National Consumer Disputes Redressal
The New India Assurance Co. Ltd. vs Krishna Cotton Factory And Ors. on 20 September, 2001
Equivalent citations: II(2003)CPJ96(NC)
ORDER
C.L. Chaudhry. J (Member)
1. By this order, we propose to dispose of two Appeals, First Appeal No. 197/98 and First Appeal 198/98 as both the First Appeals have arisen from the common order passed by the State Commission in two original complaint Nos. 14/97 and 15/97. The parties in both the complaints were the same and the matter was also similar. The question of fact and law involved were also similar. We may briefly state the facts of the Complaint No. 14/97.
2. M/s. Krishan Cotton Factory, Bathinda, the Respondent in this Appeal was a complainant before the State Commissioner. The Complainant filed a complaint against New India Assurance Co. Ltd. i.e. Appellant in this Appeal, from whom the insurance had been taken covering risk of loss to the goods sent from Raman Mandi, Bhatinda to Salem Railway Junction and therefrom to Karripatti by Road. The goods were sent through Railways sometime in January, 1995 details of which were given in the complaint. The goods reached Railway Station, Salem in Tamilnadu on or about March 9, 1995 and the stocks were damaged having been burnt. The claim was preferred to the Insurance Company which was repudiated on December 13, 1995. Thereafter complaint was filed before the State Commission seeking direction to the Insurance Company to pay the compensation.
3. The claim was contested on behalf of the Insurance Company on the ground that the duration 5 (ii) clause of Inland Transit Clause 'B' concerned with the above claim provides as under:-
"The Insurance attaches from the time, the goods leaves the warehouse and/or the store at the place named in the policy for the commencement of transit and continues during the ordinary of transit including customary shipment, if any, in respect of transits by rail only or rail and road, until expiry of seven days after arrival of the railway wagon at the final destination railway station, whichever shall first occur".
4. In the present case the goods arrived at Salam junction (the final destination Railway Station as per railway receipt) on 9.3.95 and 11.3.95 respectively i.e. after the expiry of 7 days after arrival of railway wagon, the company was not on risk as per the terms and conditions of the policy and as such the claim was not payable and accordingly the same was treated as "No Claim" by letter dated 13.12.95.
5. After due consideration of the material place on record and contentions raised by the parties, the State Commission allowed the complaint and directed the insurance company to pay an amount of Rs. 10,44,463/- in each case together with interest @ 12% w.e.f. November 10, 1995.
6. Dis-satisfied with the order of the State Commission, the Insurance Company has filed the present Appeal. Mr. P.K. Seth appearing for the Insurance Company contended that the State Commissioner erred in arriving at the conclusion that since no separate premium was calculated for ITC clause "B", it was clear that ITC Clause "B" was not to be made applicable in the case and it was not so intended. The State Commission completely misread and mis-understood the terms and conditions and the relevant ITC Clause "B" of the Insurance Policy filed as C-2 by the Complainant. In the absence of any material evidence and also without any sufficient and justifiable ground, the State Commission held that ITC clause "B" was subsequently added by the Officer of the Insurance Company. The State Commissioner failed to take into consideration that the original policy filed as C-2 by the Complainant was containing the relevant clause "ITC Clause "B" and in the office copy Exhibit C-7 ITC Clause 'B' was not appearing, no presumption could be made in the absence of any material and relevant fact. State Commission should have held that the loss occurred after a period of 7 days of reaching consignment at Salem, and in view of ITC Clause "B" Insurance Company was justified in repudiating its liability.
7. In this connection, Mr. Seth relied upon Section 2 of the Inland Transit (Rail or Road) Tariff which reads as under:-
I. Inland Transit Risks (Basic cover only) (1) This insurance attaches from the time the goods, leave the warhouse and/or the store at the place named in the policy for the commencement of transit and continues the ordinary course of transit including customary transhipment, if any.
(a) Until delivery to the final warhouse at the destination named in the policy.
OR
(b) In respect of transits by Rail only or by Rail or Road, until expiry of 7 days after arrival of the Railway Wagon at the final destination railway station.
OR
(c) In respect of transits by Road only, until expiry of 7 days after arrival of the vehicle at the destination town named in the policy;
Whichever shall first occur.
8. On the other hand, Mr. Sethi appearing on behalf of the Respondent submitted that on coming to know about the loss, the Appellant lodged a claim with the Appellant. At the time of lodging of the claim, the Respondent submitted the original policy to the Appellant. It was stated that it is the term of the insurance policy that to enable claims to be dealt with promptly, the assured or their agents are advised to submit all available supporting documents without delay including the original policy bond or certificate of insurance. Accordingly, in pursuance of this clause, it was mandatory to deposit the original insurance bond with the Insurance Company and at the time of lodging of the claim, respondent sent the Original policy to the Appellant who, in turn issued the office copy to the Respondent. Neither in the original policy nor in the officer copy and nor in the cover note issued by the Appellant, there was reference to 'ITC clause "B". The Insurance Company with malafide intention and fraudulently inserted the said clause in the policy and repudiated the claim of the Complainant on the ground that it was covered by ITC clause "B" of the Policy. It was further stated that the 'ITC clause B' was not applicable to the facts of this case. During the course of proceedings before the State Commission, the Branch Manager of the Insurance Company was cross-examined who admitted that in the copy of the insurance policy, ITC Clause "B" was not mentioned and he also admitted that ITC clause "B" was not there in the cover note as all. It was further submitted that the policy obtained from the Insurance company especially incorporated that the goods were insured for the entire transit period i.e. Raman Mandi to Karripatti. The goods were unloaded at Salem Junction where the Rail path ended and the goods were in transit to reach its ultimate destination i.e. Karripatti. The marine declaration form for the instant goods dated 26.1.95 was obtained which specifically provided that the goods were despatched from Raman to Karripatti.
9. We have considered the relevant contentions of the parties and have perused the record. State Commission, after due consideration of the material placed before it, returned the finding that ITC Clause "B" was not included in the policy and it was not to be made applicable in this case and it was not so intended. For arriving at this conclusion, the State Commission observed as under:-
Ex.-R-2 is the photo copy of such a policy, which is of Annexure C-7. In this photocopy, the word ITC Clause "B" are specifically mentioned below line "terms; risk covered:- risk covered:- basic TPND and SRCC, B. Since on the original copy Annexure C-7, there was not endorsement of ITC Clause B, it is to be presumed that such an endorsement was subsequently made by the employees/officials or officers of the Insurance Company. It may be observed that unilaterally one of the parties to the contract could not insert new terms and conditions in the contract. Some sort of explanation was being offered on behalf of the Insurance Company that words were added at the time of issuing of the insurance policy. If this had been correct, such an endorsement would have found place in all the copies of the insurance policies which were prepared at one time by placing carbon papers. There was no reason why the same should not have appeared on EX. C-7, which purports to be office copy of the marine policy issued by the Insurance Company. That being the position, the repudiation of the claim made on the basis of existence of any "ITC Clause "B" purporting to be part of the insurance policy is arbitrary."
10. We have carefully perused the reasoning of the State Commission in the light of the material placed on record before it. We find that the finding arrived by the State Commission is based on correct appreciation of the material placed on record. We find no legal infirmity which may persuade us to hold to the contrary. In this connection, we may also state statement of the Branch Manager of the Insurance Company was recorded on 19.1.98 before the State Commission who in cross-examination stated that Exhibit C-6 was the correct copy of cover note issued in this case. The cover not did not include ITC"B" clause. The Development Officer of the Insurance Company issued the cover note which was signed by me. EX. C-7 was the copy of the Insurance policy. 'ITCB' was not mentioned in Ex.C-7. It appears that the ITCB Clause 'B' was added subsequently when the Respondent lodged his claim and sent the policy along with other documents. We have also perused the policy. Against the expression terms it is mentioned:- Basic, TPND & SRCC beneath it, it is written "ITC clause B. In our view, finding recorded by the State Commission sufferes from no legal infirmity which may call our interference. In the written version filed on behalf of the Insurance Company before the State Commission there was no other plea except relying upon the "ITC Clause 'B'". Even in the declaration dated 26.2.95, it was specifically stated that the entire transit period from Raman Mandi to Karripatti was covered which means until delivery to the final warhouse at the destination named in the policy i.e. karripasatti. The clause 'ITC Clause B' was inserted by the Insurance Company, unilaterally and unauthorisedly after the contract of insurance was concluded in order to take undue advantage and made it the basis for repudiating the claim. So, the repudiation of the claim by the Insurance Company was not in good faith. It is settled law that contract of insurance is likely to be construed contra-proferentum that is against the company in case of ambiguity or doubt. (See A.I.R. 1966 SC 1644), As a result of the above finding, We do not find any merit in this appeal. It is accordingly dismissed. In view of the order passed in the First Appeal No. 197/97, the First Appeal No. 198/97 is also disposed of in these terms. In view of the facts and circumstances of the case, we leave the parties to bear their costs.