State Consumer Disputes Redressal Commission
National Insurance Company Ltd. vs Tirupati Enterprises Through Jai ... on 9 September, 2011
Daily Order
STATE CONSUMER DISPUTES REDRESSAL COMMISSION BIHAR, PATNA RAJY AAYOG (First. Floor), R. Block Rd. No.-2, Patna-800001 First Appeal No. A/27/2007 (Arisen out of Order Dated null in Case No. of District None) 1. NATIONAL INSURANCE COM. LTD NA BEFORE: HONABLE MR. JUSTICE SUBASH CHANDRA JHA PRESIDENT HON'ABLE MRS. RENU SINHA MEMBER PRESENT: ORDER
Date of order: 09-09-2011 S.C.JHA, PRESIDENT This appeal has been filed by the National Insurance Company through their Regional Manager, Patna for setting aside the order dated 29-11-2006 passed in Consumer Complaint No. 93/2004 by District Consumer Disputes Redressal Forum, Begusarai (hereinafter to be referred to as District Forum) whereby and whereunder the learned District Forum has held that the appellant-Insurance Company were negligent in providing their service and thereby the petition of the complainant-respondent was allowed and the Insurance Company-appellant was directed to pay Rs. 6,97,811/- (Rs. six lacs ninety seven thousand and eight hundred eleven) with 9% interest from 14-02-2002, the date on which partial payment was made till the date of payment to the complainant. Besides, direction for payment of Rs. 5000/- by way of litigation cost within 45 days of the passing of the order has also been given.
2. Heard the learned counsel of both sides.
3. The facts in brief of the case is that the complainant-respondent-M/S Tirupati Enterprises through Jai Prakash Hisaria @ Prakash Hisaria, Clearing and Forwarding agent of ACC Company Ltd. having their Head Office at Begusarai have filed a Complaint Case bearing No. 93/2004 for payment of loss of damaged cement amounting to Rs. 6,97,811/- from the National Insurance Company Ltd. with 18% interest and compensation of Rs. two lacs for mental and physical harassment as also Rs. 10,000/- by way of litigation cost.
4. In all 40 closed box/CRET wagons containing 44280 bags of ACC cement were dispatched from ACC Jamul Factory to Karpoorigram, Laheriasarai respectively on 28-09-2001. Out of which 9320 bags got damaged in route due to rainfall in course of transit. It has been averred that such rainfall took place in the district of Begusarai and as such, complaint was filed in the Consumer Forum at Begusarai.
5. It has also been averred that the stock of cement was insured against loss due to damage by the appellant-National Insurance Company vide its open transit insurance policy No. 260500/21/2002/44/00283 and was effective from 07-06-2001. The insurance policy was duly assigned in favour of the complainant-respondent on 03-10-2001 by ACC Ltd. and it was mentioned in the assignment letter that in case of incident of delivery of damaged cement, the complainant account will be debited as per indemnity policy and therefore, the complainant was advised to take up the issue of claim as well as settlement with the Insurance Company as the complainant was Clearing and Forwarding Agent of the ACC Ltd. The loss was surveyed by two surveyors, whose reports have been marked exhibits and as per their reports, the place and the date of damage could not be ascertained as the cement was damaged due to rainfall in between Jamul and Karpoorigram/Laheriasarai. The surveyor ascertained the loss on percentage basis to the tune of Rs. 7,74,868/- (Rs. seven lacs seventy four thousand eight hundred and sixty eight only) against damage of cement and Rs. 38,802/- against handling and transporting charge of that cement. The surveyor also recommended for reimbursement of survey fee, which they received from the complainant.
6. The salvage containing stoned cement and fresh cement as well, was sold to the highest bidder by taking Bank Draft of Rs. 2,15,344/- (Rs. two lacs fifteen thousand three hundred and forty four only) in favour of the ACC Ltd. No fraction of claimed cement was ever handed over to the complainant. The complainant in all lodged four claim totallying Rs. 14,50,000/- (Rs. fourteen lacs and fifty thousand only) and odd with the Insurance Company for loss of 9320 (nine thousand three hundred and twenty only) bags of cement @ Rs. 150/- per bag plus other incidental charges. The value of one bag of cement as agreed between the insurer and the Insurance Company was @ Rs. 150/- per bag, i.e., Rs. 3000/- per ton.
6. The Insurance Company settled the claim of Rs. 7,53,084/- (Rs. seven lacs fifty three thousand and eighty four only) but deducted Rs. 2,15,344/- of salvage already paid to the ACC Ltd. earlier and balance amount of Rs. 5,37,740/- (Rs. five lacs thirty seven thousand seven hundred and forty only) was paid to ACC Ltd. on 14-02-2002 vide four discharge vouchers exhibits OP-4 to OP-7 of National Insurance Company Ltd. The ACC Ltd. credited the aforesaid amount in the account of the complainant-respondent on 30-03-2002 but balance amount of loss remained debited in his account.
7. The appellant appeared and filed their written statements. ACC Ltd. supported the averments of the complainant and admitted the assignment of the insurance policy in favour of the complainant and further averred that unpaid loss amount was debited and deducted from the account of the complainant.
8. The National Insurance Company-appellant also appeared and filed their written statement. As per their averment, Begusarai District Forum had no territorial jurisdiction to entertain the complaint under Consumer Protection Act. This issue was decided in favour of the complainant-respondent on consideration of a certificate granted by the Railways to this effect that the route from Jamul Cement Works siding to Karpoorigram in the district of Samastipur runs via Barauni, which is in the district of Begusarai and District Statistical Officer, Begusarai has certified that during the period of transit of cement, there was rainfall in the locality of Barauni, Garhara and Bachwara (in the district of Begusarai). The loss due to rainfall has also been mentioned in the report of surveyor. The place has not been ascertained but the complainant-respondent having their business office in the district of Begusarai as also branch office of the National Insurance Company in Begusarai district. So, the learned District Forum has decided that Begusarai District Forum has territorial jurisdiction.
9. The other point, which was raised on behalf of the National Insurance Company was in respect of status of the respondent as consumer on the plea that the cement was consigned for the purpose of resale in the marked and that no insurance premium was paid by the complainant but this objection of the Insurance Company did not find any merit in the judgement of the learned District Forum. Reference of Section-38, clause-5 of the Insurance Act has been discussed in the impugned judgement, wherein it has been made clear that the assignee is the only person entitled to derive benefit under the policy. Moreover, it was held that unpaid loss amount has been realized from the complainant-respondent by ACC Ltd. by debiting such amount from the account of the complainant and therefore, the complainant had insurable interest in the insurance policy.
10. The Insurance Company has further objected by raising a plea that there was full and final settlement arrived at between the National Insurance Company and the ACC Ltd. but this issue was also decided against the Insurance Company. It has been observed that assignment was made on 03-10-2006. Reference of a decision of the Hon'ble Apex Court New India Assurance Company Ltd. Vs. B.N. Sainani (1997), CPJ 380 (1998), 92 CPJ 426 SC has been made, wherein it has been held that if the policy had been assigned during the course of validity and before the goods were appropriated after their arrival at the port of destination, it could be held that the assignee would be the beneficiary in terms or the provisions or the Act.
11. From the aforesaid analysis, it was held that assignee-complainant was a necessary participant in the settlement of the claim and such settlement between the Insurance Company and ACC Ltd. was arrived at, in the absence of joining any such participation by assignee-complainant and so settlement arrived at between the National Insurance Company and ACC Ltd. was not binding upon the complainant.
12. The learned counsel for the appellant has almost raised the aforesaid issues here, in course of their argument. Besides, a plea was also raised that the complaint was filed after two years of settlement of claim and acceptance of the same by ACC Ltd. as full and final settlement on the basis of surveyor's report.
13. It has been averred on behalf of the appellant that the learned District Forum has omitted to consider the aforesaid points raised on behalf of the appellant in true perspective and jumped on the conclusion that Begusarai District Forum had jurisdiction and that full and final sentiment arrived at between the National Insurance Company and ACC Ltd. was not binding on the assignee/complainant/respondent.
14. On the other hand, the learned counsel for the respondent has replied aforesaid points raised on behalf of the appellant and urged for upholding of the order under challenge passed by the learned District Forum.
15. There is no denying of the fact that in the transit 9320 bags of cement were found damaged and that ACC Ltd. has not incurred loss of single penny by negotiating with the Insurance Company. The ACC Ltd. have realized its money worth 9320 bags of cement by debiting the value from the account of the assignee-respondent. Negotiation with the Insurance Company by ACC Ltd. was done without any participation of the assignee respondent and as such, such settlement was not binding on the assignee.
16. It is also manifest from the record that such damage of bags of cement occurred due to rainfall in the transit and that its price was @ 150/- per bag, i.e., Rs. 3000/- per ton. Moreover, the respondent has been running business having their Head Office at Begusarai although destination of such cement was in the nearby district of Samastipur or Darbhanga but loss due to such damage has taken place in the territorial jurisdiction of Begusarai, where office of the Insurance Company-appellant is functioning. So, such territorial jurisdiction has no significance, which should not come in the way for denying or accepting the claim of the assignee.
17. We have gone through their papers, written notes of argument and considered their argument in the context of the relevant papers and documents available on the record. From the aforesaid materials on the record, it is manifest that there was non-delivery of 9320 bags of cement, the value of which were admittedly @ 150/- per bag. Out of which, the ACC Ltd. has realized the salvage value to the tune of Rs. 2,15,000/- ( Rs. two lacs fifteen thousand only) from the Insurance Company so settled between ACC Ltd. and the appellant-Insurance Company and remaining amount was credited in the account of assignee/ complainant-respondent. But ACC Ltd. Realized the entire value of the cement so damaged in course of transit by deducting the amount from the account of the assignee-complainant.
18. There was valid transit insurance cover insured by the ACC Ltd. But it was meant to be recovered from the Insurance Company, in case of any damage or loss, by assignee. Under such situation, the complainant-assignee was fully justified in lodging complaint for compensation of their loss against the Insurance Company, which had provided such insurance cover for such transshipment of cement by way of transit insurance. There is no justification for sustaining any loss by assignee-complainant in the aforesaid situation. Jurisdiction of Samastipur or Begusarai would not come in the way specially when the Insurance Company had their office in the district headquarter of Begusarai so as to enable them to contest or repudiate the claim filed by the complainant, who also has their headquarter of business establishment at Begusarai. There was no sense for the complainant to have lodged such complaint in the district of Darbhanga and Samastipur or all the places where such consignment were to be off loaded at various destination. It is but natural that such complaints should have been filed at a place, where the complainant is running his business for his livelihood and O.P.-Insurance Company has also their effective and functional office , i.e., at Begusarai. So, we do not find that this finding on jurisdiction has anything to do with the merit of the case.
19. It is apparent from the aforesaid impugned final order that the complainant has been compensated the value of the damaged or loss of cement for which there was valid insurance cover and for which he was entitled for compensation, which was realized from them by the ACC Ltd. by debiting the amount from the account of the complainant.
20. In the circumstance, having considered every facts and circumstance in their entirety, we do not want to interfere in the well discussed judgement of the learned District Forum, as there is no merit in this appeal for taking a contrary view than what has been taken by the learned District Forum.
21. In the result, the appeal stands dismissed and the order by District Consumer Forum is upheld in toto. However, it is made clear that the compliance of the order in true sprits should be done within 60 days from the date of this order. The cost of litigation in this appellate stage is also awarded to the tune of Rs. 10,000/- (Rs. ten thousand only) to the complainant-respondent, which should be paid along with the aforesaid amount within the stipulated time. [HONABLE MR. JUSTICE SUBASH CHANDRA JHA] PRESIDENT [HON'ABLE MRS. RENU SINHA] MEMBER