Consumer Complaint under DEFECTIVE SERVICE :
JUDGMENT
(Delivered on – this 13th December, 2018 )
Judgment delivered by
HON’BLE PRESIDENT MR. R.G. WANKHADE
CASE OF COMPLAINANT:
This complaint has been filed under Section 12 (1) of the Consumer Protection Act, 1986 claiming the damages caused in an accident to the container tabled under the insurance policy.
The allegations in the complaint are as follows.
The Complainant is a consumer within the meaning and definition of consumer provided under Section 2 (1) (d) of the Consumer Protection Act, 1986 (in short CPA, 1986). The Complainant is a partnership firm carrying a business of custom clearance and incidental activities thereto as self-employment and for their livelihood. The policy which was issued in favour of Opponent No. 3 and as explained below Opponent No. 3 issued NOC for the insurance claim in favour of the Complainant and Opponent No. 2. As it is clear that the Complainant has not gained or generated any profit directly or indirectly from the said insurance policy. The Complainant was working as agent for Opponent No. 2. Opponent No. 1 has issued marine insurance policy in favour of Opponent No. 3 whose containers were insured by Opponent No. 1. The insurance policy was issued in favour of Opponent No. 3 but Opponent No. 3 has given it’s NOC for settlement of insurance by the Complainant and Opponent No. 2. As per the understanding between the Complainant and Opponent No. 2 the Opponent No. 2 will pay 50% damages to Opponent No. 3 in the case of accident being occurred. The Complainant has already paid 50% of the claim amount to Opponent No. 3 and the balance will be refunded after the settlement of insurance claim. On 22.01.2010 Opponent No. 3 had carried the said container in the ship to India under Bill of Lading No. HDMUKGNS4225589. Opponent No. 2 company undertook the said work of carriage of cargos through the Complainant. The Complainant undertook the said work of clearance of customs and other incidental activities to be performed by them as an agent of Opponent No. 2. On 06.02.2010, Opponent No. 1 had issued Certificate No. MO-0007108-00-00142 through it’s agent Opponent No. 4. As per open marine insurance policy bearing no. MO-0007108-00-000 for an amount of Rs. 21,68,000/- for the goods referred therein. The said policy was valid between the period from 12.11.2009 to 11.11.2010. The premiums of the policy have been paid by the Complainant. On 11.02.2010, the said container which was insured with Opponent No. 1 through Opponent No. 4 met with an accident so the Complainant immediately informed the same to the nearest police station also to Opponent No. 3 and 4 by e-mail. Opponent No. 1 deputed their surveyor M/s. Mulchand Nagda & Co. who visited the spot and as a matter of precaution joint survey was done by M/s. Mulchand Nagda & Co. and M/s. Dolphin Marine Enterprises Pvt. Ltd. appointed by Opponent No. 3. The copy of joint survey, however, was not provided to the Complainant in spite of the guidelines of IRDA, so there is a deficiency in service and unfair trade practice adopted by Opposite Parties. Opponent No. 1 has not settled the genuine claim of the Complainant within 30 days and thereby breach the guidelines of IRDA and he is guilty of deficiency of service and unfair trade practice. On 30.08.2010 Opponent No. 1 repudiated the genuine claim of the Complainant by giving some false reasons on the grounds of T & C No. 5. Opponent No. 1 intentionally and knowingly breached the conditions of the policy and taking advantages of their own wrong by rejecting the genuine claim of the Complainant. Opponent No. 1 has also given the reason of the repudiation that the policy is for the container only and not for the cargo. The notice was sent through advocate on 27.12.2010 to Opponent No. 1 and Opponent No. 4 claiming the amount of insurance policy. Opponent No. 4 replied to the notice by changing the contention that there are lapses of payment of premium in stipulated time. Opponent No. 2 has already paid the damages sustained to the tune of Rs. 8,64,288/- which includes the service tax and so Complainant is entitled only the relief prayed in this complaint. Hence, this complaint has been filed declaring Opposite Party No. 1 is in guilty of deficiency in service and adopted unfair trade practice and also prayed the direction to hand over the final survey report and to pay the damages of Rs. 8,64,288/- with interest of 18% and compensation of Rs. 2,00,000/- towards mental agony, stress, harassment and hardship suffered by the Complainants and also Rs. 50,000/- towards the legal and incidental expenses.
Case of the Opponent:
2. Opponent No. 1 has resisted the claim by filing the Written Statement on record. It is submitted that this Forum has no jurisdiction to entertain and dispose of the present complaint. Without prejudice to the above contention it is alleged that the complaint involves complicated questions of facts and law and can be and ought to be adjudicated by the competent Civil Court only as it requires voluminous evidence. It is alleged that there is no privity of contract between the Complainant and Opponent No. 1. Moreover, there is no valid assignment of the policy in his favour. It is alleged that the Complainant has no insurable interest at the time of purported loss and therefore cannot claim itself as consumer within the meaning of Consumer Protection Act, 1986. It is not disputed that the Complainant is a clearing and forwarding agent acting on behalf of alleged consignee of the goods i.e. Opponent No. 2 and has no connection whatsoever with the property insured under the open policy namely containers. The policy was issued in favour of Opponent No. 4 as agent for the benefit of Opponent No. 3 under the provisions of Marine Insurance Act. Opposite Party No. 4 who is the agent acting for and on behalf of Opponent No. 3 generated Certificate No. MO0007108-00-00142 covering the goods reefer container (i.e. temperature controlled container valued at Rs. 21,68,000/- for road transit from Nhava Sheva to Vapi subject to conditions of open policy no. MO-0007108-000-00 dated 12.11.2009). Opponent No. 4 was given portal facility for generating certificates to be issued / generated by it in favour of it’s client as per the practice, however said certificate in respect of reefer container was illegally and wrongfully issued that was ex-facie beyond the purview of the open policy. As per open policy it prohibits or restricts any certificate to be issued for more than seven containers and sum insured of each container not to exceed Rs. 7,00,000/- or total value of seven containers in the certificates should not exceed 49 lakhs. As per the Marine Cargo Open Policy what was intended to cover was standard containers of 20 feet or 40 feet excluding Cargo and not any reefer container. Therefore, the certificate issued has no effect and it is null and void. Opponent No. 3 has failed to observe the terms and conditions and clauses of Open Marine Policy. The policy was issued in favour of Opponent No. 3 who is the agent of Opponent No. 4 for and on behalf of Opponent No. 3. It is denied that Opponent No. 3 has issued NOC in favour of Opponent No. 2 in respect of receiving claims and benefits under the policy. It is alleged that the purported letter dated 30.07.2010 of the Complainant proposing for endorsement in favour of Opponent No. 2 or the Complainant has not been accepted therefore, there could not be any transfer of right under the policy in favour of the Complainant in the absence of said endorsement. There is no novation of contract and in absence of acceptance by Opponent No. 1 nor the Complainant could claim any right, title or interest accruing under the policy by virtue of said letter dated 30.07.2010. It is alleged that right to sue has been claimed by the Complainant on the basis of payment of 50% of the damages suffered by Opponent No. 3 on account of repair cost for the said reefer container. It is alleged that the settlement or payment by Complainant to Opponent No. 3 has no connection with payability of claim under the policy and so the question of maintaining the present complaint in it’s own name does not arise. It is alleged that it has not issued a certificate dated 06.02.2010 but it has been issued by Opponent No. 4 in favour of Opponent No. 3 which had been provided a portal for generating such certificates in it’s client’s favour subject to the terms of the Open Marine Policy. It is denied that any joint survey was conducted as alleged but it is submitted that M/s. Mulchand M. Nagda & Co. was appointed as a surveyor and the survey was conducted and report was submitted on 21.06.2010 inter-alia assessing the net loss at Rs. 1,97,00,083.40 for repair, replacement charges inclusive for the labour for the damaged container. It is alleged that the claim was repudiated by letter dated 30.08.2010 by giving elaborate reasoning therefore there is no question of deficiency in service. It is alleged that as there is no deficiency in service and unfair trade practice as alleged and as there is no privity of contract between Complainant and Opponent No. 3, there is no question of granting the relief claimed in the complaint and lastly pray for dismissal of the complaint with compensatory cost.
Argument
3. Opponent No. 2 to 4 served with the notice but remained absent and so the complaint was proceeded ex-parte against them by noting dated 12.03.2013. We have heard the Ld. Advocate Shri Wankhede for the Complainant and Ld. Advocate Shri S.R. Singh for Opponent No. 1. We have gone through the records and documents produced by both the parties.
Reasons and findings
4. The Complainant is a partnership firm carrying a business of custom clearance and incidental activities thereto. The Open Marine Cargo Policy No. MO-0007108-000-00 was issued in favour of Opponent No. 4 who acted as an agent for Opponent No. 3 for benefit and/or in the interest of their customer. It seems that the said policy was issued in favour of Opponent No. 4 in view of the provisions of the Section 25 (1) of the Marine Insurance Act, 1963. As per the provisions of the Section 25, a marine policy must specify the name of the assured or of some person, who effects the insurance on his behalf. Opponent No. 1 has submitted photocopy of the policy at Exhibit – I which shows name of the insured as M.V. Leena (agent) and / or in the interest of their customer i.e. Opponent No. 3 and the period of insurance was from 12.11.2009 to 11.11.2010. The policy as stated in the complaint was Open Marine Policy inter-alia covering various transits and not a single voyage.
5. As per the law it seems that for every transit a certificate is required to be issued under open policy after requisite declaration being made by the agent / assured. The agent under the Marine Insurance Laws acts for and on behalf of assured and not the underwriter / insurer and therefore, such agent is required to make fruitful and honest disposal as provided u/s. 21 of the Marine Insurance Act, 1963.
6. As per Section 21 of the said Act where an insurance is effected by the assurer through an agent, the agent must disclose to the insurer every material circumstances which is known to himself and an agent who insures is deemed to know every circumstance which in the ordinary course of business ought to be known by, or who have been communicated to, him, every material circumstance which assured is bound to disclose, unless it comes to his knowledge too late to communicate it to the agent.
7. As per the policy as stated above the sum insured as per the insurance policy is Rs. 21,68,000/-. In the Certificate of Marine Insurance, the name of the assured is shown as Opponent No. 3 and the sum insured is shown as Rs. 21,68,000/-. This certificate was issued subject to the conditions of open policy no. 0007108-000-00 dated 12.11.2009. As per the clause 5 of the policy the policy was subject to each certificate not cover more than seven containers and sum insured of each container not to exceed Rs. 7,00,000/- and the total value in the certificate for 7 containers should not exceed Rs. 49,00,000/-. The said certificates is produced by the Complainant as C-3 is generated by Opponent No. 4 who was acting as an agent for and on behalf of Opponent No. 3 generated Certificate No. MO0007108-00-00142 covering the goods 1/20 reefer container (i.e. temperature controlled container) valued at Rs. 21,68,000/- for road transit from Nhava Sheva to Vapi subject to the conditions of open policy no. MO-0007108-00-00142 dated 12.11.2009.
8. There is no dispute that Opponent No. 4 M.V. Leena was provided with electronic portal facility for generating such certificates for each transit / voyage in favour of the customer that is in this case Opponent No. 3. However it seems that Opponent No. 4 wrongfully and illegally issued the certificate in favour of Opponent No. 3 for the voyage / transit dated 06.02.2010. On going through the policy and the certificate, as stated above it clearly appears that the said certificate was issued beyond the purview and ambit of open marine policy and as such it does not fall the part of open marine policy and so container was not covered.
9. The Complainant has alleged that Opponent No. 3 has already given it’s NOC for the settlement of the insurance by the Complainant and Opponent No. 2. It is also alleged by the Complainant that there was understanding between the Complainant and Opponent No. 2 and as per that understanding the Complainant and Opponent No. 2 will pay 50% damages to Opponent No. 3 in case of accident being occurred. It is also alleged that, Complainant has paid 50% of the claim amount to Opponent No. 3 and the balance amount will be refunded after the settlement of insurance claim.
10. The Complainant has produced the said letter at C-1 addressing to Opponent No. 1 for granting endorsement of policy in the name of Opponent No. 2 and requesting to settle the claim with Opponent No. 2. Opponent No. 3 on 22.01.2010 had carried the said container in the ship to India under Bill of Lading No. HDMUKGNS4225589. Opponent No. 2, a company undertook the work of carriage of cargos through the Complainant. The Complainant therefore, undertook the said work of clearance of customs and other incidental activities to be performed by them as an agent of Opponent No. 2.
11. The Complainant has produced copy of Bill of Lading as C-2. The said container met with an accident on 11.02.2010. Therefore, the Complainant has informed this fact to the nearest police station immediately and also informed this fact to Opponent No. 3 & 4 by e-mail. The Complainant has produced the copy of e-mail at C-5. It is clear from the Written Statement of Opponent No. 1 that the purported letter dated 30.07.2010 of the Complainant proposing for endorsement in favour of Opponent No. 2 and / or the Complainant has not been accepted and therefore there could not be any transfer of right under the policy in favour of the Complainant in absence of the said endorsement. Therefore, in the absence of the said endorsement there is no novation of contract between the Complainant and Opponent No. 1 so as to settle the claim in the complaint. There is no privity of contract between the Complainant and Opponent No. 1.
12. It is not disputed that the Complainant was a forwarding agent acting for and on behalf of Opponent No. 2, the container. The claim was not for cargo but it was for container which is the subject matter of insurance. The Container was being carried in a Trailer No. MH04CP7246 and the said container No. HDMU5210911 fell down and sustained. She said container was in the custody of goods in the said container through road transporter / carrier and so the Complainant was liable for making good the damages sustained to container belonging to Opponent No. 3. In para 4 of the complaint the Complainant has specifically mentioned that though the insurance policy was issued in favour of Opponent No. 3 by Opponent No. 1, Opponent No. 3 has already gave it’s NOC for the settlement of insurance by the Complainant and Opponent No. 2 and as per understanding between them that the Complainant and Opponent No. 2 will pay 50% damages to Opponent No. 3 in case of accident being occurred. The Complainant has further mentioned that it has already paid 50% amount of the claim to Opponent No. 3.
13. The claim of the Complainant has been repudiated by Opponent No. 1 on 30/08/2010 on the ground that there are breaches of terms and conditions no. 5 of the policy and any declaration which does not fall with the terms and conditions of the policy would be considered to be null and void ab-initio.
14. There is no privity of contract between the Complainant and Opponent No. 1. There is clause 7 in the insurance policy that insurance was not for the benefit of the Carrier or other Bailee. The clause 8.2 of the insurance policy read with section 79 of Marine Insurance Act, 1963 also mandates that the assured should insure / preserve the rights of subrogation against the Carrier / Bailee or third parties. The policy also stipulates certain obligations on the part of assured to give immediate notice to the Carrier / Bailee and to take such steps as may be required to protect recovery rights against Carrier / Bailee / Third Party liable for causing the loss.
15. In the pleadings it is necessary to plead the position as assured or assignee, his insurable interest, the type or kind of the insurance policy and other relevant terms. It is also necessary to establish the above position in the evidence. The Ld. Advocate for Opponent No. 1 urged that the claim is liable to be rejected in the absence of pleadings and proof and placed reliance on the case of New India Assurance Co. Ltd. V. Hiralal Rameshchand (2008) 10 SCC 626.
16. Moreover as per pleadings, and considering the terms of the policy and obligation undertaken by the Insurer, the nature of issues involved in the complaint, the dispute is out of the scope of the Consumer Protection Act, 1986 and was more appropriately a matter for the Civil Court. The Ld. Advocate for Opponent No. 1 has rightly pointed out by placing reliance on the case of EID Darry (India) Ltd. Vs. Far Eastern Marine Transport Co. 2 (1988) Acc90 (Mad). It is the duty of the assured and the agents in all cases to take such measures as may be reasonable for the purpose of averting or minimizing a loss and to ensure that all the rights against the Carriers, Bailees or other Third Parties and properly observed and exercised. The failure to comply with this requirement may prejudice any claim under this policy. Under the Law of insurance, the right of the insurer on payment of the loss to the assured is to be subrogated to the rights of the assured so as to enable the insurer to proceed against the Third Party and indemnify itself. It is incumbent upon the assured to keep alive his / it’s remedies against the Carrier or Bailee or other Third Party and any default committed by the assured either by allowing the remedy to get time barred or by abducting or abandoning, his rights against the Carriers or the Third Party will deprive the insurer of it’s remedies against the Third Party for indemnifying. In such cases, the insurer can repudiate the liability under the policy, the loss is not paid to the assured or to lay a counter-claim against the assured for damages if it has paid the loss to the assured.
17. Thus, the claimant / Complainant has failed to establish any deficiency of service and unfair trade practice as alleged. Therefore the Complainant would not be entitled to get any relief. The Complaint, therefore is liable to be dismissed. However, considering the facts and circumstances of the case, the parties are left to bear their respective costs. Hence following order.
ORDER
- The Complaint No. RBT/CC/165/2011 is dismissed.
- All parties to bear their respective costs.
- The copy of order be given to both the parties or it be sent to both parties as per Rule 18 (6) of Consumer Protection Regulations, 2005 and entry be taken with date on the last page of the order to that effect.
- Certified copy be given to both the parties as per Rule 21 of Consumer Protection Regulations, 2005.
- Copy of member set be returned to the Complainant.
Date : 13.12.2018
Place : Mumbai – 400 051.
