State Consumer Disputes Redressal Commission
Hind Energy & Coal Benefication (India) ... vs United India Insurance Co.Ltd. & Ors. on 12 July, 2016
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G.)
Complaint Case No.CC/2015/22
Instituted on : 24.07.2015
Hind Energy and Coal Benefication (India) Ltd.
Through Ashish Agrawal, Authorised Signatory/
Company Secretary, Hind Energy Limited,
Office - 1st Floor, Shri Sai Parisar Commercial
Complex, Shrikant Verma Marg,
Bilaspur, District Bilaspur (C.G.) - 495001 ... Complainant.
Vs.
1. United India Insurance Company Limited,
Marine Cargo Department - Through United
India Insurance Company Limited.,
24, Whites Road,
Chennai - 600014
2. United India Insurance Company Limited,
Through : Head Corporate Cell,
United India Insurance Company Limited,
3rd Floor, 1-7-241/10 Ramalay Building, S.D. Road,
Secunderabad - 500003
3. United India Insurance Company Limited,
Marine Cargo Department Through Its D.G.M.
United India Insurance Company Limited,
24, Whites Road,
Chennai - 600014
4. United India Insurance Company Limited,
Divisional Office, Gurukripa Towers,
Main Road, Vyapar Vihar,
Bilaspur (C.G.) ... Opposite Parties
PRESENT: -
HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT
HON'BLE MS. HEENA THAKKAR, MEMBER
HON'BLE SHRI D.K. PODDAR, MEMBER
HON'BLE SHRI NARENDRA GUPTA, MEMBER.
COUNSEL FOR THE PARTIES:
Shri Praveen Das, for the complainant.
Shri Dashrath Gupta, for the opposite parties.
// 2 //
ORDER
Dated : 12/07/2016 PER :- HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT. The complainant filed this consumer complaint under Section 17 of the Consumer Protection Act, 1986 against the OPs, seeking following reliefs :-
(a) To direct the OPs (Insurance Company) to pay the complainant Rs.78,00,993/- on account of loss caused along with 12% annual interest calculated from the date of accident.
(b) To direct the OPs (Insurance Company) to reimburse to the complainant a sum of Rs.1,51,479/- on account of expenses of Surveyor incurred by the complainant.
(c) This Commission be further pleased to award a sum of Rs.5 lacs along with expenses of Rs.50,000/- on account of mental harassment and financial loss and Rs.25,000/-
on account of expenses incurred due to repeated communication, email, telephone etc.
2. Brief facts of the complaint are that the complainant is engaged in coal business under the name and style of Hind Energy and Coal Benefication (India) Ltd. The Corporate Head Office of the complainant is situated at 1st Floor, Shri Sai Parisar, Commercial // 3 // Complex, Shrikant Verma Marg, Bilaspur, District Bilaspur (C.G.). The aforesaid company has duly authorised Shri Ashish Agrawal, the Company Secretary to present the instant complaint. The complainant company is a legally constituted company conducting business of coal, which involves import of coal. In furtherance of its business, the complainant took a policy on 13.03.2012 namely Marine Cargo Open Cover No.5005001100024 to cover the various transits of steam coal from any port in world (mainly Indonesia) up till the delivery of the coal to any port in India and its unloading from the vessel and its transit to the plots, its intermediatory storage at port, transit to the railway siding (including storage) till lading into rakes and finally till cargo is discharged from rakes at destination railway siding. In the instant case, a policy certificate under the terms of open cover was issued to cover transit of steam coal from originating port namely Muara Satui Indonesia, up till the final destination railway siding situated at Gatora, Bilaspur (C.G.). The OPs (Insurance Company) accepted the proposal given by the complainant through its authorised agent namely, A.O.N. Global. Based on the proposal of the applicant and negotiation between the assured (complainant) and insurer (OPs), a quotation slip (Marine Cargo Imports) was prepared and an open cover No.5005001100024 was issued, which was made effective from 13.03.2012. Original premium under open cover was 0.35% of total insured good value however with provisions of wider covers i.e. loss // 4 // during intermediate storage in port and delivery till final destination, i.e. railway siding mentioned in quotation slip, the premium was increased to 0.50% / 0.70% whichever applicable. In consonance of above mentioned open cover policy terms a Marine Policy Certificate No.50500/21/11/10/7000300 was issued on 13/03/2012. Initially the cargo value insured with respect to the transit of coal was Rs.16,06,36,873/- (Rupees Sixteen Crores, Six Lacs, Thirty Six Thousands, Eight Hundred Seventy Three) and a premium at 0.70% was paid as per the agreement between the parties as per the quotations slips, which amounts to Rs.1,24,029/- (Rupees One Lakh Twenty Four Thousand and Twenty Nine). The terms and conditions of cover were enumerated in the quotations slips and the policy document. It would be noteworthy to mention that the quotation slip was integral part of the open cover No.5005001100024 and a clear mention was made regarding this fact by insurer along with the signature and the seal of the OPs (Insurance Company). As per the mutually decided conditions mentioned in the quotation slip, the OPs (Insurance Company) agreed that additional cover along with additional premium with respect to :-
Loading / unloading Loss due to spontaneous combustion.
Intermediate storage against fire and allied perils including earthquake and spontaneous combustion for 60 days at the following locations :-
// 5 // a. Storage at port locations.
b. Storage at port city locations.
c. Storage at railway sidings at loading point while awaiting rake.
d. Storage at destination railway sidings.
An additional premium of Rs.32,782/- (Rupees Thirty Two Thousands, Seven Hundred Eighty Two) was paid for additional cargo insured value at Rs.4,24,58,327/-. Finally, the total insured cargo value was Rs.20,30,95,200/-. All premium were paid at higher rate as referred in the quotation slip instead of lower rate mentioned in Marine Open Cover (Cargo) Schedule. The insured goods (coal) left the Muara-Satuni Port, Indonesia for the delivery at Dhamra Port Orissa on 06.04.2012 and the coal was unloaded from the vessel and transported to the plot situated at Dhamra Port. On account of a sudden accident, the unloaded coal got fire accidently on 14.05.2012 on account of spontaneous combustion, which resulted in loss of Rs.96,28,850/- (Rs. Ninety Six Lakhs, Twenty Eight Thousands, Eight Hundred Fifty). A prompt intimation was given by the complainant to the OPs on 19.05.2012. The OPs (Insurance Company) appointed its Surveyor M/s. Mack Surveyors Pvt. Ltd. to assess the extent of damage on account of loss due to fire at Dhamra Port in consignment of imported coal under the policy. The Surveyor, after thorough examination and minute inspection, opined that the cause of fire of // 6 // coal was due to spontaneous combustion, which is a peril covered under the policy. It further stated that cause was to hot and dry weather condition during the period of storage and no foul play was involved. It further assessed the extent of damage to Rs.78,00,993/- (Rupees Seventy Eight Lakhs, Nine Hundred, Ninety Three) and it categorically stated that no breach of any terms, conditions or warranty of the policy was observed. The complainant based on the finds of the Survey Report, raised its claim before the OPs (Insurance Company) for indemnification of loss covered under the policy. The OPs (Insurance Company) vide its communication dated 05.06.2014, 27.06.2014 and 19.01.2015 have turned down the claim of the complainant as well as the representation / letter submitted in this regard. The basis of refusal to indemnify the loss is vague, baseless and contrary to the expressed conditions under the policy and quotations slips, which is part of the policy. In the first letter dated 05.06.2014, the reason for refusal of claim is that the policy did not cover the storage of coal at the listed plots at Dhamra Port, where a fire covered. The main reason for refusal is that according to the OPs (Insurance Company), the insurance had terminated prior to the date of fire. The ground for the refusal is grossly contrary to the conditions of cover mentioned in the Marine Policy as well as the quotations slips, which according to the OPs (Insurance Company) itself was part of the open cover. The complainant made a representation before the // 7 // OPs (Insurance Company) against the rejection of its claim. It was stated in the representation in categorical terms that the Insurance Company was bound to indemnify the insured / complainant as the circumstances under which the fire took place was covered under the terms of the policy. The representation / claim of the complainant was recklessly refused by the Insurance Company vide its letter dated 19.01.2015 stating therein that the marine open cover do not reflect any wider covers as claimed by the complainant. The action of the Insurance Company in refusing to indemnify the complainant is illegal and amounts to deficiency in service as they have acted contrary to the terms and conditions of cover clearly mentioned in the policy.
The Insurance Company accepted the additional premium at rate of 0.70% which is 0.035% additional to the original premium rate of 0.035% in order to provide wider cover as mentioned in the quotations slip. The extra premium collected by the OPs (Insurance Company) was for additional cover of barges operations at load port and after its discharge at Indian Port it covers storage at port locations, storage at port locations, storage at port city locations, storage at railway sidings at loaded point while awarding rake and delivery till destination railway sidings and the same is evident from the cover certificate issued by the OPs (Insurance Company). The refusal is contrary to the terms and conditions of the agreement / policy, which has been duly accepted by the Insurance Company and it is binding upon the OPs // 8 // while indemnifying the loss caused to the complainant on account of fire. The action of the Insurance Company amounts to deficiency in service, which has caused immense financial loss and hardship to the complainant on account of the illegal and arbitrary action of the OPs. In not indemnifying loss, the complainant has incurred financial burden of Rs.78,00,993/- (Rupees Seventy Eight Lakhs, Nine Hundred Ninety Three). This is further substantiated by the fact that the Surveyor appointed by the OPs (Insurance Company) has himself clearly opined that a loss of about Rs.96 Lakhs, has been incurred and which has been finally assessed after making the relevant deductions of Rs.78,00,993/-. According to the Surveyor, the said amount deserves to be indemnified and the OPs are bound to make good the loss caused to the complainant. The action of the OPs in not honouring the terms and conditions of the policy and in refusing the indemnification of loss, amounts to breach of the conditions of the policy and consequential deficiencies in service. Hence the complainant filed consumer complaint seeking reliefs as mentioned hereinabove.
3. The OPs filed their written statement and averred that the OPs issued Marine Cargo Open Cover No.5005001100024 to cover the various transits of all types of coal from Muarasatui Anchorage (Aouth Kalimanthan) to Dhamra Port and up to the Railway siding at loading port. The additional premium was charged towards wider coverage.
// 9 // In this regard it is submitted that premium of Marine Cargo Insurance is detariffed and premium is collected on the basis of nature of the Cargo, type of packing etc. The Cargo being Coal and transported as Bulkcargo, the rate charged was based on the risk involved. The Certificate of Insurance was issued from port of loading to the port of destination and shared with the insured. No mention of additional covers was made on the face of the policy. The insured also did not bring this to notice of the OPs (Insurance Company) to ask for an endorsement. The endorsement was obtained for enhancement of the sum insured and another endorsement was passed for inclusion of barges. However, no endorsement was obtained for additional coverages/additional transit. The Surveyor wrongly stated in his report that no breach of policy condition has been observed. The claim was repudiated by the OPs vide their letter dated 05.06.2014 by stating that as per Clause 8 of the Institute Cargo Clauses (A) by which the marine transit insurance attaches essentially from the time the Cargo leaves the place of storage at the commencement of the transit and continues during the ordinary course of transit and terminates on delivery to the final warehouse or place of storage at the destination named herein or any other warehouse or place of storage, whether prior to or at the destination named herein, which the assured elect to use for allocation or distribution whichever shall first occur. The consignment had been discharged from the vessel from 08.04.2012 to // 10 // 11.04.2012 when it was stored in leased plots at the port for delivery to various parties. The storage at the leased plots after discharge from the vessel was found to be for allocation / distribution to the ultimate buyers from the complainant. In view of the same, in terms of Clause 8 of ICC-A, the marine transit cover ceased immediately upon storage at the plots after which allocation and distribution was going on for more than a month, before the fire occurred in the stored Cargo, on 14.05.2012. The insurance had thus terminated long prior to the date of fire. The claim for the damage to the Cargo thereafter under the Marine Insurance Policy is not sustainable. The fire was initiated by self ignition due to inherent nature of the coal. It was essentially due to inherent nature / vice of the Cargo due to the volatile content in the coal. There was no fortuity that initiated the fire, but the Cargo spontaneously suffered fire due to their very nature. Such fire damage clearly due to inherent nature and / or vide of the Cargo is specifically excluded under Clause 4.4 of the Institute Cargo Clauses A of the Policy. The claim was not sustainable under the policy. The OPs vide their letter dated 05.6.2014, 27.06.2014 and 19.012015 turned down the claim. Reasons given for turning down the claim of the complainant is self explanatory in the letter dated 05.06.2014, 27.06.2014 and 19.01.2015, which are based on terms and conditions of the insurance policy. As per insurance policy, risk was not covered therefore claim was repudiated vide letter dated 05.06.2014 and // 11 // 19.01.2015, which is self explanatory and OPs adopt the same. The Marine Open Cover document and the Certificate issued thereunder, do not reflect any of the wider covers as claimed by the complainant, which are mentioned on in the Request For Quotation submitted by brokers of the complainant. The claim was repudiated by the OPs as per terms and conditions of the Insurance Policy. As per the Marine Open Cover and the Certificate issued for this consignment, it is very clearly evident that the cover was as per ICC (A) of the Policy only and on port to port basis. The loss was due to spontaneous combustion which is due to the inherent nature / vice of the material (coal) and as such is specifically excluded peril under Section 4.4 of the ICC (A). The present consignment had been discharged from the vessel from 08.04.2012 to 11.04.2013 when it had been stored in leased plots at the port for the purpose of distribution to the clients of the complainants. As such as per Clause 8 of the ICC (A) the Marine Transit cover ceased immediately upon storage at the plots and when the allocation and distribution commenced. In view of the matter, the claim was rightly repudiated by the OPs. In this regard letter dated 19.01.2015 of the OPs is self explanatory. The premium of Mrine Cargo insurance is detariffed and premium is collected on the basis of nature of the Cargo, type of packing etc. The Cargo being coal and transported as Bulkcargo. The Certificate of insurance was issued from port of loading to the port of destination and shared with the // 12 // insured. No mention of additional covers was made on the face of the insurance policy The claim was repudiated by the OPs as per terms and conditions of the insurance policy. The claim was repudiated by the OPs as per terms and conditions of the insurance policy. The OPs are not liable to pay a sum of Rs.78,00,993/- to the complainant. There is no deficiency on the part of the OPs. The complaint is liable to be dismissed.
4. The complainant filed documents. Documents are Marine Insurance Policy proposal initiated by Broker (AON Global) with United India Insurance Company Limited, Marine Open Cover Cargo No.5005001100024 Schedule (0.35%) with its Annexure (0.50% / 0.70%), Marine Cover Certificate No.500500/21/11/10/70000300 for premium charging 0.50% premium on cargo value Rs.16.06 Cr., Marine Cover Certificate No.500500/21/11/10/83000075 for additional 0.20% premium on cargo value Rs.16.06 Cr., Marine Cover Certificate No.50050021/11/10/83000082 for additional premium of 0.70% on additional cargo value of Rs.4.24 Cr., Bill of Lading of Shipment issued by Master of Vessel, Bill of Entry issued by Indian Custom Authority at Dhamra Port, First Intimation of accident by insured, appointment of Surveyor M/s Mack Surveyors (P) Ltd. by Insurance Company, Letter issued by the Port Authorities in relation to fire accident, Surveyor Report, Marine Claim Form submitted by the insured before the Insurance Company, Complaint Escalated through Insurance // 13 // Regulatory Authority for non-response by the Insurance Company for several months, letter dated 05.06.2015 from Insurance Company stating refusal of claim, letter dated 27.06.2015 from the Insurance Company stating refusal of claim on ground that policy was not covering the spontaneous combustion during intermediate storage, insured's letter dated 18.06.2014 to the Insurance Company stating that quotation slip was part of policy with having covered the additional perils, letter dated 19.01.2015 from Insurance Company stating that documents referred by insured are merely a RFQ and hence claim not maintainable, order copy of C.G. State Consumer Disputes Redressal Commission, Raipur.
5. The OPs (Insurance Company) has not filed any documents.
6. Shri Praveen Das, learned counsel appearing for the complainant has argued that the complainant obtained a Marine Policy from the OPs (Insurance Company). Initially, the cargo value of the insured goods was Rs.16,06,36,873/- and a premium at the rate of 0.70% was paid as per the agreement between the parties as per the quotation slip. The complainant deposited a sum of Rs.1,24,029/- with the OPs. The terms and conditions of the policy were enumerated in the quotation slip and the policy document. The quotation slip was integral part of the open cover. As per the mutually decided conditions mentioned in the quotation slip, the OPs (Insurance // 14 // Company) agreed that additional cover along with additional premium with respect to :-
Loading / unloading Loss due to spontaneous combustion.
Intermediate storage against fire and allied perils including earthquake and spontaneous combustion for 60 days at the following locations :-
a. Storage at port locations.
b. Storage at port city locations.
c. Storage at railway sidings at loading point while awaiting rake.
d. Storage at destination railway sidings.
The complainant deposited additional premium of Rs.32,782/- for additional cargo insured value at Rs.4,24,58,327/- and total insured value of the cargo was Rs.20,30,95,200/-. The insured goods (coal) left the Muara-Satui Port, Indonesia and reached to Dhamra Port, Orissa on 06.04.2012 and the coal was unloaded from the vessel and transported to the plot situated at Dhamra Port. All of a sudden on 14.05.2012, the coal got fire accidentally on account of spontaneous combustion, which resulted in loss of Rs.96,28,850/-. The matter was reported to the OPs (Insurance Company). The OPs (Insurance Company) appointed M/s Mack Surveyors Pvt. Ltd. as Surveyor, who inspected the spot and assessed the loss to the tune of Rs.78,00,993/-.
// 15 // The complainant filed claim before the OPs (Insurance Company) but the OPs (Insurance Company) repudiated the claim of the complainant on the baseless grounds and thus the OPs (Insurance Company) committed deficiency in service. The claim of the complainant has been repudiated by the OPs (Insurance Company) the ground that the marine cargo policy did not cover the storage of coal at the listed plots at Dhamra Port, where fire occurred. The ground taken by the OPs (Insurance Company) is baseless. The spontaneous combustion is included in the insurance policy and consignment was finally not delivered at its final destination, therefore, the policy was not ceased. The fire was caught in the coal during transit. The Surveyor was appointed by the OPs (Insurance Company) itself, therefore, their report is binding on the OPs (Insurance Company). In the written statement, the OPs (Insurance Company) simply mentioned that the "Surveyor wrongly stated in his report that no breach of policy condition has been observed. " The Surveyor is an independent person, who was appointed by the OPs (Insurance Company) on the basis of guidelines of Insurance Regulatory and Development Authority (IRDA). The Surveyor's report is being an important document under the Insurance Act, 1938, should be main point of consideration for assessing loss and deciding the insurance claim and the Surveyor's Report is admissible and acceptable until and unless it is rebutted by the cogent and reliable // 16 // evidence. The OPs (Insurance Company) did not file any evidence against the Surveyor's Report. If the OPs were not satisfied with the Report of the Surveyor, then the OPs were free to appoint second Surveyor and to obtain report from him, but the OPs did not obtain second report from second Surveyor, therefore, Survey Report given by Mack Surveyors (P) Limited, is reliable and can be basis for assessment of loss and on the basis of above Survey Report, the complainant is entitled to get compensation to the tune of Rs.78,00,993/- from the OPs. He placed reliance on Consumer Case No.330 of 2001 - M/s. Bhatia Coal Sales Ltd., Through Its Director Shri J.K. Jain Vs. United India Insurance Co. Ltd. decided by Hon'ble National Commission vide order dated 15.09.2015; Murli Agro Products Ltd. Vs. Oriental Insurance Co. Ltd. I (2005) CPJ 1 (NC); and Consumer Complaint No.115 of 2007 - Saurashtra Chemicals Ltd. Vs. National Insurance Co. Ltd., decided by Hon'ble National Commission.
7. Shri Dashrath Gupta, learned counsel appearing for the OPs (Insurance Company) has argued that no additional premium was collected by the Ops (Insurance Company). Spontaneous Combustion is not including in the insurance policy. The complainant did not obtained endorsement regarding payment of additional premium in the policy and Surveyor wrongly stated in his report that "No breach of policy condition has been observed". The coal was stored in // 17 // Dhamra Port from vessel during 08.04.2012 to 11.04.2012. When it was stored in the leased plots at the port for delivery to various parties, the policy was ceased. The fire was caught on 14.05.2012 i.e. after near about one month of the storage of the coal and the fire was initiated by self ignition due to inherent nature of coal, which is not covered in the insurance policy and was excluded under Clause 4.4 of Policy. Therefore, the (OPs), has rightly repudiated the claim of the complainant.
8. We have heard learned counsel appearing for the parties and have perused the documents filed by complainant.
9. The complainant has pleaded in para 2 of the complaint that the complainant took a policy on 13/03/2012 namely Marine Cargo Open Cover No.5005001100024 to cover various transits of steam coal from any port in world (mainly Indonesia) up till the delivery of the coal to any port in India and its unloading from the vessel and its transit to plots. In para 3 of the complaint, it has been pleaded that the OPs accepted the proposal given by the complainant through its authorised agent namely, A.O.N. Global. Based on the proposal of the complainant and negotiation between the assured (complainant) and insured (OPs), a quotation slip (Marine Cargo Imports) was prepared and open cover No.5005001100024 was issued, which was made effective from 13.03.2012 to. It has further been pleaded that in consonance of above mentioned open cover policy terms a Marine // 18 // Policy Certificate No.500500/21/11/10/7000300 was issued on 13.03.2012. It has further been pleaded that the quotation slip was integral part of the open cover No.5005001100024 and a clear mention was made regarding this fact by the insurer along with signature and the seal of the OPs (Insurance Company).
10. In the written statement, the OPs (Insurance Company) admitted the contentions made by the complainant in para 2 and in para 4 it has been pleaded by the OPs (Insurance Company) that "Certificate of Insurance was issued from port of loading to the port of destination and shared with the insured. " It appears that the OPs (Insurance Company) has admitted that insurance policy was issued by it. It means that the quotation slip, which was annexed with the insurance policy is integral part of the insurance policy.
11. The complainant has filed Marine Open Cover (Cargo) Schedule. In the said document, against the column name of the assured it is mentioned M/s Hind Energy And Coal Benefication (India) Limited - Open Cover No.500500110024 Year 2011. Against the column of period it is mentioned 17:40 Hrs. On 13/03/2012 to 12/03/2013. It is further mentioned thus :-
"Journey from Journey to Mode of transit
Any where in the world. Any port in India (Upto Railway Siding/
Vessel/Road/Rail at Loading Point)
Sr. Packing Description Commodity Description Rate (%)
// 19 //
1. Bulk Cargo All Tyres of Coal in Bulk. 0.35000
---------------------------------------------------------------------------------------------"
12. The complainant has filed Quotation Slip - Marine Cargo (Import). In the said document, it is mentioned thus :-
Terms of Cover a. Institute Cargo Clause (Sea) A - All Risk -
1.1.2009.
b. Institute War Clause (Sea Cargo).
c. Institute Strike Clause (Sea Cargo).
d. Institute Classification Clause 1.1.2001 ......
n. Loss due to Spontaneous Combustion held covered o. Intermediate Storage against Fire and Allied perils including Earth Quake and Spontaneous Combustion : for 60 days at the following locations :-
Storage at port locations.
Storage at port city locations.
Storage at railway sidings at load point whilst awaiting rake.
Storage at destination railway sidings.
1. .......
2. .......
8. The placement slip to form a part of the policy.
Special Conditions Note Terms will be presumed to be acceptable by the Insurer as per request above unless specifically commented upon in the Slip.
// 20 // In the insurance policy, it is also mentioned thus :-
"TRANSIT DETAILS Original Sum Insured. Rs.16,06,36,873/-
Terms : ICC (A) Including War and SRCC
Premium Details
Basis Premium. Rs. 88,350.28
Total Extension Premium. Rs. 0.00
War SRCC Premium. Rs. 24,095.53
Net Premium. Rs.1,12,445.81
Service Tax. Rs. 11,582.00
Add. Stamp Duty. Rs. 1.00
Total premium. Rs.1,24,029.00
Premium already paid. Rs. 88,592.00
Amount paid : Rs. 35,437.00
TRANSIT DETAILS.
Original Sum Insured : Rs.16,06,36,873/-
Endorsement Sub Insured : Rs. 4,24,58,327/-
PREMIUM DETAILS
Basis Premium. Rs. 23,352.08
Total Extension Premium. Rs. 0.00
War SRCC Premium. Rs. 6,368.75
Net Premium. Rs. 29,720.83
Service Tax. Rs. 3,061.00
Add. Stamp Duty. Rs. 0.00
Total premium. Rs. 32,782.00
Premium already paid. Rs.1,24,029.00
Amount paid : Rs. 32,782.00
// 21 //
Full wording of Endorsement.
Notwithstanding anything stated herein to the contrary, it is hereby declared and agreed at the request of the insured, the sum insured is hereby enhanced to Rs.20,30,95,200/-.
In consequence thereof, an amount of Rs.32,782/- has been charged to the insured as Additional Premium.
It is agreed that this Endorsement shall be deemed to be an Endorsement on Policy / Certificate in Terms of the condition thereof. In all other respects the Policy / Certificate remains unaltered."
13. From bare perusal of the insurance policy, it appears that initially the value of the insured goods was Rs.16,06,36,873/- and thereafter again additional premium was paid by the complainant to the OPs and the insured value was increased from Rs.16,06,36,873/- to Rs.20,30,95,200/- and an endorsement was also effected in the policy.
14. From bare perusal of the insurance policy it appears that Spontaneous Combustion was included in the policy. In the consideration of payment by the insured (complainant) to the OPs the additional premium was collected by the OPs. The complainant filed Marine Certificate Under Open Cover No.5005001100024 Certificate No.: 500500/21/11/10/70000300. In the said document, under the Exclusions it is mentioned :-
// 22 // "EXCLUSIONS :-
4. In no case shall this insurance cover 4.1. .......
4.2. ...........
4.3. ...........
4.4. loss damage or expense caused by inherent vice or nature of the subject-matter insured.
DURATION 8 8.1. This insurance attaches from the time the goods leave the warehouse or place of storage at the place named herein for the commencement of the transit, continues during the ordinary course of transit and terminates either 8.1.1. on delivery to the Consignees' or other final warehouse or place of storage at the destination named herein, which the Assured elect to use either.
8.1.2. on delivery to any other warehouse, or place of storage, whether prior to or at the destination named herein, which the Assured elect to use either.
8.1.2.1. for storage other than in the ordinary course of transit or 8.1.2.2. for allocation or distribution, or 8.1.3. On the expiry of 60 days after completion of discharge overside of the goods hereby insured from the oversea vessel at the final port of discharge, whichever shall first occur."
// 23 //
15. From bare perusal of policy, it appears that the contract cannot be of giving insurance coverage only in case of damage by fire. If that contention is accepted, the object and purpose of payment of additional premium is frustrated. Recover of additional premium indicates acceptance of risk by the Insurance Company for the perils contemplated and loss due to spontaneous combustion also. Under the Head "Duration" in the terms and conditions of policy, it is mentioned that "on the expiry of 60 days after completion of discharge overside of the goods hereby insured from the oversea vessel at the final port of discharge". In the instant case, the coal was unloaded on 06.04.2012 and fire was caught in the coal on 14.05.2012, which is within 60 days, therefore, the incident had taken place during the existence of the insurance policy.
16. In Murli Agro Products Ltd. Vs. Oriental Insurance Co. Ltd. (Supra), Hon'ble National Commission has observed thus :-
"7. At the time of hearing of this matter, learned Counsel for the complainants submitted that the issue involved does not require much consideration as it is concluded by the decisions rendered by this Commission in the cases of (i) M/s. Roshanlal Oil Mills Ltd. v. M/s United India Insurance Co. Ltd., 1 (1992) CPJ 293 (NC) and (ii) Saraya Sugar Mills Ltd. v. United India Insurance Co. Ltd., II (1996) CPJ 6 (NC).
// 24 //
8. In the case of Saraya Sugar Mills, after considering the similar terms of the policy, this Commission arrived at the conclusion that if fire was required for giving the insurance coverage, then there was no necessity of taking an additional premium for spontaneous combustion.
The relevant part of discussion is as under :-
"We have heard the parties and gone through the records. The relevant facts are not in dispute. The molasses of the complainant in Tank No.1 were burnt and solidised due to auto heating and spontaneous combustion. The Insurance Company's case is that as there was no fire due to spontaneous combustion therefore the loss was not covered under the policy. Thus the fate of the case entirely hangs upon the definition of "combustion, spontaneous combustion and fire". The definition of combustion and spontaneous combustion was considered by this Commission in M/s. Roshanlal Oil Mills Ltd. v. M/s. United India Insurance Co. Ltd., 1 (1992) CPJ 293 (NC). It was observed :
In scientific literature combustion is defined as under :-
"The burning of any substance whether it be gaseous, liquid or solid. In combustion, a fuel is oxidized evolving heat and often light........
The combustion of solids such as coal and wood occurs in stages. First , volatile matter is driven out of the solid by thermal decomposition of the fuel and burn in the air. At usual combustion temperature, the burning of the hot, solid, residue is controlled by the rate at which oxygen of the air diffuses to its surface..... (McGraw Hill Encyclopedia of Science & Technology, New York, Vol. 3 1982).
// 25 // Another test define combustion as under :-
'The term combustion signifies the process of burning associated generally with fire, flame, the generation of heat, and certain products of reaction'. (Encyclopaedia Dictionary of Physics Chief Editor Thewlis, Pergamon Press, Oxford 1961)'.
As noticed above, the case of the insurance company is that auto combustion / spontaneous combustion did not cause fire. Therefore, the loss is not covered under the policy. 'Fire' had been defined in Chambers 20th Century Dictionary as follow :
'the heat and light of burning : a mass of burning matter, as of fuel in a grate : flame or incandescence : a conflagration : firing : fuel : a heating apparatus : heat or light due to other causes than burning.' In the Concise Oxford Dictionary the meaning of 'fire' has been given as follows :
'Active principle operative in combustion in which substances join chemically with oxygen in air and usu. Give out bright light and heat; flame, incandescence.' From the above definition of fire given in the two dictionaries, it is clear that fire need not necessarily be accompanied by flame. Fire is a form of heat energy which causes smouldering, burning , heating, melting and perhaps some few more words".
17. Now we shall consider whether on the given facts and circumstances of the case, it can be held that consignment of coal was // 26 // delivered to the complainant between 08.04.2012 to 11.04.2012 and the policy was ceased ?
18. According to the complainant, the insured goods (coal) left the Muara-Satui Port, Indonesia and reached to Dhamra Port, Orissa on 06.04.2012 and the coal was unloaded from the vessel and transported to the plot situated at Dhamra Port. According to the complainant, the insurance policy was issued for any port in India (Upto Railway Siding Vessel/Road / Rail at Loading Point) up till the delivery of coal to any port in India and its unloading from vessel and its intermediate storage in port and delivery till final destination, i.e. railway siding In para 2 of the complaint, it has been specifically pleaded that a policy certificate under the terms of open cover was issued to cover transit of steam coal from originating port namely Muara Satui Indonesia, up till final destination railway siding situated at Gatora, Bilaspur (C.G.).
19. At para 18 of the complaint, it has further been pleaded by the complainant that the payment towards the premium was made from Bilaspur. Further the cover under the policy was for transit of coal from Indonesia having final end point (destination) i.e. Gatora Railway Siding, Bilaspur. It means, still delivery of consignment was not taken finally and all of sudden on 14.05.2012, on account of spontaneous combustion the coal caught fire, therefore, the Exclusion Clause 4.4 of the Policy is not applicable in the instant case. It appears that the coal caught fire during substance of the insurance policy.
// 27 // Merely the coal was stored in Dhamra Port, Orissa, it cannot be held that the coal was stored in its final destination and it can also not be held that the policy was ceased. It means that the policy was in existence at the time of occurrence of incident of fire.
20. Now we shall examine whether the complainant is entitled to get the amount as compensation, which was assessed by the Surveyor ?
21. In Oriental Insurance Co. Ltd. Vs. Pavan Enterprises & Anr. I (2016) CPJ 503 (NC), Hon'ble National Commission has observed thus :-
"12. I see no reason to discard the report of the Surveyor. He appears to be a guideless witness. No motive was ever attributed to him. There must be some reasonable ground or doubt to reject his report. The report of the Surveyor carries infinite significance as was held in Roshan Lal Oil Mills Ltd. & Ors., 2014 (SLT Soft) 1 = 2014 (CPJ Soft) 1 = (2000) 10 Supreme Court Cases 19 and in D.N. Badoni v. Oriental Insurance Co. Ltd., I (2012) C.P.J. 272 (NC)."
22. In United India Insurance Company Limited Vs. Shree Sunder Marbles, 2016 (1) CPR 66 (NC), Hon'ble National Commission has observed that "Surveyor report being important document under Insurance Act should be main point of consideration for assessing loss and deciding insurance claim."
23. In New India Assurance Co. Ltd., vs. Pave Infrastructures Pvt. Ltd., 2015 (3) CPR 577 (NC), Hon'ble National Commission has // 28 // observed that "Loss of assessment by approved Surveyor can be discarded only on cogent reasons".
24. In Garg Acrylics Ltd., Through Sh. Anish Bansal G.M. (G.M.) Authorised Representative vs. United India Insurance Co. Ltd., 2015 (1) CPR 273 (NC), Hon'ble National Commission has observed thus :-
"11.................. This is settled Law that the report of the surveyor is to be given much more weightage than any other piece of evidence. See the Law laid down in United India Insurance Co. Ltd. & Others Versus Roshan Lal Oil Mills Ltd. & Ors. (2000) 10 Supreme Court Cases 19 & in D.N. Badoni Vs. Oriental Insurance Co. Ltd. I (2012) C.P.J. 272 (NC)".
25. In The Oriental Insurance Co. Ltd., Through its Regional Manager vs. Ishwar Singh, 2015 (1) CPR 157 (NC), Hon'ble National Commission has observed thus :-
"17. Counsel for the petitioner has also drawn our attention to the Apex Court Judgment in the case Sri Venkateswara Syndicate vs. Oriental Insurance Company Ltd., and Another, (2009) 8 Supreme Court Cases 507 wherein the Apex Court has held as under :-
"There is no disputing the fact that the surveyor/surveyors are appointed by the insurance company under the provisions of the Insurance Act and their reports are to be given due importance and one should have sufficient grounds not to agree with the assessment made by them".
// 29 //
26. In Shankarlal Virji Thakkar vs. United India Insurance Co. Ltd. 2015 (1) CPR 821 (NC), Hon'ble National Commission has observed thus :-
"7. The report of the Surveyor appears to be quite reasonable and just. There is no evidence whatsoever to 501 affected bags + other bags which were not counted. Thos bags must have fetched some amount. There is no reason to discard the report of the Surveyor. It is a balanced report. It has considered all the factors. It is well settled that the report of the Surveyor has to be given due weightage in view of the celebrated authorities of the Hon'ble Apex Court in United India Insurance Co. Ltd. & Others Versus Roshan Lal Oil Mills Ltd. & Ors. (2000) 10 Supreme Court Cases 19, para 7, D.N. Badoni Vs. Oriental Insurance Co. Ltd. I (2012) CPJ 272 (NC).
27. In New India Assurance Company Ltd. vs. Balaji Emporium, I (2015) CPJ 588 (NC), Hon'ble National Commission has observed thus :-
"9. We are of the considered view that the report made by the Surveyor appears to be correct. It is bolstered by sold and unflappable evidence. He has also considered the income tax reports and entries in the stock registered. The conclusion of the State Commission is vague, evasive and leads us nowhere."
28. In Iffco Toko General Insurance Company Limited Vs. Beena Raghav, III (2015) CPJ 75 (NC); Hon'ble National Commission has observed that "respondent failed to explain her reluctance and refused to get the car repaired and thereafter claiming cost incurred based on actual bills for // 30 // repair. No cogent reason for dismissing survey report as untrustworthy. Total loss not established."
29. In M/s. Hinafil India Limited vs. United India Insurance Company Limited & Another, 2015 (3) CPR 35 (NC), Hon'ble National Commission, has observed that "Surveyor being a third person, report submitted by him is entitled to a great weight and should ordinarily be accepted."
30. Mack Surveyors (P) Ltd., Surveyor and Loss Assessor, assessed the loss to the tune of Rs.78,00,993/-. The Surveyor in his report has specifically mentioned that "No breach of any terms, conditions or warranty of the policy was observed". The OPs (Insurance Company) did not rebut the report of the Surveyor by adducing cogent evidence. The OPs (Insurance Company) did not file any document in rebuttal. The OPs (Insurance Company) has simply pleaded that "the Surveyor wrongly stated in his report that no breach of policy condition has been observed". The Surveyor was appointed by the OPs (Insurance Company) and if the OPs (Insurance Company) was not satisfied with the Report of the Surveyor, then the OPs (Insurance Company) was free to appoint second Surveyor and obtain his report, but the OPs (Insurance Company) did not obtain second report from second Surveyor, therefore, the Survey Report given by Mack Surveyors (P.) Ltd., Surveyor & Loss Assessor, is binding on the OPs (Insurance Company). On the basis of above Survey Report, the complainant is // 31 // entitled to get compensation for Rs.78,00,993/- (Rupees Seventy Eight Lakhs and Nine Hundred Ninety Three) from the OPs (Insurance Company).
31. The complainant prayed for awarding a sum of Rs.1,51,479/-, which was reimbursed by him on account of expenses of Surveyor incurred by the complainant. The above relief cannot be granted to the complainant.
32. The complainant prayed for granting a sum of Rs.5,00,000/- with expenses of Rs.50,000/- on account of mental harassment and financial loss and Rs.25,000/- on account of expenses incurred due to repeated communication, email, telephone etc. The complainant is a Limited Company, therefore, it is not entitled to get compensation towards mental agony. The complainant is entitled to get a sum of Rs.10,000/- (Rupees Ten Thousand) towards cost of litigation.
33. Therefore, we partly allow the complaint of the complainant and it is directed that the OPs (Insurance Company) will pay a sum of Rs.78,00,993/- (Rupees Seventy Eight Lakhs and Nine Hundred Ninety Three) to the complainant within a period of two months from the date of order. If the OPs (Insurance Company) will not pay the above amount to the complainant within stipulated period, then the complainant is entitled to get interest @ 9% p.a. on the said amount.
// 32 // The OPs (Insurance Company) will also pay a sum of Rs.10,000/- (Rupees Ten Thousand) towards cost of litigation to the complainant. (Justice R.S. Sharma) (Ms. Heena Thakkar) (D.K. Poddar) (Narendra Gupta) President Member Member Member 12 /07/2016 12/07/2016 12 /07/2016 12 /07/2016