Per Shri S.R. Khanzode – Hon’ble Presiding Judicial Member:

(1)                This Consumer complaint pertains to alleged deficiency in service on the part of New India Assurance Co. Ltd. (hereinafter referred to as “the Insurance Company”) in repudiating the claim under six Specific Voyage Policies in connection with the shipment of onions.

(2)                Undisputed facts are that, the Complainant M/s.Metco Export International (hereinafter referred to as “the Complainant”) procured an order to supply onions to Philippines.  Accordingly following consignments were shipped as per the details mentioned hereunder.  All the voyages were covered by the Insurance Policy i.e. Specific Voyage Policy from Mumbai J.N.P.T., India to its destination at North Harbour, Manila, Philippines.  The policies were issued by the Insurance Company:

As per the invoices covering the above referred consignments bearing Nos.MEI/22/2001/02,  MEI/24/2001/02, MEI/25/2001/02, MEI/29/2001/02, MEI/30/2001/02, the Consignee was De Llamas Trading (hereinafter referred to as ‘the Consignee’).  It is not in dispute that the consignments reached the port of its destination but were detained by the authorities for suspected narcotic drug trafficking.  The onions in the consignments which were perishable commodity got rotten and the Consignee had taken the delivery accordingly after getting it examined through the Surveyor.

(3)                Insurance policies issued covering these consignments mentioned thereunder basis of valuation, “CIF plus 10% Extra”.

(4)                The insurance claim was made by the Complainant.  Initially, the Insurance Company took objection and asked the Complainant to settle the issue since the Consignee also lodged the claim.  Later on by its letter dated 23.11.2001 it repudiated the claim on the ground “breach of utmost good faith” mentioning as under:

“The loss has been noticed at the destination port.  The sale contract was on C & F terms.  Under such a contract of sale, the property and risk of the goods is transferred to the buyer, the moment the goods are aboard the ship.  It is the buyer who has to obtain an insurance for any risk thereafter.

The insurance does not seem to have been obtained for the benefit of the buyer which is normally the case under CIF contract.  Any insurance on such export, if is to be obtained in India, the premium has to be remitted by the buyer in foreign exchange and is to be included in the invoice value.

Neither the fact of C & F contract has been disclosed at the time of obtaining insurance from us nor there is anything to indicate that the buyer have requested to obtain the insurance for their benefit and have remitted the premium in foreign currency as required under Foreign Exchange Regulations.

The loss is caused by multiple perils and more so, due to delay in transit.  Any loss caused by delay even if the delay is caused by the insured peril, is specifically excluded from the scope of the cover.

Prima facie, therefore, the loss would not fall within the ambit of the cover and hence, would not be payable.”

Not satisfied with this repudiation the consumer complaint is filed, inter alia claiming following reliefs:

“(A) to settle the claims of the Complainant for Indian Rs.17,77,190/- with an interest thereon @21% p.a. with effect on and from 30.11.2002 till final settlement.

(B) to pay a compensation of Rs.1,25,000/- for the mental agony and harassment to the Complainant.

(C) to pay to the Complainant cost of this proceeding.

(D) This Hon’ble Commission may award any other relief which in their opinion is just and proper in the interest of natural justice.”

(5)                It may be pointed out at the outset that the Opponent is described as “the Divisional Manager, New India Assurance Co. Ltd., Divisional Office No.131000, New India Centre, 12^th Floor, 17-A Cooperage Road, Mumbai 400 039”.  Thus, it is a consumer complaint filed against the Divisional Manager of a particular Division of the Insurance Company, which itself would be a separate legal entity within the meaning of Section 2(1)(m) of the Consumer Protection Act, 1986 (‘the Act’ for the brevity).  Divisional Managers are assigned with specific duties and responsibilities vis-à-vis the obligations as an employee of the Insurance Company which, per se, are different and distinguished from the contractual obligations in respect of Insurance policies in question (for consideration of deficiency in service), of the Insurance Company.  The Insurance Company itself is a distinct and separate juristic person under the Act.  However, it appears to be a mis-description of a party - Opponent since this consumer complaint is fought by the Insurance Company itself.  But for this, considering alleged deficiency in service on the part of the Insurance Company and which is not a party, the complaint cannot be prosecuted against the Insurance Company’s one of the employees viz. the Divisional Manager at Divisional Office No.131000 and that too without naming that Divisional Manager.

(6)                The complaint is opposed by the Insurance Company as per the written version dated 29/05/2003 and they had categorically denied all the allegations made against them, justified their repudiation and also submitted that the Consignor viz. the Complainant had no insurable interest.  He had obtained the policies concealing the true nature of the sale contract and misrepresenting the contract between it and the Consignee.  It also referred to the fact that the consignments (of red Indian onion) were of perishable nature and the loss was caused suffered by the inherent vice or nature of the subject matter insured and further the loss was caused  by the undue delay etc. i.e. the factors to which a reference is made in the repudiation letter, supra.

(7)                In support of their case, the Complainant relied upon the Affidavit of Pinak Rajendra Paleja while the Insurance Company relied upon the affidavit of Mr.S.G. Prabhu.  Survey Report issued by Esteban Adjusters & Valuers Inc.  is also relied upon.  Besides this, the copies of bills of lading, invoices, copies of the Insurance policies and the correspondence between the parties emerge as undisputed documents. 

(8)                As earlier pointed out, the fact that the Complainant as a Consignor had taken the policies referring to the sale contract with the Consignee on “CIF plus 10% Extra” basis.  However, the sale contract and to which the Complainant thereafter stick up to speak for the sale of onions to the Consignee on C & F basis.  It means, as per the mercantile term in the shipping, the consignment would be insured for the buyers and the sellers were under no obligation to insure those consignments.  Admittedly, the Complainant had not taken the insurance on behalf of the buyers i.e. the Consignee and requisite procedure in respect of remittance in foreign currency as per the guidelines of Reserve Bank of India were also not followed in the instant case.

(9)                The Complainant tried to putforth the case that it had insurable interest till the payment is made by the Consignee.  We are afraid, the contract as revealed between the parties does not speak for the same.  As earlier pointed out, the Consignee De Llamas Trading, which lodged the insurance claim at the first instance in respect of consignments in question after taking the delivery, in its letter dated February 28, 2002, referring to the policies in question, explained as under:

“Receipt For Partial Payment:   Per our verbal agreement with the supplier, payment of the balance shall be tendered upon settlement of Insurance Claim which we have no intention to breach.

Original Invoice:  Only (1) originally signed invoice was forwarded to us by the supplier/shipper.  Said original invoice was submitted and already in the custody of the Bureau of Customs and effort to retrieve same proved futile.  Requesting a copy from the shipper/supplied would not be possible at this time due to obvious reasons that they are now trying to claim insurable interest by issuing a contract separate from that they have issued previously to DE LLAMAS TRADING.

Sales Contract:  On the earlier part of collating claim documents, you have instructed us to provide you a Sales Contract indicating the terms of sales.  We request from the shipper/supplier said documents of which they faxed to us for our onward transmittal to you.  Due to the above mentioned obvious reasons, we again could not request from the shipper/supplier the originally signed Sales Contract.-----“

“Again, we wish to inform you that all the documents pertaining to our claim are already submitted to Esteban Adjusters and Valuers, Inc., your local agent here in the Philippines, when we file our formal claim.”

(underlining provided)

(10)            The Complainant by its letter dated 08.04.2002 tried to deny the facts as revealed from the letter of the Consignee dated February 28, 2002, supra.  We find that such an attempt is an after thought and such statement of the Complainant cannot be believed.  The parties perhaps at the subsequent event tried to change their respective stand to suit their requirement to press for insurance claim in question.

(11)            About the detention of the consignments at the destination port by the authorities for suspected trading of narcotic drugs is surfaced from the report of Surveyor M/s. W.K. Webster (International) Pte. Ltd. dated 30^th July, 2001.  These facts are not in dispute.

(12)            Thus, it is established that the Complainant had taken the insurance policy representing sale contract between it and the Consignee as on the basis of CIF plus 10% Extra, though, in fact, as per the sale agreement as further tried to be submitted on behalf of the Complainant,  onions in question were sold on C & F basis.  It may be further noted that, later on the Complainant again tried to change its stand saying that the consignment was sold on “CNF” basis.  These variations affect the credibility of the case of the Complainant.  Besides that, there is no reason to disbelieve the fact which is reflected from the documents of insurance themselves that the same was obtained after representing the transaction as on ‘CIF plus 10% Extra” basis.  Thus, there being concealment of material fact about the true nature of transaction between the Consignor and the Consignee in respect of the consignments in question, from the Insurance Company, the Complainant earns disqualification of “breach of utmost good faith” and thus, repudiation of the insurance claim on this count amongst others, is well justified.

(13)            The Insurance Company further referred about inherent vice or nature of the subject matter insured, viz. Indian Red Onions and that because of detention of the onions by the authorities in the circumstances referred earlier, certainly, contributed to the loss of the consignment.  Therefore, referring to the exclusion clause Nos.4.4 and 4.5, when the insurance Company repudiated the claim, no fault could be found with it.  These clauses read as under:

“Clause 4.4: loss, damage or expense caused by inherent vice or nature of the subject matter insured

.

Clause 4.5:  loss, damage or expense proximately caused by delay, even through the delay be caused by a risk insured against (except expenses payable under Clause 2 above).”

(14)            Referring to the established terms of C & F, admittedly, as stated earlier, the Insurance was not obtained on behalf of the buyer i.e. Consignee and other requisite conditions for obtaining such insurance were also not followed.  This indicates that the Insurance policies in question were not taken on that basis. Therefore, the Complainant had no insurable interest.  On this count also, therefore, the insurance Company cannot be blamed for repudiating the claim. 

(15)            For the reasons stated above, we find that since the Insurance Company cannot be faulted with in repudiating the insurance claim arbitrarily or without any basis; no deficiency in service on the part of the Insurance Company could be alleged.  Since such deficiency in service on the part of the Insurance Company is not established, much less, not established against the Divisional Manager of the Insurance Company, who is the Opponent; the consumer complaint deserves to be dismissed.  We hold accordingly and pass the following order:

O  R  D  E  R

    (i)            Complaint stands dismissed.

  (ii)            In the given circumstances, parties to bear their own costs.

Pronounced on 27^th  March, 2012