State Consumer Disputes Redressal Commission
M/S Jain Irrigation Systems Ltd., vs United India Insurance Co.Ltd., on 16 January, 2014
1 C.C.No. :35/2011
Date of filing:24.11.2011
Date of order:16.01.2014
MAHARASHTRA STATE CONSUMER DISPUTES REDRESSAL
COMMISSION, MUMBAI, CIRCUIT BENCH AT AURANGABAD.
C.C.NO.: 35 OF 2011
M/s Jain Irrigation Systems Ltd.,
Jain Plastic Park, 72, N.H.No.6,
Jalgaon 425001.
Through its Vice President,
Mr.Dongarmal Inderchand Desarda. ...COMPLAINANT.
VERSUS
United India Insurance Co.Ltd.,
Division No.13, Union Co.Op.Insurance
Building, 2nd floor, 23, Sir P.M.Road,
Fort, Mumbai 400001.
Through its Sr.Div.Manager. ...OPPONENT
Coram : Mr.S.M.Shembole, Hon`ble Presiding Judicial
Member.
Mrs.Uma S.Bora, Hon`ble Member.
Mr.K.B.Gawali, Hon`ble Member.
Present : Adv.Dhananjay Kulkarn for complainant, Adv.S.G.Chapalgaonkar for opponent.
O R A L JUDGMENT (Delivered on 16th January 2014) Per Mrs.Uma S.Bora, Hon`ble Member.
1. M/s Jain Irrigation System Ltd. situated at Jalgaon through its Vice President Mr.Dongarmal Inderchand Desarda preferred this complaint claiming insurance amount from opponent United India Insurance Co.Ltd., Mumbai.
2. Adv.Dhananjay Deshpande appeared for complainant. It is stated in the complaint that complainant is a company registered under the 2 C.C.No. :35/2011 provisions of Companies Act. Complainant is engaged in trading of agriculture inputs, manufacturing and supplying of wide range of quality agricultural inputs to enhance farm productivity, including water piping systems, on-farm irrigation system and superior biotech products etc. Complainant is well reputed company and pioneer in water creation, sourcing, storage structures, water distribution and water conservation devices like micro irrigation system and other agro products.
3. Complainant had obtained Marine Cargo insurance policy on estimated Annual Sales turn over basis from opponent. Policy was for the period 1.4.2009 to 31.3.2010. The said policy bearing No.120400/21/09/00000001. This policy covered risk in; 1. Export- ICC(A) including war and SRCC (CIF basis), 2. Export ICC(A) inclusive war and SRCC FOB basis with contingency, 3. Imports -ICC(A) inclusive of war and SRCC, 4. Inland ITC (A) inclusive of SRCC. The policy also covers consignment transit from anywhere in India to any where in India, pertaining to insured's trade and from any where in world to anywhere in world, pertaining to insured's trade. Premium collected from complainant on sales turn over of Rs.500 crores. Sum insured used to increase by the insurance company by collecting additional premium from complainant.
4. On 23.10.2008 complainant booked the order for purchase of 8 various types of new machines from Thomas Machine, Switzerland, S.A. Price of the same machine in CHF (Swiss Franc) 11,831,915/- which comes to Rs.54,19,01,707/- in Indian currency. As per terms and conditions agreed upon between complainant and Thomas Machine packing of the parts/machinery would be adequate and AIR/SEA Export worthy and that machines lines should be run on trials at different stages to ensure that the results are accurate and satisfactory before its shipment for Jalgaon in India. All the 8 machines are scheduled to reach 3 C.C.No. :35/2011 in India on different dates. One of the said machines i.e. Extrusion Line LIR 209 (Vaccum Calibrating trough VCT 35-6 which composed stainless steel trough, welding capstan, flattening caterpillar, pipe brake selector, level control) arrived at Sahar Air Port, Mumbai on 29.4.2009 in two packets and then it was reloaded for Jalgaon on 29.4.2009 itself through Transline Carrier, Wadala, Mumbai by lorry No.MH-43-E-5832. The said machine is amounted to cost of Rs.7,75,14,639/-. This machine needs 5 degree of accuracy in its functioning and highly sensitive and complex machine, specially manufactured in Switzerland, S.A. In India this machine is neither manufactured nor its spare parts are available. On 30.4.2009 at late night, the consignment reached at Jalgaon.
5. While unloading said machine the staff of complainant found that though wooden palate packing was intact, plastic wrapping found damage and noticed that some parts of machines are damaged due to cracks and welding damages due to transit hazards. Immediately, the said facts were informed by the staff to the complainant. Therefore on 1.5.2009 surveyor of insurance company Shri.Shekhar Malhara was called for inspection. On 1.5.2009 Shri.Shekhar Malhara visited the factory site and in his presence machinery was removed. Said surveyor thoroughly inspected the machinery and took the photographs of the damages. At that time it was found that flattening caterpillar and stainless steel trough is pressed/damaged and its welding is cracked and damaged at base level. Therefore the said surveyor recommended to file insurance claim. Preliminary surveyor report was received by complainant on 20.6.2009. Complainant got the knowledge that machinery damaged during the transit only. Therefore they claimed damages from Transline Carrier but said carrier denied their liability but issued certificate dated 10.5.2009 that machinery damaged during the transit. After preliminary survey complainant installed the machinery for its test run. Meanwhile Thomas Machines the suppliers of the machines 4 C.C.No. :35/2011 was informed about the said damages and as per its guidelines the parts which were damaged were decided to be replaced.
6. Complainant therefore placed the order of purchase with Thomas Machine as he was required to change the parts of machine to run the machine smoothly. Thereafter on 3.7.2009 complainant preferred the claim with opponent insurance company claiming amount of Rs.59,31,403/- as damage. Therefore on 8.7.2009 surveyor Shri.Alok Shankar & co. visited work place of the complainant to inspect machinery. After thorough inspection and getting all the required documents by the complainant and answers to the queries made by surveyor, surveyor submitted his report on 24.1.2011 i.e. more than 1 1/2 years after the incident. On the basis of said report on 28.2.2011 opponent insurance company repudiated the claim of complainant. According to said repudiation letter as per report of surveyor there were no visible sign of damage which ought to have existed if the reported damage had occurred during the transit of the said material. Reportedly, affected parts were replaced prior to the inspection by surveyor and what was shown to the surveyor were used/old parts whereas the insured material was new one. Circumstances and nature of damage suggest in their opinion that alleged damage did not occur during insured transit in which case there would be no liability for captioned claim for above policy.
7. After getting said repudiation letter complainant was shocked as parts of said machinery were not available in India and there is no possibility of replacing old and used parts in place of new parts. Therefore present complaint is filed claiming value of damaged parts amounting to Rs.48,76,032/- and custom and excise duty of Rs.10,49,371/- and transporting charges of Rs.6000/- in total complainant claimed Rs.59,31,403/-. To support his claim complainant 5 C.C.No. :35/2011 produced copy of policy, copy of preliminary certificate by Shri.Shekhar Malhara, cop of purchase order of the machinery, copy of survey report issued by Alok Shankar & Co. etc.
8. Adv.Shri.S.G.Chapalgaonkar appeared for opponent. Opponent filed evidence affidavit of Shekhar Malhara and Alok Shankar. It is submitted by Adv.Chapalgaonkar that it is an admitted fact that complainant had obtained Marine Cargo Insurance Policy. It is also admitted fact that as per order complainant received the machine from Thomas Machine, Switzerland. But it is submitted by Adv.Chapalgaonkar that policy was covering loss of goods during transit only. But as per survey report complainant did not suffer the loss to the machine during the transit. But it seems that damages were caused due to insufficiency or unsuitability of packing of the machine and therefore as per exclusion No.2 of the policy which reads as under:
EXCLUSIONS: 2.3 :-
In no case shall this insurance cover:-
"Loss damage or expense caused by insufficiency or unsuitability of packing or preparation of the subject matter insured".
It is submitted by respondent that complainant is not entitled to claim the damages as loss was occurred due to improper packing of the machine. It is further submitted by Adv.Chapalgaonkar that immediately after receipt of the intimation by complainant, Shri.Shekhar Malara inspected the machine and conducted preliminary survey. But the at that time it was found that complainant had already shifted the machine to the site of plant and started working. Therefore surveyor could not notice the damages. Even the damages were not visible.6 C.C.No. :35/2011
Therefore the claim of complainant that machinery was damaged during the transit cannot be accepted. It is also seen that contention of complainant that prior to dispatch of the machinery from Switzerland pre-dispatch survey was not conducted neither re-inspection was done at the port before dispatch. Therefore it cannot be said that damage was occurred during transit. Said alleged damages would have existed before the dispatching the machinery from port itself. It is submitted by Adv.Chapalgaonkar that before preliminary survey by Shri.Shekhar Malhara machine was unloaded and shifted to the plant for installation. Therefore the contention of complainant that machine was in damaged condition cannot be accepted. There was no accident or external mark during the transit which could have caused the damages. Machinery was packed in wooden palates. Therefore there is no possibility of occurring damages during the transit. It is also recorded by surveyor Shri.Alok Shankar that at the time of inspection of damaged parts it seems that damages have been occurred after boxes would have arrived at site that is after termination of journey and during test run. It is therefore submitted by Adv.Chapalgaonkar that as alleged damages are not covered within the purview of terms and conditions of the policy. Claim of complainant was rightly repudiated by the opponent and hence complaint be dismissed.
9. We thus heard both counsels. After hearing both the counsel the point arises for our consideration are :
POINTS FINDINGS
i) Whether complainant is entitled to the
claim in respect of damages to the
machinery during transit? ...Affirmative.
7 C.C.No. :35/2011
ii) Whether insurance company rightly
repudiated the claim of complainant? ...Negative.
R E A S O N S
10. Complainant M/s Jain Irrigation System Ltd. had obtained Marine Cargo insurance policy for the period 1.4.2009 to 31.3.2010. As per the said policy damages caused due to transit hazard will be compensated by the insurance company. Complainant had purchased 8 various machineries from Thomas Machines, Switzerland by placing purchase order. According to said order one machine by name Extrusion Line LIR- 209 was reached at Mumbai on 29.4.2009 and from there it was reloaded for Jalgaon on the same day through Transline Carrier, Mumbai. At the time of reloading of machine at Jalgaon the staff of complainant found that there are some damages to the machine. Therefore complainant after verifying the said fact immediately informed the said fact to the insurance company. Accordingly Shri.Shekhar Malhara inspected the machine and carried preliminary survey. He submitted his survey report on 20.6.2009. According to said report flattening caterpillar stainless steel trough found cracked/broken. In the said report Shri.Malhara also recommended the insurance claim.
11. Therefore complainant preferred the claim with insurance company. After getting claim papers opponent insurance company appointed surveyor Shri.Alok Shankar to carry out the final survey. Shri. Alok Shankar visited the site on 8.7.2009 and submitted his report on 24.1.2011. In his report he denied the conclusion in preliminary survey and submitted that even preliminary surveyor had clarified us that flattening caterpillar stainless steel trough cracked/broken from inside at support and was so minor that not clearly visible in the photographs. Surveyor also came to conclusion that it appears that 8 C.C.No. :35/2011 damages have been taken place after boxes of machinery arrived at site i.e. during test run. It is also recorded by surveyor that complainant had replaced the new parts of machinery to the old also. Therefore complainant did not suffer any loss at all. After getting said survey report insurance company repudiated the claim of complainant.
12. Shri.Shekhar Malhara visited the spot and inspected the machinery while machinery was reached at site on 01.05.2009. Shri.Shekhar Malhara at that time found that stainless steel trough flattening caterpillars were damaged during the transit. As the said survey is conducted immediately after arrival of machinery it cannot be discarded. It has also come on record that machinery was unloaded in the presence of said Shekhar Malhara. Surveyor Alok Shankar in his final report proceeded on assumptions and presumptions. He submitted that after the inspection of damaged parts it appears that damages ought to have been taken effect after arrival of machinery at Jalgaon. But he fails to produce any evidence in that respect. It is also held by surveyor Alok Shankar that complainant had replaced new parts to old parts. This is highly unimaginable. Without any authentic evidence or any solid proof about the same surveyor proceeded to decline the claim of complainant. Complainant produced purchase order of the new parts dated 10.6.2009. It has also come on record that immediately after noticing the damages to the parts of machinery complainant made communication with Thomas Machines and as per their guidelines only damaged parts of the machines were replaced. Complainant is a company working on large scale therefore it is not practicable for the said company to keep its machinery idle for more period. Said machinery were purchased by spending huge amount. Complainant was compelled to purchase the new parts as per the guidance of the supplier as changing of parts which were working consequent upon and in consonance with damaged parts. Therefore complainant was required to 9 C.C.No. :35/2011 purchase the damaged parts immediately. Opponent insurance company repudiated the claim on the ground that there was no proper packing of the machinery, the said fact was also not proved by any strict proof by the opponent. Surveyor Alok Shankar visited the site in month of July 2009 i.e. after 5 months. Machinery was started working in May. Therefore surveyor might have felt that old parts were damaged and not new one. The contention of respondent insurance company about exclusion clause cannot be accepted in absence of any evidence about the defective packing of machinery. In our view therefore complainant is entitled to claim damages occurred due to transit hazard. Complainant claimed amount of Rs.59,31,403/- which he was required to spend for the new parts of the machinery and is entitled to the same. Therefore we pass the following order.
O R D E R 1. Complaint is allowed.
2. Opponent insurance company is directed to pay Rs.59,31,403/-
( Rs.Fifty nine lakhs thirty one thousand four hundred and three only) with interest @ 6% p.a. from 28.2.2011 till realization of the amount.
3. Opponent insurance company is further directed to pay Rs.25,000/-(Rs.Twenty five thousand only) to the complainant as cost.
4. Copies of the order be supplied to both the parties.
Sd/- Sd/- Sd/- K.B.Gawali Uma S.Bora, S.M.Shembole, Member Member Presiding Judicial Member Mane