BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AMRITSAR.

Consumer Complaint No. 84 of 2014

             Date of Institution:        11.2.2014

Date of Decision:           18.12.2015

S.K.B.International, 522/6-3, Majith Mandi Amritsar through one of its partners Sh. Ritesh Bajaj

Complainant

Versus

National Insurance Co.Ltd. having its branch office at 20,Batala Road, Amritsar through its Branch Manager/Person Over all Incharge

Opposite Party

Complaint under section 11 and 12 of the Consumer Protection Act, 1986

Present:    For the Complainant                  :  Sh.Neeraj Brahmi,Advocate

               For the Opposite Party      : Sh. Sandeep Khanna,Advocate

Quorum:

Sh.Bhupinder Singh, President

Ms.Kulwant Kaur Bajwa, Member

Sh. Anoop Sharma, Member

Order dictated by:

Sh.Bhupinder Singh, President.

1. Present complaint has been filed by SKB International through its partner Sh. Ritesh Bajaj under the provisions of the Consumer Protection Act alleging therein that  complainant firm obtained Open Marine Insurance Policy No. 404402/21/10/4200000220 for the period from 26.8.2010 to 25.8.2011. The  original sum insured was to the tune of Rs. 5 crores which was extended by endorsement No. 83000047 on 18.10.2010 by Rs. 5 crores and it was further extended by endorsement No. 83000071 on 1.2.2011 for Rs. 5 crores, as such the sum insured available under this policy was to the tune of Rs. 15 crores. The policy was covering all risks during sea voyage and inland transit by rail/road upto destination. The basis of claim settlement was on invoice value plus 10% etc. The complainant firm submitted that the consignor in this case was M/s. Select Harvest USA 14827W Harding Road, Turlock, CA 95380, USA and the consignee was the complainant. The consignments were being imported from USA. The insured also got the duty insurance cover from opposite party company vide policy No. 404482/21/10/48/00000221 on 26.8.2010 covering sum insured Rs. 1,30,00,000/- which was extended later on two times and as such the sum of duty insurance comes to Rs. 3,90,00,000/-. Complainant has alleged that the contract of this consignment was on FAS  basis as per invoices and letters from the consignor dated 2.9.2013 etc.  It was submitted that FAS denotes “Free alongside ship” .As such the sellers obligation is to bring the goods at the shore by the side of the ship and the seller is responsible for the goods upto the point of shore or alongside the ship to avoid any loss to consignments upto shipment point. The seller paid freight and insurance charges from Turlock CA (California) to Oakland i.e. port of loading in California USA and the seller added such charges in the invoice. After the point of shore of alongside shipment, it is the responsibility of the buyer to take care of the goods and its safe delivery till final destination i.e. the insurable interest vests in the buyer as soon as the goods/consignments reach the port/shore or alongside ship. Complainant has alleged that the policy was on FAS basis. The complainant firm arranged insurance cover in question from any port in USA to any port in India and then to Amritsar by road/rail as is evident from the insurance policy. The consignments duly packed in container and loaded in ship and reached at ICD Ludhiana for custom checking and for paying custom duty etc. At ICD Ludhiana bill of entry is prepared by Custom Authorities. The said consignment relating to the claim No. of Almond was dispatched by consignor M/s. Select Harvest USA  vide invoice No. 1521901 dated 3.8.2011 for USD 89280.32 (Rs.44,29,197/-). This consignment was of 900 bags of Almond  which was sent from Turlock to Oakland Port in USA by road/rail (inland transit in USA). On reaching port, the port authorities issued bill of loading and the goods were placed in container No. MOTU6403570 Thereafter it was loaded in ship for destination  i.e. Nhava Sheva Port (Mumbai) in India and then to ICD Ludhiana. From the time the consignment reaches port of loading it takes about 6-7 days for shipment . On receipt of shipment particulars and declaration No. 14875 dated 16.8.2011 mentioning the invoice number for 900 bags for Rs. 44,29,197/- + Rs.8,75,000/- as custom duty was submitted to Insurance company which is well within time limit. The container of this consignment reached ICD Ludhiana on 26.9.2011. The container was opened by Custom Authorities by ICD Ludhiana on 27.9.2011 and it was found that the same was emitting foul smell and on inspection it was found that the bottom layer of the bags was found wet. The custom Authority immediately closed the container  and the clearing agent informed the complainant,  who inturn informed the Insurance company about this loss and requested for survey of the damage to the consignment. Opposite party Insurance company appointed M/s. G.P.S. Mighlani of Ludhiana to survey and assess the loss. Sh. G.P.S. Mighlani visited the premises of the complainant on 8.10.2011 and surveyed the loss after segregation the damaged and sound bags. It was found that out of 900 bags, 74 bags of lower layer were wet and were emitting foul smell. The said bags were segregated and placed in open for drying. The said surveyor assessed the loss for 74 bags. The complainant lodged claim for loss with M/s. Mitsui Osk Lines Carriers and it was duly acknowledged by them. All the papers of said claim lodged with carriers and the container company, were submitted to the Insurance company. G.P.S. Miglani Surveyors Pvt.Ltd. submitted their report dated 28.1.2012 Ex.C-12 assessing the loss of 74 bags for Rs. 3,41,714/-. The complainant lodged claim with the opposite party by submitting all the relevant documents to the Insurance company, but they adopted delaying tactics  by asking for unnecessary requirements. Since the container was received at ICD Ludhiana as such technically no carrier  could be held responsible and even complainant lodged claim on transport carrier and the container company, but to no avail. Thereafter  complainant visited the opposite party , but to no avail. Even the opposite party company appointed Mr. Ashwani Gupta & Company, CA to verify the account books of complainant, who after verifying the books concluded that on the day of loss the insured was having insurance worth Rs.  15 crores and had utilized only 10,45,83,468/- leaving balance unutilized of Rs. 45,41,634/-. On checking his report obtained under RTI Act, it was found that the said CA is not conversant with the type of insurance . As the impugned insurance cover is on FAS basis and the consignee has purchased insurance from any port in USA to any port in India  and then to Amritsar by Sea/Rail/Road, whereas said CA Mr. Ashwani Gupta wrote  it as “from anywhere in USA to any port in India and then to Amritsar”. Under FAS contract, the insurance from Turlock to port shore i.e. inland transit in USA was arranged by consignor, but Sh. Ashwani Gupta concluded that consignment under loss are on FOR basis  i.e. the consignor are responsible upto Ludhiana   as the consignor purchased the insurance which was actually for inland transit in USA only . As such due to this lack of knowledge and not going through what has been stated in the invoice and what has been exact voyage mentioned in the policy, said CA submitted his report with wrong conclusion. On the wrong report given by Ashwani Gupta, opposite party vide their letter dated 11.2.2013 repudiated the claim as “No Claim”. Alleging the same to be deficiency in service complaint was filed seeking directions to the opposite party to  pay a sum of Rs. 5,08,032/- alongwith interest. Compensation of Rs. 50,000/- alongwith litigation expenses were also demanded.
2. On notice, opposite party appeared and filed written version in which it was submitted that on receipt of the intimation from the complainant, opposite party vide letter dated 5.10.2012 requested the complainant to submit the damage certificate obtained from the carriers. Opposite party vide its letters dated 13.12.2012, 26.12.2012 and  21.1.2013 also sought the explanation from the complainant as to why the consent of the surveyor was not taken for destroying the goods in question and why the opposite party was not  informed about the destroying of the goods. But the complainant miserably failed to give any explanation or clarification thereto. Opposite party vide aforesaid letters also requested the complainant to provide the exact dates of voyage,  but the complainant miserably failed to do so. It was submitted that as per report given by CA Mr. Ashwani Gupta and Company, after verification of declarations vide report dated 15.1.2013, it was observed that both the consignments purchased by the complainant itself were on FOR basis which is clear from both the invoices i.e. invoice  No. 15190 05 dated 27.7.2011 and invoice No. 15219 05.  The freight and insurance has been charged in the bills confirming that the consignments were on FOR basis. All this shows the insurance with the opposite party was on FOR basis. Moreover, the earlier similar consignments were not declared by the complainant. The consignor had already got the consignments  insured at their own end on FAS basis. As per terms and conditions of the policy the claim in question is not at all maintainable and the complainant is not entitled to the relief.  While submitting that the opposite party repudiated the claim on merits vide letter dated 11.2.2013 and while denying and controverting other allegations, dismissal of complaint was prayed.
3. Complainant tendered into evidence affidavit  of Sh. Ritesh Bajaj, partner Ex.C-1 alongwith documents Ex.C-2 to Ex.C-23.
4. Opposite party tendered into evidence affidavit of Sh.M.S.Bhatia Ex.OP1 alongwith documents Ex.OP2 to Ex.OP9.
5. We have carefully gone through the pleadings of the parties, arguments advanced by the ld.counsel for the  parties and have appreciated the evidence produced on record by both the parties with the valuable assistance of the ld.counsel for both the parties.
6. From the record i.e. pleadings of the parties and the evidence produced on record by both the parties, it is clear that complainant firm obtained Open Marine Insurance Policy No. 404402/21/10/4200000220 for the period from 26.8.2010 to 25.8.2011. The  original sum insured was to the tune of Rs. 5 crores which was extended by endorsement No. 83000047 on 18.10.2010 by Rs. 5 crores and it was further extended by endorsement No. 83000071 on 1.2.2011 for Rs. 5 crores, as such the sum insured available under this policy was to the tune of Rs. 15 crores. Complainant submitted that the policy was covering all risks during sea voyage and inland transit by rail/road upto destination. The basis of claim settlement was on invoice value plus 10% extra. The complainant firm submitted that the consignor in this case was M/s. Select Harvest USA 14827W Harding Road, Turlock, CA 95380, USA and the consignee was the complainant. The consignments were being imported from USA. The insured also got the duty insurance cover from opposite party company vide policy No. 404482/21/10/48/00000221 on 26.8.2010 covering sum assured Rs. 1,30,00,000/- which was extended later on two times and as such the sum of duty insurance comes to Rs. 3,90,00,000/-. The complainant firm submitted that the contract of this consignment was on FAS  (free alongside  ship) basis as per invoices and letters from the consignor dated 2.9.2013 etc. As such the sellers obligation is to bring the goods at the shore by the side of the ship and the seller is responsible for the goods upto the point of short or alongside the ship to avoid any loss to consignments upto shipment point. The seller paid freight and insurance charges from Turlock CA (California) to Oakland i.e. port of loading in California USA and the seller added such charges in the invoice Ex.C-10. After the point of shore or alongside shipment, it is the responsibility of the buyer to take care of the goods and its safe delivery till final destination i.e. the insurable interest vests in the buyer as soon as the goods/consignments reach the port/shore or alongside ship. The complainant submitted that the policy was on FAS basis. The complainant firm arranged insurance cover in question from any port in USA to any port in India and then to Amritsar by road/rail as is evident from the insurance policy Ex.C-3. The consignment of Almonds as per invoice Ex.C-10 duly packed in container and loaded in ship and reached at ICD Ludhiana for custom checking and for paying custom duty etc. At ICD Ludhiana bill of entry is prepared by Custom Authorities. The said consignment  of Almond was dispatched by consignor M/s. Select Harvest USA  vide invoice No. 1521901 dated 3.8.2011 Ex.C-10 for US $ 89280 (Rs.44,29,197/-). This consignment was of 900 bags of Almond  which was sent from Turlock to Oakland Port in USA by road/rail (inland transit in USA). On reaching port, the port authorities issued bill of lading and the goods were placed in container No. MOTU6403570. Thereafter it was loaded in ship for destination  i.e. Nhava Sheva Port (Mumbai) in India and then to ICD Ludhiana. From the time the consignment reaches port of loading it takes about 6-7 days for shipment . On receipt of shipment particulars and declaration No. 14875 dated 16.8.2011 mentioning the invoice number for 900 bags for Rs. 44,29,197/- + Rs.8,75,000/- as custom duty was submitted to Insurance company which is well within time limit. The container of this consignment reached ICD Ludhiana on 26.9.2011. The container was opened by Custom Authorities by ICD Ludhiana in the presence of clearing agent of complainant . On opening container, it was found that the same was emitting foul smell. On the advice of custom authorities the clearing agent of the complainant firm closed the container and immediately sent it to Amritsar destination place. The clearing agent of the complainant informed about the loss to the complainant, who inturn informed the Insurance company about this loss. The container was dispatched to the destination at the premises of the complainant at Amritsar. The opposite party was informed and the Insurance company appointed M/s. G.P.S. Miglani of Ludhiana to survey and assess the loss. Sh. G.P.S. Miglani visited the premises of the complainant on 8.10.2011 and surveyed the loss after segregation the damaged and sound bags. It was found that out of 900 bags, 74 bags of lower layer were wet and were emitting foul smell. The said bags were segregated and placed in open for drying. The said surveyor assessed the loss for 74 bags.  The complainant lodged claim for loss with M/s. Mitsui Osk Lines Carriers and it was duly acknowledged by them. All the papers of said claim lodged with carrier and the container company were submitted to the Insurance company. M/s. G.S.K. Miglani Surveyors Pvt.Ltd submitted their report dated 28.1.2012 Ex.C-12 assessing the loss of 74 bags for Rs. 3,41,714/-.  The complainant lodged claim with the opposite party and submitted all the relevant documents to the Insurance company. Technically no career could be held  responsible , so complainant lodged claim on transport career and the container company. But they did not settle the claim of the complainant. Opposite party has adopted delayed tactis. Even the opposite party company appointed Sh. Ashwani Gupta and company, CA to verify the account books of the complainant, who concluded that on the day of such loss the insured was having insurance worth Rs. 15 crores  and it utilized only Rs.10,45,83,468/- leaving behind balance unutilized Rs.45,41,634/-. The complainant got report under RTI Act and found that the said CA is not well conversant with the type of insurance, whereas the policy in question is on FAS basis thereby the complainant purchased insurance from any port in USA to any port in India and then to Amritsar by rail/road.  But Sh. Ashwani Gupta concluded that the consignment under loss was on FOR basis i.e. consignor is responsible upto port in India . The consignor purchased the insurance which was actually for inland transit in USA only and as such the surveyor/CA have not gone through what has been stated in the invoice Ex.C-10. So on this wrong report of Sh.Ashwani Gupta, CA, opposite party filed the claim of the complainant as “No claim” vide their letters dated 11.2.2013 Ex.OP8 and 18.2.2013 Ex.OP9. So the repudiation of the impugned claim is not based on facts. Ld.counsel for the complainant submitted that all this amounts to deficiency in service on the part of the opposite party qua the complainant.
7. Whereas the case of the opposite party is that on receipt of the intimation from the complainant, opposite party vide letter dated 5.10.2012 requested the complainant to submit the damage certificate obtained from the carriers. Opposite party vide its letters dated 13.12.2012, 26.12.2012 and  21.1.2013 also sought the explanation from the complainant as to why the consent of the surveyor M/s . G.S.K. Miglani Surveyors Pvt.Ltd was not taken for destroying the goods in question and why the opposite party was not  informed about the destroying of the goods. But the complainant miserably failed to give any explanation or clarification thereto. Opposite party vide aforesaid letters also requested the complainant to provide the exact dates of voyage  but the complainant miserably failed to do so. As per report given by CA Mr. Ashwani Gupta and Company, after verification of declarations vide report dated 15.1.2013, it was observed that both the consignments purchased by the complainant itself were on FOR basis. Opposite party further alleged that earlier  similar consignments were not declared by the complainant. So it is clear that consignor had already got the consignments insured at their own end on FAS basis and as per terms and conditions of the policy, the claim in question is not at all maintainable. The opposite party repudiated the claim on merits vide repudiation letter dated 11.2.2013 Ex.OP8. As per report given by CA Mr.Ashwani Gupta and company i.e. report dated 15.1.2013 Ex.OP10 both the consignments purchased by the complainant itself were on FOR basis which is clear from the invoices of the goods dated 3.8.2011 Ex.C-10. It is clear that freight and insurance has been charged in the bills confirming that the consignments were on FOR basis as regards  consignee’s part . The consignor had already got the consignments insured at their own end on FAS basis. Apart from this the opposite party vide its letters dated 5.10.2012 Ex.OP3, 26.12.2012 Ex.OP4, letter dated 21.1.2013 Ex.OP5 and letter dated 31.10.2012 Ex.OP6 also sought explanation from the complainant as to why the consent of the surveyor M/s. G.S.K. Miglani Surveyors Pvt.Ltd. for destroying the goods in question was not obtained and why the opposite party was not informed before destroying the goods or about the destruction of the goods. But the complainant failed to give any explanation or clarification thereto. The opposite party vide its aforesaid letters also requested the complainant to provide the exact dates of voyage, but the complainant also did not provide the said dates of voyage to the opposite party. Ld.counsel for the opposite party submitted that the opposite party vide their letter dated 11.2.2013 Ex.OP8 has rightly repudiated the claim of the complainant, as such there is no deficiency of service on the part of the opposite party qua the complainant.
8. From the entire above discussion, we have come to the conclusion that  complainant firm obtained Open Marine Insurance Policy bearing No. 404402/21/10/4200000220 from the opposite party  for the period from 26.8.2010 to 25.8.2011 with original sum assured Rs.  5 crores which was extended twice on 18.10.2010 and 1.2.2011 , as such the sum assured available under this policy was Rs. 15 crores. It was an open policy covering all risks to the goods during transit and the basis of the claim settlement was on invoice value plus 10% extra. The complainant firm purchased goods (Almonds) from consignor M/s. Select Harvest USA 14827W Harding Road, Turlock, CA 95380, USA and the consignee was the complainant. The consignment was imported from USA. The insured also got duty insurance cover from the opposite party vide policy No. 404482/21/10/48/00000221 on 26.8.2010 with original sum assured Rs. 1,30,00,000/- which was got enhanced upto Rs. 3,90,00,000/-. The seller i.e. consignor got the goods insured on FAS basis. The seller/consignor paid freight and insurance charges to the insurer in USA as per invoice Ex.C-10. The bare reading of invoice Ex.C-10 fully proves that the consignor got the goods insured on FAS basis i.e. free alongside ship and he added the freight and insurance charges in the invoice Ex.C-10 dated 3.8.2011. On this invoice Ex.C-10 the shipment date is written as 3.8.2011 . It means the shipment was made on 3.8.2011  All this fully proves that the shipment was made on 3.8.2011 and the goods were got insured by the consignor from insurer in USA from the place the goods were sent i.e. Turlock C.A. upto the point where the ship is to be unloaded from ship i.e. port at Bombay at Nhava Sheva Port (Mumbai) ship destination in India because the consignor has obtained insurance policy of the goods under transit from the place the goods were sent alongside ship i.e. wherever the ship goes upto the destination of ship which is Nhava Sheva Port, Mumbai.As such the insurance of opposite party regarding these goods which were got imported by the complainant from USA to India, starts from Nhava Sheva Port at Mumbai to ICD Ludhiana and from ICD Ludhiana to the premises of the complainant at Amritsar i.e. on FOR basis (free on rail/road)
9.           The consignor has already got insured the goods /consignment on FAS basis i.e. free alongside ship which means from the place where the goods were loaded/sent i.e.Turlock in USA upto the port in India i.e. Nhava Sheva Port Mumbai India as is evident from the invoice Ex.C-10. So the goods were already insured from Turlock USA , place of consignor upto the point of shipment in India i.e. Nhava Sheva Port Mumbai. It is also the admitted case of the parties that  part of the goods became defective during transit as 87 bags of lower layer were wet and were emitting foul smell. The lower layer  bags became wet during shipment i.e. during voyage though the same were noticed at ICD Ludhiana where the container was opened by the Custom Authorities ICD Ludhiana. So it stands fully proved on record that these goods became defective during voyage   i.e. during shipment  before reaching Nhava Sheva, Port Mumbai and the same comes under the insurance obtained by the consignor on FAS basis i.e. from the destination where the goods started loaded upto the shipment in India i.e. Nhava Sheva Port Mumbai , India. The complainant  did not furnish any certificate nor he has mentioned  in its complaint nor in the affidavit of Ritesh Bajaj, partner of the complainant firm Ex.C-1 that the complainant  or consignor did not lodge any claim of the consignment from insurer in U.S.A. The complainant has also violated the terms and conditions of the policy that when the goods were opened at ICD Ludhiana , no representative of the opposite party was summoned  to witness the status of the goods . Not only this the defective goods which became wet and were emitting foul smell and later on fungus grown as alleged by the complainant, were destroyed by the complainant without getting the consent of the surveyor of the opposite party, without informing the surveyor and even without informing the opposite party. The opposite party wrote letters dated 31.10.2012 Ex.OP6, letter dated 26.12.2012 Ex.OP4 and letter dated 21.11.2012 Ex.OP5 to the complainant asking the complainant as to why the surveyor M/s. G.S.K.Miglani Surveyors Pvt.Ltd. ,was not informed nor his consent was taken for destroying the goods in question nor the complainant could produce any report that the goods became unfit for human consumption nor the complainant could produce any report regarding the destruction of the goods as well as their quantity . The complainant firm has also failed to give any explanation in this regard to the opposite party. Not only this the opposite party through the aforesaid letters Ex.OP4,  Ex.OP5 and Ex.OP6 requested the complainant to provide the exact dates of voyage , so that the opposite party could inspect and conclude as to when and where the said goods became defective. But the complainant failed to provide that information also to the opposite party. It has been held by the Hon’ble State Commission of Uttarakhand (Dehradun) in case New India Assurance Company Limited Vs. Rajendra Pal Singh  2009(1) CPJ 492 that where the comdplainant/insured fails to produce necessary documents thereby he has failed to discharge obligation under the policy, loss could not be assessed by the surveyor, no immediate damage observed, opposite party was justified in closing the case of the complainant as “No claim” on the recommendations of the surveyor. Rather it was held that the District Forum has wrongly/arbitrarily assessed compensation at 30% of the amount claimed  and that order of the District Forum was set-aside  by the Hon’ble State Commission in  appeal. Similarly Hon’ble National Commission in case  National Insurance Co.Ltd. Vs.  Yodeva Synthetic Private Ltd IV(2006) CPJ 210 (NC) held that  where the necessary documents were not  supplied by the insured to the surveyor nor he was permitted to inspect the premises  to assess the loss thereby not helped  the insurer which amounts to failure to discharge obligation on the part of the insured to render all possible assistance to enable the surveyor to assess the loss. Opposite party was justified in repudiating the claim of the complainant.

10.     In the present case also complainant neither furnished any information regarding explanation/clarification for not intimating the surveyor nor taking any consent of the surveyor for  destroying the goods in question and why the opposite party was not informed about the destruction of the goods nor the complainant submitted any reply to these letters to the opposite party nor furnished any dates/information  of voyage to the opposite party ‘ thereby the complainant failed to discharge its obligation and has failed to provide all possible assistance to enable the  surveyor /opposite party to assess the exact loss suffered by the complainant.

11.     Resultantly we hold that opposite party was justified in treating the claim case of the complainant as “No claim” vide letter dated 11.2.2013 Ex.C-19/Ex.OP8 , letter dated 18.2.2013 Ex.C-20/Ex.OP9. Hence, the complaint is without merit and the same is hereby dismissed with no order as to costs. . Copies of the orders be furnished to the parties free of costs. File is ordered to be consigned to the record room. Case could not be disposed of within the stipulated period due to heavy pendency of the cases in this Forum.

18.12.2015                                                           ( Bhupinder Singh )                                                                                                                                                                                                              President

/R/                        ( Kulwant Kaur Bajwa)           (Anoop Sharma)

Member                                   Member