1.     This complaint under section 12 of the Consumer Protection Act, 1986 (in short, the ‘Act’) has been filed against the opposite party alleging deficiency in service and unfair trade practice in repudiation of an insurance claim under a valid Marine Cargo Policy in respect of transportation of manganese ore.

2.     The complainant M/s Sharp Ferro Alloys Ltd., is a body incorporated under the Companies Act and is engaged in the business of manufacturing and a recognized export house. The respondent insurance company it engaged in the business of general insurance. The complainant availed the services of the respondent of a Marine Open Insurance Policy through policy no. 040200/21/07/02/00000121 for the period 17.03.2008 to 16.03.2009, covering the risk of manganese ore consignments being transported from different locations to its work place at Durgapur. The complainant purchased the ore from M/s Orissa Manganese and Minerals P Ltd., and dispatched it from Bansapni in Orissa to Durgapur. The consignment was transported in Railway wagons upto Tapsi Railway yard from where it was transported by road to the premises. 

3.     The complainant declared that a consignment purchased from M/s Orissa Manganese and Minerals P Ltd. and Rungta Mines Ltd.,  of manganese weighing  2308.10 metric tonnes costing Rs.4,65,57,989/- was dispatched from Barbil to Tapsi, Durgapur.  The consignment was dispatched vide RR No.21201583 dated 19.04.2008 for delivery at Tapsi Railway Station and was loaded in railway wagons. On 23.04.2008 the consignment reached Tapsi Railway Station. Complainant requested the opposite party on 23.04.2008 to depute a surveyor at the time of unloading to assess the shortage, if any, as per policy. Complainant alleges that the opposite party failed to appoint any surveyor. The complainant engaged the services of M/s Sunrise Movers, Durgapur for transportation of the consignment from the yard to Durgapur. It is stated that the complainant had to take the delivery without weighing the consignment and that only 2171.150 metric tonnes was delivered to the complainant as confirmed by the transporter.  136.96 metric tonnes of the consigned material was short. The complainant thereafter lodged a claim seeking reimbursement of Rs.30,99,955/- being the value of the consignment which was short delivered.  The respondent in the meanwhile appointed Mr Kalya Bhattacharya for the assessment of the loss. The surveyor, vide his letter dated 24.06.2008, sought various documents. The complainant submitted the documents to the surveyor which was received by him.  The complainant lodged a claim on the transporter on 17.10.2008. The complainant also states that he transported another consignment of Manganese Ore weighing 3609 of metric tonnes from Paradip to Durgapur in Railway wagons. Prior to taking the delivery at Durgapur, on 07.05.2008 the complainant states that he requested the respondent to appoint a surveyor. The respondent appointed Mr A K Mukherjee but he failed to reach the appointed place and as such the complainant was forced to take open delivery of the consignment. The consignment was short by 431 metric tonnes valued at Rs.99 lakhs. The respondent again appointed M/s Sunrise Movers to lift the material and deliver the same to the complainant at the factory premises. The initial material weighing was 3178.530 metric tonnes and subsequently a box weighing 61.70 metric tonnes was received from the railways. The total short fall was 369.300 metric tonnes and a shortage certificate was issued by the transporter.  The value of the short delivered consignment was Rs.78,82,708/- As there was no scale and weighing facilities available at the Tapsi Railway Station, the complainant took delivery without weighing the consignment. The respondent appointed M/s Cunningham Lindsey International P Ltd., to assess the loss who did not examine the material at the destination as he was appointed after a period of about four months. The surveyor sought various documents which were made available by the complainant on various dates. Subsequent queries on 13.01.2009, 07.10.2009 and 09.10.2009 were clarified.

4.     The complainant states that the report of the surveyor was not provided by the respondent to him. His letter dated 27.11.2010 requesting settling of claim failed to evoke any response. The complainant sent reminders to the respondent but to no avail. However, on 23.03.2011 the respondent conveyed that the complainant had failed to establish the loss and therefore, the claim was not admissible.

5.     The complainant thereafter requested the respondent to provide a copy of the surveyor’s report on the basis of which the loss was repudiated. From the report of the surveyor, the complainant noted that the surveyor while recommending repudiation of the claim had wrongly concluded that the shortage claimed by the complainant was not explained. The complainant claims that he is entitled to indemnification of the loss suffered. The respondent is alleged to have failed to pay a total sum of Rs.1,09,82,663/- comprising  Rs.30,99,955/- being the value of the first claim and Rs.78,82,708/- being the value of the second claim. The respondent is also liable to pay interest @ 18% on the claim amount not paid by it. The complainant has also assessed the damages on this account as Rs.10,00,000/-. Hence, the complainant is before this Commission with the following prayer:

1. Direct the respondent company to pay a sum of Rs.1,09,82,663/- along with interest @ 18% till date of actual payment;
2. Award compensation of Rs.10,00,000/- towards distress and mental agony;
3. Award the cost of the complaint; and
4. To pass any other as this Hon’ble Forum deem fit and proper under the circumstances of the case.

6.     The complaint was resisted by the opposite party by way of reply. The opposite party states that the complainant failed to substantiate the loss caused as it was admitted that it could not be established as to how and when the loss occurred. The same was also confirmed by the findings of the surveyor. Opposite party admits that the complainant obtained a Marine Cargo Open Policy for the period 17.03.2008 to 16.03.2009 covering loss caused in the transit from different locations to its work place at Durgapur, and that the consignment of manganese ore weighing about 2308.10 tonnes was dispatched from Barbil to Tapsi, Durgapur through the Railways. The second consignment of manganese order weighing 3609 metric tonnes was also transported from Paradip to Durgapur in railway wagons.  As the consignment was short by 431 metric tonnes the complainant lodged a claim of Rs.78,82,708/- with the respondent insurance company. The opposite party submits that due to the non-cooperation by the complainant the surveyor appointed by the opposite party/ insurance company was delayed in submitting his survey report. Since the complainant was not cooperating, the surveyor could not assess the loss. Opposite party states that the surveyor M/s Cunningham and Lindsey have clearly observed in their final report dated 06.09.2010 under the head ‘Nature and Extent of damage’ that the consignment was short delivered by 369.3 metric tonnes and the insured did not provide any evidence in support of the shortage. Hence, the repudiation of the claim by the opposite party was based on the fact that the claimant did not support its claim by any evidence which otherwise falls under the exclusion clause of the policy terms and conditions. The opposite party’s case is that the complaint is without any merit and hence is liable to be dismissed.

7.     Parties led their evidence and filed written submissions. I have heard the learned counsel for the parties and perused the material on record carefully.

8.     Learned counsel for the complainant argued that the complainant held a valid Marine Cargo Open Policy and the value of the first consignment was Rs.2,79,26,457/-. The consignment was handed over to Railways on 19.04.2008 for transportation. The complainant sought the appointment of surveyor at the time of unloading of the consignment at the destination which the respondent failed to arrange and on the contrary, Mr K Bhattacharya, who was appointed as surveyor, visited only on 24.06.2018 after repeated communications. On the second occasion, the opposite party also deputed Mr A K Mukherjee as surveyor who failed to examine the consignment. It is submitted on behalf of the complainant that it lodged a claim upon the transporter. It is also submitted that the respondent company belatedly appointed M/s Cunningham Lindsay International Pvt., Ltd., to investigate of loss. The contention of the opposite party that there was non-cooperation on his part is contested.  Complainant submits that although the surveyor’s report is that the loss is unexplainable, it had, however, assessed the first loss at Rs.20,17,168/- and a similar report was given in respect of the second claim in which the loss was assessed at Rs.78,50,691/-. However, it was concluded that it was not payable. Complainant submits that the certificate issued by M/s Sunrise Movers Ltd., on 30.04.2008 and 12.05.2008 affirms the short delivery of the consignment. It is the complainant’s case that there was no dispute regarding the extension of Marine Coverage provided by the opposite party/ insurance company and that the shortage certificate issued by the transporter, coupled with record showing the quantity dispatched, shows loss during transit. Complainant further submits that no enquiries were made by the surveyor from the transporter or from the firm who weighed the consignment. He has relied upon the judgment of this Commission in National Steel and Agro Industries Ltd., vs Oriental Insurance Co. Ltd., III CPJ (2016) NC 489 wherein the investigation was held to have been done by the insurance company in a haphazard manner resulting in investigation agency not tracing out six coils, and therefore repudiation made out was rejected and the claim allowed. Reliance is also placed upon the judgment of this Commission in Preet Mohan Singh vs United India Insurance Co. Ltd., II 2016 CPJ 303 NC wherein despite negligence on the part of the insured regarding the inspection of and delivery of consignment, payment of half of the cost of the exported goods was ordered.  It is argued that in the instant case also no proper investigation has been carried out and the claim has been dealt in a casual manner. Learned counsel for the complainant argued that the claim is admissible under the terms of the policy and the repudiation is not based upon any justifiable reasons. It is submitted that the investigator was appointed on 02.12.2008 after about seven months of the initial loss. It is stated that there was no breach of the terms of the policy.

9.     On part of the opposite party it was argued that the complainant’s consignment of manganese ore weighing 2308.10 M T from Barbil to Tapsi, Durgapur was transported through railways which was allegedly short delivered and a claim for Rs.30,99,955/- was lodged without disclosing as to how and when the said manganese order was short delivered. It was further argued that the second consignment of manganese order valued at Rs.78,82,708/- was transported from Paradip to Durgapur through Railway wagons and was also short delivered. Complainant’s claim with the opposite party was examined by the surveyor M/s Cunningham and Lindsey International Pvt. Ltd., whose report dated 06.09.2010 concluded that the amount was not payable. The surveyor, M/s Cunningham and Lindsey’s report under the head ‘Nature and Extent of damage’ states that ‘reportedly the consignment was short delivered by 369.3 metric tonnes, but insured did not provide any evidence in support of the shortage’. It is therefore, contended that the opposite party/ insurance company rightly repudiated the claim of the complainant in view of the fact that the claimant has not supported its claim by any evidence, which may otherwise fall under the exclusion clause of the policy terms and conditions.

10.   The opposite party stated that the complainant has not filed any claim against the carrier, M/s Sunrise Movers, who had carried the material from the railway station to the factory at Durgapur. He further stated that the final surveyor M/s Cunningham and Lindsey has observed under the heading ‘Breach of Warranties’ that the transportation of manganese ore was done through lorries which were not covered and that this constituted a ‘Breach of Warranty’ as below:

“Warranted vehicle/ wagon is closed or covered with tarpaulin: The road transit was done through open lorries without covering with tarpaulin to the best of our knowledge, insurers may confirm the same from the attending surveyor”.

11.   Opposite party further argued that the complainant was not able to substantiate his loss and it was clear from its own letter dated 27.11.2010 that they were not sure as to when the loss was caused.  It is admitted that the insurance company could not appoint the surveyor on time to assess the loss. However, it is contended that the complainant had not supplied material documents/ evidence thereby delaying the surveyors in completing the survey. Hence, it is argued that the opposite party’s repudiation of the claim of the complainant was valid.

12.   From the above, it is manifest that the complainant’s claim for damages under the Marine Cargo Insurance scheme was repudiated by the opposite party on the ground that the cause of loss was not established by the surveyor and details could not be provided by the complainant. It has been concluded by the surveyor that the goods were transported in open lorries which was a breach of contract as transportation was required to be done in lorries covered with tarpaulin. No evidence has been brought on record in support of the conclusion that the lorries were not covered with tarpaulin. It is only stated that the lorries were not covered “to the best of our knowledge’’. Admittedly, the surveyor was not present during unloading and loading due to his late appointment which is not denied by the opposite party. The Marine Cargo Insurance Policy was specifically for the purpose of indemnification against loss during transit. Admittedly, the loss occurred during transit in all instances for which the claim was preferred. The claim pertains to the period covered under the validity of the insurance policy. In view of the delay on the part of the opposite party in appointing the surveyor being admitted, it is evident that the unloading and loading from the railway wagons to lorries was not witnessed by the surveyor. Mere reliance upon the complainant’s statement that the case of the loss was not known to them to conclude that claim was not admissible as the cause of loss could not be established does not appear justifiable. In the absence of any evidence on record with regard to the covering of the trucks with tarpaulin being brought on record, the contention that the trucks were not covered with tarpaulin is difficult to sustain, more so, since it is a conclusion that the insurer is required to confirm from the attending surveyor. No document to support this from the attending surveyor has been brought on record by the opposite party.

13.   The assertion by the opposite party that the complainant did not cooperate with the surveyor is also not supported by any evidence. On the contrary, the complainant has brought on records details of the dates on which queries raised were responded to in order to facilitate the surveyor’s work.

14.   The contention of the opposite party that the repudiation of the claim was justified under the ‘Exclusion Clause’ has also been considered. This clause in the policy reads as under:

        Exclusions:

          2.       In no case shall this insurance cover

2.1     Loss damage or expense attributable to willful misconduct of the assured;

2.2     Ordinary leakage ordinary loss in weight or volume or ordinary wear and tear of the subject matter insured;

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 container or lift van but only when such stowage is carried out prior to attachment of this insurance or by the assured or their servants);

2.4     Loss damage or expense proximately caused by delay even though the delay be caused by a risk insured against;

2.5     Loss damage or expense caused by inherent vive or nature of the subject matter insured.

3.       In no case shall this insurance cover loss damage or expenses caused by

3.1.    War civil war revolution rebellion insurrection, or civil strife arising there from or any hostile act by or against a belligerent power;

3.2     Capture, seizure, arrest, restraint or detainment and the consequence there of any attempt there at;

3.3     Derelict mines, bombs or other derelict weapons of war.

          4.       In no case shall this insurance cover loss damage or expense

4.1     Caused by strikers, locked out workmen or persons taking part in labour disturbances, riots or civil commotions;

4.2     Resulting from strikers, lock outs, labour disturbances riots or civil commotions;

4.3     caused by any terrorist or any person action from political motive.

The letter of repudiation does not refer to any specific exclusion under this case. It is  also evident from this clause that insurance cover does not cover, loss, damage or expenses attributable to “willful misconduct of the assured,” “Ordinary leakage, or ordinary loss in weight” of the subject matter of insurance or loss damage or expenses by insufficiency or unsuitability of packing. The argument of the opposite party is that the manganese ore (insured subject matter) was not covered by tarpaulin while being transported by lorry after unloading from the railway wagon. The basis of this conclusion or that it was wilful has not been brought on record as stated above.

15.   The complainant’s claim under the policy in question regarding the consignments of manganese ore are for Rs.30,99,955/- and Rs.78,82,708/- respectively against consignment valued at Rs.1,09,82,663/-. Delay in appointment of a surveyor to supervise unloading a transhipment is admitted by the opposite party in the cases. As per the report of the surveyor it is mentioned that “reportedly the insured had requested the insurer for unloading supervision at railway siding vide their letter dated 23.08.2008”. The surveyor notes the date and place of survey was “not known’ and the insurers advised to investigate the claim on 02.12.2008. No document to support this is on record. Similarly, with regard to the other consignment, it is the surveyor’s report that, “reportedly the insured had requested the insurers for an unloading supervision at Tapasi railway siding vide their letter dated 07.05.2008”, and date and place of survey was “not known” and “insurers advised us to investigate the claim on 02.12.2008”. It is thus evident that unloading from the railway wagon and trans-shipment to lorries was not done in the presence of a surveyor, and insurer’s oversight was lacking due to non-availability of attendant surveyors. Therefore, the reason for concluding that it was transported by open lorries is unsubstantiated and cannot be justified to be the cause of loss. The opposite party has relied upon the surveyor’s report in reaching its conclusion. While the appointment of a surveyor under section 64 UM is mandated under the Insurance Act, 1938, the Hon’ble Supreme Court in New India Assurance Co. Ltd. Vs. Pradeep Kumar (2009) 7 SCC 787 held that

“…the assessment of loss by the approved surveyor is a prerequisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but surveyor’s report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor’s report may be the basis or foundation for settlement of a claim by the insurer of the loss suffered by the insured but surely such report is neither binding upon the insurer not insured.”

 (Emphasis added)

16.    It is also evident that M/s Cunningham Lindsay International Pvt., Ltd., was subsequently appointed as the surveyor. In their Final Investigation Report dated 07.09.2010 it has been stated as under:

Cause, after examination, attributed to:

We have examined the process of transit execution from the point of dispatch till the delivery and it was understood that the consignment had been under supervision of the insured’s staff/ representatives, as detailed below:

• After loading at the Banspani Railway siding the consignment had been under the supervision of a private security agency M/s Security and Intelligence Services (India) Ltd., and they did not report any mis-happening during the rail transit.
• At the time of unloading of consignment from rake and loading to the lorries insured’s staff and security guards along with the F&H agent were present at the railway siding and no pilferage was reported.
• The loaded consignment was loaded in lorries and dispatched from the railway siding. These were also accompanied by one of the insured’s staff/ security guard for weighment at the nearest weigh bridge then the lorries were again weighed after reaching the factory. Physically consignment reached in the condition as it was dispatched. No abnormality was noticed.

After the final weighment insured had reported a shortage in the consignment which in view of above is unexplainable shortage.”

[ Emphasis added ]

17.   While it is apparent that the opposite party’s representatives failed to be available at the time of transfer of goods from railway wagons to the lorries, the shortage is ascribed to the complainant under whose supervision the goods were. The letter of repudiation dated 23.03.2011 does not set out any reasons for the same. This letter states under:

“You failed to establish the loss before M/s Cunningham Lindsey International Pvt. Ltd., investigator, deputed by our Regional Office, the competent authority.

Therefore, under circumstances, your claim is not admissible and hence, not payable.”

The reasons for the delay of more than six months to finalise the report or the claim has also not been explained or justified by the opposite party. While the repudiation by the opposite party is based upon the surveyor’s report, the lack of any explanation or justification for the delay clearly points to deficiency in service and unfair trade practice.

18.   It is evident that the conclusion for repudiation is based on the surveyor’s findings that the consignment was carried in rail and road and thereafter in wagons/ lorries without cover with tarpaulin ‘To the best of our knowledge’. There is no categorical finding in this regard by the surveyor. This is further evident from the report where the surveyor qualifies his finding stating that ‘Insurer may confirm from the attending surveyor’. As shown from the record the attending surveyor did not present himself at the time of unloading from the railway wagon or loading into the lorries.

19.   From the above, it is manifest that the claim for loss due to shortage of the insured goods covered by the complainant under a valid Marine Cargo Transit Policy is based upon the terms and conditions of the policy. The opposite party erred in not deputing a surveyor to be present at the time of unloading of the cargo insured on two occasions and in failing to provide a clear report as to whether there was a breach of warranty due to transportation on transhipment of the manganese order in tarpaulin covered lorries or any short fall during weighment of the shipment. The conclusion of the opposite party is based upon the report of its surveyor who was appointed after 28 months and has been rightly contested by the complainant. The report of the surveyor, therefore, cannot be held as sacrosanct as held by the Hon’ble Supreme Court in Pradeep Kumar (supra).

20.    In the facts and circumstances of the case, for the foregoing reasons, the complaint is found to have merit and is liable to succeed. It is accordingly allowed with the following directions;

1. Opposite party shall pay the complainant a sum of Rs.1,09,82,663/- along with interest @ 6% per annum from the date of repudiation of the claim;
2. This order shall be complied with within eight weeks failing which the rate of interest will be 9% per annum.

21.   There shall be no order as to costs. All pending IAs, if any, stand disposed of with this order.