State Consumer Disputes Redressal Commission
Bajaj Allianz General Insurance Co Ltd vs G P Petroleums Ltd on 28 January, 2019
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
MAHARASHTRA, MUMBAI
Appeal No.A/16/2926
M/s.Bajaj Allianz General Insurance Co.Ltd.
Office at : GE Plaza, Airport Road
Yerawada, Pune 411 006
Serving office at 4th floor
Sadhana Rayon House,
Dr.D.N.Road
Fort, Mumbai 400 001 .....Appellant
Versus
M/s.G.P.Petroleums Ltd.
Corporate office 406/407,
Embassy Centre
Nariman Point, .........Respondent
Mumbai 400 021
BEFORE: Justice A.P.Bhangale, President
Usha S.Thakare, Judicial Member
PRESENT:Mr.D.S.Joshi-Advocate for appellant
Mr.Manoj Khatri-Advocate for respondent
ORDER
Per Hon'ble Smt.Usha S.Thakare, Judicial Member
1. Being aggrieved by the order passed by the Learned District Consumer Disputes Redressal Forum, South Mumbai in consumer complaint no.CC/13/201 dated 27/06/2016, original opponent - M/s.Bajaj Allianz General Insurance Co.Ltd. has filed appeal bearing no.2926/2016.
2. By the impugned order, the Learned District Forum was pleased to allow consumer complaint bearing no.CC/13/201. The opponent/present appellant is directed to pay an amount of Rs.7,64,173/- to the complainant towards the loss caused to them due to shortage of cargo with interest @ 9% p.a. from the date of filing of complaint till its realization. The opponent/ 1 present appellant is directed to pay an amount of Rs.1000/- towards costs of litigation.
3. Facts giving rise to present appeal in short are as under:-
Complainant/respondent had filed consumer complaint bearing no.CC/13/201 against the present appellant by alleging deficiency in service. Complainant/respondent is carrying the business of petroleum/oil products and frequently imports the same through sea routes which are in all courses insured under the Marine Open Cover Policies issued by the opponent. The opponent is a General Insurance Company duly registered under the Indian Companies Act, 1956. The Complainant had insured all their imports shipments and crude oil products by paying huge premium amount to Rs.17,91,362/- for the period 2009-2010 and Rs.46,01,897/- for the period 2010-2011 to the Opponent. The Opponent has issued open cover policy No.OG - 10 1908-1006-00000056, dated 14/12/2009 for the period of 1 year from 08/12/2009 to 07/12/2010 and Marine Open Cover Policy No.OG-11-1908-1006-00000044 dated 09/09/2010 for the period of 1 year from 07/09/2010 to 06/09/2011. The Opponent has issued 31 insurance certificates under these two open cover policies. Under the certificate of policy issued under open cover policy no. OG - 10 1908-1006-00000056, dated 14/12/2009 all risks were covered under the Institute Cargo clause (A) which categorically covers all the risk of loss or damage of the subject matter insured except as provided in clause 4, 5, 6 & 7. Clause (1) coverage including loading and unloading Clause (20) that excess. The first 0.5% of the consignment value for each and every claim was excluded.
4. It is alleged that complainant/respondent had imported crude oil and its allied products, base oil and allied products by Sea carriers and unexpectedly found shortage in the quantity which has been caused heavy losses to the business of the Complainant. These losses are not normal operational losses due to multiple handling of the cargo and these losses 2 exceeds 0.5% or 0.75% of the consignment value which are covered and to be indemnified under the marine open cover policies. The Complainant had engaged services of a Marine Surveyor namely Geo Chem Laboratories Pvt. Ltd. to inspect the shortage of delivery. The Surveyor has submitted its report on the loss of consignment and enumerated the reasons for shortfall of the quantity received. It is submitted that the loss was occurred due to mishandling of the cargo during decantation process which was unusual exceptional and accidental. As per the policy terms, if there is any gradual escape of crude oil and its allied products, base oil and its allied products from the tanks or in transportation from one place to another the Opponent /appellant has to pay for the shortage and losses suffered by the Complainant/respondent. Due to loss Complainant/respondent had submitted the claim with the Opponent /appellant but the Opponent had denied the claim of the Complainant on flimsy ground and denied its liability. The Opponent has settled one claim of the Complainant of Rs.74,499/- by issuing cheque dated 10/03/2010. The other insurance companies also settled the claims. Ultimately, Complainant /respondent had issued legal notice dated 24/02/2012 to the Opponent and had requested to reconsider the claim but of no use. Ultimately, Complainant /respondent had filed consumer complaint by alleging deficiency in service against the opponent as the valid claim of the complainant was rejected though insurance policy issued by the opponent was in force.
5. The Opponent /appellant resisted the claim of the Complainant by filing written statement and denied the allegations of deficiency in service. It is submitted that the insurance policies were issued to the complainant as per the requirements. The insurance policies are governed by the Marine Insurance Act, 1963. The terms, conditions, warranties and exclusions mentioned in the policies are binding upon the insured/ complainant. The claim of the Complainant was repudiated on 11/04/2011 and the consumer complaint was filed on 28/08/2013. The consumer complaint is time barred.
3The shortage discovered by the Complainant was a notional shortage due to difference in the weightage during discharge of liquid cargo from ship's tanks into barge tanks at anchorage, Mumbai and from the barge tanks into road tank cars. These notional shortages are not caused due to maritime perils nor during the course of the voyage. They are discovered subsequently during discharge operations, which is subsequent to termination of the voyage. Such notional losses do not qualify for indemnification under the scope of the marine policy. The shortage was due to handling during discharge of cargo and the same is excluded under the shortage in Weight Clause' incorporated in the marine policy issued to the Complainant. The decision of repudiation was taken within the precincts of the policy terms and conditions and based on the findings in the survey report submitted by independent IRDA licensed Surveyor. The opponent/ appellant denied all adverse allegations and requested for dismissal of the complaint with costs.
6. Both the parties have led evidence by filing affidavits. Both the parties have submitted brief notes of arguments before the Learned District Forum. After considering pleadings, affidavits of evidence, brief notes of arguments and after giving final consideration to the arguments advanced on behalf of learned counsel for both the parties, the learned District Forum was pleased to allow consumer complaint by order dated 27/06/2016.
7. Being dissatisfied with the finding and decision of the Learned District Forum, original opponent/ appellant is before us in this appeal.
8. We have heard learned counsel Mr.D.S.Joshi for the appellant/opponent and learned counsel Mr.Manoj Khatri for the respondent/complainant.
9. It is admitted fact that earlier respondent/ complainant had filed one single complaint before this Commission consolidating 31 causes of action. Consumer complaint bearing no.CC/13/19 was filed before the State 4 Commission on 21/12/2012. The respondent/ complainant had claimed an amount of Rs.98,70,895/- by filing consumer complaint no.CC/13/19 from the present appellant/opponent. However, the State Commission had passed an order dated 18/07/2013. In said order it is observed and directed that each insurance claim is to be settled on the basis of fact of each insurance claim and that there cannot be any common cause of action in each claim. The complainant had filed consolidated complaint bearing no.CC/13/19. The State Commission by order dated 21/11/2013 permitted complainant to withdraw the complaint. Complainant had filed separate case for each claim before the Learned District Forum as the value of each claim was less than Rs.20 lakhs.
10. The appellant/opponent issued Marine Open Cover Policies in favour of the respondent/complainant. The respondent/complainant had insured all their imports shipments and crude oil products by paying huge premium. It is not in dispute that at the time of alleged loss, insurance policy issued by the appellant/opponent was in force. The opponent had issued 31 insurance certificates under two open cover policies bearing no.OG-10 1908-1006- 00000056 dated 14/12/2009 and Marine Open Cover Policy No.OG-11- 1908-1006-00000044 dated 09/09/2010. Both the parties have relied on terms and conditions mentioned in the policy.
11. The Complainant/Respondent had engaged services of a Marine Surveyor namely Geo Chem Laboratories Pvt. Ltd. to inspect the shortage of delivery. The Surveyor submitted its report. The claim of the complainant/respondent was repudiated on 11/04/2011. These facts are not at challenge.
12. Learned counsel Mr.D.S.Joshi for the appellant vehemently urged that the consumer complaint filed by the respondent/complainant was barred by limitation. The claim of the complainant was repudiated by letter 5 dated 11/04/2011. Consumer complaint was filed on 28/08/2013 without any delay condonation application. The Learned District Forum should have dismissed the consumer complaint as it was barred by limitation. It was further urged that shortage discovered by the complainant was notional shortage due to difference in the weightage during discharge of liquid cargo from ship's tanks into barge tanks at anchorage, Mumbai and from the barge tanks into road tank cars. These notional shortages are not caused due to maritime perils nor during the course of the voyage but discovered subsequently during discharge operations, which is subsequent to termination of the voyage. Such notional losses do not qualify for indemnification under the scope of the marine policy. It is harped upon that the complainant had filed complaint in question on 28/08/2013 when the consolidated complaint for the same cause of action was pending before the State Commission. It was disposed of on 21/11/2013. Said fact was suppressed. Due to suppression of fact, complainant is not entitled for any relief. Learned counsel Mr.Joshi urged that the Learned District Forum committed an error while appreciating the evidence on record in its proper perception and arrived at wrong conclusion. Order passed by the Learned District Forum is in contravention of law. The order requires to be set aside by allowing the present appeal.
13. During the course of oral arguments, learned counsel for the appellant/ opponent urged that the complainant/respondent cannot be termed as 'consumer' in view of section 2(1)(d) of Consumer Protection Act, 1986. The complainant/respondent is a company. It is dealing with the business of petroleum and its products. The alleged shipment and cargo were for the purpose of business to earn profit. The consumer complaint filed by the respondent is not maintainable before the Consumer Fora. Of course, this point is not raised by the appellant/opponent in the written statement filed before the Learned District Forum or in appeal memo.
614. To give counter blow, learned counsel Mr.Khatri vehemently urged that the Learned District Forum rightly considered all the aspects and arrived at proper conclusion. The order passed by the Learned District Forum is just legal and correct. It requires no interference. The insurance policy was taken by the complainant from the opponent to indemnify the loss. Claim of the complainant is based on insurance policy. Insurance policy has nothing to do with the commercial transaction. There is no nexus between the Insurance Company and profit and loss by the respondent. Service of the appellant was not availed for commercial purpose. The complainant/ respondent will fall under the definition of 'consumer' and said consumer complaint is tenable. The Learned District Forum rightly appreciated that in fact the consolidated complaint was filed before the State Commission within a period of two years from the date of repudiation of the claim. The consolidated complaint was filed on 21/12/2012. On the direction of the State Commission, independent complaints were filed before the Learned District Forum. The period spent in contesting the bonafide complaint before the State Commission is to be excluded while considering the period of limitation. In view of direction by the State Commission, complainant/ respondent was required to file independent 31 complaints before the Learned District Forum as independent claim of the complainant/ respondent was less than Rs.20 lakhs. Time spent in contesting bonafide litigation was rightly excluded and it was rightly held that consumer complaint is within limitation. There is evidence to show that the loss was occurred due to mishandling of cargo during decantation process. As per terms and conditions of the policy, appellant was duty bound to indemnify the loss. Incorrect and illegal decision repudiating the claim of the respondent/ complainant amounts to deficiency in service. Learned counsel Mr.Khatri has requested to dismiss the appeal for want of merits. Learned counsel for the appellant has placed reliance on the judgment passed by this State Commission in the case of Consumer 7 Welfare Association v/s. The Oriental Insurance Co.Ltd. and another in consumer complaint no.CC/13/270 decided on 27/07/2017.
15. It is admitted fact that the appellant issued insurance policy in favour of the respondent/complainant after accepting huge amount towards premium. It is settled principle of law that the contract of insurance has nothing to do with the commercial purpose. Respondent did not obtain insurance policies for gaining profit. To gain profit was not the primary aim of the complainants while obtaining insurance policies. The contract of insurance is contract of indemnity and, therefore, there is no question of commercial purpose in obtaining coverage. The insured who takes the insurance policies cannot trade or carry on any commercial activity with regard to insurance policy taken by him.
16. In the case of Harsolia Motors v/s. National Insurance Co.Ltd. reported in MANU/CF/0083/2004, Hon'ble National Commission while deciding Appeal no.159 of 2004 on 03/12/2004 in para 23 and 24 observed as under:-
"Similarly, a hospital which hires the services of a medical practitioner, it would be a commercial purpose. But, if a person avails of such services for his ailment it would be held to be not a commercial purpose.
Further, from the aforesaid discussion, it is apparent that even taking wide meaning of the words for any commercial purpose it would mean that goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose. But, in a case where goods purchased or services hired in an activity which is not directly intended to generate profit, it would not be commercial purpose.
In this view of the matter, a person who takes insurance policy 8 to cover the envisaged risk does not take the policy for commercial purpose. Policy is only for indemnification and actual loss. It is not intended to generate profit."
17. In case of M/s.Polyplex Corporation Ltd. v/s. National Insurance Co.Ltd. and others reported in 2017(2)CPR 58 (NC), Hon'ble National Commission held as under:-
"that the insurance policy is availed for indemnifying the loss which the insured may suffer and therefore, the services of the insurer are availed for protection and not for making profit. It is immaterial whether the loss is on account of destruction or damage of a product or it is on account of the insured being deprived of the profit, which it would in the normal course have made, by use of the insured product."
18. It is to be noted here that while deciding case of M/s.Polyplex Corporation Ltd. v/s. National Insurance Co.Ltd. and others reported in 2017(2)CPR 58 (NC), the Hon'ble National Commission has placed reliance on the ruling laid down by the Hon'ble National Commission in the case of Harsolia Motors Vs. National Insurance Co. Ltd. I(2005) CPJ 27 (NC) cited supra. The observation of the Hon'ble National Commission in para 7 is as under:-
"7. The first question which arises for consideration is as to whether the complainant can be said to be a consumer as defined in Section 2(1)(d) of the Consumer Protection Act or not. It has been held by this Commission in Harsolia Motors Vs. National Insurance Co. Ltd. I(2005) CPJ 27 (NC) decided on 03.12.2004 that since an insurance policy is taken for reimbursement or for indemnity for the loss which may suffer on account of insured perils, the services of the insurer cannot be said to have been hired or availed for a commercial purpose and therefore, this Commission does possess the 9 requisite jurisdiction to entertain a consumer complaint wherever a defect or deficiency in the services rendered by an insurer is made out. The learned counsel for the OP states that as far as the loss of profit is concerned, the claim would not be covered by the decision of this Commission in Harsolia Motors (supra). I however, find no merit in this contention. In Harsolia Motors (supra), this Commission upheld the plea that the insurance policy is availed for indemnifying the loss which the insured may suffer and therefore, the services of the insurer are availed for protection and not for making profit. It is immaterial whether the loss is on account of destruction or damage of a product or it is on account of the insured being deprived of the profit, which it would in the normal course have made, by use of the insured product. So long as the reimbursement on account of loss of profit is one of the -5-
products of the insurance policy, it remains covered by the decision in Harsolia Motors (supra). Therefore, I find no merit in the contention that the insurance policy to the extent it pertains to reimbursement on account of the loss of profit, cannot be the subject matter of a consumer complaint".
19. In view of the rulings (cited supra) passed by Hon'ble National Commission, we are not inclined to place reliance on the judgment passed by this State Commission in the case of Consumer Welfare Association v/s. The Oriental Insurance Co.Ltd. and another in consumer complaint no.CC/13/270 decided on 27/07/2017.
20. It is harped upon by the appellant that consumer complaint was barred by limitation. The claim of the Complainant was repudiated on 11/04/2011 by the appellant/opponent and the consumer complaint in hand was filed on 28/08/2013. It is pertinent to note here that the complainant/ 10 respondent had filed consolidated complaint bearing no.CC/13/19 before the State Commission for the same relief and for the same cause of action. The State Commission observed in order dated 18/07/2013 that in the instant case (consumer complaint no.CC/13/19), each insurance claim is to be settled on the basis of the facts of each insurance claim. There cannot be any common cause of action in each claim. Deficiency in service is alleged on arbitrary repudiation of the insurance claim in respect of each insurance claim. Each repudiation vis-a-vis deficiency in service will require separate set of evidence to establish the facts relating to particular repudiation. Under these circumstances, Complainant is directed to elect one of the claim made against which this consumer complaint can be prosecuted and the complaint was adjourned on 21/11/2013.
21. The Complainant has filed in all 31 complaints before the Learned District Forum on 28/08/2013 after passing the order dated 18/07/2013 by the Hon'ble State Commission. The Rozanama of consumer complaint bearing no.CC/13/201 shows that on 04/09/2013 Advocate for the Complainant had submitted before the Learned District Forum that consumer complaint no.19 of 2013 is pending before the State Commission and the next date in the said matter is 21/11/2013. As complaint no.19 of 2013 was pending before the State Commission, the complaint before the Learned District Forum was adjourned and scheduled for hearing on admission on 26/11/2013. In the meantime consumer complaint lying before the State Commission was withdrawn on 21/11/2013. The Hon'ble State Commission permitted complainant to withdraw the complaint and the complaint was disposed off as withdrawn.
22. Under these circumstances, we do not find any substance in the allegation made on behalf of the appellant that material fact was suppressed by the complainant/ respondent. Complainant/respondent was right in filing different 31 complaints before the Learned District Forum as the value of 11 each claim was less than Rs.20 lakhs. In view of pecuniary jurisdiction, the complainant /respondent could not have filed consumer complaints before the State Commission, even he could not elect any complaint to proceed with the State Commission.
23. The learned District Forum rightly appreciated the facts and arrived at proper conclusion based on sound reasoning that the consumer complaint is filed within limitation. Section 14 of Limitation Act excludes the period where the proceedings relates to the same matter in issue and is prosecuted in good faith with due diligence. Consumer complaint no.CC/13/19 was bonafidely filed before the State Commission. Said complaint was withdrawn. No fact was suppressed before the Learned District Forum. Separate complaints were filed in view of the direction given by the State Commission in consumer complaint bearing no.CC/13/19. The consolidated complaint was filed before the State Commission well within period of limitation. We find no reason to interfere with the finding of the Learned District Forum pertaining to issue of limitation, which is based on sound reasoning. The consumer complaint is filed within limitation. Hence objection of learned counsel for the appellant is not considered and not accepted.
24. Next objection raised on behalf of the appellant is that notional shortages are not caused due to marine perils and during the course of voyage. It is not within the scope of marine policy.
25. The complainant/respondent had produced two copies of insurance policies. As per Marine Open Cover Policy, the Company/appellant promised and agreed to indemnify the assured that the Company will insure loss/damage caused to the insured. Clause 1 of the policy coverage includes loading and unloading.
1226. As per clause 20 of policy the Insurance Company is liable for the loss which exceeds 0.75% of the consignment value for each and every claim. The Complainant had appointed GEO Chem Laboratories Pvt. Ltd., Surveyor for inspection of shortage and its reasons and for assessment of loss. The said Surveyor has submitted his report on 26/03/2011. As per the said final summary report of the Surveyor the bill of lading quantity was 3007.374 M. Tons and net quantity received was 2969.600 M. Tons and there was difference of short 37.774 M. Tons. The said loss was in percentage 1.26%. The said loss is excess than 0.5% mentioned in the policy. As per policy condition the opponent/appellant is not liable only for first 0.5% loss. The loss caused in the present case was 1.26%. The opponent/ appellant never disputed the survey report. As per contention of complainant/ respondent, the price of 37.774 M.Tons consignment is Rs.7,64,173/-. The price is not disputed by the opponent/ appellant. Evidence on record shows that the shortfall of 37.774 M.Tons consignment is during the course of transportation, loading and unloading, which is covered under the policy issued by the Opponent in favour of the Complainant.
27. The policy issued covered the place from 'Anywhere in the World to Anywhere in India' also makes it clear that the policy was not from port to port but policy was from Anywhere in the World to Anywhere in India. The complainant/respondent suffered loss of Rs.7,64,173/-. Appellant/ Opponent/Insurance company is liable to indemnify the loss. Appellant/ opponent wrongly repudiated the claim of the complainant/respondent. Certainly appellant/ opponent is guilty of deficiency in service. The Learned District Forum rightly directed appellant to pay an amount of Rs.7,64,173/- for the loss of 37.774 M.Tons of consignment and rightly awarded interest @ 9% p.a. Order passed by the Learned District Forum is just, legal and correct. It requires no interference. As a result, appeal deserves to be dismissed. Hence, the following order:-
13ORDER Appeal stands dismissed.
Parties to bear their own costs.
Copies of the order be furnished to the parties.
Pronounced on 28th January, 2019.
[Justice A.P.Bhangale] PRESIDENT [Usha S.Thakare] JUDICIAL MEMBER Ms 14