National Consumer Disputes Redressal
New India Assurance Co. Ltd. & Anr. vs Industrial Transport Organisation on 14 August, 2018
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 665 OF 2017 (Against the Order dated 14/12/2016 in Appeal No. 1482/2014 of the State Commission Gujarat) 1. NEW INDIA ASSURANCE CO. LTD. & ANR. DELHI CENTRAL LEGAL HUB (820000) 12/1, 2ND FLOOR, JEEWAN RAKSHA BUILDING ASAF ALI ROAD, NEW DELHI-110002 2. VOLTAMP TRANSFORMERS LTD. MAKARPURA, VADODARA-390014 GUJARAT ...........Petitioner(s) Versus 1. INDUSTRIAL TRANSPORT ORGANISATION ITO HOUSE, 101, SWASTIK CHAMBERS, NEAR MAKARPURA S.T. DEPOT, VADODARA-390014 GUJARAT ...........Respondent(s) REVISION PETITION NO. 666 OF 2017 (Against the Order dated 14/12/2016 in Appeal No. 1483/2014 of the State Commission Gujarat) WITH
IA/4200/2017(Exemption from filing the Certified Copy),IA/4831/2017(Directions),IA/15571/2017(Condonation of delay) 1. NEW INDIA ASSURANCE CO. LTD. & ANR. DELHI CENTRAL LEGAL HUB (820000) 12/1, 2ND FLOOR, JEEWAN RAKSHA BUILDING ASAF ALI ROAD, NEW DELHI-110002 2. VOLTAMP TRANSFORMERS LTD. MAKARPURA, VADODARA-390014 GUJARAT ...........Petitioner(s) Versus 1. INDUSTRIAL TRANSPORT ORGANISATION ITO HOUSE, 101, SWASTIK CHAMBERS, NEAR MAKARPURA S.T. DEPOT, VADODARA-390014 GUJARAT ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE MRS. M. SHREESHA,MEMBER
For the Petitioner : Mr. Ravi Bakshi, Advocate
Mr. Utkarsh Mathur, Advocate For the Respondent : Mr. Jatin Zaveri, Advocate
Dated : 14 Aug 2018 ORDER
M. SHREESHA, MEMBER
1. Challenge in these Revision Petitions, under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act"), by New India Assurance Co. Ltd. (for short "the Insurance Company") and Voltmap Transformers Ltd. (for short "the Complainant Company"), Petitioners No. 1 and 2 respectively, is to the order dated 14.12.2016, passed by the Gujarat State Consumer Disputes Redressal Commission at Ahmedabad (for short "the State Commission") in First Appeals No. 1483 and 1482 of 2014. By the impugned order, the State Commission has allowed the Appeals preferred by the Respondent, namely, Industrial Transport Organization, and set aside the order dated 07.08.2014, passed by the District Consumer Disputes Redressal Forum, Vadodara (for short "the District Forum") in Consumer Complaints No. 47 and 48 of 2011. By the said order, the District Forum had partly allowed the Complaints, preferred by the Petitioners herein.
2. Except for some minor variations as regards dates of events, policy details, and amounts claimed by the Complainants etc., both the Complaints involve similar facts between the same parties and common issue and both the Forums below have decided the Complaints/Appeals by their respective common orders. Accordingly, both these Revision Petitions are also being disposed of by this common order. However, for the sake of convenience, Revision Petition No. 665 of 2017 is treated as the lead case and the facts enumerated hereinafter are also taken from the same, which would govern both the cases.
3. The facts, in brief, are that the Complainant Company was a Company dealing in manufacturing and selling of transformers and the Insurance Company, was the assignee/subrogee of the Complainant Company. The Opposite Party as arrayed before the District Forum, the Respondent herein, was Industrial Transport Organization (for short "ITO"). It was averred that a consignment of 2500 KVA 33 KV/433V transformers, worth ₹24,81,130/-, was booked through ITO to be delivered to M/s Anil Kumar & Company at Greater Noida (U.P.) vide Consignment Note No. 4027 dated 27.12.2008. It was stated that the consignment reached the consignee on 05.01.2009 and 03.01.2009 in a damaged condition and hence, the delivery was not accepted and returned to the Complainant Company. It was pleaded that it was certified by ITO that the subject consignment was delivered in a damaged condition and the value of damage was ₹10,27,500/- and a Certificate, no. 104, dated 20.01.2009 was also issued. As the said consignment was insured with the Insurance Company vide Policy No. 220200/21/07/02/00000248, the Complainant Company lodged their claim and submitted all the documents. Thereafter, the Insurance Company settled the claim by paying the Complainant Company a sum of ₹8,21,195/-. After receipt of the claim, the Complainant Company assigned/subrogated all its rights to the Insurance Company to recover the damages from ITO by signing a letter of subrogation on 04.07.2009. It was pleaded that the Insurance Company has become legally entitled to file the Complaint on behalf of the Complainant Company to recover damages from ITO.
4. On 28.01.2009 the Insurance Company got issued a legal notice to ITO by RPAD to reimburse the value of the loss incurred, i.e. ₹10,50,000/- on account of deficiency in service but received no response. In the said background, Consumer Complaint No. 47 of 2011 came to be filed before the District Forum, seeking a direction to ITO to pay (i) ₹8,21,195/- towards accidental damages to the Complainant Company's consignment of 2500 KVA Transformer, along with interest @ 12% p.a. from 05.01.2009; (ii) ₹1,00,000/- for mental agony; (iii) ₹50,000/- as costs; (iv) ₹20,290/- as administrative charges; and (v) ₹1,48,515/- towards Survey Fee. More or less, similar were the prayers made in the second Complaint, i.e. Consumer Complaint No. 48 of 2011.
5. ITO contested the Complaints by filing its Written Versions, stating that the Insurance Company is not a 'consumer' as defined under Section 2(1)(d) of the Act; that the Complainant Company had hired the services of ITO for commercial purposes as it is dealing with manufacturing and selling of transformers; that the District Forum had no jurisdiction to entertain the Complaints; and that there is no deficiency in service on its part, warranting payment of any compensation.
6. The District Forum, based on the evidence adduced by the parties, allowed Consumer Complaint No. 47 of 2011 in part, directing ITO to pay to the Insurance Company a sum of ₹8,21,195/- with interest @ 9% p.a. from 07.07.2009 till the date of realization, together with ₹5,000/- towards mental torture and agony and ₹2,000/- as costs.
7. Consumer Complaint No. 48 of 2011 was also partly allowed, directing ITO to pay to the Insurance Company a sum of ₹4,42,270/- with interest @ 9% p.a. from 20.11.2009 till the date of realization, as also ₹5,000/- towards mental torture and agony and ₹2,000/- as costs.
8. The District Forum placed reliance on the judgment of the Hon'ble Supreme Court in Economic Transport Organization, Delhi v. Charan Spinning Mills Pvt. Ltd. And Anr., (2010) 4 SCC 114, and observed that the Complaints are maintainable before the District Forum; that as the Complainant Company had booked its consignment with an objective of transferring the consignment to reach to the consignee and paid charges for the same, the same cannot be called as 'commercial transaction'; and finally, the letter of subrogation is a contractual arrangement, which crystalizes the rights of the insurer vis-à-vis the assignee. The District Forum has further observed that as the Insurance Company had settled only a part of the loss incurred by the Complainant Company, the insurer may, if the letter of subrogation so authorizes, first appropriate what it had paid to the assured and pay only the balance, if any, to the assured.
9. Aggrieved by the said orders, ITO preferred the afore-noted Appeals before the State Commission. The State Commission, while allowing the Appeals, observed as follows:
"12. Relying on the letter of subrogation, the District Forum has allowed the complaint and passed order in favour of Complainant No.2. No doubt, relying upon the letter of subrogation, the insurance company is at liberty to file complaint if letter of subrogation is duly proved or in good faith it has been given by the complainant to the insurance company. Now, let us go through the letter of subrogation. As stated above, in our opinion, on the basis of letter of subrogation the insurance company is authorised to file complaint but then due authorization is required to be placed on record by the insurance company from the complainant or the complaint should be filed by complainant No.1 as well as complainant No.2 i.e. the insured as well as the insurer. Here, as discussed above, no authorization letter of complainant is placed on record nor the complaint is signed by complainant No.1 - insured. It is also pertinent to note that as discussed above, considering the terms and conditions of the Bill, the transporter is not liable for any damage caused to the consignment during the transit. Therefore, in our opinion, the opponent would not be liable to pay compensation or indemnify the damage caused to the goods of the complainant. We have gone through the terms and conditions of the policy. The insurance company is liable to pay for any damage caused to the goods during transit and therefore, now it is not proper for the insurance company to file complaint for recovering the damages under the guise of letter of subrogation.
13. Further, the vakalatnama has not been signed by both the complainants. If there is any damage to the consignment during transit, damage certificate is required to be obtained by the consignor from the transporter for putting the claim before the insurance company. But, as discussed above, considering the recital in the certificate, there is no mention by the opponent with respect to the cause of damage to the goods. Further, as per condition No.4 of the terms and conditions of the LR, the opponent has not undertaken any liability to indemnify the consignor in case of any loss or damage to the consignment or part thereof. Therefore, the damage certificate cannot be the base for lodging complaint by the insurance company.
14. In our opinion, the District Forum has erred in interpreting the documents placed on record and by that committed error in partly allowing the complaint in favour of complainant No.2 insurance company. The order of the District Forum requires interference in Appeal.
ORDER
Appeal No. 1482 of 2014 and 1483 of 2014 are allowed Judgment and order dated 7.8.2014 rendered by the Consumer Disputes Redressal Forum, Vadodara in Complaints No. 47 of 2011 and 48 of 2011 are hereby quashed and set aside. Complaints No. 47 of 2011 and 48 of 2011 shall stand dismissed. No order as to costs in appeals."
10. The brief point, which falls for consideration in these Revision Petitions, is whether the Insurance Company can file the Complaints as the subrogee/assignee of the Complainant Company. The facts not in dispute are that the subject consignment was booked by the Complainant Company to be delivered to the consignee; was delivered in a damaged condition and the same was certified on 20.01.2009 and 18.01.2009 respectively, assessing the value of damages at ₹10,27,500/- and ₹7,00,000/- respectively. It is also not in dispute that the Insurance Company settled the claim in the sum of ₹8,21,195/-, in addition to the survey fee and administrative charges. It is specific case of the Insurance Company that after receiving the amounts, the Complainant Company subrogated all its rights to recover the damages from ITO by signing letter of subrogation on 04.07.2009 and 23.11.2009. The State Commission has given a finding that the Complaints were filed by the Insurance Company without due authorization from the Complainant Company and that the vakalatnama was also not signed by both the Complainants. It was also observed that as per Condition No.4 of terms and conditions of the L.R., ITO had not undertaken any liability to indemnify the consignor in case of any loss or damage to the consignment or in part thereof.
11. Learned Counsel for the Petitioner/Insurance Company drew our attention to the letter of subrogation, para-5 of which authorizes the Insurance Company to use the Complainant Company's name in any suit, complaints, action or proceeding that may be brought jointly in their names, or in relation to any of the matters subrogated to the Insurance Company and it was also undertaken to assist the Court in any matter or proceedings, which may deem expedient or necessary in any of the suits/complaints. For better understanding of the said clause in the letter of subrogation, it is reproduced hereunder:
"5. And we also hereby authorise you to use our name in any suit, complaints, action or proceedings that you may bring jointly in our name and yours in relation to any of the matters hereby subrogated to you and we undertake for ourselves to assist and concur in any matters or proceedings which you may deem expedient or necessary in any such suits, complaints, actions or proceedings and to execute all deeds and/or documents including any and all pleadings and releases which may be necessary therefore and generally to assist therein by all means in our power."
12. Learned Counsel for the Insurance Company vehemently argued that para 35(v) of the Economic Transport Organization (supra) is not applicable to the present case, as the letter of subrogation only subrogates but does not assign the rights to the Insurance Company and that if the insurer alone files the Complaint in its own name, the same will not be maintainable as the insurer is not a 'consumer' and does not fall within the definition as provided under the Act. The letter of subrogation, entered into between the Insurance Company and the Complainant Company on 25.04.2009, states in unequivocal terms that the Insurance Company can jointly or otherwise use the Complainant Company's name in any suit/complaint.
13. It is the main contention of Learned Counsel for ITO that the Complaints have been filed by the insurer in its own name and that the State Commission is right in dismissing the Complaints as the vakalatnama has not been signed by the Complainant Company and, therefore, the Complaints are not maintainable as the insurer is not a 'consumer'. It is pertinent to note that vakalatnama filed in these Revision Petitions is signed by both the Complainant Company and the Insurance Company and, therefore, the technical objection to the effect that the vakalatnama did not have the signatures of the Complainant Company is laid to rest. At the cost of repetition, we are of the considered view that where the insurer pays to the insured the value of goods lost due to negligence of a third party, which in the instant case is ITO, it was held that the rights and remedies of the insured against such a third party stands transferred to and vested in the insurer and such equitable assignment of rights and remedies of the of the insured in favour of the insurer, implied in contract of indemnity is known as "subrogation", which supports the stand of the Insurance Company.
14. For all the afore-noted reasons, these Revision Petitions are allowed; the order of the State Commission is set aside; and the Appeals are restored to the board of the State Commission. The State Commission shall decide the same on merits as expeditiously as practicable but not later than six months from the date of receipt of a copy of this order.
15. The parties/their Counsel are directed to appear before the State Commission on 18.09.2018 for further proceedings.
......................J R.K. AGRAWAL PRESIDENT ...................... M. SHREESHA MEMBER