DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II

Udyog Sadan, C-22 & 23, Qutub Institutional Area

(Behind Qutub Hotel), New Delhi- 110016

Case No.360/2008

Sanyo Koreatex Pvt. Ltd.

8-H, Vandana Building, 11,

Tolstoy Marg, New Delhi

                                                                                                            ….Complainant

Versus

Export Credit Guarantee Corporation of India Ltd.

NBCC Place, South Tower, 4^th Floor, Pragati Vihar,

Bhishma Pitamaha Marg, New Delhi- 110003

Oyster Shipping Line (UK) Ltd.

Through: OSL Shipping Agencies (New Delhi) Pvt. Ltd.

98, Nehru Place, New Delhi

OSL Shipping Agencies (New Delhi) Pvt. Ltd.

309, Hemkunt Tower, 98, Nehru Place, New Delhi

….Opposite Parties

          Date of Institution    :      05.06.2008  

          Date of Order            :      18.02.2022

Coram:

Ms. Monika A Srivastava, President

Ms. Kiran Kaushal, Member

Sh.  U.K. Tyagi, Member

ORDER

Member: Ms. Kiran Kaushal

1.    Facts leading to the complaint as stated by the Complainant are-              

            Complainant is a company engaged in manufacturing, production of non-woven mattresses and paddings, represented by Mr. Anup Das.
The Complainant Company exported one container containing fifty-five non-woven mattresses and 20 kgs of soft silky pads on 15.10.2004. Value of the said products was US $5018. The said consignment was shipped through Oyster Shipping Line, UK Ltd. (OP-2) having an office in Delhi by the name of
OSL Shipping Agencies (New Delhi) Pvt. Ltd. (OP-3). Complainant purchased an insurance policy from Export Credit Guarantee Corporation of India Ltd. (OP-1) to cover the risks.

2. The said consignment reached its destination and Complainant was informed on 13.12.2004 that the buyer was requesting for extending the time for payment till 25.06.2005. The message regarding the same, received from the Consignee Bank is attached as annexure C-8. The agent of OP-3 vide email dated 14.12.2004 informed the Complainant that the consignee had not taken the delivery. Complainant wrote various mails to the buyer to take the delivery of the consignment but to no avail. OP-3 vide E-mail dated 21.2.2005 informed the Complainant that if the goods were not got released, they would be auctioned to recover, demurrage and port charges.
3. The Complainant wrote letter dated 19.02.2005 to the buyer conveying that the Shipping Company had fixed the last date as 28.02.2005 by which the consignment was to be released and if the consignment was not released the Port Authorities would auction the same. Complainant vide letter dated 20.02.2005 was informed by the buyer that they did not place any order for the goods. Therefore, they would not take delivery of the goods sent. Ultimately, the Shipping Line and Port Authorities auctioned the consignment. Vide email dated 12.09.2005 the shipping line/agents informed the Complainant that the consignment had been auctioned in March, 2005. Thereafter, the Complainant vide different modes of communication asked
   OP-2 & OP-3 for the details of the auction and the value of money, which was released by the auction but they did not respond with the required details.
4. Alleging that OP-1 did not guide the Complainant properly regarding the steps to be taken in filing and pursuing of the claim therefore OP-1 is deficient in service. Complainant has alleged deficiency of service qua OP-2 & OP-3 stating that OP-2 & OP-3 did not provide any documentary proof in support of the auction and auction proceeds obtained from the Port Authority or clearing agent.
5. Aggrieved by the circumstance above Complainant approached this Forum with the prayer for directions to OP-1  OR  OP-2 & OP-3  OR  all the OPs jointly and severally to pay US $8,307 or its equivalent in Indian Rupees alongwith pendentelite and future interest @18% per annum till the date of realization.
6. OP-1 resisted the claim raising objection inter-alia that the Complainant is a Pvt. Ltd. Company and deals in the commercial activities. Therefore, it is not a consumer as per the provisions of Consumer Protection Act. The other objection raised by OP-1 is that complaint is not maintainable and the same is barred by the law of res subjudice as the Complainant had already filed a civil suit on the same alleged cause of action.
7. It is submitted by OP-1 that a Small Exporters Policy (SEP)
   dated 16.07.2004 was issued to the Complainant, which was valid for a period from 23.06.2004 to 30.06.2005, the same was subsequently renewed for a further period from 01.07.2005 to 30.06.2006. It is next submitted that the Complainant sent a shipment worth Rs.2,29,573/- to a buyer in UAE
   on 25.10.2004 on DA-90 days (Documents against Acceptance) terms of payment. The due date for payment for the said shipment was 23.01.2005.
   In terms of Provisos (g) of the insurance policy to risks insured, the insured should have preferred the claim with OP-1 within one year from the due date of payment that is on or before 22.01.2006 whereas, the Complainant lodged the claim with OP on 04.05.2006 thereby making its claim time barred as per Provisos (g).
8. It is further submitted that the shipment was reportedly made
   on 25.10.2004 and the due date of payment for the same was 23.01.2005. However, the Complainant without seeking any prior approval from
   OP-1 extended the due date of payment from 23.01.2005 to 25.06.2005, thereby violating the terms and conditions of the policy as per clause 18(b) of the policy.
9.  It is next submitted that the Complainant for the first-time informed
   OP-1 on 01.04.2005 about the non-payment by the said buyer and OP-1 immediately vide its letter dated 05.04.2005 informed the Complainant about further steps to be taken by the Complainant to minimize the loss.
   However, the Complainant failed to adhere to the instructions of OP-1 and thereby violated Clause 7 of the terms and conditions of the policy.
10.   Complainant has filed rejoinder to the written statement of OP-1. Evidence of by way of affidavit and written submissions are filed on behalf of Complainant and OP-1.

As none appeared on behalf of OP-2 & OP-3, they were proceeded exparte vide order dated 27.03.2009.

Submissions on behalf of OP-1 are heard. Documents placed on record are perused.

11. Preliminary objection raised by OP-1 that as the Complainant is a Pvt. Ltd. Company, which deals in commercial activities is not a ‘Consumer’, holds no merit. As the relationship between the Complainant and OP-1 is that the Complainant had taken an insurance policy from OP-1 to indemnify the loss which may be suffered by the Complainant. It is for indemnification/protection against the loss that the complainant had purchased the policy and not to make any profit. Therefore, there is no question of commerce or commercial purpose in obtaining the insurance coverage hence Complainant is a ‘Consumer’ as per Consumer Protection Act.
12. Next objection raised by OP-1 is that the Complainant has already filed a Civil Suit on the same alleged cause of action. On perusal of the said Civil Suit it is noticed that the Complainant had filed a Civil Suit against the buyer and its agent. Though OP-1 was initially impleaded as a party in the said Civil Suit later it was deleted from the array of parties reserving its rights to file a consumer complaint against OP-1 for wrongful repudiation of his claim. Further it is noticed that OP-2 & OP-3 were also not impleaded in the said suit. The Complainant has approached this Forum as regards the deficiency in service of OP-1, OP-2 and OP-3, which is different from the said Civil Suit therefore; we are of the opinion that the complaint case is maintainable in the present Commission.   

Now on the merits of the case:

13. Admittedly, Complainant had purchased an insurance policy from OP-1 & it had repudiated the claim of the Complainant due to  reasons reproduced below :

1. As per the policy procedures issued to you, claim, if any, should be lodged with in one year from the due date of the shipment under claim. However, you have lodged claim after the expiry of one year and hence makes your claim time barred which is a serious lapse.
2. The shipment was made on 25.10.2004and the buyer had failed to take delivery of the goods. It has been observed that you have not taken necessary steps to safeguard the goods and to minimize loss by shifting to bonded warehouse which eventually resulted in auctioning of the goods by the port authority and incurred 100% loss on the transaction which could have been avoided.
3. The shipment has been auctioned as per the claim form. However, documentary proof in support of auction and auction proceeds obtained from port authority or clearing agent has not been provided.

14.   It is noticed that Complainant filed its claim beyond one year from the due date of payment thereby making its claim time barred. The due date for payment for the consignment was 23.01.2005 therefore, the Complainant should have preferred the claim on or before 22.01.2006 whereas, the Complainant has lodged its claim on 04.05.2006 making its claim time barred.  Proviso (g) of the policy, to the risks insured  reads as under: -  

PROVISOS

PROVIDED ALWAYS THAT the Corporation shall not be liable for any loss:

(a)……………

(b)…………...

(c)……………  

(d)……………

(e)……………

(f)…………….

(g) Unless a claim for the loss is made by the insured to the Corporation in writing in the form prescribed by it within one year from the due date of payment.

15.  Ground two of the repudiation that the Complainant had failed to take necessary steps to safeguard  and to minimize loss by shifting the goods to bonded warehouse, which eventually resulted in auctioning of the goods by the Port Authority and incurred 100% loss on the transaction could have been avoided is correct and also meritorious in our opinion. The mails annexed with the complaint as annexure C-9, C-10 and others show that it was in the knowledge of the Complainant that the buyer had not taken the delivery of the consignment. Thereafter, it was Complainant’s duty to take necessary steps to safeguard its goods and to minimize its loss, which the Complainant had failed to do.

16.   Further, we are in agreement with the OP-1 that if the shipment had been auctioned the documentary proof in support of the auction and auction proceeds obtained from the Port Authority or clearing agent should have been provided to OP-1 in order to raise the claim. Therefore, we are of the opinion that OP-1 could not have given the claim to the Complainant in the absence of any document evidencing auction and the details of the proceeds.

17.   Moreover, records reflect that the Complainant first informed about the non-payment by buyer on 01.04.2005 by which time the consignment/shipment had already been auctioned and the Complainant had already extended the credit to the buyer upto 25.06.2005. The same as per the terms and conditions of the agreement with OP-1 is in violation of the policy which states that if the buyer seeks extension in due date, Complainant could agree only with the prior approval of the insurance company/OP-1. It is also noticed that on receiving the request from the Complainant on 01.04.2005
OP-1 replied on 05.04.2005 regarding the procedure or process to be followed. Therefore the complainant cannot say that OP-1 did not guide or advise the Complainant correctly.

18.  In view of the facts discussed above we are of the considered view that there is no deficiency of service qua OP-1 and the claim of the Complainant was rightly repudiated since the Complainant had failed to comply with the terms and conditions of the policy issued to him.

19.  As regards OP-2 & OP-3 not much evidence is placed before us to establish the deficiency of service. Mail dated 17.02.2005 by OP-3 annexed as annexure C-10 with the complaint states that: -

       ‘’If we have to hold the container then you (CNEE/SHPR) have to pay the ports storage charges first. Please note that any time container can go for auction, then please update and advice as ASAP’’.

There is another mail dated 08.08.2005, which informs the Complainant regarding the sale of the consignment on 31.03.2005. Besides these two mails we can only see the mails written by the Complainant to OP-2 & OP-3 regarding the details of the auction and its proceeds. Complainant has failed to convince the Commission regarding not receiving the information on auction and the proceeds as OP-2 & OP-3 have not joined the proceedings and they were proceeded exparte. Further in the absence of the contract or agreement between the Complainant and OP-2 & OP-3 we will refrain ourselves from concluding that OP-2 & OP-3 are liable and are deficient in service.

20.  In view the discussion above we dismiss the complaint with no order as to costs.    

File be consigned to the record room after giving a copy of the order to the parties.