State Consumer Disputes Redressal Commission
The New India Assurance Co Ltd vs 1. Pushpak International & Ors on 11 January, 2012
DRAFT : A/10/387 (PNK+DK) (11/01/2012)
BEFORE THE HON'BLE STATE CONSUMER DISPUTES
REDRESSAL
COMMISSION, MAHARASHTRA,
MUMBAI
First Appeal No. A/10/387
(Arisen out of Order Dated 13/01/2010 in Case
No. 325/2006 of District Additional DCF, Mumbai(Suburban))
1. THE NEW INDIA
ASSURANCE CO LTD
SAKI NAKA DIV OFFICE
NO 140400 VISWAS CTS 728-A ANDHERI KURLA ROAD SAKI NAKA MUMBAI 400072
...........Appellant(s)
Versus
1. PUSHPAK
INTERNATIONAL & ORS
A-24 NANDJYOT INDUSTIAL ESTATE ANDHERI KURLA
ROAD
SAFED POOL SAKI NAKA ANDHERI E MUMBAI 400 072.
...........Respondent(s)
2.M/S.HANSRAJ MATHURDAS,
CHETAN-C RAJAWADI ROAD,
GHATKOPAR (EAST), MUMBAI
400 077.
BEFORE:
Hon'ble Mr. P.N.
Kashalkar PRESIDING MEMBER
Hon'ble Mr. Dhanraj
Khamatkar Member
PRESENT:
S R SINGH & CO ,
Advocate for the Appellant
ABHIJIT GONDWAL,
Advocate for the Respondent
ORDER
(Per Shri P.N.Kashalkar, Honble Presiding Judicial Member) (1) This appeal is filed by the The New India Assurance Co. Ltd., Mumbai the order passed by Additional District Consumer Disputes Redressal Forum, Mumbai Suburban District, Bandra, Mumbai (hereinafter to be referred as to forum below) in Consumer Complaint No.325/2006 decided on 13/01/2010. While allowing the complaint partly the forum below directed the insurance company to pay an amount of `11,92,415/- as per survey report with an interest @ 9% p.a. from 05/10/2005 and also directed to pay an amount of `10,000/-
towards mental harassment and `1,000/- towards costs of the complaint to the complainant. As such, the original opponent insurance company has filed this appeal.
(2) The facts in nut-shell are that :-
The complainant, M/s.Pushpak International is manufacturer and also exporter & importer of goods. They are having goods godown at A-24, Nandjyot International Estate, Andheri-Kurla Road, Safed Bridge, Saki-Naka, Andheri (East), Mumbai 400 072. It was on the first floor. The complainant had purchased Marine Open Cover (Cargo) Policy bearing No.1404000400012 from the opponent. The said policy was for the period from 16/12/2004 to 15/12/2005. The complainant had prepared 484 boxes containing stainless steel, aluminium utensils and plastic wares for exporting to M/s.Mosali Cold Storage, Zambia by sea to Lusaka via Dar-E-Salam. They had registered requisition with M/s.Swift Shipping & Freight Logistics Pvt.Ltd. and had asked to provide 20 containers for sending their goods by see. According to the complainant, M/s,Swift Shipping & Freight Logistics Pvt.Ltd. on 25/07/2005 informed that they would be sending containers on 26/07/2005.
M/s.Swift Shipping & Freight Logistics Pvt.Ltd. had contacted Arabi Star Maritime Agency Pvt.Ltd. for sending the said containers of the complainant by shipping to the destination port. Accordingly, the complainant had brought those packets on the ground floor from first floor and kept it in the open space and they were waiting for containers on 26/07/2005 at 10.00 a.m. They had also intimated to Superintendent, Central Excise, Range O-I, Powai that they would be sending goods by sea as export consignment.
However, according to the complainant on 26/07/2005 because of heavy rains before the containers of M/s,Swift Shipping & Freight Logistics Pvt.Ltd. arrived there was heavy rain.
The complainant could take 48 packets out of 484 packets from ground floor to first floor and 438 packets which remained there were spoiled totally because of heavy rains.
Accordingly, opponent was informed and surveyor was sought to be appointed, but the opponents officials informed them that the goods were damaged in floods before they were put in containers and therefore policy taken by the complainant did not cover the risk in respect of goods before they were put in the container for onward journey by sea. Again on 01/08/2005, the opponent was requested to appoint surveyor.
Thereafter, M/s.Hansraj Mathuradas was appointed as surveyor. They surveyed the packets and assessed the damage of goods by the heavy rains.
They submitted survey report on 05/09/2005 and as per the survey report, they had asked the opponent to make reimbursement of `11,92,415/-. According to the complainant, by letter dated 11/11/2005, insurance company informed they have not received any documents from the complainant and hence again on 17/11/2005, the complainant sent all requisite documents to the opponent insurance company. The opponent insurance company repudiated the claim by sending letter (Exh.P-13). Insurance company repudiated the claim on the ground that they had not received any declaration from the complainant company about the consignment being sent and the consignment affected by the flood was not covered by them.
After repudiation, the complainant company filed consumer complaint claiming an amount of `11,92,415/- along with 21% p.a. and also claimed compensation of `1,50,000/- towards mental harassment and loss of business.
(3) Appellant (original opponent) filed written version and pleaded that the complaint claiming for damage was not covered under Marine Open Cover (Cargo) Policy purchased by the complainant. Under Marine Open Cover (Cargo) Policy, whenever goods are to be sent, description of the goods has to be declared and for that declaration insurance premium has to be paid. The complainant had not sent declaration to the insurance company and had not paid the insurance premium and therefore they are not liable for the damages caused due to flood. Moreover, the opponent pleaded that the goods of the complainant company were damaged in the floods when the goods were brought from first floor to ground floor and kept in open space. This is not covered by Marine Open Cover (Cargo) Policy purchased by the complainant. The necessary pre-requisite was not supplied by sending declaration and after receipt of declaration, company put signature and seal and then receives insurance premium from the party. This was not followed in the instant case. Moreover, according to the insurance company the goods were to be filled in the containers which the complainant company had called from M/s,Swift Shipping & Freight Logistics Pvt.Ltd., but before the containers could reach at the godown of the complainant, the goods were damaged because of heavy rain which kept at the open space of the complainants premises. Therefore, according to it, the goods were not ready for carriage by transporter from the complainants premises to nearest port for shipment by ship.
Therefore, insurance company pleaded that transit had not initiated under Marine Open Cover (Cargo) Policy.
According to the insurance company, only those perils are covered in Marine Open Cover (Cargo) Policy which are known as perils mentioned under Marine Insurance Act. The insurance company has denied the report of surveyor and pleaded that they are not bound to pay to the complainant as per recommendation made by the surveyor. Therefore, they pleaded that the consumer complaint should be dismissed with costs.
(4) The forum below, however, perusing documents placed on record felt that the goods were damaged because of heavy rain kept at the open premises of the complainant. Ware house of the complainant was covered by Marine Open Cover (Cargo) Policy as per the Institute Cargo Clause (A), Duration 8 & 8.1 and since the goods were brought from first floor to ground floor and was to be put in the containers which were specifically called from M/s,Swift Shipping & Freight Logistics Pvt.Ltd., the said goods damaged by floods were covered under the policy purchased by the complainant company and therefore, they were entitled to get compensation of `11,92,415/-, besides this, compensation of `10,000/- for mental harassment and cost of `1,000/-. Accordingly the forum below passed award in favour of the complainant who is respondent herein. Aggrieved by the award passed against it, New India Assurance Co.Ltd. filed this appeal. We heard the submission of learned counsel, Mr.S.R.Singh, advocate for the appellant and learned counsel Mr.Abhijeet Gondwal, advocate for the respondent.
(5) We are finding that though the policy was purchased by the respondent as Marine Open Cover (Cargo) Policy, the policy conditions clearly mention that insurance is subject to advance premium deposit amount with statutory balance and for covering risk of each dispatch there was special conditions that closing particulars to be declared by the company immediately upon receipt of shipping documents. Premium payable against each certificate as stated therein are as per debit note. Notice of loss or damage is to be given and survey arrange and certificate obtained from the companys agent at the port of discharge. Mr.Singh submitted in the course of argument that under Marine Insurance Act, Maritime Perils has been defined under Section 2 (c) of the Act, which reads as under :-
(c) maritime perils means the perils consequent on, or incidental to, the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints and detainments of princes and people, jettisons, barratry and any other perils which are either of the like kind or may be designated by the policy;
(6) He also invited our attention to Sec.4 of Marin Insurance Act, which runs as under:-
4. Mixed Sea and Land Risks (1) A contract of marine insurance may, by its, express terms, or by usage of trade, be extended so as to protect the assured against losses on inland waters or on any land risk which may be incidental to any sea voyage.
(2) Where a ship in course of building, or the launch of a ship, or any adventure analogous to a marine adventure, is covered by a policy in the form of a marine policy, the provisions of this Act, in so far as applicable, shall apply thereto, but, except as by this section provided, nothing in this Act shall alter or affect any rule of law applicable to any contract of insurance other than a contract of marine insurance as by this Act defined.
Explanation An adventure analogous to a marine adventure includes an adventure where any ship, goods or other movables are exposed to perils incidental to local or inland transit.
(7) Mr.Singh submitted that the goods which are not declared by sending declaration to insurance company by giving details are not covered under the said policy.
According to Mr.Singh, for every shipment to be covered under the policy purchased by the respondent, a declaration was required to given upon receiving the shipping documents.
Shipping documents include bill of shipping and bill of landing, those were not at all submitted by the respondent company, because even before the goods were sent to the nearest port, the goods were damaged due to heavy flood at the premises of the complainant itself and therefore, transit had not commenced and since transit had not commenced, the complainant cannot be permitted to take advantage of Marine Open Cover (Cargo) Policy. Moreover, Mr.Singh emphasized that for every consignment to be sent to nearest port for shipment by sea, declaration should have been issued by the respondent company mentioning the number of goods being sent, the value of goods, name of the ship through which it was being sent and all other particulars by the respondent Company should be mentioned in the declaration and that declaration has to be verified from the insurance company. For every declaration, payment has been made. This was not followed in the instant case, because before goods were placed in the container called from M/s,Swift Shipping & Freight Logistics Pvt.Ltd., goods were damaged at the premises of the complainant itself and mere movement of the goods/consignment from first floor to ground floor was not sufficient to hold that transit of goods had begun and therefore Mr.Singh submitted that before goods were kept in the container and loaded in the truck, there would not be transit of goods from the premises of the complainant to the nearest port, so as to invoking clause Institute Cargo Clauses (A). This fact was not considered in the right perspective by the forum below while allowing the complaint of the complainant. For the applicability of the policy, the goods ought to have been declared by sending declaration to the insurance company by the respondent company giving all the details of shipment. They should have paid premium, actual premium or by sending debit note in the account held by insurance company and the goods should have been moved in the container for being taken to the nearest port.
These three things were not followed in the instant case. Therefore, Mr.Singh submitted that the forum below erred in directing them to honour the insurance claim lodged by the complainant company under the policy in question.
(8) We are finding that there is substance in the submission made by Mr.Singh, counsel for the appellant insurance company. The Marine Open Cover (Cargo) Policy purchased by the respondent required that for every consignment being sent by sea from the port to foreign destination, the respondent company should have issued declaration. They should have debited premium, they should have informed and sent bill of landing to the insurance company and they should have got the consignment certified from the insurance company. In the instant case, we are finding that the goods in consignment of export had not been put in the container sent by M/s.Swift Shipping & Freight Logistic Pvt.Ltd., because the containers had not reached to the complainants premises. Mere shifting of goods from first floor to ground floor of the complainants premises does not mean the goods were in transit. So, that attracts the ambit of Marine Open Cover (Cargo) Policy.
Movement of goods from godown to ship would have been covered if the goods were taken to container for taking them to the nearest port means taking cargo to foreign destination.
In this case, the goods were lying in the premises of the complainant and therefore the complainants goods were not in transit so that attract the Institute Cargo Clauses.
Before goods could have taken for shipping, before they were put in the truck or container to be carried by truck, goods were damaged by floods and therefore this contingency is not covered under Marin Open Cover (Cargo) Policy. So we agree with the submission made by Adv.S.R.Singh for the appellant. The forum below erred in law by passing award against the appellant. The order passed by the forum below allowing the consumer complaint is appearing to be bad in law and is not sustainable as such. Hence, the order.
ORDER (1) Appeal is allowed.
(2) The impugned order dated 13/01/2012 passed by Additional District Consumer Disputes Redressal Forum, Mumbai Suburban District is quashed and set aside.
Accordingly, consumer complaint No.325/2006 stands dismissed.
(3) Inform the parties by sending copies of judgement.
Pronounced on 11th January, 2012.
[Hon'ble Mr. P.N. Kashalkar] PRESIDING MEMBER [Hon'ble Mr. Dhanraj Khamatkar] Member pgg