State Consumer Disputes Redressal Commission
Great Eastern Energy Corporation Ltd., vs National Insurance Co. Ltd. & Anr. on 15 October, 2014
State Consumer Disputes Redressal Commission West Bengal 11A, MIRZA GHALIB STREET, KOLKATA 700 087 S.C. CASE NO CC/62/2011 DATE OF FILING : 18-07-2011 DATE OF ORDER: 15-10-2014 COMPLAINANT : Great Eastern Energy Corporation Ltd., M 10, ADDA Industrial Estate, Asansol 713 305 RESPONDENTS : 1.National Insurance Co. Ltd. 3, Middleton Street, Kolkata 700 071 2.Howden Insurance Brokers (I) Pvt. Ltd. HM Plaza Business Centre, 8, A.J.C. Bose Road, Gr. Floor, Kolkata 700 017 BEFORE HONBLE MEMBER : Sri Debasis Bhattacharya. HONBLE MEMBER : Sri Jagannath Bag. FOR THE APPELLANT : Mr. Abhik Kr. Das, Ld. Advocate FOR THE RESPONDENTS : Mr. Afroze Alam, Ld. Advocate Sri Debasis Bhattacharya , Member
The case of the Complainant, in a nutshell, is that it opened a Marine Policy with OP no. 1 through OP no. 2 being policy no. 100701/21/07/4300000019 for the purpose of insuring a Mobile Rig (RD20 Atlas Copco) along with accessories and spares for Coal Bed Methane Gas for a sum insured of Rs. 4,96,10,000/-. The Mobile Rig was scheduled to be shipped from Houston, Texas on 12-05-2007 under cover of Bill of Lading No. 50500013467 to Asansol via Mumbai Port. After inspection and clearance from the Customs Authorities in Mumbai, the supplier of the Indian Representatives, M/s Atlas Copco was called on 15-07-2007 for their inspection for its onward transportation to Asansol. The said Indian representatives tried to switch on the ignition of the said Rig, but the diesel engine did not respond at all and as the engine of the said Rig could not be started by all tested and tried means, it was decided by the said Indian Representatives of the supplier to investigate the matter further when they observed that rain water had entered the engine crank casing through the exhaust pipe, for which combustion chamber and casing of the engine did not start.
In the meantime, the Surveyor, J B Boda Surveyors Pvt. Ltd. asked the Insurance Broker, M/s Howden Insurance Brokers India Pvt. Ltd. to inform all concerned regarding survey to be taken up of the said rig and necessary communication to this effect was accordingly made. Thereafter the Rig, loaded in a trailer, was transported to Nagpur for repairing at M/s GMMCO Ltd., Nagpur. During joint inspection on 22-08-2008 by the Surveyor, it was found that various parts of the diesel engine got affected because of rain water necessitating its replacement. Thereafter, the Rig was transported to Asansol where the Complainant carried out necessary repairing work after incurring an expenditure of Rs. 15,71,457/- and lodged its claim with the OP no. 1 on 04-01-2008 and submitted all relevant documents to process its claim. The OP, for the purpose of assessment of the damages, appointed Surveyor, J. B. Boda Pvt. Ltd. to whom the Complainant rendered all necessary assistance and also followed up the matter with the OP insurer from time to time.
However, on 05-05-2009, the OP rejected its claim on the ground that the validity of the policy stood ceased from the time the Drilling Rig prior to its casualty rolled out of its vessel under its own power from Mumbai Port to intended move to its final destination at Asansol. On receipt of such illegal repudiation letter, the Complainant served Advocates letter dt. 26-05-2009 upon the OP insurer, but to no avail. By not releasing the bona fide claim of the Complainant, the OP no. 1 had failed to provide its services to the Complainant, which is tantamount to deficiency in service. So, the Complainant suffered loss and damages to the tune of Rs. 15,71,457/- over such illegal act on the part of the OP insurer, hence the case.
On notice, the OP no. 1 entered appearance and contested the case by filing Written Objection, whereby they denied all the material allegations of the Complainant. It is stated by the OP no. 1, inter alia, that the Rig was booked for Asansol and Mumbai was not the destination, yet the consignment was unloaded in Mumbai.
Therefore, they are in no way responsible to indemnify the Complainant for the alleged damage caused at Mumbai Port.
That apart, despite incessant rain, the Rig was parked in the open space for onward transportation to Aasnsol and thereby the Complainant failed to ensure proper care/safe handling of the consignment and as a result of such careless handling of the Rig, rain water penetrated inside the same causing damage to it and by such irresponsible act, the Complainant breached the express terms and conditions of the policy for which, they are not entitled to any insurance benefit. As OP insurer repudiated the claim of the Complainant on bona fide ground, no deficiency in service can be attributed to such action and accordingly, they prayed for dismissal of the case.
It transpires from the postal endorsement on the envelope of the Notice sent by the Office of this Commission that Respondent No. 2 refused to accept the same. Hence, the case was heard ex-parte against them.
We have heard the submission of Ld. Advocates who appeared for the respective parties at length and perused the materials on record.
Points for deliberations are as follows:-
1. Is the complaint maintainable?
2. Is the complaint hit by Section 24A of the Consumer Protection Act, 1986?
3. Has the Complainant violated the terms of policy, as alleged?
4. Is the repudiation of the claim of the Complainant by the OP no. 1 just and correct?
5. Is the Complainant entitled to the relief(s) as prayed for?
Decision with reasons Point nos. 1&2:
Both these inter-connected points are taken up jointly for the sake of convenience of discussion.
One of the main thrusts of the OP no. 1 is that the complaint has been filed at a belated stage. In other words, the complaint has not been filed within the statutory period of 2 years from the date of repudiation of claim by the OP no. 1.
On going the materials on record, it is found out that a series of correspondences have been exchanged between the Complainant and OP no. 1 pertaining to repudiation of the claim and lastly, a legal notice was issued by the Complainant to the OP no. 1 on 26-05-2009, to which, the OP issued their reply vide letter dt. 08-10-2009 stating, upon consideration such legal notice, that the claim is not admissible. There is no denying the fact that such correspondences, by way of issuance of legal notice and reply thereof by the OP no. 1 give rise to a fresh and continued cause of action.
Furthermore, as an abundant precaution, the Complainant has filed MA No. 343/2012 to condone the delay in filing the complaint, if any. Upon consideration such realities, it is well found that the complaint is a fit one, entertainable and not hit by any terms of non-maintainability, including the point of limitation, and accordingly, the complaint, as admitted vide Order no. 1 dt. 06-09-2011.
Accordingly, these two points are disposed of in favour of the Complainant.
Point nos. 3 & 4:
These two points are, also being inter-connected, is taken up jointly for the brevity of discussion.
In fact, there was a valid insurance policy of the OP no. 1 obtained by the Complainant through the Proforma OP, who remains absent, being Marine Policy No. 100701/21/07/4300000019 for a sum insured of Rs. 4,96,10,000/-, being sum insured in foreign currency of US$ 11,27,500.00 @ Rs. 44/- for the journey of a movable Rig for Methane base exploration from Houston, Texas to Asansol via Mumbai by vessel, i.e. Mumbai Port and thereafter to Asansol via road. The said Rig, along with its accessories and spares, were dispatched as per schedule.
After the said Rig arrived at Mumbai Port, and was awaiting inspection and customs clearance, due to heavy rain, water entered inside the engine through the exhaust pipe, as a result of which the engine became defunct. Due survey for such damage was carried out by J B Boda Surveyors Pvt. Ltd. Thereafter, the said Rig was transported to Asansol, and necessary repairing works of the damaged Rig was done by the Complainant incurring an expenditure of Rs. 15,71,457/- and subsequently, it lodged claim to that effect.
Ld. Advocate for the Complainant has submitted that for the purpose of safeguarding the Rig from any untoward incident during transportation of the same from Houston to Asansol via Mumbai Port, they obtained the Marine Insurance Policy from OP no. 1. For the specific purpose of customs clearance, the said Rig was kept at Mumbai Port, and due to heavy downpour at Mumbai, rain water soaked inside the machine causing damage to it. The incident occurred in the year 2007, but the repudiation was only made in the year 2009, against which they issued legal notice to the OP no. 1 and after that, this complaint. Although they repeatedly followed up the matter with the OP no. 1 through mails, the latter only replied to some of the mails. It was a case of natural calamity, namely rain, to which the Complainant has got no control. By such correspondences, being made by the Complainant, they provided due clarifications as sought for by the OP insurer and lastly, the OP no. 1, by a letter dt. 08-10-2009, further repudiated their claim, for which the present complaint.
It is stated by the ld. lawyer that the cause of action arose on 08-10-2009, by which the OP no. 1 lastly refused to entertain their claim and the instant case has been filed on 18-07-2011.
Thus, the case has been filed well within the limitation period. Moreover, as an abundant precaution, they filed a delay condonation petition vide MA No. 343/2012. There is a simpliciter denial in the whole WV. OP no. 1 has caused gross injustice to them by repudiating their genuine claim, thereby occasioned a deficiency in service. All bills pertaining to repairing job have been placed and other requisite documents, being called for by the Surveyor, have also been provided by the Complainant. So, it is a clear case of utter negligence on the part of the OP no. 1, for which, the Complainant should be indemnified by compensation and other relief(s), as prayed for in the petition of complaint. Repudiation, as such, was made without any cogent/justified reason whatsoever.
Further, the Op no. 1 did not refute/dispute the expenses of repair as claimed by the Complainant. He has relied upon certain internet copies of decisions, firstly of the Honble Supreme Court in the case of Collector Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors., [Equivalent Citation: 1987 AIR 1353, 1987 SCR (2) 387] and of the Honble National Commission in RP No. 2412/2009, RP No. 4113/2007 and RP No. 3454/2007.
Ld. Advocate for the OP no. 1, on the other hand, has submitted that the case itself is barred by limitation. Whereas the repudiation was made by the OP no. 1 on 09-05-2009, the complaint has not been filed within 2 years. Hence, in terms of Section 24A of the Consumer Protection Act, 1986, the case is barred by limitation. Moreover, the Complainant did not take adequate precaution to safeguard the Rig at Mumbai Port, which itself is tantamount to breach of policy conditions. So, there is a valid repudiation of the claim. He has cited one decision of the Honble National Commission reported in 2012 (3) CPR 156 (NC), by which it has been decided that the period of limitation would run from the date of repudiation of claim and not from the date of loss.
It requires no emphasis that an insurer reserves every right to repudiate a claim if there is valid reason to do so. However, if it seeks to renege on its commitment (ostensibly to make good the loss which is clothed under the cover of an insurance policy) on flimsy ground, that cannot be allowed under any circumstances. A cursory look through the written objection submitted by the OP no. 1, however, makes it abundantly clear that this is exactly what the OP no. 1 has done.
First, the OP no. 1 called in question the rationality of offloading the consignment at Mumbai Port notwithstanding the fact that the policy document, in unequivocal terms, mentions Mumbai Port as a transit point.
Secondly, it is quite unheard of - unless of course specifically mentioned that an insurer ceases its responsibility midway before the consignment reaches its final destination. It transpires from the materials on record that the OP no. 1 repudiated the claim on the ground that the validity of the Marine Policy stood ceased from the time the Drilling Rig, prior to its custody, rolled out of vessel under its own power from Mumbai Port and intended to move to its final destination at Asansol, though there is no mention of such clause anywhere in the policy document.
Thirdly, it is alleged by the OP no. 1 that, due to utter negligence of the Complainant, the Rig in question got damaged. In this regard, it bears no mentioning that in the event of a damage caused to an insured product, it is the end user who bears the brunt most. Therefore, smelling rat over such untoward incident, without any valid reason, is nothing but a fat imagination. It is nobodys argument that customs clearance is imperative to take out an imported item from the port and given the fact that the Rig in question was in the custody of the Custom Authority when the damage caused to the Rig due to heavy rainfall, the Complainant can hardly be blamed for the same and above all, natural calamity like rain, being beyond the control of human being, it is totally futile to hold an importer responsible for the same.
The Complainant obtained a valid insurance policy from the OP no. 1 to cover the Rig in question from such an unforeseen calamity. Therefore, the OP no. 1 cannot shrug off its responsibility to indemnify the loss being suffered by the Complainant. The repudiation was not at all a justified one. It appears, the same was done only to fulfill the whims, fancies and caprices of higher authorities of the insurer without any proper explanation whatsoever.
There is no outward breach of any policy condition by the Complainant. The objection of the OP no. 1 in this regard remains unfounded. The contributory negligence of the Complainant is also not proved by any supportive document.
Therefore, the repudiation, as a whole, is incorrect and violates the terms and conditions of the polity itself.
Thus, these two points are also decided in favour of the Complainant.
Point No. 5:
There being an undisputed and valid claim of Rs. 15,71,457/- in the matter of repairing of the Rig concerned, Complainant is entitled to such amount, along with interest @ 18% p.a. only from the date of last intimation by the OP no. 1 vide letter dt. 08-10-2009.
Accordingly, the complaint succeeds.
Hence, ORDERED that the complaint be and the same is allowed on contest against the OP no. 1 with cost of Rs. 10,000/- and exparte against the OP no. 2 without any cost. The Complainant is entitled to a sum of Rs. 15,71,457/- along with interest @ 18% p.a. from 08-10-2009 till full and final settlement from the OP no. 1, which should be paid by the OP no. 1 to the Complainant within a period of 45 days hence. No other cost/compensation is awarded in the matter.
M.A. No. 343/2012 is, accordingly, disposed of.
Sri Jagannath Bag. Sri Debasis Bhattacharya.
MEMBER MEMBER