Monopolies and Restrictive Trade Practices Commission
Prem Nath Diesels Pvt. Ltd. vs Oriental Insurance Co. Ltd. on 29 June, 1998
ORDER
Sardar Ali, Member
1. This order shall dispose of a compensation application instituted under Section 12B of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as "the Act"). Primarily this compensation is relating to recovery of balance payment of 25 per cent. (Rs. 1,80,967) under Marine Policy No. 211502/21-6-95/00486, dated December 28, 1994, on which further endorsement for enhancement of the insurance amount was made and also the policy was extended from time to time and was in vogue at the relevant time. The applicant has alleged that by not paying the balance amount of 25 per cent, the respondent has indulged in the unfair and restrictive trade practices within the provisions of Sections 36A, 36A(1)(iv), (viii) and 2(o) of the Act. The applicant has also requested for interest at 18 per cent. plus expenses, etc.
2. A notice of this application was given to the respondent who has denied the allegations of indulgence in unfair and restrictive trade practices. The defence of the respondent is that the respondent, vide letter dated January 8, 1996, while remitting the 75 per cent, of the amount claimed (Rs. 5,15,609) has categorically stated that "In case it is found that you have not fulfilled your obligations to protect the right of recovery, this payment will be treated as full and final payment of the claim. If it is otherwise payment of balance of 25 per cent, will be considered at a later stage". The respondent has quoted condition No. 16 of the Institute of Cargo Clause (A) and the same is reproduced as under :
"Minimising losses.--16. It is duty of the assured and their servants and agents in respect of loss recoverable hereunder :
16.1 to take such measures as may be reasonable for the purpose of averting or minimising such loss, and 16.2 to ensure that all rights against carriers, bailees or other third parties are properly preserved and exercised."
3. The respondent has further stated that Section 79(2) of the Marine Insurance Act, 1963, entitles the insurer-respondents to become subrogated to the rights of the assured applicants on payment of loss and it is necessary that the assured applicants must properly preserve and exercise their rights against third parties, bailees, i.e., Madras Port Trust and in the present case the assured applicant has failed to preserve that right. The respondent in the policy/cover note has also mentioned "important" notice which is as under :
"It is the duty of the assured and their agents in all cases to take such measures as may be reasonable for the purpose of averting and minimising a loss and to ensure that all rights against carriers, bailees or other third parties are properly preserved and exercised."
4. The respondent has stated that the applicant has failed to observe the aforesaid provision of the "important" notice, and therefore, not entitled to the claim. The respondent has further stated that the applicant has also failed to serve a notice under Section 120 of the Major Port Trusts Act, 1963, which is a mandatory notice for intended suit against Port Trust. Further, the applicant has failed to file a suit against the Port Trust within six months as prescribed under Section 120 of the Major Port Trusts Act, 1963. The respondent has stated that it has been quite liberal in paying 75 per cent, of the claimed amount which was also not payable because of breach of the aforesaid specified condition of the policy by the applicant.
5. The applicant has filed the rejoinder and after completion of the pleadings the following issues were framed on October 28, 1997 :
1. Whether the respondent has indulged in or is indulging in the unfair and restrictive trade practices alleged in the CA ?
2. Whether the applicant has suffered any loss or damage as a consequence of the alleged unfair and restrictive trade practices ?
3. Relief.
6. Both the parties agreed that the matter can be disposed of on the basis of the affidavit and counter-affidavit in evidence. Subsequently, both the parties have filed their affidavit and counter-affidavit in evidence and reiterated their averments as stated in the compensation application and reply, respectively. The arguments were heard and liberty was given to the parties to file their synopsis, which were filed by them later.
7. The respondent has admitted the payment of 75 per cent, to the tune of Rs. 5,15,609 and denied the payment of the balance 25 per cent, amounting to Rs. 1,80,967, inter alia, on the ground of failure in adhering to the provision of the insurance policy and of some statute as mentioned above. The bone of contention in this matter is that the respondent has been quite liberal in paying 75 per cent, of the claim amount which also was not payable because of breach of the specified condition of the policy by the applicant and, therefore, 25 per cent, balance amount has not been paid. We observe that once the respondent has acquiesced to pay the 75 per cent, of the insured amount implied thereby that it has agreed to waive any condition precedent in not paying the claim. By their act of paying 75 per cent, of the insured amount, the respondent was estopped from raising the plea of not adhering to the condition of marine policy by the applicant and the doctrine of estoppel would apply.
8. We are, therefore, of the view that by not paying the balance amount of 25 per cent. (Rs. 1,80,967) the respondents have indulged in the unfair trade practices within the definition of Section 3GA of the Act. We are of the view that the applicant is entitled for the balance payment of 25 per cent, amounting to Rs. 1,80,967. We are also of the view/that the applicant is also entitled to the interest at the rate of 12 per/cent, per annum from January 8, 1996, on 25 per cent, balance amount/on which date the 75 per cent, of the claim amount was forwarded by the respondent to the applicant. The 12 per cent, interest we are allowing in view of the submissions by the respondent that the Supreme Court in United India Insurance Co. Ltd. v. M.K.G. Corporation [1998] 92 Comp Cas 331 (SC) ; [1996] III CPJ 8, has decided that the rate of interest cannot exceed 12 per cent, per annum. In the facts and circumstances of the case, we, therefore, award a cost of Rs. 5,000 to the applicant being the cost of the proceedings. We therefore, pass a decree in the sum of Rs. 1,80,967 plus 12 per cent, interest per annum with effect from January 8, 1996, till the dale of realisation and cost of Rs. 5,000 in favour of the applicant and against the respondent. We direct that the respondent shall pay the abovesaid amount within six weeks from the date of this order and file an affidavit of compliance in this regard.
9. A copy of this order shall be sent/to the applicant and the respondent by registered post A. D.