KERALA STATE CONSUMER DISPUTES REDRESSAL
COMMISSION VAZHUTHACAUD, THIRUVANANTHAPURAM.
APPEAL NOS.166/09 & 210/2009
COMMON JUDGMENT DATED: 10-12-2010
PRESENT:
JUSTICE SHRI. K.R. UDAYABHANU :PRESIDENT
SHRI.S. CHANDRAMOHAN NAIR : MEMBER
APPEAL NOS.166/09
M/s Narendran Sons,
Kadappakkada, Kollam,
R/by Murugesh Narendran, : APPELLANT
Anvil, Kadappakkada, Kollam.
(By Adv.Sri.David Koshy)
Vs.
1. National Insurance Company Ltd.,
3 Middleton Street, P.B.No.229,
Kolkota-700 071.
2. National Insurance Company,
Hospital Road, Kollam.
: RESPONDENTS
(R1 & 2 by Adv:Sri.C.S.Rajmohan)
3. G.Link, Express Cargo Pvt. Ltd.,
21, Chiranjivi Tower,
43, Nehru Place, New Delhi-10 019.
(R3 by Adv:Sri.K.P.Vijayan)
APPEAL NOS. 210/2009
1. The Chairman & Managing Director,
M/s National Insurance Company Ltd.,
3 Middleton Street, P.B.No.229,
Kolkota-700 071. : APPELLANTS
2. M/s National Insurance Company,
Hospital Road, Kollam.
(By Adv:Sri.Prasannakumaran Nair)
Vs.
1. M/s Narendran Sons,
Kadappakkada, Kollam,
R/by Murugesh Narendran,
: RESPONDENTS
2. G.Link, Express Cargo Pvt. Ltd.,
21, Chiranjivi Tower,
43, Nehru Place, New Delhi-10 019.
(R3 by Adv:Sri.K.P.Vijayan)
COMMON JUDGMENT
JUSTICE SHRI. K.R. UDAYABHANU : PRESIDENT
The appellants in A.166/09 are the complainants in OP.267/05 in the file of CDRF, Kollam and the appellants in A.210/09 are the opposite parties 1 and 2/insurance company. The opposite parties 1 and 2 are under orders to pay to the complainant a sum of Rs.6,02,775/- with interest at the rate of 12% per annum from 1/6/2005 and also to pay Rs.50,000/- as compensation and Rs.10,000/- as cost.
2. It is the case of the complainants that in response to a purchase order from Teknor-Apex USA with respect to 800 numbers of Hercules mats at the rate of US$ 13.5 and 1300 members of ramp mats at the rate of US$ 9 for a total value of US$ 22,420/- the mats were despatched in 2 containers on 27/5/2004 from the complainant’s factory at Kollam to be forwarded by ship from Kochi. The agent of the buyer, Mr.Mohindar Satpal (PW5) stationed at New Delhi had visited the complainant’s factory and verified the export quality of the rubber mats on 19th and 20th of May 2004 and approved. The complainants availed 2 Marine Insurance Polices for the two containers on 26/5/2004. Before stuffing of the goods in the containers, the containers were subjected to physical verification by the customs officials and opposite parties 1 and 2 and thereafter light test were conducted to find out the possibility of leakage and rusting of the containers. Only the floorings of the containers could not be subjected to light test as the containers were placed on the platform of the trucks. The loading and stuffing were done after careful scrutiny and physical verification as to the possibility of water damage wetness and moisturisation within the containers and the same was totally ruled out. The wooden pallets used as packing materials were manufactured with treated wood. It was in the presence of the customs officials and opposite parties 1 and 2 that the consignment was stuffed and despatched. The containers were sealed by the customs officials. There was meteorological forecast with the weather condition would be rainy and very cloudy due to early Monsoon. The bill of lading is dated:28/5/2004. The consignment was made on FOB basis ie freight is to be paid by the buyer at the destination. The port of discharge was New York and the containers were to be transported by rail or road from New York to Pawtucket wherein the buyers’ warehouse was situated. The complainant is unaware of the weather conditions during voyage to United States and transportation from New York to Pawtucket. The complainant received communication from 20/7/2004 from Mr.Peter Larkin the buyer’s representative along with photographs informing that the Hercules mats received were found infested with moid and mildew and there was sludge on the container floor and pallets were socked. The complainants received similar mail on 21/7/2004 with respect to the 1300 numbers of ramp mats also. The buyer expressed inability to keep the goods in the warehouse of the buyer in the light of the anticipated practical problems that might come across in the course of survey by the insurance company and the probability of contamination of other goods stored in the warehouse etc. Immediately the complainant activated M/s EWIG International Marine Corporation, New Jersy, who are the surveyors and settling agents of the insurers in USA for conducting a spot survey. The complainants also suggested the buyer to jet wash and dry the mats which was not acceptable to the buyer. M/s EWIG International on behalf of the insurer and M/s Sealink International Inc. CA, being a representative of the 3rd opposite party was alerted for joint survey of the containers and consignments. On 23/7/2004 inspection was done by M/s EWIG International and a preliminary report was made. Inspite of direction, joint survey was not done. It is also understood that the containers were not available for survey. Later on 6/8/2004 M/s EWIG International unilaterally and arbitrarily issued a biased final report mentioning that the consignment were contaminated and sweat occurred and that the pallets were green in colour and that it was due to moid. In fact the greenish colour was on account of chemical treatment of the pallets. The complainant requested M/s EWIG International to do silver nitrate test. It is alleged by M/s EWIG International that the presence of chloride has been ruled out as per the test. The surveyor did not examine whether the containers were damaged and whether the entry of rain water had been the reason for the negative result of the silver nitrate test. The surveyors had illegally denied the possibility of the containers being damaged through external factors. M/s EWIG International arbitrarily held that the loss on damage did not fall under the purview of the policy and recommended the claim to be repudiated. The complainant under protest effected payment of US$ 22,420 to the buyer. The survey report is faulty as the surveyors had not ascertained the status of the containers or history of the containers from any source to trace the condition of the containers. They had also not ascertained the history of damages, repairs or age factors of the containers. The surveyors did not consider the fact that the goods in the consignment were water proofed and that the same would not emit or absorb moisture or that the pallets used were dry at the time of loading. They did not ascertain whether there was any tampering of the seals of the containers as in case of tampering rain water would have entered during transit. The surveyors did not ascertain the possibility of seeping of water in to the containers while the containers were kept on the ground at the port and the container yard. The surveyors also have not ascertained whether the handling of the containers in the yard, port and in the vessel caused any denting or puncture and whether the same resulted in entry of rain water. The surveyors also failed to do light test at the time of survey to rule out the subsequent entry of water in the containers. It is contended that the survey was not scientific and that it was partial and biased. The complainant has claimed a compensation of Rs.14,13,900/- which is equivalent to US$ 31,420 that included freight, customs duty etc. A suit notice was issued on 11/11/2004 claiming the above amounts and compensation. The 3rd opposite party being a shipping agent had organized the supply of containers. They ought to have adopted all safety measures while supplying the containers for export. The policies were issued based on the satisfaction of the goods in the consignment, packing etc. Photographs were taken before stuffing and loading and after stuffing and loading and sealing of the containers. On receipt of suit notice, the insurers sent a reply dated:30/11/2004 suggesting a settlement mentioning that the complainant is an esteemed customer. Prompted by this promise complainant forwarded the documents sought for. Later the complainant received a letter dated:5/5/2005 after a lapse of 6 months demanding the surrendering of the goods in the consignment for selling the cargo at available price to reduce the loss. Subsequently vide letter dated:1/6/2005, the opposite parties repudiated the claim. At the same time in the above letter the insurer had admitted that the buyer had handed over the remaining mats to the surveyors and the surveyors had received a salvage offer of US$ 15 for Hercules mats and US$ 12 for ramp mats and that the sales were concluded for a gross return of US$ 13,500 and that the salvage commission at 5% worked out to US$ 675 and that the net salvage return amounted to US$ 12,825, which is equivalent to Rs.6,02,775/-. If that be so, the insurers ought to have been returned the same to the complainant. The complainant had sent a letter dated:23/6/2005 (sic.20/6/2005) in reply to the letter dated:1/6/2005. The complainant has claimed a sum of Rs.18,70,902/- together with interest up to 18% per annum on Rs.14,13,900/- and compensation of Rs.2.lakhs and cost of Rs.2000/-.
3. The opposite parties 1 and 2/insurers have filed version pointing out that the policies were issued with the risk of Institute Cargo Clause (A). The consignments were insured for US$ 11,792 and 12,870 each (Indian Rupees 5,18,848/- and 5,66,380/-). It is admitted that both the containers were thoroughly checked and inspected by the complainant to rule out any damage to the containers and also conducted light test. The cargos were loaded into the containers after full satisfaction about the quality and condition of the containers. It is denied that the flooring of the containers was not subjected to light test. It is contented that the containers were properly sealed. It is denied that the opposite parties 1 and 2 verified the packing materials and the goods. It is stated that the Overseas settling agent of the opposite parties, M/s EWIG International had arranged survey of the consignment at the consignee’s storage place, and the Marine Surveyor Mr.Ed.Romans had visited the Teknor Apex warehouse at Pawtucket in the presence of Mr.Peter Larkin, the representative of the consignee. A detailed examination was conducted on 23/7/2004 and it was found that almost all the original packing were green in colour apparently from mold and the wooden pallets were having thick white mold in various areas of the wood used for packing. All the nails used were rusty and corroded. The samples of rubber mats were subjected to silver nitrate test have ruled out the presence of chlorides (salt) due to sea water entry. It was found that the damages were caused as a result of condensation within the shipping containers and not due to any external source. It was also observed that the cargos were wet when loaded into the containers and that the subsequent fluctuations in temperate during voyage caused moisture to condence on the internal surface of the containers and to drip down on the cargo. The above wet environment gave rise to the mold growth observed in the packing materials and the rubber mats. The survey clearly rules out the possibility of damages from external source such entry of water into the containers. It was also noted that it is unlikely that such things would have occurred in the two containers simultaneously. The consignee did not make any complaint about any damage to the containers. The consignee had no difference of opinion about the finding of the surveyor. The surveyors also opined that damages resulting from condensation is not a risk covered and hence M/s EWIG International, the claim settling agents repudiated the claim. It is alleged that the packing of cargos were unsuitable for transit. It is denied that M/s EWIG International declined the request for a joint survey. No such request was made by the complainant. No representative from M/s Sea Link were made available. The surveyors informed the consignee that the consignments can either be cleaned or if that proved to be cost prohibitive, they could be sold on the secondary salvage market in order to reduce the net loss. The claim settling agents had later visited the warehouse of the consignee on 30/3/2005. At the time it was found that the majority of the rubber mats except 300 pieces of Hercules mats and 750 pieces of competitor mats have been sold by the consignee on the basis of the agreement between the consignee and the complainant. The surveyors requested the consignee to hold the remaining mats with them in order to conduct salvage sale. The surveyors contacted local salvage buyers and obtained tentative offers. A prospective buyer Mr.Mike Mentuck affered $ 15 per piece of Hercules mats and $ 12 per piece for competitor mats after commission and cleaning expenses etc for the mats on “as is where is” condition. But the consignee refused to hand over the salvage mats to the surveyors. The opposite party on 5/5/2005 sent a letter to the complainant requesting them to hand over the rubber mats in the custody of the consignee to the claim settling agents of the opposite parties for conducting salvage sale. The allegation that the complainants have paid a sum of US$ 22,420 to the consignee under protest is false. The complainants vide their letter dated:28/5/2005 have informed the insurers that the consignee had already sold the mats except a few. The consignee did not furnish any details about the sale conducted. The consignee vide their letter dated:22/5/2005 have informed the claim settling agents that they have sold the entire rubber mats with them. The complainant is silent about the salvage proceeds received by the consignee. The details of offer received by M/s EWIG International which was informed to the consignee. If sold by the claim settling agents it would have realize better value. The consignee did not co-operate with the claim settling agents in this regard. Even if the consignee had sold the salvage immediately they could have received much higher amounts than US$ 26,220. The insurers cannot be made liable for the lapse on the part of the consignee. The fact that the consignee sold the salvage in an arbitrary manner is a doubtful circumstance. After repudiation made by M/s EWIG International subsequently on request from the complainant the possibility of reopening the case was considered. As advised by the opposite parties M/s EWIG International was asked to explore the possibility of selling the salvage. The offer they received worked out to more than the insured value. The opposite parties further repudiated the claim as the net realizable salvage value as per the offer received by M/s EWIG, far exceed the value insured. M/s EWIG has not conducted the sale of even a single piece of mat and have not received any amount by way of salvage sale. It is evident from the letter dated:25/5/2005 issued by the complainant that the buyer had already sold a substantial quantity of the rubber mats except a few rubber mats remaining unsold. Further the consignee did not hand over any mats remaining unsold to M/s EWIG for conducting salvage sale. The consignee has not alleged any complaint against the carriers for any imperfection in the transportation of goods. The allegation that M/s EWIG had already sold a portion of the salvaged mats left over by the consignee and had received a net return of US$ 12,825 is absolutely false. Since the complainant informed by legal notice that they have refunded the full payment under both consignments to the consignee the opposite parties reasonably assumed that the consignee would have handed over the remaining mats with the claim settling agents and they have completed the salvage sale as per the offer received by them. It was under this assumption that it was informed vide letter dated:1/6/2005 that M/s EWIG could have received a net salvage return. The complainant is now trying to take advantage of the inadvertent bonafide mistake committed by the 1st opposite party in letter dated: 1/6/2005. It is quite known to the complainant that the entire consignments were sold by the consignee. There is no evidence to show that the consignee had entrusted a portion of the consignment to M/s EWIG for making salvage sale. The complainant has not produced any document in this regard. It is contended that the entire claim is liable to be rejected.
4. The 3rd opposite party the shipping agent has also filed version totally disputing their liability. It is pointed out that they have nothing to do with the stuffing of the cargos. It is pointed out that containers were entrusted in carriage after already loaded and sealed. There is no cause of action against the 3rd opposite party. It is on the request of the complainants that the 220 FCC containers were provided to the complainants. The complainant was satisfied that the containers were in good condition. They have totally denied any liability on their behalf.
5. The evidence adduced consisted of the testimony of PWs 1 to 5, DW1, Exts.P1 to P15 D1 to D18 and X1 to X5.
6. The Forum has held that the repudiation of claim on the basis of the survey report cannot be said to be proper or valid. It was also observed that Ext.D14 dated 2 years after Ext.P10, the repudiation letter dated:1/6/2005 cannot be safely relied on and the allegation that it is a forged one cannot be ruled out. Ext.D14 is the letter from Teknor Apex that they never handed over the mats to M/s EWIG as the offer from M/s EWIG was ridiculously low. It was also held that Ext.P10 the letter dated:1/62005 signed by the Regional Manager of the opposite parties stands not properly explained for the non examination of Mr.Ramabhadran, the Regional Manager who issued the same. It was held that the above letter did not contain any mistaken averments and that M/s EWIG International have received a sum of Rs.6,02,775/- from the sale of salvage. It was also held that the consignee conducted sale of salvage and received a sum of US$ 23,100/- vide Ext.P9 the letter of the complainant dated:28/5/2005 and that as per Ext.P10 dated:1/6/2005 from the opposite parties M/s EWIG has collected from salvage sale a sum of US$ 12,825 equivalent of Rs.6,02,775/-. It was observed that the mention in Ext.P9 letter of the complainant that more than 20,000 US$ were expended towards the expenses for salvage sale that included freight etc appeared excessive. It was noted that the expenses would not exceed US$ 12,000 and the balance would be around US$ 11,000. It was noted that the complainant has not produced any evidence to show that the entire expenses incurred by M/s Teknor Apex was paid by the complainant. It was inferred that the expenses incurred as shown in Ext.P9 was in fact far below. It was noted that the amounts covered by the salvage sales referred to in Exts.P9 and P10 if taken together it would indicate that the contention of the opposite parties that the complainant received by way of salvage more than the sum insured is correct. All the same it was ordered that the amount retained by the opposite parties evidenced by Ext.P10 letter dated:1/6/2005 is liable to be returned to the complainant. Hence the complaint was allowed in part directing the opposite parties to pay to the complainant the above sum of Rs.6,02,775/- with interest at 12% per annum from 1/6/2005 till payment and also to pay Rs.50,000/- as compensation and Rs.10,000/- as costs.
7. As evident from the pleadings the case of the complainant is that rubber mats sold for a sum of US$ 22,420 was despatched in 2 containers on 27/5/2004 from the warehouse of the complainant at Kollam and the same was transported to Cochin by road and there after by ship to New York and there from to warehouse of the buyer at Pawtucket by road. It is on 20/7/2004 and 21/7/2004 ie after about 2 months of despatch that the complainant received communications that the rubber mats have infested with moid and mildew and that there was sludge on the container floor. The consignments were covered by the voyage policies with the opposite parties 1 and 2. The coverage amount for both together being Rs.10,85,228/-. On receipt of communication from the consignee , M/s EWIG International, the surveyors and claim settling agents of the opposite parties were alerted and spot survey was done on 23/7/2004 evidenced by Ext.B2 preliminary survey report and Ext.D3 final survey report dated:6/8/2004. It is on the basis of the final survey report that the claim was repudiated. The case of the complainant as noted above is that the survey reports are totally erroneous and incomplete and hence the liability cannot be repudiated on the basis of the survey reports. The coverage extends from the complainants factory at Kollam to the destination.
8. Ext.D2 is the preliminary report as per which the survey was done in the presence of the representative of the consignee. It is mentioned in Ext.D2 that the original packing was in green colour apparently from mold. There was thick white mold in various areas on the wood. The nails were found very rusty and corroded and several mats were wet. It is mentioned that samples were taken for silver nitrate testing. It is further mentioned that due to heavy mold on all pallets, that the slate crates were wet before loading and during transit and heavy condensation (swet) occurred. Ext.D3 final survey report dated:6/8/2004 is the report based on Ext.D2 preliminary survey report wherein the surveyor was a different person. In Ext.D3 water damage is the nature of loss mentioned. It is mentioned that water damage and mold growth were evident on the packing materials and the rubber mats. It is also mentioned that from the photos provided by the consignee, the floor of the container appeared wet and the news prints used as packing materials appeared saturated and adhered to the container floor. It is also noted that the original packing was in green colour apparently due to mold. The observations as to thick white mold on the wood and that the nails were rusty and the mats and sheeting were wet are also mentioned and the samples were taken. As to the result of silver nitrate test it is mentioned that the field testing of packing materials with the solution of silver nitrate did not indicate the presence of chlorides (salt). The conclusion is that the damages were on account of condensation within the shipping containers. It is noted that it is likely that the cargo was wet when loaded into the 20 feet containers, and subsequent fluctuations in temperature caused moisture to condense on the internal surface of the containers and to drip down on the cargo. The wet environment gave rise to mold growth. It is also mentioned that it is unlikely that the damages was from an external source such as entry of water into the container which would not have occurred in two separate containers simultaneously. It was suggested to the consignee either to clean the mats or if that proved to be cost prohibitive, the same may be sold on salvage market to reduce the net loss of the party. In Ext.D17, the addendum to survey dated:24/5/2005 ie after 10 months , it is clarified that the green colour was on account of the fact that the wood was treated with a preservative that was green in colour. It is further mentioned that the term green was used to reflect the position that the wood had not been kiln dried and moisture laden.
9. We find that the above clarification in Ext.D17 additional report amounts really to taking ‘U’ turn. As in Ext.D2 and D3 survey reports green is mentioned as colour and not with respect to the nature of the wood used. It is the case of the complainant that the 14 pallets out of which each of the boxes were made was of treated wood so as to eliminate water content and treated with copper sulphate to prevent fungus growth. The allegation of the complainant that the survey report is not a complete one appears true in view of the fact that the surveyors did not inspect the containers. Only the wood pallets and the rubber mats covered in polythene sheets were inspected by the surveyors. Without inspecting the containers, the survey reports cannot be said to be complete. As contended by the complainant the possibility of rain water etc entering the containers during the transportation by road or at the port or during handling of the containers or during voyage or at the time of carrying the containers at the port of destination etc cannot be ruled out without examining the containers. It is the case of the complainant which has not been disputed and in fact supported by Ext.P5 letter of the opposite parties dated:30/11/2004 that it was heavily raining in Kerala at the time of despatch. The contention of the complainant that it is possible that the seals of the containers were damaged or certain portions of the containers would have dented during handling or voyage and water would have entered the containers. The surveyors had relied on the photographs supplied by the consignee to observe that the news papers kept on the floor of the containers are drenched. The observation of the surveyors that the consignment was wet at the time of loading into the containers is incorrect in view of the fact that the containers were admittedly inspected by the Central Excise Authorities and Export Inspection Agency as evident from Ext.X1 to X5 documents. Further PW4, the Superintendent of Central Excise who inspected the containers before loading has testified that the consignment appeared perfect. There is no question of any water inside the containers as PW4, the Superintendent of Central Excise has specifically inspected the empty containers although in order to ascertain that the containers did not contain any other goods other than the goods to be loaded therein. PW4 has also witnessed the stuffing of the rubber mats into the wooden pallets. Further as pointed out by the counsel for the complainant, the detailed result of the silver nitrate test is not appended to the survey report. Of course the contention that the complainant sought for a joint survey is not supported by any documentary evidence. Further the complainant vide Ext.P6 letter dated:8/12/2004 has written to the opposite parties that the buyer has reported that there was sludge inside the container. The same has not been specifically denied.
10. Further the correspondence would indicate that subsequent to Ext.D3 final survey report the opposite parties/insurance company have not taken any effective steps through their claim settling agents, M/s EWIG International to see that the salvage is protected and sold so, that the loss can be reduced. The complainant is located in Kerala and would be rather helpless compared to the opposite parties which have got surveyors and settling agents in United States to take effective steps in this regard. The complainant had sent Ext.P4 suit notice dated:11/11/2004 ie after 3 months from the receipt of information as to the damaged consignment. Ext.P5 is reply of the Regional Manager of the Insurance dated:30/11/2004 mentioning that the matter can be further considered and has requested the complainant to provide photographs of the container at the time of loading and also to provide evidence to confirm that the packing was suitable and sufficient and that it will not allow any entry of water even in heavy Monsoon and that the rubber mats and the container were dry at the time of packing. It is admitted therein that at the time it was raining heavily. It has to be noted that it is the case of the complainant that loading was done in a roofed area and that there is no possibility of water entering the containers at the time of loading. The above has not been disputed. In reply the complainant has sent Ext.P6 letter dated:8/12/2004 detailing the defects in the survey report and also contending that there is no occasion for entry of water into the containers at the yard of the complainants. Ext.D8 dated:13/9/2004 is the letter from M/s EWIG to the consignee repudiating the claim invoking ICC (A) clause of the policy. Ext.P7 dated:14/12/2004 is the letter of the complainant mentioning that light test was conducted in the containers before loading in order to ascertain that there is no possibility of water entering the containers. The above is supported by the evidence of PW4 also. It is the case of the complainants that except on the floor of the containers the rest of the portions were subjected to light test. Ext.P8 dated:5/5/2005 is a letter to the opposite parties informing that in view of the long standing business relationship they are trying to explore the possibilities of making an ex-gratia payment to cover part of the loss without admission of liability. It is mentioned that there are only 750 pieces of competitor mats and 300 pieces of Hercules mats available out of 1300 and 800 respectively and that the balance have been sold at a discount by the consignee. It is also mentioned that the consignees are not willing to hand over the mats to M/s EWIG unless guarantee for payment of US$ 9000 with respect to the expenses incurred by them is given. The complainant has been asked by the opposite parties to direct the consignee to hand over the remaining mats. It is pertinent to note that Ext.P8 is dated after 9 months of the survey. As is pointed out it would be virtually impossible for the consignee to keep the goods in their warehouse so long. Why it took so much time for the insurers to seek re-conveyance of the damaged mats stands not explained. Ext.P9/Ext.D11 dated:28/5/2005 is the reply sent by the complainant pointing out to the above fact. It is further mentioned therein that the consignee has already sold the rubber mats except a few and that a sum of US$ 23100 was the amount received by sale. It is also mentioned that US$ 20,993.01 is mentioned is the total expenses incurred by the consignee and the balance would be less than 300 dollars. Vide Ext.P9, the complainant replied that they are not in a position to advice to hand over the remaining mats to M/s EWIG.
11. Ext.P10 dated:1/6/2005 is the letter from the opposite parties/insurers which is about 10 months after the survey wherein it is mentioned allegedly by mistake that consequent to Ext.P8 letter dated:5/5/2005 seeking to hand over the remaining mats for salvage sale, buyers have handed over the same to M/s EWIG and M/s EWIG have concluded the sale and received US$ 13,500 and after deducting the salvage commission of 5% the net salvage return is US$ 12825. It is also mentioned that the proceeds would have been higher, had the buyer properly organized the salvage sale. It is the case in the version of opposite parties 1 and 2 vide paragraph 16 that the above mention as to the receipt of US$ 12825 was made on the assumption that the consignee would have handed over the remaining mats with the claim settling agent of the opposite party and that they have completed the salvage sale as per the offer received by them from salvage buyers. It is also mentioned that the above was an inadvertent mistake. The Forum has rejected the above contention also on the ground that the signatory of Ext.P10 ie the Regional Manager was not examined. Really such a statement in Ext.P10 in such clear terms should have been explained properly. All the same we disagree with the finding of the Forum in this regard as the complainant vide Ext.P9/Ext.D11 has rejected the request to direct the consignee to hand over the remaining mats to M/s EWIG and also replied that except a few the rest have been sold by the time and the amount received by the buyer on the salvage sale is also mentioned in Ext.P9. Such an admission in Ext.P10 as to the receipt of US$ 12825 in salvage sale by M/s EWIG should not have occurred. It is an indication as to how carelessly and in a casual manner the matters are dealt with in the office of the opposite parties. It is also interesting to note that immediately after receipt of Ext.P10 the complainant issued Ext.P11 letter dated:20/6/2005 demanding the return of US$ 12825 admittedly with the claim settling agents of the insurers vide Ext.P10. There was no reply to Ext.P11. It is the contention that they have not received Ext.P11.
12. The insurers have relied on Ext.P9 letter dated:31/3/2005 from M/s EWIG to the consignee requesting to retain the remaining mats ie 300 pieces of Hercules mats and 750 pieces of competitive/ramp mats. The letter is dated about 8 months after the survey that Ext.D9 is sent. The complaint was filed before the Forum on 16/7/2005. Ext.D12 dated:4/7/2007 is from M/s EWIG to the consignee mentioning that the insurers have reopened the claim filed for further consideration and seeking the details of the sale of salvage. It may be noted that Ext.D12 is dated after 2 years of the survey. Ext.D13 and D14 strongly relied on by the opposite parties are dated subsequent subsequent to the filing of the complaint. Ext.D14 dated:5/8/2007 is the letter allegedly sent by the consignee to M/s EWIG admitting that they have sold the entire mats in the open market as the offer from M/s EWIG was ridiculously low. Really Ext.D14 was not properly proved. It was contended by the complainant that Ext.D14 is fabricated. The Forum has upheld the above contention. We find that such documents dated much subsequent to filing of the complaint cannot be given any evidentiary value. Ext.D17 the addendum survey report is dated:24/5/2005 ie, dated after about 10 months of the final survey. Except for the clarification regarding the green colour of the pallets Ext.D17 is only a repetition of the case of the opposite parties. It is mentioned that if the goods were sold as per the offer received by the claim settling agents they would have received a potential return of 130.7% of the invoice value after deducting approximately 28.2% of the invoice value of goods towards expenses, free charges etc. The freight charges as evident from Ext.D4 the freight notes is US$ 6571.
13. It is pertinent to note that without examining the container the source of entry of water stands not established. As already noted above at the time of packing, placing inside the container and sealing there is no possibility of the consignment being wet damaged. Further the Survey reports have not been proved properly. The steps taken to hold video conference was not followed up by the opposite parties. Hence we find that the survey reports are not complete and proper and hence the opposite parties are liable to honour the claim to the extent permissible. It has also to be noted that vide Ext.P8 letter dated:5/5/2005 issued after 6 months of the receipt of suit notice the opposite parties have stated that they are considering ex-gratia payment to cover loss which would indicate that the opposite parties were not certain of the propriety and correctness of the survey report and the steps taken by the claim settling agents.
14. The assured being the complainant, the contention that the complainant has no insurable interest is without merits.
15. As the containers were not examined and in the absence of proof as to the defects of the containers at the time of supply the claim against the 3rd opposite party cannot be sustained.
16. So far as the quantum of compensation is concerned it has to be noted that the complainant has not produced any objective evidence as to the alleged payment of US$ 22,420 to the consignee. The complainant has also not produced any direct evidence as to the amounts received from the consignee or the amount settled with the consignee. As per Ext.P9 letter, the complainant has mentioned that the amount received by the consignee on the sale of salvage amounted to less than US$ 3000 ie the excess after deducting freight and expenses. Feight charges as per Ext.D9 is US$ 6571. Transportation from the Port to the consignee’s warehouse, the expenses for cleaning, the amounts required as auction commission, the expenses towards keeping the goods in the warehouse, all will be claimed by the consignee. Hence the statement in Ext.P9 letter of the complainant that a sum of US $ 23100 was received from the sales and US$ 20,993.01 was the expenses incurred by the consignee cannot be brushed aside although it can be stated that the amount claimed as expenses by the consignee is excessive. But the complainant may not have any control on the above claims made by the consignee. US$ 2016.99 ie, the difference after expenses would work out to less than Rs.1.lakh. It has to be noted that there is deficiency of service on the part of the claim settling agents of the opposite parties as they did not take effective steps to protect and sell the salvage as already mentioned above. The direction to keep in hold the mats were issued after a lot of delay. The survey report is incomplete. Taking into consideration all these aspects we find that opposite parties 1 and 2 are liable to pay 70% of the assured sum which would work out to Rs.7,59,660. The complainant will also be entitled for interest at 7.5% per annum from 16/7/2005 the date of complaint. Complainant will also be entitled for cost of Rs.7500/-. The amounts are to be paid within 3 months from the date of receipt of this order failing which the complainant will be entitled for interest at 12% per annum from 10-12-2010 the date of this order.
In the result Appeal-166/09 is allowed in part and Appeal-210/09 is dismissed.
Office will forward the LCR along with the copy of this order to the Forum.
JUSTICE K.R. UDAYABHANU:PRESIDENT
S. CHANDRAMOHAN NAIR: MEMBER
VL.
