(3) National Insurance Company Limited, Regional Office-I, SCO No.332-334, Sector 34-A, Chandigarh.
……Respondents/Opposite Parties.
Appeal under Section 15 of the Consumer Protection Act, 1986.
BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT.
SH. DEV RAJ, MEMBER.
MRS. PADMA PANDEY, MEMBER.
Argued by: Sh. Sunil Kumar, Partner of the appellant, in person.
Sh. Devinder Kumar, Advocate for respondent No.1.
Sh. Nitin Gupta, Advocate for respondents No.2 and 3.
PER DEV RAJ, MEMBER.
This appeal is directed against the order dated 24.12.2014 rendered by the District Consumer Disputes Redressal Forum-II, UT, Chandigarh (hereinafter to be called as the District Forum only) vide which, it allowed the complaint of the complainant (now appellant) and directed the Opposite Parties (now respondents) in the following manner:-
“14] In the given circumstances, as the Insurance Company has shown willingness to settle the claim, we allow the complainant and direct the OPs No.2 & 3 (Insurance Company) to make payment of the claim filed by the complainant, as per terms & conditions of the policy as recommended by the Surveyor. However, documents as required as per letter dated 6.1.2014 (Ann.R-4) must be supplied by the complainant before the claim is settled. The OPs No.2 & 3 shall comply with this order within a period of 45 days from the date of receipt of documents from the complainant.
The total insured value of the consignment was Rs.116318/-, though the Surveyor has wrongly assessed the amount as Rs.1,37,253/-. The settlement of claim be made by the OPs No.2 & 3 by taking the value of the consignment as Rs.116318/- only.
As is clear from observations of the Surveyor and also the contentions of the OPs NO.2 & 3 that the goods have been damaged due to bad packaging and transport by Opposite Party No.1, therefore, we hold the Opposite Party No.1 also liable to make good the loss of the complainant. The Opposite Party No.1 is thus directed to pay the balance amount beyond the assessment of OPs No.2 & 3, so that the complainant gets the total insured amount of Rs.116318/-. This amount be paid by Opposite Party No.1 within 30 days of information from the side of the complainant about the amount due.
Apart from the above, the Opposite Party No.1 shall pay Rs.5000/- as cost of litigation to the complainant. The OPs No.2 & 3 will also pay Rs.5000/- to the complainant as cost of litigation.”
2. The facts, in brief, are that the complainant firm hired the services of Opposite Party No.1 for proper packing and safe transportation of goods from Nabha to Bangalore, worth Rs.4,19,331/- and paid Rs.11,806/- as packing and transportation charges vide receipt No.1460 dated 15.3.2013 (Annexure A-2). Copy of the consignment note bearing No.1341 dated 15.03.2013 was annexed as Annexure A-1. It was stated that the complainant firm purchased a Marine Cargo Policy No.354900/21/12/4500000531 from Opposite Parties No.2 and 3, through an Insurance Broker i.e. Mahindra Insurance Brokers Ltd., for its consignment of demo stocks containing PC tablets, navigators and their accessories worth Rs.1,16,318/- and contents of show room, EDC machine etc. worth Rs.3,03,013/- totalling Rs.4,19,331/- from Nabha to Bangalore.
3. It was further stated that during the transit from Nabha to Bangalore, due to rough and negligent transportation by Opposite Party No.1, the goods were damaged. It was further stated that on 08.04.2013, the Insurance Company deputed Mr. C. N. Muralidhar, Surveyor and Loss Assessor to assess the reason and extent of loss or damage to items. It was further stated that the Surveyor and Loss Assessor inspected and surveyed the loss on 10.04.2013 at M/s Lakshmi Access Communications Pvt. Ltd., #79, B Lane, Anand Rao Extension, Bangalore – 56000009 and submitted his report dated 01.05.2013 (Annexure A-4) to the Insurance Company. It was further stated that the Surveyor and Loss Assessor, in his report, confirmed that the cause of loss was due to rough and negligent transportation, which was a covered peril under the Insurance Policy. It was further stated that the Surveyor and Loss Assessor also specified that all the electronic items were packed in a separate carton with enough packing material inside, which was strong enough to take care of normal transit hazards, but, on the other hand, he stated that the contents of show room such as Horizontal Sections, Vertical Sections etc., which were of high declared value, were not packed properly.
4. It was further stated that the Surveyor and Loss Assessor assessed the loss of electronic items to the tune of Rs.1,37,253/- and recommended the claim as payable. It was further stated that the Surveyor and Loss Assessor also remarked that no pre dispatch inspection was done to ascertain the condition of the items before dispatch and, hence, the claim be settled on non-standard basis. It was further stated that, in this regard, an enquiry was received by the complainant firm from Mr. J. S. Joon, Divisional Manager of the Insurance Company, on phone on 26.09.2013, which was replied to by it vide email dated 26.09.2013 (Annexure A-5) informing Mr. Joon that it told the Broker with regard to the proposal form, which, in turn, informed that proposal was not required. It was further stated that it was the mistake on the part of the Broker and the Insurance Company’s underwriting Department which issued the Policy without proposal form and pre-dispatch inspection.
5. It was further stated that the Surveyor and Loss Assessor denied assessment of contents of showroom saying that the same were improperly packed, whereas these contents were properly and well packed by Opposite Party No.1. It was further stated that as required, the complainant firm completed each and every formality, and the claim was pending with the Insurance Company without any reason and logic. It was further stated that a legal notice dated 10.10.2013 (Annexure A-6) was sent to the Divisional Manager of the Insurance Company. It was further stated that Opposite Party No.1 was also responsible for the loss or damage to the consignments due to its rough and negligent transportation, regarding which, a registered letter was also sent to it on 29.5.2013 (Annexure A-7).
6. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Parties, to pay Rs.4,19,330/- alongwith interest @18% per annum from the date of loss for delay in payment and Rs.1,00,000/- as compensation.
7. Opposite Party No.1, instead of filing reply though opportunity was given to it by the District Forum, filed affidavit of Sh. Mukesh Pal, its Proprietor stating therein that he being the Proprietor of Opposite Party No.1 firm, had been doing the packing job for the last 5 years. It was further testified that the packing material was packed in a decent manner and there were no discrepancies in it, hence the allegations of the Insurance Company were false. It was further testified that the concerned Company was up-to the mark as claimed by the complainant, Sai Enterprises, Nabha (Pb.) and the packed material was sent from Sai Enterprises to Bangalore.
8. Opposite Parties No.2 to 3, in their joint written statement, took up certain preliminary objections, to the effect that the complainant was not a consumer as it was engaged in the commercial activity; that the complaint was premature as the complainant did not reply to the letter dated 06.01.2014 of Opposite Party No.2; and that the complaint was defective for non-joinder of necessary parties as M/s Mahindra Insurance Broker was not impleaded in the complaint as the Opposite Party. On merits, Opposite Parties No.2 and 3, admitted the issuance of Marine Cargo Insurance Policy to the complainant for transport of goods from Nabha to Bangalore as well as the value of Insurance Cover (Annexure R-1). It was stated that the Insurance Policy was obtained through Broker i.e. Mahindra Insurance Broker Ltd. It was admitted that the goods were damaged in transit but the Insurance Company was liable as per the terms and conditions of the Policy. It was further stated that as per the assessment done by the Surveyor, the loss was assessed to the tune of Rs.1,37,253/-, though the sum insured was Rs.1,16,318/-, subject to applicable excess clause and deduction of salvage value of Rs.250/-. It was further stated that the calculations made by the Surveyor were wrong as two items were wrongly added in the assessment. It was further stated that the packing by Opposite Party No.1, was not strong enough to take care of normal transit hazards and if that would have been the case, the contents of the boxes would not have bulged out from the boxes and got damaged. It was further stated that as per Exclusion No.2.3 of the Insurance Policy, the claim was not payable if the loss was attributable to unsuitable or insufficient packing of the consignment. It was further stated that the complainant did not submit the required documents for finalization of the claim as required vide letter dated 06.01.2014 (Annexure R-4). It was further stated that though the Surveyor recommended for settlement of claim on non-standard basis as pre-dispatch inspection was not carried out, yet Opposite Party No.2 had not yet taken any final decision in the absence of required documents from the complainant. It was further stated that as per Surveyor’s report, the claim has to be settled as per the terms and conditions of the Policy and in case the consignment was damaged due to negligent handling of the carrier, then the carrier would be liable for the same. It was further stated that even if, the consignment was in sound condition, the damage was caused due to the rough and negligent handling of the consignment by the carrier for, which, Opposite Party No.1 was solely liable for payment of claim. It was further stated that without prejudice to the foregoing submission, if any amount was found payable by the Forum to the complainant, the same be restricted to the sum insured of Rs.1,16,318/-, subject to excess clause of 5% of consignment value and salvage value of Rs.250/-. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Parties No.2 and 3, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.
9. The complainant filed replication, wherein it reiterated all the averments, contained in the complaint and repudiated the same, contained in the written versions of Opposite Parties.
10. The Parties led evidence, in support of their case.
11. After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, allowed the complaint, as stated in the opening para of the instant order.
12. Feeling aggrieved, the instant appeal, has been filed by the appellant/complainant.
13. We have heard the Partner on behalf of the appellant/complainant in person, Counsel for respondent No.1/Opposite Party No.1, Counsel for respondents No.2 & 3/Opposite Parties No.2 and 3, and have gone through the evidence, and record of the case, carefully.
14. Mr. Sunil Kumar, Partner, appearing on behalf of the appellant/complainant submitted that the claim of the appellant/complainant was in the sum of Rs.4,19,331/- but the District Forum allowed the same in the sum of Rs.1,16,318/- only. He further submitted that the Surveyor and Loss Assessor wrongly assessed the claim, in the sum of Rs.1,16,318/-. He further submitted that the Surveyor while in regard to electronic items confirmed that packing was proper and strong, on the other hand, in regard to contents of showroom EDC machine etc, he observed that the packing was not proper. He further submitted that packing was done by Opposite Party No.1, which was a professional packer and both the items got damaged. He further submitted that the District Forum in last para at page 9 of its order directed Opposite Party No.1, to pay the balance amount beyond the assessment of Opposite Parties No.2 & 3 so that the appellant/complainant could get the total insured amount of Rs.1,16,318/- whereas the total insured amount was Rs.4,19,330/-. He further submitted that letter dated 6.1.2014 (Annexure R-4) was fake and the same was never dispatched. He further submitted that there was delay in settling the claim and, as such, the appellant/complainant was entitled to interest on the claim amount. He further submitted that there was no condition of Marine Cargo Insurance Policy for giving prior information to the Insurance Company for pre-inspection before dispatch.
15. The Counsel for respondent No.1/Opposite Party No.1 submitted that the material was packed in a proper manner and there was no deficiency on its part. He further submitted that allegations of the Insurance Company were false.
16. The Counsel for respondents No.2 and 3 submitted that, no doubt, the total sum insured was Rs.4,19,330/-, yet the consignment said to have contained stocks of PC tablets, navigators and their accessories was for Rs.1,16318/- and for showroom contents was Rs.3,03,013/-. He further submitted that as per the Surveyor’s Report (Annexure R-2), all the electronic items were packed in a separate carton with enough packing material in side, which was strong enough to take care of normal transit hazards and his observations with regard to partition items were that these items such as Horizontal Sections, Vertical sections etc. were bundled using some adhesive tapes, leaving most of the area exposed without any packing, whereas the branding panels and the pre-laminated flexible sheets, which were of high declared value were just wrapped with corrugated sheets, which could not hold these sheets firmly and with this type of packing, the material was sesusptible to damage such as bending and scratching. He further submitted that deficiency for the same could not be attributed to respondents No.2 & 3.
17. It is evident that the appellant/complainant obtained Insurance Policy dated 20.02.2013 (Annexure A-3) by paying premium of Rs.2,636/- and total sum insured was Rs.4,19,330.00 (Rs.1,16,318/- for consignment said to contain stocks of PC Tablets, Navigator, the IRACC and showroom contents of Rs.3,03,013/-). The consignment was despatched to Consignee – Lakshmi Access Communications System (P) Ltd., Ganesh Krupa, 24, Ist Main Road, Gandhi Nagar, Bangalore. It is also evident from Invoice dated 28.2.2012 (Annexure R-3) that value of part consignment viz. PC Tablets, Navigator (34 items) was Rs.1,16,318/- and it was demo stock not for sale on returnable basis. The Surveyor in its report dated 01.05.2013 (Annexure R-2) regarding this, made the following observation:-
“As per the mail reply received, the following are the facts:
M/s Sai Enterprises NABHA, were authorized dealers for Magnum make Electroic Products such as I pads, pocket Tablets Etc. but due to some reasons, M/s Sai Enterprises relinquished the dealership. As such the Un sold products which were supplied to them Under DC Number DC/178/11-12 dated 28.2.2012, were returned back to the supplier almost after year along with the used and removed show room partitions items such as Pre laminated Boards, Panel with branding, beams of various sizes and other items pertaining to the above.
And also M/s Sai Enterprises did not confirm regarding Pre inspection of these items which were being returned for my mail, a copy of the same is enclosed.
DETAILS OF SURVEY
When I visited the Insured place as detailed above, the damaged items were produced for inspection. During inspection noticed the following damages.
The consignment was receive don 4.4.2013.
ELECTRONIC ITEMS
Noticed external damages to the cartoon which was used to dispatch all the 22 types of Electronic items. Noticed damage such as tearing, opening and bulging of the cartoon.
PACKING
ELECTRONIC ITEMS
These items were packed in a separate cartoon with enough packing materials in side, which are strong enough to take care off normal transit hazard.
PARTITION ITEMS
The partition items such as Horizontal Sections, Vertical sections etc. were bundled using some adhesive tapes, leaving most of the area exposed without any packing, whereas the branding panels and the pre-laminated flexible sheets, which are of high declared value were just wrapped with corrugated sheets, which can not hold these sheets firmly. With this type of packing, the material are sesusptible for damages such as bending and scratching.”
18. No doubt, the Surveyor assessed the loss in the sum of Rs.1,37,253/- yet he recommended that as no pre-inspection was done to ascertain the condition of the items before despatch, the claim may be settled on non-standard basis. Since there was no clause in the Policy for pre-inspection, there was no question of settling the claim on non-standard basis. Admittedly, the consignment was in two parts. One PC Tablets, navigators and their accessories worth Rs.1,16,318/- for which there was no defect in the packing. The claim on this account could not exceed the sum insured viz. Rs.1,6,318/-. The Opposite Parties, in their written statement also stated that if the District Forum found any amount payable towards the claim, the same be restricted to the sum insured of Rs.1,16,318/- for electronic items and also subject to excess clause and salvage value. The District Forum has, however, passed order for settlement of claim by respondents/Opposite Parties No.2 and 3, by taking the value of consignment as Rs.1,16,318/- as the Surveyor had wrongly assessed the amount of Rs.1,37,253/-. The District Forum, however, erred in directing Opposite Party No.1, to pay the balance amount beyond the assessment of Opposite Parties No.2 & 3, so that the appellant/complainant got the total insured amount of Rs.1,16,318/-. Since the District Forum directed Opposite Parties No.2 & 3 to settle the claim, taking the value of the consignment as Rs.1,16,318/-, no amount was left which could be paid by respondent No.1/Opposite Party No.1, in respect of this consignment.
19. Apparently, there was delay in settling the claim by Opposite Parties No.2 and 3. The appellant/complainant is, therefore, entitled to interest thereon from the date of filing the complaint i.e. w.e.f. 28.02.2014.
20. The District Forum in its order also ordered that the documents, as required as per letter dated 6.1.2014 (Annexure R-4), must be supplied by the complainant before the settlement of claim. This direction of the District Forum is not relevant. The appellant/complainant has specifically averred that the letter aforesaid did not bear any despatch number and the same was never received by it. In the absence of any cogent evidence regarding the mode of communication under which letter dated 6.1.2014, was sent, we are inclined to accept the contention of the appellant/complainant that it did not receive the same. In our considered opinion, observation of the District Forum in the order that documents as per letter dated 6.1.2014 (Annexure R-4) must be supplied by the complainant before the settlement of claim is unnecessary.
21. As regards claim of Rs.3,03,013/- relating to EDC machines etc., it is clearly established from the report of the Surveyor that partition items were bundled using some adhesive tapes, leaving most of the area exposed without any packing and the branding panels and the pre-laminated flexible sheets of high declared value were just wrapped with corrugated sheets, which could not hold these sheets firmly, leading to damage. Exclusion Clause 2.3 of the Policy terms and conditions, being relevant, is extracted hereunder:-
“2.3 loss, damage or expense caused by insufficiency or unsuitability of packing or preparation of the subject matter insured (for the purpose of this Clause 2.3 “packing” shall be deemed to include stowage in a container or liftvan but only when such stowage is carried out prior to attachment of this Insurance or by the Assured or their servants)”
22. It is the categorical stand of Opposite Parties No.2 & 3 that there was damage due to improper packing and the same is the allegation of appellant/complainant. This fact is fortified from the Surveyor’s report and complainant’s registered letter dated 29.5.2013 (Annexure A-7) to Opposite Party No.1 for delivering the consignment in damaged condition etc. at the destination. The Surveyor did not rightly recommend payment of claim in respect of consignment relating to EDC machines etc., which were insured in the sum of Rs.3,03,013/-. For this consignment, there is, thus, deficiency in rendering service, on the part of Opposite Party No.1, which did not pack the material properly. No evidence has been brought, on record, by the appellant/complainant about the exact value of the goods nor about the salvage value of such goods for attributing specific deficiency to Opposite Party No.1. In the absence of such details, Opposite Party No.1, cannot be made liable to pay a sum of Rs.3,03,013/-. As per the consignment note bearing No.1341 dated 15.3.2013 (Annexure A-1), DHL International Packers and Movers (respondent No.1/Opposite Party No.1) charged a sum of Rs.11,806/- from the appellant/complainant vide receipt No.1460 dated 15.03.2013 (Annexure A-2). No doubt, the consignment note contains note to the effect that “Company is not responsible for breakage, damage, leakage, fire, accident and theft”. Nevertheless, from the report of the Surveyor, it is clearly established that the packing was not proper, effective and adequate, on account of which, the material got damaged. Thus, there was deficiency on the part of respondent No.1/Opposite Party No.1. In our considered opinion, compensation for deficiency, in rendering service, on the part of Opposite Party No.1, in the sum of Rs.50,000/- shall be adequate to meet the ends of justice. To this extent also, the order of the District Forum needs modification.
23. No other point, was urged, by the Counsel for the parties.
24. For the reasons recorded above, the appeal is partly accepted, with no order as to costs. The order of the District Forum is modified, in the following manner:
- Opposite Parties No.2 & 3 (Insurance Company) are directed to pay Rs.1,16,318/- to the complainant, alongwith interest @9% per annum from the date of filing the complaint i.e. 28.02.2014, within a period of 30 days, from the date of receipt of a certified copy of the order.
- Opposite Party No.1 is also directed to pay Rs.50,000/- as compensation for deficiency, in rendering service, within a period of 30 days, from the date of receipt of a certified copy of the order.
- Opposite Party No.1 and Opposite Parties No.2 & 3 are jointly and severally directed to pay Rs.5,000/- each, as cost of litigation to the complainant, as awarded by the District Forum.
- If the order is not complied with, within the stipulated period of 30 days, from the date of receipt of a certified copy thereof, the amount mentioned in Clause (i) above, shall be payable by Opposite Parties No.2 and 3 alongwith interest @12% per annum, from the date of filing the complaint, whereas the amount mentioned in Clause (ii), above, shall be payable by Opposite Party No.1 alongwith interest @12% per annum from the date of default, till actual payment, besides payment of cost of litigation.
- All other directions given, and reliefs granted by the District Forum, in the impugned order, subject to the modification, aforesaid, which are contrary to and, in variance of this order, shall stand set aside.
25. Certified copies of this order, be sent to the parties, free of charge.
26. The file be consigned to Record Room, after completion.
Pronounced.
March 12, 2015.
Sd/-
[JUSTICE SHAM SUNDER (RETD.)]
PRESIDENT
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(DEV RAJ)
MEMBER
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(PADMA PANDEY)
MEMBER
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