Sri Shyamal Gupta, Member
This complaint case is filed by M/s Ashoka Exports u/s 17 of the Consumer Protection Act, 1986, alleging gross deficiency in service on the part of the OPs.
The brief facts of the complaint case are that the Complainant took one insurance policy from the OP No. 1 for indemnifying its goods. Before shipment, a pre-despatch survey was held wherein it was confirmed that goods were loaded in the container in good and sound condition. The vessel unfortunately met an accident at Hooghly river and returned to the Port of Kolkata for repair. Thereafter, the ship set sail and reached Singapore where the said consignment was transshipped to the mother vessel. On or about 14-11-2011, the cargo arrived at Port of Oakland and sent to Colorado by rail road. The cargo arrived at Denver and forwarded to end consignee but was returned as it was not palletized. On 25-11-2011, the container was opened by the handling company for palletizing and found that cartons were damaged and photographs taken about the condition of the goods. The fact of damage of the cargo was immediately reported to the settling agent of the OP No. 1. On or about 28-11-2011, the cargo was palletized and delivered to the end user due to pre-existing instructions. The end user distributed the cartons to its stores. The stores found the bags damaged and so the same were returned to the warehouse. By its letter dated 06-12-2011, the Complainant lodged its formal claim with the OP No. 2 for a sum of US$ 50,500 for the loss occurred to the shipment. The Complainant also lodged claim with the OP No. 1 vide Claim No. 516003. On or about 19-12-2011, necessary survey was conducted by McLarens on behalf of the OP No. 1 through its local agent Chartis. After that, another survey was conducted by A.G. Wassenaar on 29-12-2011. Though the said two reports differed to a great extent, yet, taking shelter under the same, the OP No. 1 declined the claim of the Complainant on 02-03-2012. Such repudiation was contested by the Complainant and on 23-03-2012, the Complainant asked for a joint survey of the cargo. Accordingly, on or about 02-04-2012, said joint survey was conducted by Surveyor firm, Peak Consultants in presence of the representative of the OP No. 1. After receiving the survey report, the same was forwarded to the OP No. 1. Despite this, the OP No. 1 did not show any inclination to settle its claim. Therefore, this complaint case.
Per contra case of the OP No. 1 is that the Complainant is not a consumer under the Consumer Protection Act and therefore, the complaint case is not maintainable. During survey, the Surveyor noted that the cartons did not exhibit direct wetting pattern, although the same were found to be weakened, creased/wrinkled, bulged, stained and/or distorted to a varying degree and extent. About 4% of the cartons may have been moisture damaged at some point, although all the cartons were dry to the touch. Though the Surveyor asked the consignee to segregate the sound boxes from the damaged ones, no step was taken to mitigate the loss at its end, which aggravated the quantum of damage. Further, M/s A.G. Wassenear Inc was engaged by the Surveyor, McLaren Young International to test the mold samples and ultimately it was found that the damage was not due to entry of sea or fresh water, but occurred due to condensation as the consignment was packed in India (warm climate) and travelled across to a very cold climate, causing the shipment to sweat. Secondly, not fully drying of ink after printing logs on the bags could also have been the reason for higher levels of humidity found to the product and the shipment. Salinity tests returned negative results which mean that there was no entry/contact with sea water. Further case of this OP is that, there was no evidence forthcoming of any damage or abnormality following the alleged collision of the vessel at Hooghly river forcing the vessel to return to Kolkata Port for repairs. The Surveyor finally concluded that the damages to the shipment appear to have been caused due to accumulation of condensation due to temperature change during transit and/or possible pre-shipment condition of the product at origin. Stating that the Complainant has failed to show that the damage caused directly due to operation of ICC B Perils, it is claimed by this OP that the instant claim was rightly declined by it.
On the other hand, the OP No. 2 submitted that its personnel were not present nor it was the responsibility of this OP to witness the loading as the carrier in no way is involved in such activity. The shipper after loading, handed over the same to the carrier for carriage. Therefore, the claim for damage is not at all maintainable against it.
Points for consideration
- Whether the complaint case is maintainable in its present form and prayer?
- Whether there is any deficiency in service on the part of the OPs?
- Whether the Complainant is entitled to any relief?
Decision with reasons
At the time of hearing, parties were heard through their respective Ld. Advocates and documents on record gone through carefully.
Point No. 1:
The value of goods of the subject consignment is well within the pecuniary jurisdiction of this Commission. The complaint case has been filed within the limitation period. Although the subject consignment was sent for commercial purpose, in view of the decision of Hon’ble National Commission in Harsolia Motors v. National Insurance Co. Ltd., I (2005) CPJ 27 (NC), the complaint case has been rightly filed before this Commission. In a word, none of the maintainability issues raised by the OPs is tenable in law.
Point Nos. 2&3:
Both these points are taken up together for the purpose of brevity of discussion. Moreover, they are inter-linked.
Ld. Advocate for the Complainant contended that the goods were securely packed in cartons and loaded in the ship in a sealed container in good/sound condition and before shipment, pre-despatch survey was held wherein it was confirmed that goods were loaded in the container in good/sound condition. After its claim was repudiated by the OP Insurance Company, at the insistence of the Complainant a joint inspection was carried out by the newly appointed Surveyor in presence of the representative of the OP No. 1 and the copy of said survey report was forwarded to the OP No. 1 in due course by the Complainant. He claimed that the survey report of Peak Consultants dealt extensively with the earlier two survey reports being submitted by the Surveyors deputed by the OP No. 1 wherein due comparisons with those earlier reports were made with reasoning. After taking into consideration all aspects and upon careful examination and investigation of the cargo, the said Surveyor in its report dated 21-05-2012 observed (page no. 14) as under:
“(1) appropriately designed and packed individually within the cartons to sustain the standard rigours of ocean transit, and to prevent moisture from invading and/or being attracted to the cartons through the use of plastic barrier (previously described).
(2) Appropriately packed within the container, based on estimates of carton measurements as applicable to the interior ocean container volume.
3(b) all surveyed cartons contained the same or similar arrangement of plastic on the exterior of the bags and interior of the carton, which depicted a seam, seal or air-preventive form at top of the plastic upon opening the carton, as such that air (and moisture within the air) does not appear capable of normally making an entrance, with the sides either being tucked into the bottom of the carton or otherwise sealed; and
(c) the carton referred to in paragraph (a) was opened and a hole approximately 3 inches in diameter was discovered on the right side of the carton (as shown in the photograph), where it appears the plastic was subject to compressed air within the volume area of the container, occurring due to a rigorous and rapid shift of product within in the carton, ultimately causing the plastic to burst open, tear, or otherwise be subject to abnormal stress leading to failure; and
(d) a significant number of cartons were subject to extraordinary force not normally expected under the rigors of ocean transit, caused by the collision of the M/V; and
(e) the minimal gap distance between the top bag in the damaged cartons and the top of the carton itself appear to have been over-exposed as a result of extreme product agitation and other forces which were sustained as a result of the M/V collision; and
(f) this condition created air compression sufficient to force the air volume between the plastic and bags in several cartons; causing many to burst within a time of close proximity to each other; and
(g) the majority of cartons surveyed displayed consistent findings where the plastic and/or top seam (of that plastic) had burst open or otherwise broken during transit; and ….
(j) no moisture appeared present during our survey, and no water marks appeared visible within or on the preventive plastic in the cartons, or was contained inside of the cartons because the moisture did not originate there and was contained within the bags themselves as a result of poor transit conditions…
In summary, we find it appears (1) the marine vessel collision was the contributing source of packaging failure, leading to moisture collection within the containers; (2) the weather in the area of collision and/or berth appears consistent with high-humidity conditions thereby contributing to the ability of moisture collection within the container throughout times relative to the M/V collision; (3) such moisture within the container was absorbed by the bags;…..”
Drawing our attention to the aforesaid findings of the Surveyor firm, M/s Peak Claims, Inc., the Ld. Advocate contended that it is crystal clear from the final report submitted by the said Surveyor firm that the loss and/or damage to the consignment was mainly attributed to vessel collision in transit. Moreover, as per the pre-despatch survey at Kolkata port, the goods were shipped in sound/good condition. Accordingly, he prayed for allowing his prayer.
Ld. Advocate for the OP No. 1, on the other hand, submitted that the report of Peak Consultants is based on conjecture and surmises. The Surveyor in his report concluded that condensation was the result of collision at Hooghly river without adequate information or documentation about the damage to the container. He argued that the report is remarkably silent about any damage to the container following the collision while the initial part of the report says that the consignment was packed in container. No irregularities have been reported so far as to condition of the container is concerned. He termed it unbelievable that the collision did not cause any damage to the container but caused the consignment packed in the container to be exposed to the humid weather causing moisture collection within the container which was observed by the bags. He claimed that the conclusion drawn by the Surveyor was not borne out of records. Further, he questioned the method of sampling being done by the Surveyor as only top layers of the consignment, which was not representative of the whole consignment, was selected. He claimed that the instant claim was rightly repudiated.
It appears that three different Surveyors were deputed for the purpose of ascertaining the proximate cause of damage and admissibility of the subject claim under the policy terms and conditions. Out of the three Surveyors, 2 of them were deputed by the OP No. 1 and the one by the Complainant.
It is noteworthy here that unlike other Surveyors, M/s Peak Claims Inc carried out due survey in presence of the representative of the OP No. 1.
Although the Ld. Advocate for the OP No. 1 questioned the rationality of only surveying the top layers of the consignment, it appears that M/s Peak Claims, Inc. has deliberated this aspect vividly in its afore-mentioned report at page nos. 4 and 5. That apart, if the OP No. 1 indeed had any reservation in this regard, we wonder, why its representative, who was present at the time of survey, did not raise the issue with the surveyor concerned.
It transpires from the final survey report dated 21-05-2012 being prepared by M/s Peak Claims, Inc. that it punched several holes into the findings of other two Surveyors (page nos. 2 – 12) to which no satisfactory counter-defence is put forth by the Ld. Advocate of the OP No. 1.
There is nothing to show that the nature of packaging being done for the safety of the consignment had any shortcoming vis-à-vis standard packaging norms. That apart, given that similar packaging pattern was followed in respect of entire consignment, if there remained any flaw with the packaging system, the entire consignment would met the same fate (damage).
There is nothing to show that M/s EMLab P&K was apprised of the fact that the vessel which was carrying the consignment sustained damage owing to mid-river collision. No wonder, therefore, while preparing its report, the said laboratory did not explore the probability of accumulation of moisture inside the container, thanks to marine vessel collision and resultant damage of the cargo.
It is indeed surprising that though M/s Peak Claims, Inc. found several grey areas into the findings of other Surveyors being deputed by the OP No. 1, the OP No. 1 did not refer the matter to them seeking their opinion in respect of the findings of M/s Peak Claims, Inc.
Thus, taking due note of the fact that following joint inspection, M/s Peak Claims, Inc. prepared its final survey report, wherein the defects of the earlier two survey reports was spelt out in crystal clear terms; and lastly, abject failure of the OP No. 1 to put any credible defence in respect of the various issues being flagged by M/s Peak Claims, Inc., we deem it appropriate to place the report of said Surveyor firm on a higher pedestal vis-à-vis other survey reports.
Accordingly, we hold that the Complainant deserves due relief in the matter from the OP No. 1.
Hence,
O R D E R E D
The case stands allowed on contest against the OP No. 1 and dismissed against other OPs with a cost of Rs. 50,000/- being payable by the OP No. 1 to the Complainant. OP No. 1 shall pay the sum of Rs. 31,36,650/- to the Complainant along with simple interest @ 9% p.a. over the sum of Rs. 31,36,650/- from the date of filing of this case till full and final payment is made. In case this order is not duly carried out by the OP No. 1 within 40 days from today, Complainant shall be at liberty to execute this order in accordance with law.
