Tamil Nadu

StateCommission

CC/145/2014

Rasi Seeds Private Limited, Authorized Signatory, V.K. Ramanujam - Complainant(s)

Versus

Tata AIG General Insurance Company Ltd., Authorized Signatory - Opp.Party(s)

A.A.V Partners,

17 Dec 2021

ORDER

IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI

BEFORE      Hon’ble Thiru Justice R. SUBBIAH          PRESIDENT

                   Tmt. Dr. S.M.LATHA MAHESWARI            MEMBER

 

CC.NO. 145/2014

 DATED THIS THE 17^th  DAY OF DECEMBER 2021

Rasi Seeds Private Limited

Through its authorized signatory Mr.V.K.Ramanunam

Registered office at:

174, Satyamoorthy Road

Ramnagar, Coimbatore- 641 009                                           ....Complainant

 

                                                  Vs 

Tata AIG General Insurance Company Ltd.,

Through its athorized signatory

No.1, CNC Ethiraj Salai    

Egmore, Chennai 600 008                                            ....Opposite party

 

Counsel for complainant                               :   M/s AAV partners

Counsel for opposite party                            :   M/s. M.B.Gopalan

 

                This complaint coming before us for hearing finally on 3.11.2021 and on hearing the arguments of counsel appearing on bothsides and upon perusing the material records this Commission made the following order:

ORDER

Justice R. SUBBIAH,  PRESIDENT    

 

1.    The complainant had filed this complaint U/s. 17 of Consumer Protection Act 1986 praying for a direction to the opposite party to pay a sum of Rs.65,16,575/- towards loss of seeds with interest @24% p.a., alongwith cost.

2.       The case of the complainant in brief is as follows:

          The complainant is a private limited company, dealing in the supply of various kinds of seeds for the past several years.  They are carrying out the said business in the name and style of “Rasi Seeds Private Limited”.  The opposite party viz. TATA AIG were the insurers of the complainant for more than 5 years. 

          In the course of their business the Clearing & Forwarding Agent (C&FA) of the complainant viz. P.C.Enterprises, Akola had despatched a consignment 1100 cases of Bt cotton seeds after the completion of the season to the complainant’s processing plant at Attur, Chinna Salem Unit, Villupuram District, Tamil Nadu vide STN/Akl/BT/11-12 dt.13.8.2011.  The consignment was sent by the PC Enterprises, Akola in a truck covered with tarps, which was insured with the opposite party, vide Marine Cargo Open Policy No.0830003641 for a period from 18.3.2011 to 13.3.2012.  The complainant had paid Rs.25,93,430/- as total premium,  which was duly acknowledged by the opposite party vide receipt No.03-10-00030231 dt.21.3.2011. 

          As per the Marine Cargo Open Policy, the risks covered / terms of cover were (i) All risks & SRCCC subject to inland transit  including initial loading and final unloading risks;  (ii) Inland transit (Rail or Road) clause A (All Risks) including total loading and unloading risks, (iii) storage risk for six months from the date of arrival at the respective location,  (iv) The policy also covers Inland Transit (Rail or Road) – clause B (Basic risks) for second-hand machinery. 

          The cotton sowing seeds are packed in 450 gms. pouches, again 25 such are packed in one polywoven bags (HDPE BAGS).  1100 of these HDPE bags were loaded in the lorry.  The lorry commenced its journey on completion of loading of the entire consignment.  The consignment was sent from Akola Maharashtra to the complainant’s processing plant at Chinna Salem, Attur, Tamil Nadu, by vehicle/ truck bearing Regn. No.KA 01 C 2858 of Shri Vinayaka Transport Co., at H.H.6, Murtizapur Road, Babulgaon, Akola – 444 204 (M.S) vide LHRdt 1393  dt.13.8.2011. 

          On 16.8.2011, when the said lorry reached its destination at Attur, while unloading the bag, the complainant noticed that some bags were in wet condition and unloading was stopped and the opposite party was immediately intimated by email dt.17.8.2011, through the employee of the complainant.  Thereafter M/s. Rank Surveyors Pvt. Ltd., Surveyors and loss Assessors, Salem were appointed as Surveyors and Loss Assessors, which was informed by the opposite party vide mail dt.17.8.2011 at 13.02 hours.  The opposite party registered the claim vide claim No.489996 and the same was intimated by the opposite party vide mail dt.18.8.2011 at 11.5 hours.  The surveyors surveyed the goods on 18.8.2011 and the lorry was unloaded in the presence of Mr.Saravanan of M/s. Rank Surveyors Pvt. Ltd.,  At that juncture it was noted that 640 bags were in good condition and 460 bags were in wet condition.  This was evidenced by the IN GATE PASS of the complainant dt.18.8.2011.  The surveyor’s first observation was based on his visit to the site of the lorry unloading at Chinna Salem, which is evident from the email dt.19.8.2011 and the Letter of Requirement (LOR) of additional documents.  The Surveyor’s observation was sent by email on 19.8.2011 to the complainant, by marking a copy to the opposite party and to Bharat-Re-Insurance, Coimbatore, which is the agent of the complainant.  The Bharat Re-Insurance had replied vide their letter dt.22.9.2011, in reply to the surveyor’s letter dt.17.9.2011 alongwith documents as required by the opposite party.  Hand written letter from the driver on the same day i.e, on 18.8.2011 was also annexed by Bharat Re-Insurance Broker Pvt. Ltd.,  The said letter stated that the consignment was loaded at Akola on 12.8.2011 and on 13.8.2011, while loading on 12.8.2011 there was drizzling followed by heavy rain which resulted in stoppage of loading after covering with tarps and resuming on 13.8.2011.  The opposite party had repudiated the claim of the complainant on 16.2.2012 only based on the driver’s letters/ statement stating that the loading was done when there was rain, wetness and moisture which resulted in the seeds becoming unfit for sowing.  The information report dt.13.3.2012 by the Metrological department, confirms that there was no rain on 12.8.2011.  The opposite party had concluded that it was due to rain while loading which had made the seed unsuitable for sowing and the same is entirely based on the statement by the driver.  Hence the repudiation of claim based on the statement of the driver is bad in law and on facts.   The surveyors’ report dt.12.10.2011 based on observation on 18.8.2011 found that 460 bags were wet out of a total 1100 bags which were damaged.  But the surveyor report was given to the complainant only on 22.2.2012 after communicating the denial of claim on 16.2.2012.  Inspite of repeated requests by the complainant several times including on 3.10.2011 and 11.1.2012 the addendum reports if any has not yet been provided.  This is a clear violation of Sec.9(2) Insurance Regulatory and Development Authority (Protection of Policy Holders Interest) Regulations 2002.  The complainant made claim No.4899996 for loss/damage to 307 bags on 17.9.2011 to the opposite party.  The surveyor had asked for some details, which were sent on 23.12.2011.  Further details were sent on 11.1.2012.   While so the opposite party vide letter dt.16.2.2012 quoting certain clauses of insurance policy rejected the claim.  The relevant clauses are

          4.3   loss damage or expenses caused by insufficiency or unsustainability of packing or preparation of the subject matter insured (for the purpose of this clause

            4.3, “packing” shall be deemed to include stowage in a container or lift van but only when such stowage is carried out prior to attachment of this insurance or by the assured or their servants )

            4.4  loss or damage or expense caused by inherent vice or nature of the subject matter insured.

            Cl:16  It is the duty of the assured and their servants and agents in respect of loss recoverable hereunder.

            16.1 to take such measures as may be reasonable for the purpose of averting or minimizing such loss and

            16.2  to ensure that all right against carriers, bailies or such other third parties are properly preserved and exercised. 

 

          The rejection of the opposite party in view of the above clauses do not hold good in view of the fact that the consignment was well packed in customary manner in HDPE woven bags as per the terms and conditions and warranties attached to the insurance policy. The seeds are packed in Polyethylene packet and in turn such packets were packed in HDPE bags in such a manner that any rain per se would not directly affect the contents.  In fact in the year 2006 to 2012 they had settled certain claims.  At that time, the opposite parties have not advised anything about the inadequacy of the packing adopted by the complainant so far.  Therefore, the complainant made a detailed representation dt.12.4.2.12, through its

Insurance Broker viz. Bharat reinsurance, stating that the opposite party failed to forward the survey report eventhough they had confirmed receipt of survey report vide mail dt.3.11.2011 listing out three points for reconsideration.  The opposite parties have replied to the said letter vide their letter dt.20.4.2012 with vague and false allegations against the complainant.  A legal notice dt.25.9.2012 was sent to the opposite party, which was replied by the opposite party’s counsel on 17.10.2012 with false allegations.  The opposite party had overlooked the very fact that the consignments were well packed in customary manner.  Thus there is deficiency in service on the part of the opposite party. Hence the complaint. 

3.       The said case was resisted by the opposite party by filing their version as follows:

          The complainant availed Marine Cargo Open Policy bearing No.0830003641, that interalia provided cover for consignments against loss/damage during transit subject to terms and conditions stipulated therein.  The complainant has merely filed a portion of the open policy without any of the coverage clauses such as Institute Cargo Clause, Inland Transit Rail/ Road Clause etc.  attached to the open policy.  The complainant is thus guilty of misrepresentation of the terms of insurance and disclosure of the full policy.  The consignment worth Rs.25 lakhs comprising returned seeds which were unsold and admittedly being sent back from its Akola Godown by its own agent, was allegedly received in wet condition at its Salem factory.  The surveyor promptly proceeded to the complainant’s factory for inspection of the damage.  At the time of their visit the vehicle carrying the consignment was still present at the complainant’s factory and out of 1100 HDPE bags containing seeds in plastic packets, major portion of the bags stacked on the top and on the rear side of the body of the truck had been discharged from the vehicle being dry, while bags in the lower stacks.  The moisture plays a very important role in influencing the seed deterioration. As any excess moisture would greatly affect the seed quality, it is prudent that the wet bags should have been unloaded and arrangements should have been made to dry the seeds at Akola itself.  Since this exercise was not done, the bags remained in wet condition throughout the journey causing/ aggravation of damage to seeds. The surveyors assessed the damage under their report dt.12.10.2011.  The reports as well as the other records establish the facts that (i) there was no evidence of any fortuity or peril during transit. The driver’s statement was provided by the complainant and the same contains no mention of any other incident than the rain during loading and before departure. The opposite party cannot be held liable without proof or risk during transit.  (ii) The seeds were damaged due to unsuitability of stowage by the C&F agent acting on behalf and under authority of the complainant.  It is deemed to be loading by the complainant itself if not by its servants.  The deterioration of the seeds was caused entirely due to the partially loaded bags that were exposed to rain not being dried before further loading but allowed to remain in wet condition and consequent damage to the seeds stands excluded by clause 4.4/2.3 of the Institute Cargo Clauses/ Inland Transit Rail Road clause.  The deterioration of the seeds is also attributable to their inherent nature of being hygroscopic and tendency to absorb moisture induced by sweating within the bags and as such damage was due to inherent vice of the consignment.  In any event there has been gross failure / breach on the part of the complainant or its agents to avert the damage by taking minimal precaution of drying the bags which were wet and then loading the same in the vehicle.  Thus alleging prayed for dismissal of the complaint. 

4.       In order to prove their case, proof affidavits were filed by the respective parties alongwith 31 documents on the side of the complainant which are marked as Ex.A1 to A31, and 4 documents filed by the opposite party are marked as Ex.B1 to B4.

5.       The learned counsel for the complainant submitted that during the course of business they have forwarded the returned seeds after the completion of the seasoning, through their Clearing and Forwarding Agent viz. P.C. Enterprises from Akola, Maharashtra to Chinna Salem, Aattur, Tamil Nadu.  The said lorry reached the destination on 16.8.2011, while unloading the bags, the complainant noticed that some bags were in wet condition, therefore unloading was stopped.  An intimation was sent to the opposite party, and a surveyor was appointed.  M/s. Rank Surveyors Pvt. Ltd., had inspected the goods and noted that out of 1100 bags 640 bags were in good condition and 460 bags were in wet condition.  Hence the complainant had made a claim to the opposite party.  But the same was rejected by their repudiation letter dt.16.2.2012, which is marked as Ex.A23.  In the said repudiation letter they have referred the clauses 4.3 in the Institute Cargo Clauses (A);  2.3 in the Inland Transit (Rail or Road) -  Clause A (All Risks) under the policy.  But the reasons assigned in the said letter does not hold good because the consignments were  well packed in customary manner in HDPE open bags with the warranty condition attached to the insurance policy.  The seeds were packed in High Density Polythene Bags (HDPE Bags) as per the standard trade practice as prescribed under the policy.  Infact in earlier occasions, in respect of the same complaints, the opposite party had settled the claims.  The repudiation of the claim is baseless. 

In this connection the learned counsel for the complainant had also drawn our attention to the judgement of the Hon’ble National Commission in the case of Noble Grain India Pvt.Ltd., Vs. New India Assurance Co. Ltd., reported in 2008 (2) CPC 45, I (2008) CPJ 350 (NC) held that clauses relating to “minimizing the losses” in the insurance policy were not clear.  It was also held that “The insurance company did not consider it an important material point otherwise it would have mentioned the same in the insurance policy”. 

The learned counsel for the complainant further submitted that the primary reason for rejecting the claim was mainly placing reliance upon the statement of the lorry driver as per Ex.A6, where he had stated that while loading the cargo there was drizzling followed by heavy rain, which resulted in stoppage of loading after covering with tarps.  The said statement of the driver would show that the complainant had taken efforts to minimise the loss.  Therefore, when there is a policy coverage, the opposite party is liable to compensate the loss. 

 

6.       Countering the submissions, the learned counsel for the opposite party submitted that the consignments were exposed to rain not being dried, and in the initial stage there was no necessary for covering the same with tarpaulin when moisture was there.  Though the policy provides cover for damage during loading and unloading, in the present claim seed damage was not caused during loading or unloading.  Even the loading/ unloading cover is subject to the exclusions and conditions of the policy as set forth in various clauses particularly the Institute Cargo Clauses, Inland Transit Rail/ Road Clause etc.  The complainant had failed to disclose that the bags were in wet condition and except those within the vehicle near the cabin and the lower stacks, rest of the bags being dry were removed without any damage.  The complainant stopped unloading immediately on noticing the bags being wet, and before examining the contents, reported about the damage to the opposite party which would itself reveal that external wetness would be presumed to affect the contents and as such dispatch in wet condition was an exposure to damage.  Though the complainant had stated that as per meteorological report there was no rain on 12.8.2011 at Akola, as per the information provided by the complainant’s driver there was a rain in Akola.  The meteorological report will not record local rainfall activity over a small area.  Therefore the first hand information provided by the driver cannot be discarded.  As per the surveyor report, value of the salvage had not been included.  Hence the claim of Rs.65,16,575/- cannot be considered as the value of loss sustained in the absence of salvage value. 

7.       Heard the submissions of both parties.   The facts that are germane to decide the complaint are as follows:

It is the case of the complainant that out of 1100 bags loaded in the lorry containing returned seeds, while unloading it was found that 460 bags were in wet condition.  On intimation, a surveyor was appointed by the opposite party, and they have assessed the loss.  The complainant had made a claim.  But the same was rejected by the opposite party, mainly on the ground that the driver had made a statement that at the time of loading the bags, there was drizzling in Akola followed by heavy rain, which had resulted in stoppage of loading after covering with tarps and resuming on 13.8.2011.  Therefore, according to the opposite party/ insurance company, had the consignment been packed in a proper manner, the damage would not have been occurred.  Therefore, according to the counsel for the insurance company, there is a duty cast and the burden is upon the shoulder of the complainant to monitor that the goods are loaded and unloaded in a proper manner. 

          In this regard, the our attention was drawn to Ex.A6, the report of the driver dt.18.8.2011, stating that “while loading the bags on 12.8.2011, there was slight drizzling, and when half of the bags were loaded the rain started heavily.  Therefore, we have stopped the loading further, and covered the bags with tarpaulin.  The rest of the bags were loaded on the next day.  While unloading the bags on 16.8.2011 most of the bags were in wet condition”.  `The surveyor report had explained that based on the exposure to rain at the time of loading there was an increase in the moisture caused the damage to the exposed bags.  However, the complainant had attempted to wriggle out of the above situation by stating that the seeds were well packed and “peril would have happened” while in transit.  While stating allegation against the carrier. the complainant ought to have impleaded the carrier also as a party.  Therefore, the damage caused was entirely due to the negligence on the side of the complainant.  In support of their contentions, the opposite party had also drawn our to the judgement of the Hon’ble National Commission reported in Jaiprakash Associates Vs. ICICI Lombard 2016 SCC Online NCDRC 1048;  Greenlam Industries Vs. United India 2019 SCC Online NCDRC 95;  and Whirlpool Vs, New India 2020 IV CPJ 282 NC. 

9.       Therefore, in view of the above submissions, the questions that has to be decided are  

          1.  Whether the consignment was properly packed?

          2.  Whether the complainant had taken maximum care to avoid any damage?

          Only these questions are answered in affirmative, the complainant will be entitled for the claim.

10.     POINT NO.1 & 2:

In this connection, a perusal of the Ex.A6, the statement of the driver is totally not in support of the complainant.  The ground raised by the complainant, would show that the complainant’s main allegation was made only against the carrier.  Therefore, in this case we find that the carrier is a necessary party.  But unfortunately the complainant had not impleaded them as a party to the proceedings.  When the question that the bags had been loaded in a good condition is being answered in favour of the complainant, then only the question for deciding the claim made to the opposite party would arise.           

          Moreover, the issue whether the goods have been loaded in good condition by following all the protocols can be decided only by adducing elaborate evidence, which is not possible in a complaint before the consumer commissions.  This court cannot conclude that the complainant had taken all the efforts to minimise the loss, and inspite of their best efforts the damage had occurred.  Likewise, as contended by the opposite party there is no breakup details furnished for the claim amount.  Therefore if at all advised, it is proper for the complainant to approach the civil court.  In view of the above findings, the complaint is liable to dismissed, with liberty to the complainant to approach the proper forum. 

12.     In the result, this complaint is dismissed.  There is no order as to cost. 

           

  S.M.LATHAMAHESWARI                                                                 R SUBBIAH     

           MEMBER                                                                                        PRESIDENT

Exhibits filed on the side of complainant

A1      18.03.2011    Copy of Marine Cargo Open Policy

A2      21.03.2011    Receipt by TATA-AIG

A3      13.08.2011    C Note 1393 of Shri Vinayaka Transport Co.

A4            “            Stock Transfer note

A5      17.08.2011    Appointment of surveyors

A6      18.08.2011    Drivers letter

A7            “            Rasi Seeds (P) Ltd., In gate pass

A8      19.08.2011    Surveyor report

A9      17.09.2011    Claim bill

A10     22.09.2011    Reply to surveyor letter

A11     21.0-9.2011   Copy of monetary claim notice

A12     12.10.2011    Survey report

A13     14.10.2011    Letter to transporter regarding money claim

A14     03.11.2011    Insurers mail confirming receipt of survey report

A15     08.11.2011    PC Enterprises statement given to insurers

A16           “            Vinayaka transport invoice given to insurers

A17     28.11.2011    Chinnasalem unit Asst.Manager statement

A18     20.12.2011    Further details required by the surveyor after visit to Rasi

A19     23.12.2011    Reply to surveyor

A20     11.01.2012    Details of Nyak Agro sent to surveyor

A21     20.01.2012    Email information to Rasi that Surveyor explanation not adequate

A22     27.01.2012    Email to Rasi Seeds

A23     16.02.2012    Repudiation of claim by insurers

A24     13.03.2012    India Meteorological department letter to Shree Sunil Lingade

A25           “                      -do-

A26     12.04.2012    Representation by Bharatre reg repudiation

A27     20.04.2012    Reply by insurers

A28     25.09.2012    Legal notice by complainant

A29     15.10.2013    Authorisation letter by complainant in favour of V.K.Ramanujam

A30     17.10.2012    Reply to legal notice by opposite party

A31     16.12.2013    Copy of judgement in CC.No.37/2013 by National commission

 

 Exhibits filed on the side of Opposite parties

B1      18.03.2011    Marine cargo endorsement

B2                         Inland transit (Rail or Road) clause A (All risks)

B3                         Institute cargo clause A

B4                         Photographs

 

 

 

  S.M.LATHAMAHESWARI                                                                 R SUBBIAH     

           MEMBER                                                                                        PRESIDENT

 

INDEX : YES / NO

Rsh/d/rsj/ Open court