Tamil Nadu

South Chennai

317/2008

M/S.Kog-KTV food Products India Ltd - Complainant(s)

Versus

M/S.National Insurance Co.Ltd. - Opp.Party(s)

M.Aravind Subramaniam

08 Oct 2015

ORDER

                  Date of complaint   : 15.07.2008

                  Date of Order          : 08.10.2015

 

DISTRICT CONSUMER DISPUTE REDRESSAL FORUM, CHENNAI(SOUTH)

2^nd Floor, Frazer Bridge Road, V.O.C.Nagar, Park Town, Chennai-3

 

PRESENT:   THIRU.B. RAMALINGAM, M.A.M.L.,                       : PRESIDENT

                   TMT. K.AMALA, M.A.L.L.B.,                                    : MEMBER I

                    DR. T.PAUL RAJASEKARAN, M.A PGDHRDI, AIII,BCS:  MEMBER II

 

C.C.NO. 317/ 2008

THURSDAY THIS  8^TH     DAY OF OCTOBER   2015

M/s. KOG-KTV Food Products India Pvt. Ltd.,

Rep. by its  Manager,

Mr.S.Durai Babu,

No.48/310 Thambu Chetty Street,

Chennai 600 001.                                                  ..Complainant

                                                      .. Vs ..

M/s. National Insurance Co. Ltd.,

Rep. by its Senior Divisional Manager,(Retd.)

II Floor, S-7, Mamanji Centre,

Thiru-Vi-ka Industrial Estate,

Guindy, Chennai 600 032. .                                  .. Opposite party.

 

For the complainant                      :  M/s. M. Aravind & other   

For Opposite party                        :  M/s. M.B. Raghavan & another   

 

                 Complaint filed under section 12 of the Consumer Protection Act, 1986 for a direction to the opposite party to pay a sum of Rs.9,042/- with interest  and also to pay a sum of Rs.50,000/- as compensation for the mental agony and also to pay a sum of Rs.25,000/- towards the cost of the compliant  to the complainant.

 

     ORDER

THIRU.B. RAMALINGAM, PRESIDENT

 

 

1.The case of the complainant is briefly as follows:-

        They are engaged in the business of Importing Edible Palm Oil refining wholesale and retail of the same.   The said oil had to be transported to Chennai Port, India by ship.  The complainant thought it wise to insure the Cargo during overseas voyage and inland transit and hence approached the opposite party for the same.  The complainant and the opposite party entered into a Master Policy numbered 5016000500021 along with an Memorandum of understanding on 13.3.2006 for insurance of all kinds of vegetable oils, oil fats and oil related products in all forms from load port shore tanks anywhere in the world to various final destination, comprising of sea voyage and  or inland transit.    They purchased 2499.993 MT of Edible palm oil from M/s. Kuok Oils and Grains Pvt. Ltd on 7.4.2006.  The total of 2500 MT of oil was insured by a Marine Insurance certificate numbered 4370000001 of  open cover NO.5016000500021 issued on 4.4.2006.    The said bulk quantity was loaded on to a ship by name “Countess on 7.4.2006.

2.     The above said ship countess arrived at Chennai Port on 15.4.2006.  On 15.4.2006 750 MT of B/L 1-3 was sold to M/s. Kaleesuwari Refineries Pvt. Ltd a total of 749.980 MT was loaded only 60 trunks.  The  discharge report for the said quantity was prepared by Sea-Tech Marine Services for M/s. Kaleesuwari Refineries Pvt. Ltd.  For the remaining 1749.993 MT the product discharge report was prepared by Caleb Brett on behalf of the complainant on 19.5.2006.     The Surveyor has reported that Shore Outturn quantity is 1743.295 MT.  Only 1743.295 MT of oil was loaded on to trucks for transit.    As per the surveyor report the shortage of 6.698 MT quantity was found.   As per the condition of the policy after deducting the policy excess at the rate of 0.25%  bill of lading i.e. 6.250 MT the net shortage of oil is 0.448 MT which value at the rate of Rs.20,183/- per metric ton comes to Rs.9,042/-Therefore the complainant has made claim before the opposite party by sending claim with necessary documents.   The complainant   approached the opposite party for several time and made exchange of communications with the opposite party.  Despite of several reminders the opposite party has not settled the claim as per the policy.    As such the act of the opposite party is amount to deficiency in service.   Hence the complaint.

Written version of  opposite parties  is  as follows:-

3.     The allegation in the compliant are hereby denied except those that are specifically admitted hereunder.   The complaint is not maintainable either in law or on facts and is liable to be dismissed in limine.   The complainant has availed policy of insurance covering consignments being imported as commercial venture.   The complainant has hired the services of the opposite party for “commercial purpose” and therefore the complaint itself is not maintainable.    The decision taken by the opposite party to deny settlement of complainant’s claim for alleged  shortage is bonafide  in the absence of any proof about the cause of shortage and also valid doubts about correctness of measurements, inherent nature of the consignment, the difference in method of weighment at different places, operational reason etc.  The claim has been duly considered and repudiated for valid reasons as explained in the letters dated 23.1.2008 and 18.3.2008.   In view of the facts and circumstances involved, the complainant cannot attribute any deficiency in service on the part of the opposite party for a bonafide decision taken on the claim.    On the other hand it is the complainant who is improperly invoking the Consumer Protection Act and the complaint is not maintainable.    The policy consignments were insured under the policy subject to ICC(A) and other clauses specified by which cover was against “..risk of Loss /damages..” subject to the following Exclusions:  As per Institute Cargo Clause

        “4.2 Ordinary leakage, ordinary loss in weight or volume or ordinary wear and tear of the subject matter insured.

         4.4 loss damage or expense caused by inherent vice or nature of the subject matter insured not covered.  

The claim mentioned shortage of oil is of the leakage nature, since the said oil were transmitted / unloaded from the vessels to number of lorries by using pipe line and hose etc.   As such the leakage / loss are inevitable for which as per the above said terms and conditions of the policy the opposite party / Insurance Company is not liable to compensate to the complainant.      Hence there is no deficiency of service on the part of the opposite party and  prays to dismiss the complaint.  

4.     Complainant has filed his Proof affidavit and  Ex.A1 to Ex.A.20 were marked on the side of the complainant.    Opposite party have filed their proof affidavit and Ex.B1 to Ex.B3 were marked on the side of the opposite party.   

 

5.         The points that arise for consideration are as follows:-

1. Whether there is any deficiency in service on the part of the opposite party ?
2. To what relief the complainant is entitled to?

 

6. POINTS 1 & 2

        Perused the complaint filed by the complainant, written version filed by the  opposite party,  the  proof  affidavit filed by complainant and opposite party  and Ex.A1 to Ex.A20  filed on the side of the complainant and Ex.B1 to Ex.B3 filed on the side of the  opposite party  and considered both side arguments.

7.     On going through the both side pleadings there is no dispute in respect of the following facts that the complainant is engaged in the  business of importing Edible Palm oil refining wholesale and retail of the same.   The complainant has purchased the complaint mentioned Bulk oil from M/s. Kuok oils and Grains Pvt. Ltd, Singapore.  The opposite party  is the insurance company.  The complainant and the opposite party entered into Marine open cover policy with Memorandum of understanding for transport of 2500 MT  of said oil from Indonesia Warehouse to Tutucorin warehouse.  The  said oil was loaded to ship on 7.4.2006,  the tanker bill of lading for the said quantity filed as Ex.A5, dated 7.4.2006.  The said oil through ship “countess”  arrived on 15.4.2008 at Chennai Port.    From Chennai Port the said consignment of Palm oil were transported to different warehouse through lorries the same was measured  by the steamer surveyor  and the complainant surveyor.  The surveyor report filed as Ex.A7 & Ex.A8    As per the surveyor report the shortage of 6.698 MT quantity was found.   As per the condition of the policy after deducting the  excess at the rate of 0.25%  bill of lading i.e. 6.250 MT the net shortage of oil is 0.448 MT which values at the rate of Rs.20,183/ per metric ton comes to Rs.9,042/-.   As per the Memorandum of understanding and the terms of the policy the opposite party / insurance company is to compensate to the complainant, for which the complainant has made claim before the opposite party by sending claim Ex.A11,  dated 10.7.2006 with necessary documents.  According to the complainant the complainant approached the opposite party for several time and made exchange of communications with the opposite party.   Despite of several reminders the opposite party has not settled the claim as per the policy which amount to deficiency of service which caused mental agony and hardship to the complainant .   As such the complainant has filed this complaint claiming the reimbursement of amount mentioned in the complaint a sum of Rs.9,042/- with interest at the rate of 9% p.a. with compensation of Rs.75,000/- and litigation  charges.

8.     Whereas the opposite party has resisted the complaint by stating that the complaint mentioned claim is made by the complainant on the basis of terms and conditions found in the Memorandum of understanding attached with the policy.  Whereas, as per the terms and conditions of the Marine Insurance Policy, under Exclusion clause ICC (A) 4.2. “ ordinary leakage, ordinary loss in weight or volume or ordinary wear and tear of the subject matter insured,  not covered.   The claim mentioned shortage of oil is of the leakage nature, since the said oil were transmitted / unloaded from the vessels  to number of lorries by using pipe line and hose etc.  As such the leakage / loss are inevitable for which as per the above said terms and conditions of the policy the opposite party / insurance company is not liable to compensate to the complainant.  Further the reason for the alleged shortage have not been properly explained by the complainant.   Further the complainant is relying  for the  said claim on the terms and conditions found in the Memorandum of understating attached with the policy i.e. clause -15 “the  quantity lost  or shortage received for which claim may be lodged by Insured will be ascertained by calculating the difference between B/L quantity and the quantity received at the final destinations including Insured’s  and or Customers’ warehouses.  The Loss / shortages calculated as above shall include all losses associated with transit” which cannot be sustainable,  since it is contrary to the General provision of terms and conditions mentioned in the Marine Insurance Policy.  Therefore according to the opposite party though the complainant made claim on the basis of the terms and conditions in the MOU, since the said MOU is against the provision of Marine Insurance Policy, the General terms and conditions of Marine Insurance Policy alone  prevail over   Memorandum of understating.  As such the complainant is not entitled for the shortage of Cargo which has happened due to  Clinkage loss. 

9.     However on careful perusal of the insurance policy, paper thereon and MOU attached thereon the opposite party cannot deny the said MOU attached with the policy which is relied upon by the complainant as part and parcel of the policy.   Further in the said MOU the complainant as well as the Divisional Manager of the Insurance Company have signed as party which is not in dispute.   Further on going through the contents of the MOU it appears that both the parties have mutually discussed and consented at various issues.  Accordingly the memo mentioned terms and conditions were entered into with their mutual agreement.   Therefore the said Memorandum of understanding is for the purpose of in addition to was entered by the parties giving some concessions and privilege  to the complainant who is the party to the Memorandum   with some variation in addition  with existing Marine Insurance Policy which is attached with the said policy.   It is also pertinent to note that the Ex.A1  policy it is mentioned as follows:

        Special condition: POLICY IS SUBJECT TO EXCESS OF 0.25% OF SUM INSURED POLICY TERMS CLAUSES AND CONDITIONS AS PER MOU DATED 13.3.2006.

          Closing Particulars: To be declared to the company immediately upon receipt of shipping documents.

Therefore we are of the considered view that as contended by the learned counsel appearing for complainant the Memorandum of understanding attached with the policy is part and parcel of the Insuranc policy which binds the parties to the said agreement, as such as mentioned in Memorandum of understanding Clause-15, the shortage / lost of quantity of oil mentioned in the complaint while transporting of the said oil was covered under the said policy to be compensated by the opposite party is acceptable.   Contrary to this the contention raised by the learned counsel for the opposite party that the said terms and conditions found in the MOU is contrary to the General Marine Insurance Policy terms and conditions that cannot bind the opposite party, as such the complainant is not entitled for reimburse of the said loss, the said loss of quantity oil mentioned in the complaint is of Clinkage loss is not acceptable.   It is also pertinent to note and we are of the considered view that the very purpose of entering the MOU special condition i.e. entering for the said policy by the parties is in order to give some concessions  and benefits in additions and varying to the terms and conditions stipulated in the  Marine Open Insurance policy.   Therefore we are of the considered view that the claim made by the complainant for the shortage of oil as measured and found out by the surveyor report as final and acceptable by the Insurance company as per the terms and conditions found in the MOU is acceptable.   Though it may  be due to Clinkage loss, as per the above mentioned conditions incorporated in the MOU the insurance Company is liable to compensate the said loss to the complainant as it covers under the policy. 

10.    Further the complainant in the complaint has clearly calculated that by the said shortage of quantity of oil  6.698 MT and after deducting 6.250 MT as policy excess at the rate of 0.25%  on bill of lading quantity for net lost / shortage of quantity of oil is 0.448 MT for which at the rate Rs. 20,183/- per ton the value of the shortage of oil was claimed is Rs.9,042/- is appear to be very proper in accordance to the policy.   Further the opposite party has not raised any specific objection in this regard.

11.    Therefore we are of the considered view that the opposite party is liable to reimburse a sum of Rs.9,042/- towards loss or shortage of oil as per the policy to the complainant.  

12.    Though the complainant has made claim  for the said amount to the opposite party on 10.7.2006 as per Ex.A11, the opposite party has not settled the genuine claim to the complainant and has protracted the said proceedings by asking unnecessary documents such as R.C. book of the lorries through which the said oil were transported which are unwarranted as per the terms and conditions found in the MOU.   Therefore the said act of the opposite party in non settling the claim of the complainant amount to deficiency of service which caused mental agony and hardship to the complainant is also acceptable.    Therefore we are of the considered view that the opposite party is liable to pay the said sum of Rs.9,042/- with interest at the rate of 9% p.a. from the date of claim i.e. 10.7.2006 to  till the date of payment.

 

13.    Further the complainant has claimed a sum of  Rs.75,000/- as compensation which appears to be exorbitant.   But we are of the considered view  the facts and circumstances of the case that the opposite party is also liable to pay a sum of Rs.10,000/- as just and reasonable compensation  and also to pay a sum of Rs.5,000/- as litigation expenses to the complainant  and accordingly the points 1 & 2 are decided. 

In the result, the complaint is partly allowed and the  opposite party is directed to pay a sum of Rs.9,042/- (Rupees Nine thousand and forty two only) towards the loss or shortage of oil as per the policy with interest at the rate of 9% p.a. from the date of claim i.e. 10.7.2006  to till the date of payment and also  to pay a sum of Rs.10,000/- (Rupees Ten thousand only) as compensation  and also to pay a sum of  Rs.5,000/- (Rupees five thousand only) as litigation charges to the complainant within six weeks from the date  of  this order failing which the compensation amount Rs.10,000/- will  carry interest at the rate of 9% p.a. from the date of order passed till the date of payment. 

Dictated to the Assistant transcribed and typed by her corrected and pronounced by us on this  8^th    day of October   2015.

 

MEMBER-I                                        MEMBER-II                                          PRESIDENT.

Complainant’s Side documents :

Ex.A1- 13.3.2006      - Copy of Master Policy and MOU.

Ex.A2- 7.4.20-06       - Copy of Agreement for purchase of oil.

Ex.A3- 4.4.2006        - Copy of Insurance Policy.

Ex.A4- 7.4.2006        - Copy of Invoice.

Ex.A5- 7.4.2006        - Copy of Bill of lading.

Ex.A6- 7.4.2006        - Copy of certificate of Origin.

Ex.A7- 12.4.2006      - Copy of Load Port Survey.

Ex.A8- 17.4.2006      - Copy of Discharge Port Survey.

Ex.A9- 19.5.2006      - Copy of discharge port survey. 

Ex.A10- 18.4.2006     - Copy of Notice to freight service.

Ex.A11- 10.7.2006     - Copy of covering letter fro claim.

Ex.A12- 10.7.2006     - Copy of claim form.

Ex.A13- 10.7.2006     - Copy of claim bill.

Ex.A14-         -        - Copy of letters requesting opposite party to process the claim.

Ex.A15- 12.10.2007   - Copy of letter from opposite party seeking RC Book and other

                                  Details.

 

Ex.A16- 12.11.2007   - Copy of letter from complainant regarding RC book and other

                                  Details.

Ex.A17- 23.1.2007     - Copy of letter from opposite party rejecting the claim.

Ex.A18- 3.3.2008      - Copy of legal notice.

Ex.A19- 3.3.2008      - Copy of reply notice.

Ex.A20-         -       - Copy of Institute Cargo Clause-A

 

Opposite party’ side documents: -   

 

Ex.B1-                    -        - Copy of policy.

Ex.B2-                    -       - Copy of Survey Report.

Ex.B3-                    -        - Copy of discharge report submitted by complainant.

 

 

 

MEMBER-I                                        MEMBER-II                                          PRESIDENT.