), delivery was sought by the holder of the documents and that such delivery was refused. It is also not the case of the complainants that the consignments were unauthorizedly delivered to Atlanta Rugs or that such delivery was within 60 days of the landing of the consignments at Atlanta. 43In the absence of any averment or evidence as to when the consignments were discharged from the ship at Atlanta and an averment that within 60 days of the landing of the consignments at Atlanta the holder sought delivery and delivery was refused, the question of the Insurer being made liable for non-delivery does not arise. After 60 days of the landing of a consignment even if the consignment is destroyed, lost or mis-delivered, it is no concern of the Insurer".
It is thus clear that the case is barred by time.
24. The other connecting question is that nobody on the earth, knows where the goods have vanished. It is surprising to note that the Buyer did not state that he had not received the goods. Neither the Blackfield International LLC, the Buyer, nor M/s. OOO Inturtzentr, consignee, nor Sam Aviation (P) Ltd., nor East Line Aviation Co. Ltd., Moscow, was made a party in this case. Dollops of mystery surround this case.
25. On the contrary, it is apparent that Insurer, OP1 is not a necessary party in this case. It is a matter between the Buyer, Consignor-Consignee, the Aviation agent and Airlines. It is the Airlines which is to account for the loss of goods. Under the International law, they are bound to pay damages for the loss of goods.
26. Certain harsh realities cannot be glossed over. The report of the Surveyor and other circumstances, including the letter issued by the First Secretary, Embassy of India, clearly go to show that due to disturbed conditions, prevailing thereon, the goods were either misplaced or stolen. It was the duty of the complainant to lodge a complaint with the Airlines or with their agent, or at best, with the Insurance Company, immediately. In terms of the policy, the complainant was duty bound to inform the insurance company about the loss of the goods immediately, after the incident. However, the main problem is that the complainant did not know, immediately, where the goods were? It was assuming that the goods had reached the Consignee. It clearly shows negligence, inaction and passivity on the part of the complainant. It should have been vigilant and should have posted itself with the 'day-to-day' proceedings.
27. The Insurance Company-OP was deprived of its legitimate right to get the enquiry conducted into the alleged loss of the goods and make an endeavor to recover the same. After the lapse of more than 2-3 years, it is not only difficult, but impossible to trace out those goods. The complainant should have been vigilant from the very start because this case has got unique facts. The Seller is a resident of India, the Buyer is a resident of America, the Consignee is a resident of Moscow and the concerned Bank belongs to fourth country, i.e., Latvia. It was incumbent upon the complainant to keep tabs upon the goods, at each and every stage. It should not have initiated the proceedings before the Riga District Court, Latvia, because the goods had not yet arrived with the Consignee. Its right would have cropped up only after the receipt of the goods by the Consignee. Consequently, it appears that the courts at Latvia passed a proper order. The complainant and its agent must have informed the foreign settling agents, immediately and should have given notice to the Surveyor, whose address was mentioned in the certificate or if not mentioned or if the Surveyor or its agent was not available in that event to the insurance company immediately without delay. Moreover, it did not extend co-operation to the Insurance Company and did not furnish to it, all the documents. The complainant did not file any claim with the local settling agent of the insurance company, i.e., M/s. Ingosstrakh, at Moscow.
28. Again, the claim was to be lodged at Moscow and not in India. It is difficult to fathom as to how the goods got vanished. There is not even an iota of evidence. It is for the complainant to prove that the goods actually stood lost, by cogent and unflappable evidence. It appears that the complainant exhausted each and every way to recover the goods and when it could not succeed, it had unnecessarily filed this case against the OP. The evidence goes to show that the complainant has no bone to pluck with the OPs. So far as OP1 is concerned, no deficiency can be attributed to it. The complainant has tried to make the bricks without straw. The complaint is, therefore, dismissed. No order as to costs.
......................J J.M. MALIK PRESIDING MEMBER ...................... DR. S.M. KANTIKAR MEMBER