State Consumer Disputes Redressal Commission
M/S. Poongodhai Textiles (P) Ltd., vs The United India Insurance Co. Ltd., on 30 April, 2013
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE : Honble Thiru Justice R. REGUPATHI PRESIDENT Thiru S. SAMBANDAM MEMBERC.C.NO.10/2004
DATED THIS THE 30th DAY OF APRIL 2013 M/s.
Poongodhai Textiles (P) Ltd., Rep.
by its Managing Director M. Palanisamy S.F.13/2, P. Vadugapalayam M/s. G. Karthikeyan Palladam Road (West) Counsel for Palladam, Tamil Nadu Complainant Vs. The United India Insurance Co. Ltd., Divisional Office I Bank of Baroda Buildings M/s. K.S. Narasimhan State Bank Road Counsel for Coimbatore 18 ..Opposite party This complaint dt.17.9.2003 is filed by the complainant, praying for compensation of Rs.60,00,000/- towards the damages caused, to pay Rs.11,40,000/- towards interest from 17.12.2002, to pay Rs.10,00,000/- compensation for mental agony, to pay Rs.20000/- towards legal fees, as well as to pay further interest on Rs.60,00,000/-.
This petition coming on before us for hearing finally on 28.3.2013.
Upon hearing the arguments of the counsels on bothsides, and upon perusing the materials on record, this commission made the following order:
JUSTICE R. REGUPATHI, PRESIDENT
1.
The complainant is the Managing Director of M/s. Poongodhai Textiles Ltd., having its office at S.F.13/2, P.Vadugapalayam, Palladam Road (West), Palladam. The complainant entered into a contract with the opposite party viz. United India Insurance Co. Ltd., Coimbatore, for a Marine Insurance, for shipment of Sulzer Projectile Looms on 7.1.2002, and paid a sum of Rs.26,069/- as premium, for the policy sum of R.76,00,000/- vide certificate No.170100/21/01/80103, valid from 8.1.2002 to 7.1.2003. The looms were loaded in 5 tankers, and were dispatched in a vessel by name India Mex Daj 1151, form Charleston U.S.A, to Tuticorin Port, India, and the journey commenced on 17.1.2002. The spare parts of the looms were loaded in the 5th container. It is alleged that the complainant received information from the shipping agent on 9.2.2002, that the four containers, during the course of journey, got damaged due to bad storm, encountered by the ship during the voyage. Due to that four containers were off loaded in the midway at the Port Said Egypt, and the same was informed to the opposite party on 9.2.2002. The opposite party appointed a surveyor at Egypt and assessed the damages caused to the looms. On 14.2.2002 they surveyed the looms, and submitted a report on 25.2.2002, and the complainant paid 7200 USD towards the expenditure for inspection charges at Port Said Egypt. Later the looms were dispatched from Egypt to India and on reaching the port at Tuticorin a survey was conducted at the instance of the opposite party on 3rd , 4th , and 5th May 2002, at the factory premise of the complainant.
2. On 17.12.2002, the complainant submitted a claim for Rs.59,14,544/- towards the damages, since he has suffered Rs.60 lakhs towards repairing charges. By letter 10.3.2003, he called upon the opposite part to settle the claim. As there was no reply, issued notice on 24.6.2003, and though the opposite party acknowledged the same on 25.6.2003, never replied and subsequently preferred a complaint before this commission, claiming for Rs.60,00,000/- alongwith interest from 17.12.2002, towards compensation for damages, and RS.10,00,000/- towards compensation for mental agony alongwith cost of RS.20000/-.
3. The complainant to substantiate his claim, filed proof affidavit, alongwith documents which are marked as Ex.A1 to A9.
Ex.A1 is the Sale contract entered with CTE International, Inc. USA. Ex.A2 is the letter issued by the opposite party requesting for issue of Maritime Policy, enclosing cheque for premium of Rs.26069/-. Ex.A3 is the policy certificate, Ex.A4 is the Preliminary Marine Survey Report by Rank Associates, Ex.A5 & A6 dt.9.2.2003 and 10.3.2003 respectively are the letter issued by the complainant to opposite party, and Ex.A7 is the Advocate notice sent to the opposite party on 24.6.2003 and Ex.A8 is the acknowledgement card for the same. Subsequently the complainant filed a Technical Inspection Packing and Loading Report conducted on and from 13.12.2001 to 18.12.2001 by Mr.G. Christy Devadoss, a Swiss trained Technician, at Thomaston, North Carolina, USA, which is marked as Ex.A9.
4. The written version of the opposite party in brief is as follows:
The opposite party admitted issue of policy mentioned by the complainant, and further admitted the inspection & survey conducted by the surveyors appointed by the opposite party. It is contended that they are not guilty of any deficiency in service, as the decision to repudiate the insurance claim of the complainant, was taken after due consideration of all facts and circumstances and was communicated to the complainant by letter dt.24.12.2003. That the complainant suppressed certain details relating to packaging and manner of loading the machinery inside the tankers. The opposite party had issued a Marine Open Cover Insurance Policy, subject to the terms of insurance as per clauses mentioned in the policy. When the containers were off loaded in the midway and joint survey was conducted on 8.2.2002 at Port Said Egypt, by Mr.M.Elady of P&T Club Surveyor and the Surveyors have given the report, Ex.B2 dt.8.2.2002 which reads as follows:
Aforesaid four containers found to have bulges, different ton opened across mainly located at side walls due to cargo of heavy weaving machine (used) were slamming against walls when post their fixation with showing wooden rodles inside containers.
Upon opening all above containers, the weaving machines found badly tumbled, turned over and in severe contact with side walls, beside their components were either detached or distorted and scattered over floor. Most machines looses dropped on container floor and partly embedded so that attempt of removing of them for proper repositioning and lashing was in vain. The forklifts used were not powerful enough to shift them.
5. The Marine Insurance certificate dt.8.2.2002 was issued based on the details furnished by technical inspection, packing and loading report given by Mr.G.Christy Devadass and packing and loading was done in his presence from 13.12.2001 to 18.12.2001, and such a report is contradictory to the report furnished by Marine Technical Services, Cairo, Egypt, and submitted that it is always essential while transporting looms to ensure firm securing to the sides within the container. Therefore, it is absolutely necessary for lashing on either side between the loom and the side wall of the container so that the lateral movements/ displacement during transit are impossible, and considering the nature of the machine, the looms cannot be transported by placing one over the other which would lead to further balancing problems during the voyage involving side way movements and turbulence.
6. It would be evident from the reports of M/s. Marine Technical Services ltd., Cairo and M/s. Samrat Shipping and Logistics Pvt. Ltd., Tuticorin, proper steps have not been taken to ensure safe passage by sea.
A preliminary survey was conducted by M/s. Rank Associates who assessed the damages in their report dt.3.7.2002 at Rs.3500000/-, and a final survey was conducted by M/s. COMTEC Surveyors, Valuers & Assessors who in their report dt.10.12.2002, assessed the damages to the extent of Rs.41,85,549/-. Inspite of advise by the opposite party, the complainant have chosen to send the cargo from Egypt to India by the same containers, which could have caused further damage, and the resultant loss has probably been aggravated and submitted that since the complainant has violated the policy condition, is not entitled to the claim, which was rightly repudiated by the opposite party.
7. To substantiate their contentions the opposite party filed their proof affidavit, alongwith documents, which are marked as Ex.B1 to B6.
8. Ex.B1 dt.24.12.2003 is the repudiation letter by the opposite party, Ex.B2 is the Initial Advice by the P&T Club Surveyor and Fairtrans Surveyor, Ex.B3 is the Survey report by Marine Technical Services, Ex.B4 is the E mail from Samrat Ship Co. informing about the damage, Ex.B5 is the Preliminary Marine Survey Report dt.3.7.2002 by Rank Associates, and Ex.B6 dt.10.12.2002 is the Final Survey Report by Final Marine Survey Report.
9. Mr. N. Veeraraghavan, Surveyor of M/s. Comtec, has been examined as RW1 on the side of the opposite party, and Mr.Christy Devadass, Surveyor, has been examined as PW1 on the side of the complainant.
10. The learned counsel for complainant, Mr.G. Karthikeyan, taken us hrough the typeset of papers, filed by the complainant and submitted that inspite of specific allegations made by the complainant, the opposite party failed to respond the same in time, and belatedly made some vague statements, which is liable to be dismissed in limine. It is unfortunate that the opposite parties have never responded for the claim petition dt.10.3.2003 and for the legal notice dt.24.6.2003, and before that the complaint came to be filed and submitted that itself will constitute deficiency of service.
11. The insurance was issued only on the basis of the pre-inspection report, and submitted that the opposite parties have verified that everything was in order, before issuing the policy. Though it has been contended repeatedly by the opposite party, that the manner of packing and loading was improper, failed to rely on the pre-inspection report, which has been done in the presence of the opposite party, based on which the policy was issued. Though the complainant was ready and willing to transfer the cargo, to a new container at Port Said Egypt, facilities to re-stuff the cargo was not available, and in the absence of alternate facility, the cargo was carried in the same container. Even at this point of time, the opposite parties were informed and they never objected for the movement of the cargo in the same container.
12. It is further submitted that the opposite party, without any rime or reason, appointed another surveyor by name M/s. Comtec, when already a survey report by M/s.Rank Associates are available. Even on the basis of the report given by M/s. Rank Associates, submitted that the complainant is entitled for the damages. It is submitted that the risk is fully covered under the policy, and the complainant has suffered Rs.6000000/- towards repairing charges for the looms and in view of the conduct of the opposite party huge damage has been caused, and he must be suitably compensated.
13. Per contra, the leaned counsel for the opposite party Mr.P.V.Raghavan, submitted that the machineries were not properly packed, and the same could be ascertained by the surveyor M/s. Marine Technical Ltd., Cairo, Egypt and it is also conveyed by the surveyor M/s. Comtec, and the claim does not merit scope of cover under the policy. It is submitted that the finding of M/s. Marine Technical services, Egypt is contrary to the report of Mr.Christy Devadass, who has given pre-inspection report, the looms cannot be transported by placing one over the other, which would lead to further balancing problem during the voyage, involving side way movement and turbulence. Inspite of advise by the opposite party to load the cargo in a new container at Port Said Egypt, the cargo was sent in the same container, which would have caused further damage, and submitted that in view of insufficiency or unsuitability of the package or preparation of the subject matter insured, the complainant is disentitled for the claim, and that is the reason why it was repudiated, and the same was communicated to the complainant on 24.12.2003.
14. We have heard the arguments of bothsides counsels, perused the documents, filed by both parties, and the evidence of RW1 and CW1.
15. Point for consideration is whether there is deficiency in service on the part of the opposite party, and if so what relief could be granted?
16. Admittedly, the insurance policy was issued only after receiving pre-inspection report, furnished by Mr.Christy Devadass. Mr. Christy Devadass (CW1) was cross-examined at length by the counsel for opposite party by raising doubt that he would not have visited for inspection of the cargo before loading, and his report should not be taken into consideration, since it is contrary to the report of the other surveyors.
17. On perusal of Ex.A3, a specific mention has been made in the Marine Insurance Certificate dt.8.1.2002, this document is issued subject to the details contained in the pre-inspection report. When such a certificate has been issued by the opposite party, relying on the pre-inspection report, it is unfortunate that now they are taking a stand that Mr.Christy Devadass, never visited for inspecting the looms, at the time of loading.
On perusal of the evidence of Mr.Christy Devadass, he has specifically stated as follows:
Since the looms by themselves were heavy by their self weight and being the second hand looms, they were packed as per practice and convention, one above the other and were shipped. Since suitable provisions were given by the loom manufacturer, it was possible to load one loom above the other loom and secured with heavy bolts and nuts and the screws were with proper bushes. Moreover, all the four corners of the looms were also secured by the above bolts with their legs. Each bottom of the looms were also skidded with two heavy wooden blocks (6X6X20 length) on both the legs and were secured with heavy bolts and nuts.
The above said heavy wooden blocks were provided for each set of looms before loading into the containers. These wooden blocks are provided for smooth loading of the looms in each container and also to arrest the movements of looms inside the containers. Roping of the machineries were also done perfectly to avoid the wooden skidding, as the looms were loaded one above the other. Before starting to load the looms, I thoroughly inspected each container and found that they are in good condition and no oil or water spilled over the floor of each container. The containers were also washed and kept clean.
The looms were kept inside the container by using heavy fork trucks by well experienced rigging crew. The first two looms were kept positioned in the centre position of the container while loading. After loading the first set of two looms, the wooden blocks were strongly arrested with the container floor by using heavy nails to arrest the movement of the looms to avoid oscillation movements of the looms while sailing. Two other looms were loaded next to first two set of looms in the same manner with proper care. The second sets of two looms were also arrested properly with heavy nails to avoid the movements of the looms inside the container. The wooden blocks were also provided between the side walls and surface of the looms.
After loading four looms, I thoroughly checked the packing of the looms and then container doors were closed and sealed by using proper seal. The seal number of the container and container number and all particulars of containers were recorded by me. The details are given above. Similarly, all other looms were loaded in other containers in the same manner stated above. I also submit that, all the containers were loaded with looms and all dismantled parts were loaded in the fifth container in my presence and guidance only.
18. Mr. Christy Devadass has been subjected to cross examination and on perusal of the same, we could not find anything contrary to disbelieve his evidence, and we are of the opinion that the looms were properly loaded into the containers before it was sent for voyage. On perusal of Ex.B5, Survey Report of Rank Associates dt.3.7.2002, we could see the following observations made:
Each loom having an approx. length of 15was kept on strong wooden block of app. size of 6X 6X 16 and is fitted to the wooden block by means of four bed bolts at the four bottom corners of the loom. Another loom was placed over the top of this loom and fitted firmly by means of 4 strong bed bolts thus connecting the top of the first and bottom plate of the second loom. Thus two loom were kept one over the other in two tier arrangement and totally 4 such loom were stuffed in the container. Since the looms are heavy and massive, there could be little lateral movement and this type of packing for a second hand machinery can be termed as customary.
Cause of Damage:
Based on the records produced/ documents produced for verification, we were given to understand that there was a bad storm when the ship was undergoing voyage.
Since the containers suffered external damage on the sides of the wall, we are of the opinion that the heavy storm might have titled the containers causing lateral movement to the looms (kept in two tiers) and the looms might have lost their centre of gravity and hit against the walls of the containers thus causing damage to the loom parts.
It is quite possible that the containers might have been continuously jolted due to the storm and the looms kept in the top tier might have collapsed and during the collapse many of the parts might have been broken and the bottom wooden block had also broken due to sudden collapse. The severity of the damage to the parts would clearly indicate how violent the storm had pervaded.
19. On perusal of the pre-inspection report, as well as the inspection report, dt.3.7.2002 safely we could come to a conclusion that the contention of the opposite party cannot be taken seriously, and the consignment suffered damage due to violent storm, and when it was under the custody of carriers. In the report in Ex.B5 dt.3.7.2002 the damage has been assessed as Rs.35 lakhs. Though M/s. Comtec, Surveyor, in their report dt.10.12.2002 assessed the damage to an extent of Rs.41,85,549/-, stated that the claim does not merit scope of cover under the policy. On careful perusal of the reports, we could come to a conclusion that the opposite parties have reached such a decision for repudiating the claim, without any basic materials. While disagreeing with the stand taken by the opposite party, we are of the considered opinion that the complainant is entitled for repair charges claimed under the policy.
20. The opposite party though was in possession of all the materials, failed to reply to the claim petition and legal notice of the complainant, and only when the complaint was filed before this commission, chosen to reply and we are of the considered opinion that this itself will constitute deficiency of service and negligence.
21. The National Commission has held in Prakash Road Lines Ltd., Vs. R.S.Chandel reported in 2004 III (NC) CPJ 10 as When the respondent brought to the notice of the petitioner regarding the damages caused to his personal belongings, the petitioner did not respond to the demand at that relevant time which amounts to deficiency in service.
22. Having issued the insurance policy, on the basis of pre-inspection report, it is unfortunate that a peculiar stand has been taken, that such inspection was not conducted and such a report is non-existent. Even after receiving a report of a surveyor, without even informing the complainant, appointed a second surveyor, which was all along discouraged. In a case in Sri Sai Anil Enterprises Vs. Oriental Insurance Co. Ltd., reported in I (2004) CPJ 196, it has been held that The National Commission has time and again pointed out that the insurance company cannot go on appointing surveyors till they get a favourable report without justifiable cause. We are of the opinion that there is absolutely no justification to appoint a third surveyor having obtained two reports merely because they are not acceptable to the opposite parties. For these reasons we hold that there is deficiency in service, on the part of the opposite parties.
23. Having held that the opposite party has committed deficiency of service the case of the complainant shall be considered on available materials. Though the report of the surveyors quantify the damages as Rs.35,00,000/- and Rs.4185549/- the claim made by the complainant for carrying out the repair is Rs.59,14,544/-. The opposite party having delayed even to reply the legal notice, taken a stand to repudiate the claim on the sole ground that the goods were not properly packed.
However failed even to take into account the observation made by their own surveyors that this type of packing for a second hand machinery can be termed as customary. The opposite party simply ignores the stand report there was a bad storm when the ship was undergoing voyage and the severity of the damage to the parts would clearly indicate how violent the storm had prevailed. The opposite party never bothered to look into the correctness or quantum of claim made by the complainant and this lethargic conduct of a reputed insurance company shows that how casual in handling the claim of consumers. We are of the opinion that the opposite party has not only committed deficiency of service but also highly negligent in considering the claim made by the complainant. Since the quantum of claim made by the complainant is not seriously disputed with sufficient materials, we are left with no other alternative to allow the claim made in the complaint. Apart from the repair charges, the complainant sought for a relief to levy interest and damages towards mental agony. The complaint is pending consideration for 10 years and we are of the considered opinion that the complainant must be suitably compensated. The point is answered in favour of the complainant.
24. In the result, the complaint is allowed.
1. The opposite party is directed to pay a sum of Rs.59,14,544/- being the cost of repair, alongwith interest @9% p.a., from the date of claim, till realization.
2. To pay a sum of Rs.10 lakhs towards compensation for mental agony and damages.
3. To pay a sum of R.10000/- towards cost.
Time for payment two months.
S. SAMBANDAM R. REGUPATHI MEMBER PRESIDENT Exhibits of the complainant A1 02.11.2001 Copy of Sale Contract entered with CTE Inter National Inc. USA A2 07.01.2002 Letter by complainant to OP A3 08.01.2002 Maritime Insurance Certificate to the OP A4 03.07.2002 Maritime Survey Report by Rank Associates A5 09.02.2002 Letter by complainant to OP A6 10.03.2003 Letter requesting damages from OP A7 24.06.2003 Advocate Notice issued by complainant to OP A8 25.06.2003 Ack. card
A9 13-18.12.2001 Survey report of Mr.Christry Devadoss Exhibits of the opposite party B1 24.12.2003 Letter from OP to complainant B2 08.02.2002 Initial advice by P & T Club Surveyor B3 25.02.2002 Fax message from Maritime Technical Services B4 12.02.2002 E mail from Samrat Ship Co.
B5 10.12.2002 Final Survey Report of COMTEC S. SAMBANDAM R. REGUPATHI MEMBER PRESIDENT INDEX : YES / NO Rsh/d/RRJ/OP Orders