National Consumer Disputes Redressal
Natonal Insuracne Co. Ltd. vs M/S. Narendran Sons & Anr. on 6 October, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 1381-1382 OF 2011 (Against the Order dated 10/12/2010 in Appeal No. 166-210/2009 of the State Commission Kerala) 1. NATONAL INSURACNE CO. LTD. 3, Middleton Street, P.B. No. 229 Kolkata - 700071 West Bengal ...........Petitioner(s) Versus 1. M/S. NARENDRAN SONS & ANR. Rep. by Murugesh Narendran Kadappakkada Kollam Kerala 2. G. LINK EXPRESS CARGO PVT. LTD. 8, Kumtha Street, Gyan Bhavan (Dubash House), Ballard Estate Mumbai - 400 001 ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER HON'BLE DR. B.C. GUPTA, MEMBER For the Petitioner : Ms. Sakshi Gupta, Advocate For the Respondent : Mr. David Koshy, Advocate Ms. Rashmi Nandakumar, Advocate (R-1) Ex parte (R-2) Dated : 06 Oct 2015 ORDER JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL) The complainant received a purchase order from M/s Teknor Apex Co. for supply of 800 Hercules mats @ US$ 13.5 per mat and 1300 Competitor mats @ US$ 9 per mat, the total order value being US$ 22420. The aforesaid mats were dispatched to USA in two containers. The consignment was insured with the petitioner Company. After the consignment was delivered in the overseas buyer, he complained to the complainant that Hercules mats were infested with moid and mildew, whereas wrapped mats were wet and water damage. The buyer expressed its inability to keep the aforesaid goods. Since the consignment had been insured with the petitioner Company, the complainant arranged for inspection of the said consignment. The consignment was inspected by Ewig International Marine Corporation, who were the authorised surveyor and settling agent of the insurer in USA. Vide letter dated 1.6.2005, the insurer rejected the claim stating, inter alia, as under:-
"2. We had vide our letter dated 5.5.2005 informed you that there were only 700 Pcs Competitor Mats and 300 Pcs Hercules Mats remaining with the consignees as per information made available to M/s Ewig and had only requested you to advise the consignees to hand over the remaining mats to M/s Ewig for salvage sale in as is where is condition as the buyers were refusing to hand them over for salvage sale without a guarantee from the manufacturers for USD 9000.00 which they had reportedly incurred as expenses. The buyer may have already given you statements of the sale of mats already sold by them but this has not been provided to us till date.
4. Following our letter dated 5.5.2005, the buyers have handed over the remaining mats to M/s Ewig and we understand that Ewig have already received a salvage offer of USD 15.00 for the Hercules mats and USD 12.00 for the Competitor Mats and concluded the sales for gross returns of USD 13500.00, the salvage commission @ 5% works out to USD 675.00 and net salvage returns are USD 12825.00.
5. From the sale of salvage on "as is where is" basis it is clear that if the buyers had simply sold both the consignments on similar lines earlier they would have recovered at least the following proceeds.
Type of Mat Salvage Price No. of mats Sales Proceeds Hercules USD 15.00 800 USD 12000/-
Competitor USD 12.00 1300 USD 15600/-
Total Sales Proceeds USD 27600/-
Less-Salvage Commission USD 1380/-
Net Salvage Proceeds USD 26220/-
It is also likely that if the salvage sale had been concluded immediately following detection of loss/damage the proceeds could have been much higher. Since the amount recoverable on "As is where is" condition is more than the insured value under both our policies, we do not consider that you have suffered a loss under these policies. We cannot be held liable for the failure of your buyer to organise proper salvage sale of the consignment. Even otherwise the claim does not fall within the scope of the policy terms and conditions.
We therefore regret our inability to consider any ex-gratia payment under this claim which was repudiated by our Overseas Claim Settling Agents as per policy terms and conditions."
2. The complainant then approached the concerned District Forum with a complaint seeking payment of Rs.14,13,900/- from the Insurance Co. along with interest and compensation, making a total sum of Rs.18,70,902/-.
3. The complaint was resisted by the Insurance Co. It was stated in the reply that on receipt of intimation from the complainant, they had arranged for inspection of the consignment through Ewig International Marine Corporation in order to determine the cause and extent of the damage. The surveyor concluded that the goods were damaged on account of condensation within the shipping containers and not due to an external source. It was reported by the surveyor that the cargo were wet when loaded and subsequent fluctuations in the temperature during voyage caused moisture to condense on the internal surface of the containers and to drip down on the cargo. The said wet environment gave rise to mould growth. Since damage resulted from condensation was not a risk covered under the insurance policy, the claim was rejected.
It was also stated in the reply that when the surveyor visited the premises of the buyer, it was found that majority of the mats except 300 pieces of Hercules mats and 750 pieces of Competitor mats had been cleaned and sold by him. The surveyor requested the consignee to hold the remaining mats pending with them in order to conduct salvage sale. Local buyers were contacted who offered price of US$ 15 per piece for Hercules mats and US$ 12 per piece for Competitor mats. However, the salvage was not handed over to Ewig International Marine Corporation. Thus the stand taken in the reply was that no part of the salvage was handed over by the overseas buyer to the surveyor.
5. The District Forum vide its order dated 21.11.2006, directed the Insurance Co. to pay the net salvage sale proceeds of US$ 12825 (Rs.6,02,775/-) within one month from the date of the order.
6. Being aggrieved from the order passed by the District Forum, the Insurance Co. approached the State Commission by way of an appeal. The complainant was also not satisfied with the aforesaid order and, therefore, he also filed a separate appeal challenging the order of the District Forum. The State Commission vide impugned order dated 10.12.2010, directed the Insurance Co. to pay a sum of Rs.7,59,660/- to the complainant along with interest @ 7.5% p.a. from 16.7.2005 along with cost quantified at Rs.7500/-. Being aggrieved, the Insurance Co. is before us by way of this revision petition. The order of the State Commission, however, has not been challenged by the complainant. It was expressly admitted in the letter dated 1.6.2005 sent by the Insurance Co. to the complainant that the buyers had disposed of 700 pieces of Competitor mats and 300 pieces of Hercules mats and was left with 100 pieces of Competitor mats and 1000 pieces of Hercules mats which it had handed over to Ewig International Marine Corporation. It was also stated in the aforesaid letter that Ewig International Marine Corporation had concluded the sale of the mats handed over to it for a gross amount of US$ 13500 and after deducting US$ 675 towards salvage commission, the net return was US$ 12825. However, the aforesaid admission is sought to be withdrawn in the reply filed before the District Forum by claiming that no part of the salvage was actually handed over to Ewig International Marine Corporation. In support of its contention that no part of the salvage was handed over to its surveyor, the Insurance Co. relied upon the letter dated 15.08.2007 purported to be written by the overseas buyer M/s Teknor Apex Co. to Ewig International, stating therein that the mats were never sold to Ewig International Marine Corporation since the price offered by them was ridiculously low. It is further stated in the aforesaid letter that after going through the expenses of storing, transporting and cleaning the mats, the overseas buyer had sold them in the open market to reduce their losses.
7. The aforesaid letter, however, was not duly proved by the insurer in accordance with law. No affidavit from M/s Teknor Apex Co. was filed to prove the aforesaid letter. No affidavit from Ewig International Marine Corporation was filed to prove the receipt of the aforesaid letter from M/s Teknor Apex Co. No one from Ewig International Marine Corporation was examined nor was any affidavit from any official from the aforesaid Corporation filed to prove that no part of the salvage was actually delivered to them by M/s Teknor Apex Co.
8. The Insurance Co. did not file the affidavit of Mr. Ramabhadran S. who wrote the letter dt. 1.6.2005 to explain in what circumstances and for what reason, he had written a letter acknowledging receipt of part of the salvage by Ewig International Marine Corporation and its sale and the net consideration of US$ 12825. Therefore, in our opinion the Insurance Co. failed to prove that the admission contained in its letter dated 1.6.2005 as regards sale of part of the salvage for US$ 12825 was made under a mistake. Consequently, we hold that part of the mats were actually handed over to Ewig International Marine Corporation and were sold by them.
9. It was for the complainant to ensure delivery of the entire salvage to the insurer through the overseas buyer. If the complainant refunded the money received from the overseas buyer without first making them return the salvage, the complainant alone has to suffer for adopting such a course of action. We, therefore, are of the considered view that the Insurance Co. is entitled to adjustment of the remaining salvage value out of the claim payable to the complainant.
10. A perusal of the letter dated 1.6.2005 would show that total net salvage proceeds at the rates at which sale was concluded by Ewig International Marine Corporation comes to US$ 26220, out of which US$ 12825 were realized by Ewig International Marine Corporation. Therefore, the Insurance Co. is entitled to adjustment of the balance amount of US$ 13395, out of the total amount of US$ 22420 which the complainant refunded to the overseas buyer. The net amount payable by the Insurance Co. to the complainant comes to US$ 9025. The rate of Dollar prevailing in India at the time of filing of this complaint admittedly was Rs.45/-. The amount payable to the complainant, therefore, comes to Indian Rs.4,06,125/-.We, therefore, dispose of this revision petition by directing the Insurance co. to pay the aforesaid amount of Rs.4,06,125/- to the complainant along with interest @ 10% p.a. from the date of filing of the complaint. The Insurance Co. has deposited a sum of Rs.10,78,881/- with this Commission on 14.10.2011. The interest, therefore, will be payable only till the aforesaid date. Thereafter, interest will be payable to the complainant at the rate at which it has been actually realized by the Registry on the amount deposited by the Insurance Co. The Registry is directed to calculate the amount payable to the complainant in terms of this order, make the said payment within four weeks from today out of the amount lying deposited with it and refund the balance amount to the Insurance Co.
......................J V.K. JAIN PRESIDING MEMBER ...................... DR. B.C. GUPTA MEMBER