State Consumer Disputes Redressal Commission
Indian Acrylics vs Nicl on 11 December, 2013
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UNION TERRITORY, CHANDIGARH Consumer Complaint No. 54 of 2013 Date of Institution 01.08.2013 Date of Decision 11.12.2013 M/s Indian Acrylics Ltd., a Company registered under the Companies Act, 1956 and having its Head Office at SCO No.49-50, Sector 26, Chandigarh through Sh.Surinder Kansal, Chief General Manager (Accounts & Finance). .Complainant. VERSUS 1. M/s National Insurance Company Limited, Head Office, 3 Middleton Street, P.B. No.9229, Kolkata 700071. 2. M/s National Insurance Company Limited, Chandigarh Regional Office-II, SCO No.337-340, Sector 35-B, Chandigarh. 3. M/s National Insurance Company Limited, SCO 813, Chandigarh Kalka Road, Manimajra, U.T., Chandigarh. . Opposite Parties. BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT SHRI DEV RAJ, MEMBER
Argued by:Sh.C.S. Pasricha, Advocate for the complainant.
Sh. J. P. Nahar, Advocate for the Opposite Parties.
PER DEV RAJ, MEMBER The brief facts of the case, as alleged by the complainant, are that the complainant has its factory situated at Village Harkishanpura, Tehsil Bhawanigarh, District Sangrur, Punjab and is the manufacturer of Acrylic Fiber in the form of bales. It was stated that each bale, when produced, automatically goes to a weighing scale and the weight shown is updated automatically in the system. It was further stated that the sealed containers are sent to ICD Concor, Dhandarikalan, Ludhiana from the factory alongwith Form A.R.E.-1 signed by the excise officials. It was further stated that each truck is weighed at the complainants plant, at Sangrur, and slip showing the recorded weight is generated. It was further stated that the containers are dispatched to the destinations through various trucks, operating contractors/ transporters and this procedure is being followed by the Company for the last so many years.
2. It was further stated that the complainant had Marine Export Policy No.420200/21/11/4200000003 (Exhibit C-2) valid for the period from 1.4.2011 to 31.3.2012, issued by the Opposite Parties with regard to the material dispatched from its factory and various consignments were dispatched under various export bills including export Bill Nos.,1062, 1069 and 1100. It was further stated that the export Invoice/Bill No.1062 was raised on 16.12.2011 and the date of export for the same was 17.12.2011. It was further stated that the goods were received short by the purchaser from the complainant and the consignment under export Invoice No.1062 (Exhibit C-3) was found having shortage of 10 bales. It was further stated that as the consignment had not been checked in the presence of complainant, nor any survey was carried out at that stage, as such, no claim with regard to the shortage of 10 bales was made by the complainant Company. It was further stated that similarly under export Bill No.1069 dated 27.12.2011 (Exhibit C-4), the goods were found to be less to the extent of 19839.4 Kgs i.e. loss of 59 bales costing about Rs.31 Lacs in three containers. It was further stated that on 28.2.2012, a letter regarding the aforesaid shortage was also received from the complainants customer at Iran. It was further stated that similar shortage was found in the material exported by the complainant Company vide export Bill No.1100 dated 24.1.2012 (Exhibit C-6). It was further stated that on 16.4.2012, another letter was received from the customer intimating that in one container, out of six, dispatched on 25.1.2012, there was shortage of 20841 Kgs worth Rs.34 lacs. It was further stated that intimation was given to the Insurance Company regarding the shortage of material of Rs.31 Lacs on 16.4.21012 and Rs.34 Lacs on 6.5.2012 (Exhibits C-7 and C-8). It was further stated that marine claim for shortage of 59 bales & 63 bales relating to export bills no.1069 dated 27.12.2011 and 1100 dated 24.1.2012 was submitted to the Opposite Parties on 12.5.2012 (Exhibit C-9). It was further stated that on complaint made to the SSP Ludhiana on 20.3.2012, Rs.20,000/- were recovered from one Prahlad Singh, Driver of the Transporter and, thereafter, FIR No.71 dated 31.5.2012 was registered at Police Station Sadar, Sangrur (Exhibit C-10). It was further stated that the complainant got the survey done from an independent survey agency SGS Surveyors which gave their report (Exhibit C-11). It was further stated that Irano General Insurance Company, duly appointed Surveyor by the Opposite Parties, at Port Bandar Abbas on 21.4.2012, conducted the survey, which showed that the claim occurred in India itself and that also certainly prior to loading on Board at Mundra Port (Exhibit C-12).
3. It was further stated that the Policy obtained by the complainant was a marine open policy, which also covered FOB shipments and the loss had taken place during the transportation of the consignment from Sangrur. It was further stated that since the loss pertained to pilferage prior to loading as clearly mentioned in the FIR, it clearly fell within the purview of the Marine Open Policy issued by the Opposite Parties. It was further stated that the complainant also sent free of cost replacements of 20682.70 Kgs material worth Rs.34 Lacs against the transit shortage of 20691 Kgs. It was further stated that against the shortage of 19839.40 Kgs, the complainants customer had deducted 4199009 Japanese Yen i.e. Rs.31 Lacs approximately. It was further stated that FIR for criminal breach of trust, cheating and dishonestly selling stolen property was registered vide F.I.R. No.71 dated 31.05.2012 against the carriers and thereafter the bail applications of the accused were also rejected by the Court of Additional Sessions Judge, Sangrur and thereafter by the Honble High Court of Punjab & Haryana (Exhibit C-17 and C-18). It was further stated that the claim was also lodged with the Container Corporation of India (Exhibits C-19 and C-20) for Rs.30,73,817/- and Rs.33,50,587/- for the theft/pilferage from the export shipment, in transit, in the months of December 2011 and January 2012. It was further stated that the containers were received at Ludhiana Dry Port, and were cleared by Ludhiana Customs but the same were not opened or reweighed either by the customs or by CONCOR as per their guidelines for factory stuffed container. It was further stated that the consignment was found to be short at Iran and the necessary surveys were conducted and the survey reports were supplied to the Opposite Parties by the complainant Company. It was further stated that the complainant through internal investigation and market enquiries were able to establish that there was a gang of operators who were involved in such similar cases. It was further stated that the Policy covered FOB shipments with the risk of theft and pilferage, the loss was within the purview of the Policy even though it may be a case of skilful pilferage.
4. It was further stated that the buyer did not claim any insurance claim and, in fact, during the course of investigation prior to and in FIR No.71 dated 31.5.2012, it transpired that the loss took place during the shipment of the material from Bhawanigarh, Distt. Sangrur to Ludhiana. It was further stated that the report of Irano German Insurance Services Company and the copy of FIR were supplied to the Opposite Parties. It was further stated that after the police investigation, there remained no doubt that the loss had taken place in transit in India due to the stealing of goods from the containers by the drivers. It was further stated that an email was sent to the Opposite Parties on 7.6.2012, detailing therein the claims totaling Rs.73 lacs pending with it. It was further stated that in reply, the Opposite Parties confirmed that the claims would be settled as soon as possible. It was further stated that thereafter, the complainant sent various reminders to the Opposite Parties, the last being dated 21.8.2012 (Exhibit C-24). It was further stated that as demanded, copy of the FIR, latest charge sheet submitted by the Police, short delivery certificate from shipping company, details of recovery, if any, etc. were submitted by the complainant on 28.7.2012 (Exhibit C-25 and C-26). It was further stated that on 28.2.2013, the Opposite Parties informed that while the containers pass through ICD Ludhiana Port, they were subjected to rigorous inspection by skilled professionals and the weight was accurately detected by lifts/cranes, which had sensitive weight detecting devices attached to them, which could detect even a minor variance in the weight. It was further stated that according to the Opposite Parties, there was no shortage. It was further stated that this letter of the Opposite Parties was a delaying tactics as no such mechanism or procedure was prevalent at ICD Ludhiana. It was further stated that the Container Corporation of India had also supported the claim of the complainant Company through their letter dated 13.3.2013 (Exhibit C-28). It was further stated that the complainant also clarified the same to the Opposite Parties vide letter dated 15.3.2013 (Annexure C-28) and also submitted Concors letter.
5. It was further stated that the repudiation of the claim by the Opposite Parties was illegal, arbitrary and unsustainable in law. It was further stated that the Opposite Parties acted in a biased manner by raising frivolous objections and issues just to delay/avoid the settlement of the pending two claims amounting to Rs.64,24,404/-. It was further stated that the Opposite Parties were trying to deny their liability by one way or the other on false and baseless grounds. It was further stated that the aforesaid acts of the Opposite Parties, in not settling the claims of the complainant Company, amounted to deficiency in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking the relief that the Opposite Parties be directed to pay a sum of Rs.64,24,404/- under the Marine Export Policy, alongwith interest @ 18% p.a.; Rs.2,00,000/- as compensation besides costs of litigation.
6. Opposite Parties, in their joint reply, took up certain preliminary objections, to the effect, that since two separate claims were lodged by the complainant with the Opposite Parties, therefore, two separate complaints should have been filed instead of clubbing two causes of action into one; that the complaint was defective due to non-joinder of necessary parties; that the complaint was filed against the Opposite Parties in collusion with the buyer of the goods for making wrongful gains and the complaint involved detailed evidence, which could not be done in a summary procedure under the Act.
7. On merits, the procedure detailed in Para 3 of the complaint relating to packing, weighing, sealing, loading of the bales in the presence of Central Excise Officials and preparation of Form A.R.E etc. etc. was denied by the Opposite Parties. However, it was admitted that Open Marine Insurance Policy No.420200/21/11/4200000003 (Exhibit C-2) for the period from 9.4.2011 to 31.3.2012 was issued to the complainant. It was stated that the Policy, in question, covered the risk as per Institute Cargo Clause (A) including War and SRCC (Strike Riot and Civil Commotion). It was further stated that the Policy provided the risk coverage, aforesaid, from anywhere in India to anywhere in the world, and the basis of valuation was Cost Insurance Freight (CIF) + 10% and the mode of transit specified was rail/road/air/sea/ courier. It was further stated that the claims were payable by W.K. Webster (International). It was denied that the various consignments sent under Export Bills No.1062, 1069 and 1100 are covered under the Policy because the Policy covered the consignments sent under CIF whereas the present consignments sent under the aforesaid export bills were on FOB (Free on Board) basis. It was further stated that the terms of Delivery were CFR (Cost and Freight), which meant that the insurance was the responsibility of the buyer and the seller was required to put the goods on to the ship. It was further stated that the complainant was not claiming any amount under Export Bill No.1062 because the consignment was not checked in its presence nor any survey was carried out at that stage. It was further stated that in marine insurance, the insurable interest should exist at the time of loss. It was further stated that in the instant case, the seller had lost insurable interest the moment the goods crossed the rails of the vessel and, therefore, the complainant had no insurable interest in the alleged lost material. It was further stated that the buyer had opened the container and then he came to know about the alleged shortage. It was further stated that the container was not opened in the presence of the representative of the seller but only shown as already opened container, and it could not be said that the buyer had received the material short. It was further stated that it was not understood as to why the buyer had not lodged the claim on his insurer as he had the policy on the goods. It was denied that the surveyor M/s SGS Iran was the designated surveyor of the Opposite Parties. It was further stated that M/s W.K. Webster was the surveyor of the Opposite Parties. It was further stated that the so called letter dated 28.2.2012 was sent by the buyer after the visit of Sh.Satish of the complainant and the alleged shortage seen by him. It was further stated that FIR was lodged on 31.05.2012 and the loss was reported in February 2012. It was further stated that the complainant had no idea about the point of occurrence of loss. It was further stated that there was collusion between the buyer and seller to take the undue claim from the Opposite Parties. It was further stated that the complainant had attached only the commercial invoice No.Export/1100 dated 24.1.2012 (Exhibit C-6) but it had not placed, on record, the Buyers Contract No.964 dated 9.1.2012 to know the terms of the Sale Agreement. It was further stated that since the terms of delivery were CFR (cost and Freight), the responsibility of the seller ceased when the goods crossed the rails of the vessel at the exit port and the risk of the buyer started from that point as he acquired the insurable interest in the goods. It was further stated that even if the letter of shortage was received by the complainant, the logical response would have been that they were not responsible for the shortage as the containers were shipped safely from India as the Bill of Lading was clean and it was a proof enough that the containers were safe at the time of putting the same in the vessel. It was further stated that the buyer should have been advised to lodge the claim with their insurers as the complainants insurable interest ceased when the containers crossed the rails of the vessel.
8. It was admitted that the claims were lodged with the Opposite Parties for Rs.30,73,817/- and Rs.33,50,587/-. It was also admitted that the sale of goods was on CFR basis and the surveyor rightly refused to survey the loss unless the insurer of the buyer asked him to do so. It was further stated that the right course of action was that the buyer should have approached his insurer and lodged a claim on them and get the survey conducted through them. It was further stated that the buyer unnecessarily informed the complainant and it unnecessarily involved itself when he had no insurable interest in the goods. It was further stated that after examining the claim papers, the Opposite Parties rightly repudiated both the claims vide letters dated 4.4.2014 on the grounds of not establishing the pilferage during the transit and the complainant was not having insurable interest in the goods when the same crossed the rails of the export vessel at the exit port. It was further stated that the opinion of the surveyor that 63 missing bales must have been removed from the container at some stage prior to application of the two original seals and certainly prior to loading on board the carrying vessel, was not supported by any evidence. It was further stated that by necessary implication, it also meant that 63 bales, alleged to be missing, were not loaded in the container. It was further stated that the stand of the Opposite Parties that the loss took place after the containers were placed on the vessel was based on the proof that the Bill of Lading was clean. It was further stated that if there would have been any tampering of seals, the same would not have been allowed to be taken on the vessel. It was further stated that the lodging of the claim with the Container Corporation of India vide letter dated 25.8.2012 was just a formality completed by the complainant. It was further stated that the complainant did not observe complete good faith and the Policy was taken on CIF basis but the dispatches, on which, the claims were reported, were made on FOB basis. It was further stated that there was breach of duty of utmost good faith by the exporter and thus, the Opposite Parties could not be held liable, when the contract itself was void. It was further stated that neither there was any deficiency, in rendering service nor indulgence into unfair trade practice, on the part of Opposite Parties. The remaining averments, being wrong, were denied. In the end, prayer for dismissal of the complaint has been made.
9. The complainant filed replications, wherein it reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of the Opposite Parties.
10. The parties led evidence in support of their case.
11. We have gone through the evidence, record of the case, and the written submissions of the parties, carefully.
12. The Counsel for the complainant submitted that the complainant-Company was insured vide Marine Export Policy No.420200/21/11/4200000003 (Exhibit C-2) valid for the period from 1.4.2011 to 31.3.2012, for Rs. 50/196 crores, which covered risk from anywhere in India to anywhere in the world. It was further submitted that it was a ICC(A) Policy. It was further submitted that the loss/shortage came to the notice of the complainant in February/April 2012. It was further submitted that the documents pertaining to the shortage of 20.84 and 19.8394 MT acrylic fiber involving loss of Rs.33,50,587/- and Rs.30,73,817/- respectively, were submitted to Opposite Party No.3 vide letters dated 6.5.2012 and 12.05.2012 (Exhibits C-8 and C-9) respectively. It was further submitted that the insurance covered the entire production. It was also submitted that the complaint was lodged with the Police on 22.3.2012 and the FIR was registered on 31.05.2012 (Exhibit C-10). It was further submitted that the claim for consignment Nos.1069 and 1099, was lodged after verification, but the claim for consignment no.1062 was not lodged, due to non-verification. It was further submitted that all the 12 containers, relating to the consignment were dispatched together, at the same time from Sangrur but 03 containers with respect to the consignments being short, were received at Ludhiana i.e. between 1:50 hours to 4:07 hours, which had been dispatched vide Trucks bearing No.Pb 13Q 3613, Pb 13Q 5278 and Pb 10AB 9438. It was further submitted that since the seals on the containers were intact, weighment was not conducted. It was further submitted that the Survey report regarding the survey conducted on 21.4.2012 was Exhibit C-12, which confirmed that 63 bales were missing. It was further submitted that legal notice (Exhibit C-30) giving all the facts including the factum that loss took place in India itself, was sent to the Opposite Parties. It was further submitted that the Container Corporation of India (Concor) in its letter dated 13.3.2013 (Exhibit C-28) stated that normally no weighment was done unless specifically requested by the party, after collecting the due charges and Fork lift had no weight monitoring cell sensors. It was further submitted that vide letter dated 15.3.2013 (Exhibit C-29), the complainant wrote to the Insurance Company to settle its claim amounting to Rs.64,24,204/- alongwith interest for delay in payment. It was further submitted that it was a case of skillful theft. It was further submitted that the claim of another insured Private Limited Company pertaining to skillful theft for an amount of Rs.10,36,200/- was settled by the Opposite Parties. It was further submitted that the Customs people do not have any mechanism, to conduct weighment. It was further submitted that the statements of Surveyors were not possible, as they were in Iran only. It was further submitted that the bail applications of the accused for anticipatory bail were dismissed by the Additional Sessions Judge, Sangrur and the Hon'ble High Court on 14.07.2012 and 21.08.2012 respectively. It was further submitted that Sh. Satish Kumar, GM, Technical Services had visited Iran.
It was further submitted that the claim of the complainant was illegally and arbitrarily repudiated by the Opposite Parties.
13. The Counsel for the Opposite Parties, admitted the issuance of Insurance Policy, in question, covering the period when the loss occurred. It was submitted that the sum insured was Rs.50 Crores plus 10% CIF (Cost, Insurance and Freight) and the shipments were sent under FOB (Free On Board). It was further submitted that FOB and CIF are two different terms regulating the insurable interest. It was further submitted that goods were stolen, from the custody of the transporter. It was submitted that as per policy, immediate notice was mandatory which was not given. It was further submitted that, as per the Policy Schedule, V. K. Webster (International) Pvt. Ltd., 139 Cecil Street, No.10-00 Cecil House, Singapore, was to pay the claim. It was further submitted that as per Exhibit C-4, Buyer had the insurable interest. The Cargo was also insured, by the buyer, with Mellat Insurance Policy. It was further submitted that the consignee received the goods with seals intact and it was not clear, as to where and when the theft took place. It was further submitted that as per the letter dated 25.8.2012 (Exhibit C-19), of the complainant to the Container Corporation of India (Concor), it was stated that the loss occurred whilst the material was in its (Concor) control and custody. The complainant asked Concor to make good the loss immediately. It was further submitted that as per Clause 11.1 relating to the insurable interest, under general insurance, the insured must have an insurable interest, in the subject matter insured, at the time of loss. It was further submitted that two policies were operative. It was further submitted that in CIF, seller is responsible and insurable interest remains with the seller. In FOB, the moment, the goods are put in vessel, the insurable interest, of insurer (seller) ceases. It was further submitted that the Insurance Policy was CIF but the goods were sent on FOB and, thus, there was violation of the fundamental condition. It was further submitted that since the inspection report (Exhibit C-11) was neither signed nor supported by an affidavit, the same could not be taken into account. It was further submitted that as per Exhibit C-12, the Cargo reached Bandar Abbas Port Iran on 21.2.2012 and inspection/survey was conducted on 21.4.2012. It was further submitted that, as per the rejoinder, the short delivery certificate was obtained from the transporter/Shipping Company. It was further submitted that it was a clean GR and there was no short delivery report. It was further submitted that the complainant did not press its liability. It was further submitted that mere lodging of the FIR was not sufficient to come to the conclusion that there was a skilful theft when the recovery was only Rs.20,000/-and no recovery of goods was effected. It was further submitted that as per letter No.2700/SA dated 13.11.2013 of Police Station Sadar, Sangrur, the Police had not reached any conclusion. The Counsel for the Opposite Parties in the written arguments by placing reliance on-D.K.Lall Vs. Samrat Shipping and Transport Systems Pvt. Ltd. III(2003) CPJ-113 (NC) and Contship Container Lines Ltd. Vs. D.K.Lall and Others II(2010) CPJ-12 (SC) submitted that the consignments were not covered under the Insurance Policy issued by the Opposite Parties.
14. The details of claims which were declined by the Opposite Parties, and which are the subject matter of the instant complaint, are tabulated in the following table:-
Invoice Bill of Lading No. Shortage Estimated loss(Rs.lacs) Export/1069 dated 27.12.2011 EPIRINDDEL116679 9.1.2012 19.834 MT 30,73,817 (Exhibit C-9) Export/1100 dated 24.01.12 INLUH003901 12.02.2012 20.841 MT 33,50,587/-(Exhibit C-8)
15. As per the evidence on record, intimation to the Insurance Company regarding the aforesaid shortages of material valued at Rs.30,73,817/- and Rs.33,50,587/- was given on 16.4.2012, 6.5.2012 and 12.5.2012 vide Exhibit C-7, C-8 and C-9 respectively. The claim was also lodged on 12.5.2012. The shortage of 19.8394 MT acrylic fibre was found on 26.2.2012. As per Ex.C-2, in the event of loss and damage which may result in claim under this Insurance, immediate notice must be given to Intertek Testing Services ( Australia) Pty Ltd., Australia.
In New India Assurance Company Ltd.
Vs Trilochan Jane, First Appeal No.321 of 2005 decided on 9.12.2009 by the National Consumer Disputes Redressal Commission, a similar question, fell for decision. In that case also, there was condition No.1 in the Policy, somewhat similar and identical to the terms and conditions, in the instant case. While accepting the appeal, holding the repudiation of claim, by the Insurance Company, as valid, and setting aside the order of the Fora below, the National Consumer Disputes Redressal Commission, New Delhi, held as under;
Word immediately has not been defined under the Act. Resort has to be made to the dictionary meaning assigned to it.
As per Oxford Advanced Learners Dictionary, the word immediately means at once.
As per Strouds Judicial Dictionary, Fifth Edition, word immediately is defined as under:
(1). The word immediately, although in strictness it excludes mean times, yet to make good the deeds and intents of parties it shall be construed such convenient time as is reasonable requisite for doing the thing.
As per Blacks Law Dictionary, Sixth Edition, word immediately means: -
Immediately. Without interval of time, without delay, straightway, or without any delay or lapse of time. When used in contract is usually construed to mean within a reasonable time having due regard to the nature of the circumstances of the case, although strictly, it means, not deferred by any period of time. The words immediately and forthwith have generally the same meaning. They are stronger than the expression within a reasonable time and imply prompt, vigorous action without any delay.
According to Mitras Legal and Commercial Dictionary, Fifth Edition, word immediately is defined as under: -
Immediately. Immediately is to be construed as meaning with all reasonable speed, considering the circumstances of the case. Halsburys Laws of England, 4th Ed. Vol. 23, para 1618, p. 1178.
The word immediately is stronger than the expression within a reasonable time, and imply prompt, vigorous action, without any delay. It means all convenient speed. The word immediately should not be construed so as to require doing something which is impossible.
As per Oxford Advanced Learners Dictionary, the word immediately means at once whereas Strouds Judicial Dictionary, Fifth Edition, word immediately in the context of contract has to be taken as reasonable requisite time for doing the thing. As per Blacks Law Dictionary, Sixth Edition, word immediately means doing of a thing straightway or forthwith but when used in the context of contract, it is usually construed to mean within a reasonable time having due regard to the nature of circumstances of the case. More or less to the effect, is the same meaning assigned in Mitras Legal and Commercial Dictionary, Fifth Edition. Since, in the present case, there was a contract between the insured and the insurer and, the word immediately, under the circumstances, has to be construed within a reasonable time having due regard to the nature of circumstances of the case.
In the case of theft where no bodily injury has been caused to the insured, it is incumbent upon the respondent to inform the Police about the theft immediately, say within 24 hours, otherwise, valuable time would be lost in tracing the vehicle. Similarly, the insurer should also be informed within a day or two so that the insurer can verify as to whether any theft had taken place and also to take immediate steps to get the vehicle traced. The insurer can coordinate and cooperate with the Police to trace the car. Delay in reporting to the insurer about the theft of the car for 9 days, would be a violation of condition of the Policy as it deprives the insures of a valuable right to investigate as to the commission of the theft and to trace/help in tracing the vehicle.
In the aforesaid case, there was a delay of 2 days, in lodging the FIR and 9 days in reporting the loss to the Insurance Company. Even, in those circumstances, the National Consumer Disputes Redressal Commission, New Delhi, in clear-cut terms, held that since there was violation of Condition No.1 of the Policy, as the insurer was deprived of the valuable right to investigate, as to the commission of theft, and to trace/help in tracing the vehicle, the repudiation of claim, was legal and valid.
16. In Devendra Singh Vs. New India Assurance Co. Ltd., & Ors. III (2003) CPJ 77 (NC), a case decided by a three Member Bench of the National Consumer Disputes Redressal Commission, New Delhi, theft of the vehicle was reported to the Police, after four days, and to the Insurance Company, after about a month. The claim of the complainant, was repudiated. Feeling aggrieved, he filed a complaint, before the District Forum, which was dismissed. First Appeal which was filed, before the State Consumer Disputes Redressal Commission, by the appellant/ complainant, was also dismissed. Still feeling dissatisfied, he filed Revision Petition, before the National Consumer Disputes Redressal Commission, New Delhi, which was also dismissed, on the ground, that the claim was rightly repudiated. Similar principle of law, was laid down in Silversons Vs Oriental Insurance Company Ltd. & Anr. IV(2011)CPJ 9(SC). In the instant case, intimation with regard to the shortage was not given in time.
17. The contract of insurance, which is based on utmost good faith, and governed by the terms and conditions of the Policy, is binding on the parties to the same. In the instant case, no doubt, the complainant had Marine Export Policy, initially for Rs.50 crores, and, subsequently, with additions for Rs.196 crores, valid for the period during which the shortage took place. The policy covered risk from anywhere in India to anywhere in the world. It was submitted by the Opposite Parties that the policy taken was on CIF basis, but the dispatches on the basis of which the claims were reported, were made on FOB basis. Undoubtedly, FOB and CIF are two different terms regulating the insurable interest. Since, in the instant case, the goods were sent on FOB basis, the moment the goods were put in the Vessel, the insurable interest of the seller ceased. When the Policy was on CIF basis, the dispatch of goods on FOB basis was in violation of its fundamental condition of the Policy. There is, thus, merit in the submission of the Counsel for the Opposite Parties, that once the goods were sent on FOB basis, the insurable interest of the seller ceased. There is also logic in the contention of the Opposite Parties, that when the insurable interest of the seller ceased, the complainant unnecessarily involved itself in the dispute. This contention of the Counsel for the Opposite Parties finds support from D.K.Lalls case (supra) in which the Honble National Commission in para 23 held that .it cannot be disputed that the Insurance Policy was on basis of valuatin-cif+10 whereas, as discussed earlier, this consignment was sent on FOB basis thus in our view making the consignment violative of terms of Policy and Contship Container Lines Ltd.s case (supra) in which the Honble Supreme Court in para 22 held as under:-
22. It is common ground that the seller had, in the case at hand, reserved no right or lien qua the goods in question. In the absence of any contractual stipulation between the parties the unpaid seller's lien over the goods recognized in terms of Sections 46 and 47 of the Sale of Goods Act, 1930 stood terminated upon delivery of the goods to the carrier. The goods were from that stage onwards held by the carrier at the risk of the buyer and the property in the goods stood vested in the buyer. The principle underlying transfer of title in goods in FOB contracts was stated by a Constitution Bench of this Court in B.K. Wadeyar V. Daulatram Rameshwarlal (AIR 1961 SC 311). The question as to the transfer of title in the goods arose in that case in the context of a fiscal provision but the principle relating to the transfer of title in goods in terms of FOB contract was unequivocally recognized. This Court held that in FOB contracts for sale of goods, the property is intended to pass and does pass on the shipment of the goods. The National Commission was, therefore, right in holding that the seller had no insurable interest in the goods thereby absolving the insurance company of the liability to reimburse the loss, if any, arising from the mis-delivery of such goods.
18. It is evident from Ex.C-4, regarding the terms of delivery and payment that buyer had the insurable interest as the Cargo was also insured by it (buyer) with Mellat Insurance Policy. It is also evident from the letters both dated 25.08.2012 (Ex.C-19 and C-20), whereby, the complainant wrote to M/s Container Corporation of India Ltd. that since the loss has occurred whilst the material was in your control and custody hence we hold you responsible for the loss and ask you to make good our loss immediately on receipt of this letter. It cannot be accepted that lodging of claim with Concor vide letters dated 25.8.2012, was just a formality, completed by the complainant. Lodging of such a claim with Concor also falsifies the stand of the complainant that it was a case of skillful theft, which allegedly took place during transportation from their factory to Ludhiana Dry Port. Thus, when the complainant was holding the Container Corporation of India responsible for the loss, its plea that it was a case of skilful theft stood negated.
19. As regards the contention of the complainant that the loss occurred on account of skilful theft, it may be stated here that the perusal of the contents of FIR and connected documents, on record, reveals that there are glaring inconsistencies, infirmities and contradictions as depicted hereunder:-
i) The consignments were dispatched in December, 2011/January, 2012. Intimation regarding shortage of 19839.4 kg Fiber was received from the consignee at Iran by the complainant on 28.02.2012. Shortage/loss of 20841 Kg. was detected in April 2012. As per their own admission, the intimation to the Insurance Company for shortage/loss was given on 16.04.2012, 06.05.2012 and 12.05.2012. Despite receipt of shortage intimation on 28.02.2012, a report with Police (SSP) was lodged on 22.03.2012 and FIR was registered on 31.05.2012. No specific details regarding shortage of 20841 Kg. acrylic fiber detected in April 2012 have been given in the F.I.R.
ii) It is beyond comprehension, as to why intimation to the Insurance Company was given by the complainant so belatedly viz 16.04.2012, 06.05.2012 and 12.05.2012 when the complaint with the SSP, Sangrur was allegedly lodged on 22.03.2012. Neither any copy of DDR nor copies of complaints allegedly lodged on 22.03.2012, and amended on 2.5.2012 have been brought in evidence. Even the formal FIR was registered on 31.05.2012, much after 22.03.2012/2.5.2012 and when intimation was given and claim lodged with Opposite Parties on 16.04.2012 and 06.05.2012. Even copy of the FIR (Annexure C-10) has not been produced in complete form in as much as, copies of GRs (bilties) (Annexure-3), copy of email showing entry of each truck (Annexure-5) have not been brought in evidence. FIR revolves around shortage in container No.CLHU-9041403, TCNU-9595121, DFSU, 6015629 and loss is mentioned as Rs.30 lacs instead of Rs.64 lacs for which claims were lodged with the Opposite Parties. The contention of the complainant that three trucks reached belatedly at dry port Ludhiana is also without any cogent evidence.
iii) It is also not understood as to why the complainant despite having come to know about the shortage/loss of 19839.4 Kg. on 28.2.2012, did not intimate the same to the Insurance Company immediately. On the other hand, it intimated regarding the shortage of 20841 Kg. acrylic fibre in the consignment of 149.764 MT dispatched in 6 containers from the factory on 25.01.2012 and loaded on Board the ship from Mundra Port on 12.2.2012, after custom clearance at ICD Ludhiana, only on 16th April,2012 (Exhibit C-7) and 6th May, 2012 (Exhibit C-8).
iv) The surveyor report dated 29.04.2012, Ex.C-12 containing the following observations:
Origin/cause of shortage:
In consideration of our findings, we are of the opinion that the 63 missing bales must have been removed from the container at some stage prior to application of the two original seals and certainly prior to loading on board the carrying vessel, cannot be overlooked.
v) The averment that each truck is weighed at the complainants plant at Sangrur and slip showing the recorded weight is generated is without any evidence. The best evidence would have been to produce the weighment slips to prove the weight of the consignments transported.
vi) The averment that similar thefts took place in the area is without any cogent evidence.
vii) The averment that the applications for the anticipatory bail were rejected, were not relevant with regard to tenability or otherwise of the claim. The Hon'ble High Court order dated 21.08.2012, Ex.C-17 rejecting the bail application clearly stated that needless to state that nothing recorded hereinabove, would reflect, in any manner on merits of the main case, because the same has been so observed for a limited purpose of deciding the present petition. The fact remains that only a sum of Rs.20,000/- was recovered and there was no recovery of goods. It is also clear that from the date of report dated 22.03.2012 and FIR dated 31.05.2012 till 21.08.2012, no arrest was made.
20. The afore-enumerated inconsistencies, infirmities and contradictions clearly indicate that lodging of the FIR was nothing but a concocted affair, and an after thought exercise, just with a view to justify the false claims lodged with the Opposite Parties to extract money. The aforesaid finding, also stands fortified from the fact that no recovery of goods was effected, from the accused nor the Police reached any definite conclusion in the matter.
21. In view of the foregoing discussion, we are of the considered opinion, that there was no deficiency in rendering service, on the part of the Opposite Parties and the claim of the complainant-Company were rightly repudiated vide Annexures R-2 and R-3.
22. For the reasons recorded above, finding the complaint to be devoid of any substance and merit, the same is dismissed with no order as to costs.
23. Certified Copies of this order be sent to the parties, free of charge.
24. The file be consigned to Record Room, after completion.
Pronounced.
December 11, 2013.
[JUSTICE SHAM SUNDER (RETD.)] PRESIDENT [DEV RAJ] MEMBER Ad/Cmg STATE COMMISSION (Consumer Complaint No. 54 of 2013) Argued by:Sh.C.S. Pasricha, Advocate for the complainant.
Sh. J. P. Nahar, Advocate for the Opposite Parties.
Dated the 11th day of December, 2013 ORDER Vide our detailed order of the even date, recorded separately, this complaint, filed by the complainant, has been dismissed, with no order as to costs.
(DEV RAJ) MEMBER (JUSTICE SHAM SUNDER (RETD.)) PRESIDENT Ad/cmg