State Consumer Disputes Redressal Commission
Life Archives Inc vs Reliance General Insurance Co Ltd on 6 April, 2015
C/11/156 1/9
BEFORE THE HON'BLE STATE CONSUMER DISPUTES REDRESSAL
COMMISSION, MAHARASHTRA, MUMBAI
Complaint Case No. CC/11/156
Lifestyle Archives Inc.,
17 Meadow Lane, Syosset,
New York, 11791, U.S.A.
...........Complainant(s)
Versus
Reliance General Insurance Company Limited,
19, Reliance Centre, Walchand Hirachand Marg,
Ballard Estate,
Mumbai 400 001. ............Opp.Party(s)
BEFORE: MR. Shashikant A. Kulkarni PRESIDING MEMBER
MR. Narendra Kawde MEMBER
For the Complainant: Advocate Kumar Abhishek
For the Opp. Party: Advocate S.R Singh.
ORDER
Per Mr.Narendra Kawde - Member:
(1) Complainant is a proprietor based in the United States and operating business of import and export in the leather and other leather boots from various suppliers and manufacturers from India. Complainant allegedly bought leather shoes from Tryshoera India Pvt. Ltd., manufacturers of the leather boots worth US$ 70492 from India for export to New York, U.S.A. Complainant availed services of Delta Airlines by booking airway bill for transporting consignment of boots from Mumbai to New York. Marine Insurance policy bearing No.12010112120 was availed to provide transit insurance to the consignment issued by opponent, Reliance Insurance Company on 20th August, 2010 on receiving the payment of premium of C.I.F. (Costs, Insurance and Freight).C/11/156 2/9
(2) Undisputedly, the consignment was loaded in the aircraft on 21.08.2010 and accordingly bill of lading was issued favouring the dispatch of consignment to the complainant's company. Consignment did not reach directly to New York within expected travel time. On receiving the damaged consignment of the goods with fungus, the complainant was surprised and shocked as it was not marketable in U.S.A. According to the complainant, said damage was due to fortuitous and external factors, such as rain, wetting, moisture, humidity solely attributed to the negligence of the carrier, viz. Delta Airlines as they failed to handle the goods while in transit. On receiving intimation opponents have appointed international surveyor to assess the loss. Survey was carried out by International Surveyors & Adjustors (U.S.A.). Under the marine insurance policy the complainant filed insurance claim for compensating damage to the insured goods. However, the opponent insurance company repudiated the insurance claim by invoking condition, stating that the "damage is not covered under the insurance peril/external source as there is no evidence to indicate that the cargo is subjected to any type of wetting during the voyage as there were no signs of water stain or lost of rigidity etc. to the master cartons or the retail boxes." Moreover, the opponent relied on the policy condition incorporating ICC (C) clause governing contract of insurance, which excludes any kind of shortages/contaminations and further indicated that the policy was issued on 9th September, 2010, whereas, the airway bill was dated 21 st August, 2010, i.e. prior to the issue of policy under Institute Cargo Clause (C). Under ICC conditions, applicability of the clause is restrictive in nature. Aggrieved thereby the complainant has filed this complaint alleging deficiency of service against the opponent and C/11/156 3/9 claiming amount of Rs.27,80,262/- with future interest @18% per annum.
(3) The opponent insurance company vehemently contested the contentions and claim of the complainant defending the repudiation of the claim on the fivefold defense. Firstly on the ground that insurance policy was issued with the provisions of C & F and not on the C.I.F. basis as presumed by the complainant. Secondly, the complainants have no insurable interest as there is no material that the insurance cover was for the benefit of the complainant. Thirdly, the consignment was governed under the provisions of ICC Clause 'C'. Fourthly on the ground of territorial jurisdiction and final defence on the ground that, policy was issued subsequent to the actual voyage. Applicability of the restrictive clause is in place and the opponent prayed for dismissal of the consumer complaint as not covered under the provisions of marine insurance policy.
(4) Heard extensively Mr.Kumar Abhishek, Ld.Counsel for the complainant and Mr.S.R. Singh, Ld.Counsel for the opponent.
(5) Undisputed facts are that, there exists the contract of insurance between the parties to provide transit insurance cover to the consignment from warehouse to warehouse. Consignment of the goods did not reach on time as expected by air and instead had a break journey at Dubai Air Port for final destination. Marine policy was assigned by endorsing in favour of complainant's company as legally permitted under the provisions governing the insurance contract. Bill of lading issued favouring the complainant's company was dated 21 st August, 2010. Sum insured under marine policy was Rs.24,48,575/-
C/11/156 4/9(Rupees Twenty Four Lakhs Forty Eight Thousand Five Hundred Seventy Five only).
(6) We have gone through the record and the relevant documents relied upon by the parties. The Ld.Counsel of the complainant brought to our notice Sale Invoice (for export) supporting value of the consignment to US$ 70492. It was submitted that the consignment was cleared only after inspection by the complainant's surveyor about the contents and quality of the goods before dispatch. Survey report is available on record. Immediately after receiving the consignment and verifying the contents, the matter was reported to the opponent insurance company about the damage. Thereupon the international surveyors, viz. W.K. Webster (Overseas) Ltd. were instructed to carry out survey through International Surveyors & Adjusters (USA). Cause of loss has been recorded by the surveyors. However, though the surveyors have endorsed the damage to the consignment, yet the opponents have not considered the claim and repudiated the same arbitrarily. Ld.Counsel relied on the policy certificate issued on 20th August, 2010 which is prior to commencement of air journey of the consignment. Air carrier failed to deliver the consignment within expected time from Mumbai Airport to New York Airport. Consignment was ultimately delivered to the complainant's warehouse on 7th September, 2010. Thus, for the reasons best known to the air carrier the consignment was undoubtedly held up in transit and met with damage. The goods were covered with fungus when the complainant opened the carton and the fungus was attributed to external factors like rain, wetting, moisture, humidity, due to negligence of the carriers. Repudiation of the claim is arbitrary and contrary to the terms and conditions of the contract of insurance as damaged goods (leather goods) were not marketable in U.S.A. The C/11/156 5/9 terms and conditions incorporated in the policy documents attaching thereby ICC Clause 'A' covered all risks. It is a case of total loss for the complainant which was to be indemnified under the policy. However, the opponents arbitrarily misinterpreting the policy clause to their advantage rejected the insurance claim.
(7) Mr.Singh, Ld.Counsel for the opponent submitted that on receiving intimation of damage the opponents have immediately taken up the matter with their international Surveyor W.K. Webster, who in turn carried the detailed survey of the damage through International Surveyors & Adjusters based in U.S.A. The survey report does not support the contentions of the complainant attributing the damage due to rain water or excessive humidity during transportation as a cause of external source to damage. On the contrary the surveyors did not find alleged ground of damage as a result of rain water or humidity as presumed by the complainant as there was no evidence of direct rain water or other forms of wetting to the shipping cartons, interior shoe boxes or tissue wrappers surrounding the boots. Mr.Singh Ld.Counsel for the opponent further argued that the surveyor's observation that the mold appears to have originated directly from the suede and leather material utilized in the manufacturing of the boots in India prior to packing and transport and further submitted that, possible delay for transshipment in India via Dubai might have contributed to the damage as the mould spores were already present on the goods inside the packing prior to transportation. Complainant failed to establish with cogent evidence that the damage was due to external sources such as rain water, humidity etc. Complainant did not make any pleadings as to whether air carriers were intimated about the unreasonable delay in transshipment and whether claimed any compensation against the damages from the air carriers. Nowhere in C/11/156 6/9 the pleadings or even in the affidavit, the complainant stated as to how alleged damaged goods were disposed of. Mere statement that the goods were not marketable in U.S.A. due to cover of fungus is not enough ground to claim compensation. There is no authentic document to support value of the consignment except the uncertified voucher. Mr.Singh, Ld.Counsel for the Opponent further pleaded that, in a transaction like this, where consignment is being exported overseas (foreign country) ought to have been documented declaring price of the goods authenticated by competent authority at airport, viz. custom authority. Complainant failed to establish that the alleged damage due to fungus is covered under the insured perils.
(8) On carefully going through the written version, affidavit of evidence and other documents relied upon by the parties, we are of the opinion that the contentions raised by Mr.Singh, Ld.Counsel appearing for the opponent Insurance Company are valid for our consideration and proper settlement of dispute between the parties. Mere statement about damage due to development of fungus without any substantive reason does not establish deficiency in service or arbitrary rejection of claim by the opponent. Undisputedly, the air carriers i.e. Delta Airlines, failed to carry and dispatch the consignment in reasonable time and in no case a period of three weeks from loading point of airport to the destination of complainant in U.S.A. can be termed by any stretch of imagination as reasonable time. Complainant did not disclose steps taken by the air carrier for delay in delivery and loss due to damage in transit. Opponent though denied contract with C.I.F. premium, ICC clause attached to policy excludes loss/damage caused by inherent vice or nature of the subject matter insured. Here, it is pertinent to consider findings of the surveyor leading to damage of consignment. Observations of the surveyor are reproduced as under:
C/11/156 7/9"In our opinion, the mold appears to have originated directly from the suede and leather material utilized in the manufacturing of the boots in India prior to packing and transport."
(9) The complainant did not counter the opinion of the surveyor by adducing tangible documentary/reliable evidence. No damage certificate has been obtained from the carrier certifying loss/damage in transit due to delayed delivery. Ld.Counsels appeared for both the parties were permitted to address this Commission to find out as to what is the inherent vice in the finished leather product consignment. Material placed on record by the Ld.Counsel of the opponent clearly reads as under:
Leather shoes:
"Leather will absorb or lose moisture to the atmosphere depending on the relative humidity of the atmosphere. Shoes which have been packed in apparent good order and condition may be delivered at the destination with mould damage. Such damage may be caused either by an excess of moisture in the leather during the manufacture of the shoes or holding under damp conditions before packing for export."
(10) Surveyor has already observed about raw quality leather used in the manufacturing process of the boots. Moreover, Complainant did not make any statement as to how the fungus laden goods not marketable in U.S.A., were disposed of or whether recovered any salvage by selling the goods. We are of the opinion that the initial burden to establish prima-facie the case of damage has not been discharged by C/11/156 8/9 the complainant by leading cogent evidence to govern the same under the terms and conditions of the policy. Therefore, no deficiency in service can be attributed against the opponent for repudiating the claim. Complaint, therefore, must fail as it is without merit.
(11) Complainant relied on Judgment of the Hon'ble National Commission in case of National Insurance Co. Ltd. V/s. M/s.Mangalagowri Cashew Industries in First Appeal Nos.377, 378, 379, 380 and 381 of 2002, decided on 6th March, 2006 AND in the case of M/s.Ajanta Offset & Packaging Ltd. V/s. M/s. National Insurance Co. Ltd., in Original Petition No.281 of 1996, decided on 27th May, 2004.
Complainant has also brought on record for reference purpose the judgment of British Supreme Court in the matter of Global Process Systems Inc and Another (Respondents) v Syarikat Takaful Malaysia Berhad (Appellant) decided on 1st February, 2011.
The facts and circumstances narrated in the judgment relied upon by the complainant are different and therefore, not relevant to the case in hand.
(12) Opponent relied on the judgment of Court of Appeal (U.K. ) in the matter of T.M. Noten B.V. V/s. Paul Charles Harding, reported in Lloyd's Law Reports, [1990] Vol.2 at page 283, decided on 19th June, 1990 and 21st June, 1990. Opponent rightly relied for damage to goods due to inherent vice of the leather. In this case there is substantive material to show that leather goods which were damaged as a result of natural behavior of goods (finished leather) in the ordinary course of the contemplated voyage without the intervention of any fortuitous external sources like rain water, humidity etc. C/11/156 9/9 (13) In view of the aforesaid observations, we deem it appropriate to dismiss the consumer complaint as the Complainant failed to discharge the burden by establishing deficiency in service against the opponents. Therefore, no liability can be fastened against opponents for repudiating the claim. We hold accordingly and pass the following order:
ORDER
(i) Complaint is dismissed.
(ii) No order as to costs.
(iii) One set of complaint compilation be retained for our record and rest of the sets be returned to the complainant.
(iv) Inform the parties accordingly.
Pronounced on 6th April, 2015.
[ Shashikant A. Kulkarni]
PRESIDING MEMBER
[ Narendra Kawde]
MEMBER
ep