State Consumer Disputes Redressal Commission
Manipal Press Ltd., vs Bajaj Allianz General Insurance ... on 1 October, 2024
1 CC/82/2011
Date of Filing : 20.04.2011
Date of Disposal : 01.10.2024
BEFORE THE KARNATAKA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, BENGALURU (PRINCIPAL BENCH)
DATED THIS THE 01st DAY OF OCTOBER 2024
PRESENT
Mr. K.B.SANGANNANAVAR : JUDICIAL MEMBER
Mrs M.DIVYASHREE : LADY MEMBER
CC-NO.82/2011
The Manipal Technologies Ltd.,
Manipal Centre,
Dickenson Road,
Bengaluru-42.
Rep. by its Sr.General Manager . ..Complainant/s
(By Adv.Sri.T.N.Raghupathy)
VS
1.
Bajaj Allianz General Insurance Co.Ltd.,
GE Plaza, Airport Road,
Yerwada, Pune-411006.
Rep. by its Manager ... Opposite party/s
(By Adv.Sri.A.N.Krishna Swamy)
ORDER
BY Mr.K.B.SANGANNANAVAR : Pri.Dist & Session Judge (R) - JUDICIAL MEMBER.
1. This is a complaint filed U/s.12 of CPA 1986 to direct OP to pay a sum of Rs.52,74,341/- in respect of the value of the consignment expenses together with cost and current interest at 12% p.a. from the date of refusal to honour the claim till the date of repayment.
2 CC/82/2011
2. The brief facts of the case of the Complainant are:
The Complainant and Sirrocco-Parkstone International Ltd., England and Wins Holland Konigbeltweg, Netherlands had entered into an agreement on 04.06.2009. As per the agreement, the Complainant had consigned the books ordered by these two companies to the destination as specified by them. The Complainant had insured the consigned goods by way of Marine Insurance Open Cover Policy covering transit. All risks with Bajaj Allianz General insurance company Ltd., under policy no.04-10- 1709-1056-0006-01 from 01.06.2009 to 31.05.2010. The Complainant had sent 15 shipments in respect of the Marine Transit Export Policy under „All Risk Insurance.‟ The OP has rejected three claims in respect of Invoice nos.MPL/EXP/138/09- 10, MPL/EXP/151/09-10 and MPL/EXP/152/09-10. The OP has not settled these three invoices without assigning any reasons. The surveyor has in one of the claims, observed damage may have occurred because of loading of the books when the packaging was warm. It is also not disputed that the consignments were placed in moist conditions. This is clear by the fact that in respect of 15 consignments, the Complainant has registered only six transit claims. The remaining nine consignments have reached the
3 CC/82/2011 consignee and there have been no complaints. All these consignments have the same type of packing. The insurance is an „All Risk Cover.‟ The details of invoices raised are MPL/EXP/127/09-10, MPL/EXP/138/09-10, MPL/EXP/150/09-
10. These are three consignments shipped to Wins-Holland, Sirrocco Parkstone International ltd., and Nigensha Publishing Co., Ltd., The next three consignments would be Invoice nos.MPL/EXP/151/09-10, MPL/EXP/143/09-10, MPL/EXP/152/ 09-10 shipped to Trak Pen Estomia, New York, Ingram, Lynn Denny and Mlada Fronta-Czech Republic. The consignee did not honour the invoices alleging that the books sent to them were damaged during transport. The Complainant raised claims before the OP as the goods were allegedly damaged during transit. The Complainant was informed that the OP appears to have got surveyed the damaged books. The survey reports in respect of MPL/EXP/143/09-10, MPL/EXP/150/09-10, MPL/EXP/138/09- 10 and MPL/EXP/151/09-10 damages could not be compensated since Complainant is expected to follow the packing condition as per terms & conditions of the policy. The damages caused to the books during transit were not due to transport but due to defective packaging. The Complainant has not received survey reports in respect of other two invoices and has received survey report in 4 CC/82/2011 respect of three invoice nos.127, 143 & 150. The OP has failed in its duty in not making payment under invoice nos.127, 143 & 150 as the surveyor has not sent any report regarding damages. The OP has committed deficiency in service in as much as insurance cover is obtained to protect the interest of the insured during situations where the consignment is rejected by the consignee on unreasonable grounds and also damages due to act of god. The Marine open cover all risks policy covers all such contingencies. In this case there has been no error or negligence on the part of the Complainant in ensuring safe passage of the books. The insurance is an All Risk Cover which covers an eventuality. Non-settlement of claim submitted by the Complainant is illegal and inrespect of invoice nos.127, 143 & 150 survey has not been done impliedly means the claim of the Complainant has been accepted by the OP. The claim under these invoices amounting to Rs.31,99,841, Rs.3,78,000/- and Rs,3,78,000/-. In respect of invoice nos.138, 151 & 152 the claim amount is Rs.3,78,000/-, Rs.3,78,000/- and Rs.5,62,500/-. Thus, in all these invoices, OP is liable to pay Rs.52,74,341/- which is legitimate claim of the Complainant has not been honoured by the OP on unreasonable grounds. The fact that there is no rejection of the claims substantiates the fact that the OP is liable to settle the transit claims. OP is liable to pay 5 CC/82/2011 interest at 12% p.a. from the date of refusal to honour the claim till the date of repayment.
3. The OP has submitted version, contending the certificate of the surveyor issued by Wendt & Company gives a statement that despite several requests made by them, they were unable to obtain any transit document but understand that the consignment was packed into container and forwarded from Mumbai to the United Kingdom under cover of bill of lading dtd.07.09.2009. The survey/investigations as per certificate of survey gives an indication that the consignment was received in sound condition. The surveyor has stated that they have arrived at the company premises in order to complete the inspection, they confirmed that the books to be packed in similar manner to those subject to reference 9N008 in cardboard cartons with tape sealed flaps. Again the books within the cartons were found to be extremely tightly packed with no separation. The reasons for not settling the claim under the policy terms are tabulated. The theory put forth by the Complainant that penetration of moisture was the root cause of damage is falsified by the certificate of survey wherein it is clearly mentioned that the cartons themselves were not affected by any moisture penetration and they considered it impossible to remove, and adequate care is taken in unpacking. The cause of damages 6 CC/82/2011 and or loss is stated by the survey in his report "It would appear that despite suggestions of moisture penetration, the problem is solely due to the extremely tight packing of the books within the cartons, with no separation. It is also possible that these may have been loaded immediately following in warm conditions." The details of the claims are mentioned and the grounds of repudiation is mentioned as follows:
Invoice Claim Policy Certificate Reasons
Number Number Number Number
MPL/EXP/138/ OC-10-1702- OG-10-1709- OG-10-1709- Claim repudiated
09-10 1061-00000003 1056-00000001 1061-00000027 due to insufficient
packing
MPL/EXP/151/ OC-10-1702- OG-10-1709- OG-10-1709- Claim repudiated
09-10 1061-00000002 1056-00000001 1061-00000032 due to insufficient
packing
MPL/EXP/152/ OC-10-1702- OG-10-1709- OG-10-1709- Claim repudiated
09-10 1061-00000006 1056-00000001 1061-00000033 due to insufficient
packing
MPL/EXP/150/ OC-10-1702- OG-10-1709- OG-10-1709- Consignee has
09-10 1061-00000001 1056-00000001 1061-00000031 shredded the books
even before survey
thereby denying
opportunity to
assess the loss-no
documents
MPL/EXP/127/ OC-10-1702- OG-10-1709- OG-10-1709- No opportunity for
09-10 1061-00000005 1056-00000001 1061-00000036 survey given
MPL/EXP/143/ OC-10-1702- OG-10-1709- OG-09-1709- Consignee has
09-10 1061-00000004 1056-00000001 1061-00000028 shredded the books
even before survey
thereby denying
opportunity to
assess the loss-no
documents
submitted
And contended the Complainant is expected to submit the fully worded policy of insurance and has to establish that each one of the terms and conditions of the policy was meticulously followed by it and it has a right to make a claim and to prove repudiation 7 CC/82/2011 made by the OP is erroneous. Further submitted that the repudiation made by the OP is in accordance with law and the burden is on the Complainant to substantiate its case by leading evidence with required documents.
4. In view of rival contentions of the respective parties, the Commission had received affidavit evidence of Sri.Guruprasad Shenoy S/o Late Krishnaray V Shenoy, Assistant Manager along with Ex-C1 to C23 for Complainant. On the contrary, received affidavit evidence of Sri.Krishna Sheernalli S/o Sathyanarayana Bhat, the Assistant Vice President Claims along with Ex-R1 to R8 for OP. After closure of enquiry, the Commission heard learned counsels for the respective parties, now the points that arise for consideration of the Commission would be:
(1) Whether Complainant proves, OP/insurer had rendered deficiency in service as alleged in the matter of Marine Insurance Open Cover Policy No.OG-10-1709-
1056-00000001 for the consignments ?
(2) Does complainant is entitle for claim settlement in respect of the value of the consignment in a sum of Rs.52,74,341/- ?
REASONS
5. Points.1 & 2: Let us examine Ex-C series documents, commencing from Ex-C1/Confirmation of Purchase Order no.090509/05 in respect of Sirrocco Parkstone International Ltd., This is the 8 CC/82/2011 purchase order based on their agreement dtd.04.06.2009, in accordance with their standard terms of business printed on the back of the order. The terms supersede any and all other terms introduced before or after the present purchase order. The books have to be in absolute conformity with the contractual dummy supplied by the printer. The specifications are mentioned in this confirmation of the purchase order. Quantity is 30000 copies in three titles which in fact, not disputed by parties to the complaint. The packing instructions could be seen at page 4 and the terms of payment of the purchase order at page 5. As per Term.7 under the head "Transportation": Unless otherwise provided in the purchase order transportation shall be FOB shipping point-collect. No insurance or premium transportation costs will be allowed unless authorised in writing. If printer does not comply with Sirrocco Parkstone International‟s delivery schedule, Sirrocco Parkstone International may specify, at its sole discretion, the mode and conditions of transportation to affect delivery and deduct from any of Printer‟s invoices the cost of such premium transportation, if borne by Sirrocco Parkstone International. Under Term.14 under the head "Packing": The method of packing shall be in accordance with the instructions given by Sirrocco-Parkstone International in the purchase order and when no instruction is given by Sirrocco 9 CC/82/2011 Parkstone International the printer shall pack the books to afford the protection required under normal transport conditions to prevent damage to and/or deterioration of the books in transit to their destination, as specified in the purchase order. Thus terms & conditions at para 7 & 14 provides for process of transport and packing.
6. Ex-C2 is the policy issued by OP in the name of Complainant under the name and style of Marine Open Cover for the period from 01.06.2009 to 31.05.2010. The policy was issued on 08.06.2009 from place to place anywhere in India and anywhere in the world. The consignment details and mode of transport coupled with cargo details, packaging details also could be found in this policy cover. The Mode of transport through sea, cargo details in respect of printed books and scratch cards of various types bear SI per transit Rs.65 lakhs, and under air mode of transport printed books and scratch cards of various types bear SI per unit Rs.30 lakhs. Rate of premium is as agreed and initial estimated sum insured is Rs.3 crore, which in fact is not disputed. The name of insured is Manipal Press Ltd., OP also issued Marine insurance certificate with open cover on 13.08.2009 in respect of invoice no.MPL/EXP/127/09-10. The sum insured in a sum Rs.31,99,841/-. The description of goods and packaging are 10 CC/82/2011 printed books and scratch cards as per documents in 5522 boxes of various types. Ex-C4 is invoice and packing list. The consignee is Serrocco Parkstone International ltd., and could find description of goods, quantity, net weight and gross weight. OP issued marine certificate in the name of Complainant with open cover number in respect of printed books and scratch cards of various types, sum assured at Rs.3,78,000/-, issued date is 30.09.2009. Mr.Guruprasad Shenoy has submitted claim intimation in respect of invoice no.127 to arrange to do survey for reported damage consignment, since books in shipment to New York - Ingram under invoice no.127 in respect of policy certificate no.OG-10-1709-1061- 00000036. Nature of damage: books got damaged while in transit, place of inspection: Almere, Nedarlands. Total value of the damaged goods details are furnished. On 31.12.2010 the OP replied in respect of claim no.OC-10-1702-1061-00000002. They have received the survey report and documents submitted by Complainant. They have noted from the survey report that the surveyor has opined that the damage was caused due to fact that the cartons with the books were stowed on dirty, damp and contaminated with the fungus pallets. Additionally the size of the used cartons was unfit i.e. too small for the books of this format and that the books had been improperly placed in the cartons.
11 CC/82/2011 Surveyor has attributed the damages to insufficient packing. Since it falls under the exclusion 4.4.3 of the ICC (A) clause attached to the policy, loss, damage or expense caused by the insufficiency or unsuitability of packing, or preparation of the subject matter insured we regret our inability to consider the claim. In other words, claim stands repudiated and claim file closed at their end.
7. Ex-C7 is in respect of invoice no.MPL/EXP/143/09-10 and the details of packing list. Mr.Guruprasad Shenoy of Complainant has submitted claim intimation to OP in respect of damaged books in shipment to New York - Ingram, Invoice no.143 and policy certificate no.OG-10-1709-1061-0000028. Ex-C8 is invoice with packing list in respect of MPL/EXP/152/09-10. In respect of this shipment OP issued open cover marine certificate no.OG-10-1709- 1061-00000033, the sum assured is Rs.5,62,500/-. Mr.John Garcia of Sirrocco Parkstone International Ltd., had wrote a letter „they just received a note from Orca and Antique Collectors (their consignees for the English books) that they could not accommodate the inspection team to visit their warehouse mainly due to the high activity during this season. They could arrange to send the books to a location to be named by their surveyors where the latter could conduct their inspection.‟ Mr.John Garcia of Sirrocco Parkstone had also informed Mr.Ruby Rodrigues/Manipal 12 CC/82/2011 Press that they have given him the details of contact persons and the location of the damaged books as he requested. The Complainant being customer did not benefit out of this activity. Since they have suffered enough and to require them to do extra work is absolutely embarrassing and this arrangement is not acceptable. This was the response, since Mr.John Garcia had informed Mr.Ruby Rodrigues that „They could arrange to send the books to a location to be named by their surveyors where the latter would conduct their inspection. This of course will entail some cost.‟ Ex-C9 is the letter addressed by Mr.Guruprasad Shenoy to arrange to do survey for reported damage consignment in shipment to New York - Ingram in respect of invoice no.151 under policy certificate no.OG-10-1709-1061-0000032. Ex-C10 is letter addressed from Mr.Guruprasad Shenoy dtd.04.11.2009 along with surveyor details mentioned in the insurance certificate copy and had requested Mr.Ruby to arrange for the same through customer itself. Ex-C11 is survey report dtd.11.02.2010. In this survey report could see „Extent and cause of mechanical damages to a consignment of printed books - 1000 Sculptures. Transported by vessel and truck from Manipal/India via Hamburg/Germany to Modrany/Czech Republic. The Survey held at the premises of M/s.Mlada Fronta, Modrany/Czech Republic on 06.01.2009.‟ 13 CC/82/2011 Surveyor received the order to survey from Mr.Sasikumar M/s.Bajaj Allianz General insurance company ltd., Yerwada/India by e-mail. In particulars of transport could be seen in the said survey Mrs.Veronika Turzo and Mr.David Rousek have participated and recorded their findings. They identified the consignment by comparison of the marks with the documents, description of packing, appearance of damage, measures and extent of damage is 559 books x USD 3.88 = USD 2,168.92. They have suggested to conduct a salvage sale on the ambulant market, but the consignee did not agree to a sale within the Czech Republic. Though the books are printed in Czech language, a sale in other countries is not possible. Therefore they asked other potential buyers and estimated a residual value of Czech Corunas (CZK) 30,00 per book. Thus the potential salvage sale proceeds would amount to 559 books x CZK 30,00 = CZK 16,770.00. Cause of damage which surveyors have recorded in para 8 at page 5 of survey report - „The damages occurred have to be attributed to insufficient packing. As obvious from the enclosed fotos the plastic straps were tied very tight around the cartons. Therefore the straps carved into the edges. They concluded that the cartons were squeezed together and thus the books inside, which in addition also slightly shifted against and into each other causing the above described 14 CC/82/2011 deformations. A similar consignment of books sent a few weeks later arrived with the same type and kind of damages.‟ They have concluded, based on the before mentioned, they have suggested to cover the books inside the cartons all around with a protecting elastic material in order to prevent them from damages of this kind. Mr.David Rousek is the surveyor has enclosed 10 photos, full-style addresses, CMR waybill, commercial invoice, packing list and marine insurance certificate.
8. Ex-C12 is the Preliminary report, wherein mentioned as against Type of Loss - Wet damage to the consignment of printed books during transit. Date of Locus of survey - as on 28.10.2009 at the consignee‟s warehouse, Saitama, Japan. Consignment insured -
Printed books and Scratch cards as per invoice no.MPL/EXP/150/09-10, Declared value - USD.7,560.00, Basis of valuation - CIF plus 10%, Insured voyage - from anywhere in India to anywhere in the world, Insured - Manipal press ltd., Manipal, India. The consignment details as well as shipment details could also be found from Preliminary survey report and at page 3 under „Circumstances‟ by the end surveyor has stated "Subsequently on 07.10.2009 the LCL/LCL container no.TRLU 9288493 had been de-stuffed at UTOKU Yokohama, CFS, Honmoku, Yokohama, Japan on 07.10.2009. At this time, it was noted that the LCL/LCL 15 CC/82/2011 consignment under bill of lading no.GNSAYOKI 900115 had been arrived in a partially wet condition. The Yokohama CFS personnel accordingly made the following remarks on the delivery and the tally sheet: „(7) PPSL/Crushed and S/L dirty‟, „(3) PP SL/broken, SL/crushed and SL/dirty." Under „Nature and Extent of Damage‟ has recorded "Every corrugated fibber board carton contained 10 printed books and such 20 cartons were stowed in two pairs on one wooden pallet and the whole pallet load was fastened by PVC bands. The cargo consisted of 2000 books titled „1000 Sculptures of Genius‟, of which the contents showed pictorial explanation with artistic commentary. Upon de stuffing of the cargo from the LCL/LCL container occurred at UTOKUYohohama CFS, the packages were found in a damp, wet and softened condition with partial mauled formation. As such, appropriate remarks were made on the delivery sheet and tally sheet. All the 10 pallets were found to be in the same condition." Learned counsel for Complainant submits all such reports have been made not in the presence of Complainant. In other words, such preliminary survey was conducted in the absence of Complainant, which would falsify the final survey report/Ex-C11 dtd.11.02.2010, wherein the surveyor afterthought wrongly concluded "The damages occurred have to be attributed to insufficient packing could be considered to appreciate 16 CC/82/2011 the final survey report. As obvious from the enclosed fotos the plastic straps were tied very tight around the cartons. Therefore the straps carved into the edges. They have concluded that the cartons were squeezed together and thus the books inside, which in addition also slightly shifted against and into each other causing the above, described deformations.‟ But facts remain that on 08.11.2009 itself in the absence of insured a preliminary survey was conducted, wherein found damages caused on account of „wet damage to the consignment of printed books during transit.‟ The said preliminary survey was conducted immediately upon arrival at the consignee‟s warehouse, all the packages were opened and the books were inspected in detail. Out of 2000 books consigned in this instance, only 371 books were received in sound condition. The remaining books were rejected due to deformation of the book itself and/or the covers. Among the deformed books, approximately 655 books could be reconditioned by replacing the outer covers only. The remaining 974 books are considered to be a total loss. The „Policy liability‟ is also mentioned that „The loss falls for consideration under Marine Cargo open cover policy no.OG-10- 1709-1056-0000001 and certificate no.OG-10-1709-1061- 000000031, the coverage of which is inter alia governed by Institute cargo clause A.‟ Under „Subrogation‟ - The consignee has 17 CC/82/2011 already lodged a written claim against the vessel‟s local agent holding them fully responsible for the loss. The vessel‟s local agent has acknowledged receipt of the claim and confirmed that it is in order for the consignee to subrogate their rights to their Marine cargo underwriters who may then pursue a claim against the Carrier.‟
9. Ex-C13 is Certificate of Survey in respect of consignment of 10 pallets said to contain 200 boxes books, wherein Cause of damage is recorded - „It would appear that despite suggestions of moisture penetration, the problem is solely due to the extremely tight packing of the books within the cartons, with no separation. It is also possible that these may have been loaded immediately following processing in warm conditions.‟ Mr.Guruprasad Shenoy had written to insurer „books stuck together and the jackets shrinked and got damaged due to moisture, while on transit.‟ He has also attached invoice copy for their reference to arrange for survey on priority had requested to send survey report to insurance company. The insurance company on 31.12.2010 in respect of claimno.OC-10-1702-1061-0000003 informed Mr.Shenoy, Manipal Press Ltd., that they have received the survey report and documents submitted by insured and noted from the survey report that the surveyor has opined damages are due to 18 CC/82/2011 extremely tight packing of the books within cartons with no separation with the possibility of being loaded immediately following processing in warm conditions. The Surveyor had attributed the damages caused due to insufficient packing, since it falls under the exclusion 4.4.3 of the ICC (A) clause attached to the policy Loss damage or expense caused by the insufficiency or unsuitability of packing or preparation of the subject matter insured. In such circumstances, they have informed their inability to consider the claim. Ex-C14 is the letter addressed to insurer by Section Head - Cargo Claims Department concerning the packaging method they have enclosed Certificate together with the survey report received from the Surveyor in Estonia, wherein surveyor has formed an opinion that the damage in this case was caused due to the fact that the cartons with the books were stowed on dirty, damp and contaminated with the fungus pallets. Additionally the size of the used cartons was unfit i.e; too small for the books of this format and that the books had been improperly placed in the cartons. In view of such situation, it would appear, insurer liability is not involved in this claim and that this claim can be repudiated. In survey report dtd.01.12.2009 under the head Nature of damage „It was established during the first cargo inspection that 420 books were already distributed to three 19 CC/82/2011 bookshops. Part of them was already returned as unsalable goods.‟ They, have noted two different kinds of damages i.e. (1) Mouldy, damp and dirty books were found from the lower layer of cartons (2) The books were found corrugated and with deformed covers due to unfit (small) cartons and due to improper position of the books in the cartons. To be placed front and back alternately. The damages assessed totalling at USD 1,647.78. In Ex-C15 in respect of claim no.OC-10-1702-1061-0000002 what they have stated in Ex-C14 are repeated. Similarly in Ex-C16 in respect of claim no.OC-10-1702-1061-0000006 insurer repudiated the claim on the basis of survey report and has formed an opinion that „plastic straps were tied very tightly around the cartons in which the books were packed. Therefore the straps carved into the edges and squeezed together the books inside, shifting against and into each other and causing the deformations and damages mentioning exclusion clause 4.4.3 of the ICC (A) attached to the policy.‟ Even on similar grounds in Ex-C17 insurer repudiated the claim in respect of OC-10-1702-1061-0000003.
10. On 31.08.2010 as per Ex-C18 insured informed insurer that they are in receipt of 4 sets of survey report with regard to marine transit exports claim with their company and while going through the reports they have observed in respect of sl.no.138 concerning 20 CC/82/2011 OG-10-1702-1061-0000003 consignment stating that this claim is not considered by the insured „due to the reason of moisture penetration that due to extremely tight packing of the books with in the cartons, with no separation.‟ Further surveyors have made a remark that it is also possible that they may be loaded immediately following processing in warm condition. It was informed, as insurer aware of all the consignments, the packing has been done according to the instructions of the client, as specified in the purchase order, the copies of which are made available to the insurer. The company has been in this business for over a decade and the company has not received complaints about defective packing till now. That being the case, the opinion formed by the surveyor that the damage caused to the goods is due to insufficient packing is far from truth and this can be verified on going through earlier consignments to various destinations both in India and abroad. It was also informed to insurer to note down that the surveyor in his earlier comments has stated that the consignment although received in sound condition, appeared affected by moisture during the course of transit. Hence there is a prima facie case of damage during transit and hence requested insurer to take up the matter on merit and in respect of sl.no.150 (OG-10-1702- 1061-00000001) consignment also informed that „This is the 21 CC/82/2011 preliminary survey report issued by Crawford and based on this survey report claim is payable. Hence requested to make arrangement to settle the claim immediately.‟ Further in respect of sl.no.151 (OG-10-1702-1061-00000002) consignment „According to the surveyor, the damages were due to the fact that, the cartons with the books were stowed on dirty, damp and contaminated with fungus palates. Further, the size of used cartons was unfit for the books of this format and the books had been improperly placed in the cartons. Hence due to this reason, the surveyor recommends this claim may be repudiated by the insurance company.‟ In this regard, it was informed to the insurer to refer to their comments in respect of claim no.138 stated above. Similarly in respect of sl.no.152 (OG-10-1702-1061-00000006) consignment - according to surveyor the damages occurred have to be attributed to insufficient packing and the damage occurred to have attributed to insufficient packing due to the fact that the plastic straps were tied very tightly around the cartons. The conclusion arrived by the surveyor is a suggestion to cover the books inside the cartons all around with a protecting elastic material. The survey report nowhere categorically denies the claim. As such insured reiterated that packaging material and the packaging strategy used is a standard packaging procedure and are strictly in conformity with 22 CC/82/2011 the purchase order. All the details of packaging were already made known to insurer while taking the insurance. It was informed to settle the claim in respect of Invoice no.127 - policy no.OG-10- 1709-1056-00000001 on non-standard basis since the cost of survey exceeds the claim and in respect of invoice no.143 - policy no.OG-10-1709-1056-00000001 they are yet to receive the survey report, hence requested to make arrangement for settlement of survey claim without further delay. Further as per Ex-C19 on 21.10.2010 insured had written letter to insurer on claim refusal of shipments to Sirocco of 4 claims at sl.no.138, 150, 151 & 152 informing that there are no definitive standards for packaging of books suitable for exports via sea and are evolved over time and experience. Specifically, the parameters to be kept in consideration are (a) Packaging material (b) Packaging design (c) Actual packing/filling of content or goods (d) Packaging strength (e) Containerization and in these aspects based on their experience of having shipped several tons of books over several years, the following is evolved as guidelines and their standards, which are Packaging material, Packaging design, Packing of goods, Packaging strength requirements, Packaging container and in view of the above requested the insurer to process their claim at the earliest. Ex-C20, 21 & 23 are the photographs of the books shipped and 23 CC/82/2011 these photographs were taken on 18.11.2009, 23.11.2009 from cartons of the warehouse pallet „1000 paintings of Genius, Sculptors of Genius‟.
11. The insured has placed Policy schedule, Policy wordings, Survey reports - 3 in number, Repudiation letters - 3 in number, Parkstone International letter. In so far as description of packing is concerned is already stated above and similarly even in respect of appearance of damage is also were stated while referring the documents placed on record by the Complainant. In survey report dtd.11.02.2010 suggested to cover the books inside the cartons all around with a protecting elastic material in order to prevent them from damages of this kind which in fact replied by the insured as per Ex-C19. The photos taken by surveyor are enclosed to the survey report which could be seen as already stated above which are taken on 18.11.2009 and 23.11.2009. The surveyor has taken photographs from Cartons on the warehouse pallet 1000 paintings of Genius, Sculptors of Genius, Noted damage to edges of the dust covers, Concertinaed edge of carton as per Ex-R4. Further OP has placed Ex-R5 to R7 they are letter dtd.31.12.2010 in respect of claim no.OC-10-1702-1061-0000006, claim no.OC-10-1702-1061- 0000003 and claim no.OC-10-1702-1061-0000002 and Ex-R8 is the letter dtd.16.03.2010 addressed by Sirrocco Parkstone 24 CC/82/2011 International Ltd., referring three policies requesting insurer in respect of Manipal Press Ltd., as "their buyers were one in saying that the damaged copies resulted from Manipal‟s wrong packaging. Even the reports of independent surveyors attest to bad packaging as the reason for the occurrence of damaged copies. They understand that Manipal had filed indemnity claims against insurer, perhaps indicating that the damage occurred during shipment. Manipal may completely recover the entire cost to print their books the moment insurer settle their claim. In the meantime, they have to bear the cost of reprinting the damaged copies with other printers. They have suffered severely out of these problems that Manipal had created. The cost of printing with Manipal represented only 30% of the total cost of producing the books. In addition to printing cost, they also incurred author fees, iconography/picture rights, licenses, translators, proofreading fees, layout costs, design and prepress expenses, colour separation costs and general overhead expenses. These represent the bigger share of the losses they suffered out of Manipal‟s negligence. Moreover, they have lost their goodwill with their important customers, and their cash flows were severely affected as these books were intended for the Christmas sales. In this regard, they have also filed formal report to the Export Credit Guarantee 25 CC/82/2011 Corporation of India Ltd., (ECGC) as Manipal was also filing a claim against the credit insurance with ECGC."
12. Thus, from the above materials placed on record by the parties to the Complaint, admittedly the Complainant had sent shipment under All Risk Insurance and as the Complainant had insured consigned goods by way of Marine Insurance Open Cover Policy Export covering transit had sent 15 shipments in respect of Marine Transit export policy and in one of the claims we found the surveyor has observed that the damage may have occurred because of loading of the books when the packaging was warm. It is also not in dispute that the consignments were placed in moist conditions, which could be borne from 15 consignments. It is to be noted herein that the Complainant had registered six transit claims against 15 consignments. In other words 9 consignments have reached the consignee and there have been no complaint and all these 9 consignments have the same type of packing and the insured/complainant repeatedly stated the insurance obtained is an All Risk Cover, which covers any eventuality during transit. It is also found from the enquiry, OP had failed in its duty in not making payments under invoice no.150, 127 & 143 as the surveyor has not sent any report regarding damage. The Marine Open Cover All Risks policy covers all such contingencies which 26 CC/82/2011 cannot be denied by the insurer herein. It was also informed to the insurer and it has come in the enquiry that Complainant is not new to these types of consignment, since, has been in this business for over a decade and has not received any complaints about defective packing till date which is not denied by the insurer. In such circumstances, the report in so far as it exonerates the OP from liability due to faulty and tight packing of the books has to be held in correct or not justified. As already stated above, even surveyor also found, damages caused to the books have occurred during transit was not considered by the Surveyor. Further to be noted herein out of 6 consignments, 3 consignments, transit claim has been rejected, also substantiates, packing was not defective. Therefore the reason given for rejection of the claim on the ground packing was defective could be said not justifiable and could also be said non settlement of the accepted claim is held illegal. In respect of other 3 claims as already stated above no survey has been done and this impliedly means that the claim of the Complainant in respect of these 3 claims under invoice nos.150, 127 & 143 has been accepted by the OP. It is therefore, we are of the view that rejection of the claim of the Complainant in respect of invoice nos.138, 151 & 152 have to be held unjust and similarly non-settling of the claim in respect of invoice nos.127, 143 & 150 27 CC/82/2011 for the reasons stated above could be held not justifiable under law as per terms and conditions of the policy in question. Upon examination of the materials placed on record by the parties, viewed from any angle, OP cannot attribute any error or negligence on the part of Complainant in ensuring safe passage of the books considering their experience of having shipped several tons of books over several years as informed in Ex-C19 dtd.21.10.2010 which is not denied by the insurer, as such in our view, it goes without saying that OP had rendered deficiency in service in not settling 6 claims of the Complainant amounting to Rs.52,74,341/-, since, OP has not disputed the claim of Rs.31,99,841/- in respect of invoice no.127, Rs.3,78,000/- each in respect of invoice nos.138, 150, 151 & 143 and Rs.5,62,500/-, in respect of invoice no.152. In such conclusion of the matter, we are of the view that OP is liable to pay the value of the consignment in a sum of Rs.52,74,341/- and since OP has failed to settle the claim under 6 invoices is liable to pay interest thereon from the date of repudiation till realisation at 12% p.a. for simple reason that the complainant is Printer is engaged in this business since decade and had the amount under claim was invested in their business would have earn even more that the interest now determined to be payable by insurer. Further, it has come in the enquiry that 28 CC/82/2011 Complainant had incurred expenses of Rs.10,000/- and similar such amount towards incidental expenses, which also to be considered while passing the award. Accordingly, we proceed to allow the complaint and directed OP to pay Rs.52,94,341/- along with interest at 12% p.a. from the date of repudiation till realisation and do pay Rs.1 lakh towards litigation costs within 60 days from the date of receipt of this order, failing which, the amount so awarded shall also carry interest at 9% p.a. from the date of default till realisation.
13. Supply free copy of this order to both the parties.
Lady Member Judicial Member
*NS*