Date: 12-02-2015
Sri Debasis Bhattacharya
Case of the Complainant, in a nutshell, is that it took a Marine Cargo Open Policy being No. 0840005208 from the OP on 14-09-2010 for the period from 14-08-2010 to 13-08-2011 of Rs. 14,73,97,185/- to cover the transportation risk of a costly machines. On 17-03-2011, the Complainant obtained a Certificate of Insurance for Rs. 1,71,03,271/-in respect of a Motor which was to be transported from Bhopal to Vishapattanam Simhadri in Andhra Pradesh. On 31-03-2011, while the consignment was plying in SH 271 Bhandara – Tar Road Opposite Nerala Irrigation Department at Village Nerala near Adyal near Nagpur, Maharashtra, the entire trailer along with the cargo caught fire and within a very short time, the entire Trailer along with the cargo got badly damaged. The above incident of fire was intimated by the Complainant to the OP on 31-03-2011 by email. On 01-04-2011, Mr. Sandeep Mashru, Surveyor deputed by the OP visited the accident site and then by his letter dated 01-04-2011, asked the Complainant to submit some documents. The OP, however, by its letter dated 16-04-2011, without furnishing any report of the said Surveyor, informed that the conditions of the policy have not been complied with and appointed another Surveyor, Mr. Sreeram Vasu of M/s Bhatawadeker & Co. as final Surveyor. On 18-04-2011, one Mr. Bijoy Kumar Agarwala for Miland Bhatrawadkar sought some documents from the Complainant by an email of even date. On 19-04-2011, Mr. Agarwala inspected the damaged motor in presence of the representative of the Complainant and BHEL and by his email dated 20-04-2011, asked the Complainant to furnish some documents, which the Complainant furnished on the very same day. On 19-04-2011, a joint inspection of the damaged motor was conducted at the workshop of BHEL and report thereof was made on 20-04-2011 indicating the motor cannot be repaired. As the damaged motor was beyond repair, the Complainant placed order for another motor of similar specification at the same price and the BHEL agreed to supply the same accordingly. The Complainant lodged a formal claim on 09-06-2011 for Rs. 86,92,646/- with the OP. However, the OP by its letter dated 14-09-2011, referring to Section 35 of the Marine Insurance Act, 1963, rejected the claim of the Complainant stating that the Complainant has violated the terms of the policy by transporting the motor without tarpaulin cover and the policy became void for warranty clause. Although the Complainant objected to such arbitrary decision of the OP, it went in vain. As such the instant case for settlement of the insurance claim and some other relief(s) as per prayer of the complaint petition.
The OP on notice appeared and contested the case throughout the entire proceedings in a positive manner. They submitted a written version whereby they inter alia denied all the material allegations of the Complainant and stated that after receiving the claim intimation, the OP immediately appointed one IRDA licensed Surveyor to conduct spot inspection, who visited the spot of incident on 01-04-2011. Later, the affected motor was sent to the workshop of BHEL at Bhopal and considering the extent of damage and nature of machinery, IRDA licensed Surveyor-cum-Loss Assessor, M/s Milind Bhatawadekar was appointed to conduct final survey based on the observation of the preliminary Surveyor. Upon inspection it was revealed that the consignment got damaged while it was being carried by the carrier M/s Transport Corporation of India Ltd. On scrutiny of the Surveyor Report and available documents, the OP came to know that the consignment was being carried on board in an open trailer without any tarpaulin cover in violation of the express warranty condition laid down in the policy and therefore, the OP has no liability in terms of Sec. 35 of the Marine Insurance Act, 1963. It was also reported from the spot survey that the packing material put over the crate of the motor touched the overhead power conductor on the way and the wooden crate caught fire. Moreover, the gross weight of the consignment was 37,000 kgs. whereas the registered laden weight of the carrying vehicle (trailer) was 40,200 kgs. and unladen weight was 10,200 kgs., i.e., the carrying capacity of the vehicle was 30,000 kgs. Hence, at material time, the said vehicle was overloaded by about 7,000 kgs. It was a gross violation and willful breach of Motor Vehicles Act, 1988 and Central Motor Vehicle Rules, 1989. The OP duly intimated the insured the reason behind repudiation of the claim by a speaking letter dated 14-09-2011 and also answered to the queries raised by the insured later. The rejection of claim was as per the policy terms after due application of mind. The OP has no deficiency in service as alleged by the Complainant and they acted strictly in accordance with the terms and conditions of the policy.
Both sides adduced evidence and were cross-examined by the other side.
The moot point for consideration in this case is whether the Complainant is entitled to any relief or not.
Decision with reasons
Ld. Advocate for the Complainant has submitted that in terms of Regulation 9(3) of the IRDA (Protection of Policyholders’ Interests) Regulations, 2002 and Regulation 13(3) of the Insurance Surveyors and Loss Assessors (Licensing, Professional Requirements and Code of Conduct) Regulations, 2000, it is obligatory for a Surveyor to submit his report within 30 days of his appointment. In the present case, Mr. Sandeep Mashru had been appointed as Surveyor on 31-03-2011, but it has not been disclosed whether Mr. Mashru submitted any report or not. On the contrary, though it has been stated by the OP in its letter dated 16-04-2011 that preliminary surveyor submitted the report, but no copy thereof has been provided to the Complainant in spite of letter. Although Mr. Sreeram Vasu was appointed as Final Surveyor, but the purported report dated 18-08-2011 was given by Mr. Miland Bhatawadekar who has never been appointed as Surveyor. The only ground of rejection (as stated in letter dated 14-09-2011) was that the consignment was not covered with tarpaulin. The condition for covering the consignment with tarpaulin was not there in the terms and conditions of the policy issued on 14-08-2009, but such condition was put unilaterally while certificate of insurance was issued on 17-03-2011 without complying with the provisions for change of policy terms as stated in clause 13 of the policy. As such, the newly added terms of policy, i.e., covering the consignment with tarpaulin is void and not binding terms of the policy and therefore, the claim cannot be rejected on the charge of breach of policy condition. It is further submitted by the Ld. Advocate that even if it is assumed for the sake of argument that the same was a term of the policy, in that case also, even if the tarpaulin was covered that could not have saved the motor from accident out of fire. Tarpaulin is not the appropriate measure for avoiding the fire which the motor has faced during transit. As the damage has not been caused due to rain, the tarpaulin has got nothing to do with the damage. So, rejection of Complainant’s claim on this ground is totally unjustified. In rejecting the claim, the OP has relied upon Sec. 35 of the Marine Insurance Act, 1963. But, according to Sec. 3 of the said Act, the same is applicable in case of marine losses and marine adventure. But, the present transportation having been not a sea voyage, the same has got no application in the present case. Ld. Advocate has referred to four decisions of the Hon’ble National Commission reported in I (2013) CPJ 389 (NC), III (2002) CPJ 336 (NC), II (1996) CPJ 77 (NC) and I (2010) CPJ 80 (NC), and another decision of the Hon’ble State Commission, Gujarat reported in 1996 (1) CPR 583.
Ld. Advocate for the OP, on the other hand, has submitted that immediately after receiving the claim intimation, the OP appointed one IRDA licensed independent Surveyor-cum-Loss Assessor, Sandeep Mashru & Co. to investigate and inspection of the consignment at the spot of incident near Bhandara. The said Surveyor inspected the spot of the incident on 01-04-2011. Later, the affected motor was placed at BHEL, Bhopal and as such, another IRDA licensed Surveyor-cum-Loss Assessor, M/s Milind Bhatwadeker had been appointed by the OP Insurance Company to conduct the final survey. On scrutiny of the Surveyor’s report and available documents, the OP came to know that the consignment was being carried on board in an open trailer bearing registration no. MP/09/HG-0347 without any cover. It has also been noted that the gross weight of the consignment was 37,000 kgs. whereas the registered laden weight of the carrying vehicle (Trailer) was 40,200 kgs. and unladen weight was 10,200 kgs., i.e., the carrying capacity of the vehicle was 30,000 kgs. Hence, at material time, the said vehicle was overloaded by about 7,000 kgs., which is a willful breach of the Motor Vehicles Act, 1988 and the Central Motor Rules from the part of the insured. That apart, the insurance policy had express warranty condition to carry the consignment with tarpaulin cover and the warranty had been breached by the insured. Hence, the contract itself became void as per the provision of Section 35 of the Marine Insurance Act, 1963 relating to warranty violation. At the material time, the consignment was being carried in an open type of trailer bed with tarpaulin cover, which has been admitted by the Complainant. The OP duly intimated the insured the reason behind the repudiation of the claim by a letter dated 14-09-2011 and also answered to the queries raised by the insured later. The liability of the Company is always subject to terms and conditions of the policy. According to the terms and conditions of the insurance policy, reported loss is beyond the purview of the policy of insurance under reference. There is no deficiency in service on the part of the OP and they only acted as per rules and regulations of the policy in question.
Though the Certificate of Insurance dated 17-03-2011 stipulates a condition that. ‘Warranted goods will be dispatched only by tarpaulin cover/closed vehicle/railway wagons’, the policy schedule of Marine Cargo Open Policy issued on 14-09-2010 which was valid from 14-08-2010 to 13-08-2011 only stipulates that, ‘Warranted road vehicle covered by adequate tarpaulin’. Therefore, there is a palpable difference between the policy schedule issued on 14-09-2010 vis-à-vis the Certificate of Insurance issued on 17-03-2011 though there is nothing on record that in terms of Clause No. 13 of the policy schedule dated 14-09-2010, mandatory seven days’ notice was served upon the Complainant.
It transpires from the Survey Report dated 18-08-2011, submitted by M/s Milind Bhatawadekar that preliminary Surveyor, M/s Sandeep Mashru & Co. reported the cause of loss as below:-
‘Based on the discussion with the Driver, Police Panchanama and inspection of the road/spot, it is likely that rubbing/brushing of the overhead conductor with the packing generated spark which possibly ignited the packing engulfing it along with motor inside it’.
It goes to show that when the consignment came in contact with the OH conductor, the same caught fire. True, the policy condition dated 14-09-2010 stipulates covering of warranted road vehicle by adequate tarpaulin. However, we cannot gloss over the rationale behind incorporating this clause in the policy schedule. There can be no manner of doubt that the said clause intended at protecting the insured goods from being affected by rain water during transportation and for no other purpose. It is clarified by the Complainant that the motor in question was covered with polythene sheet all over, then packed in wooden crate. Therefore, there is no reason whatsoever to believe that safety and security of the insured motor was compromised in any manner because of non-use of tarpaulin. Moreover, in case of fire accident, use/non-use of tarpaulin cover is not so germane for the simple reason that it is not a fire resistant material, but the other way round.
In terms of Sec. 3 of the Marine Insurance Act, 1963, contract of marine insurance is an agreement whereby the insurer undertakes to indemnify the assured, in the manner and to the extent thereby agreed, against marine losses, that is to say, the losses incidental to marine adventure.
Section 2(d) defines marine adventure as follows:-
“Marine Adventure” includes any adventure where –
(i) “any insurable property is exposed to maritime perils; tc" (i) any insurable property is exposed to maritime perils;"
(ii) “the earnings or acquisition of any freight, passage money, commission, profit or other pecuniary benefit, or the security for any advances, loans, or disbursements is endangered by the exposure of insurable property to maritime perils;"
(iii) “any liability to a third party may be incurred by the owner of or other person interested in or responsible for, insurable property by reason of maritime perils;"
Whereas, in terms of Sec. 2(e) “maritime perils” means the perils consequent on, or incidental to, the navigation of the sea, that is to say, perils of the sea, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints and detainments of princes and peoples, jettisons, barratry and any other perils which are either of the like kind or may be designated by the policy;"
Clearly, though the OP has repudiated the claim accusing the Complainant of violating Sec. 35 of the Marine Insurance Act, 1963, the peril being occurred during road transportation, it has got no application in respect of the instant claim.
It is alleged by the OP that the trailer was overloaded by about 7,000 kgs. assuming gross weight of the consignment, registered laden and unladen weight of the carrying vehicle(trailer) being 37,000 kgs., 40,200 kgs. and 10,200 kgs., respectively. However, most surprisingly, no cogent document, viz, registration paper of the trailer, invoice copy, is placed on record to substantiate this claim. In fact, there is no whisper in this respect in the Final Survey Report too.
It is not even the case of the OP that the said trailer overturned while travelling on the road. On the contrary, it is the undisputed position of this case that the accident occurred when the packing material over the crate of the motor touched the OH power conductor while travelling, the wooden crate caught fire. That being the admitted position, the registered laden/unladen weight of the vehicle or for that matter the provisions of Motor Vehicles Act, even if the accusation of the OP is correct, has got no bearing in respect of the said accident.
The concerned insurance policy, issued by the OP, is meant to cover all risks and SRCC during inland transit (Rail or Road) – Clause A (All Risks). That being the undisputed position, the instant peril over the incident of fire definitely comes under the purview of policy. The manner in which OP has repudiated the Complainant’s claim leaves nothing to imagination about its desperation to wrangle out of the contractual obligations by hook or by crook. By no stretch of imagination one can find any correlation between the alleged breach/violation of rules and regulations vis-à-vis cause of accident. Repudiating a claim on the basis of non-issues is nothing but a clear instance of deficiency in service. It is the immaculate service/commitment towards the cause of customers that distinguishes one business organization from other fly-by-night operators. Giants cannot live only on reputation.
Admittedly, the motor in question is beyond repair. In fact, apart from disputing the claim on account of violation of warranty condition over non-use of tarpaulin cover during transportation, for which also the Complainant was not responsible insofar as the same was packed by the consignor, M/s BHEL, the Surveyor has otherwise accepted the claim of the Complainant. Accordingly, in our considered view, the Complainant is entitled to full settlement of claim insofar as price of the 3350 KW Vertical SC Induction Motor is concerned less Salvage together with interest and litigation cost.
In the result, the complaint case succeeds.
Hence,
ORDERED
that the case be and the same is allowed on contest against the OP. The OP is directed to pay the full value of insured Motor amounting to Rs. 82,70,100 after deducting Salvage value for a sum of Rs. 12,95,000/-, i.e., Rs. 69,75,100/- (net) to the Complainant within 40 days from the date of this order along with interest @ 9% p.a. from the date of filing of this case, i.e., 26-03-2013 till full and final settlement and litigation cost Rs. 5,000/-.
