Andhra Pradesh

East Godwari-II at Rajahmundry

CC/18/2013

M/s P.S.R. Egg Exporters - Complainant(s)

Versus

United India Insurance Co., rep. by its Divisional Manager, - Opp.Party(s)

P.A.Chowdary

22 Feb 2016

ORDER

                                                                           Date of filing:   04.06.2013

                                                                                                          Date of Order: 22.02.2016

 

BEFORE THE DISTRICT CONSUMER FORUM-II, EAST GODAVARI

DISTRICT AT RAJAHMUNDRY

 

                          PRESENT:   Smt H.V. Ramana, B.Com., L.L.M.,   PRESIDENT(FAC)

                      Sri A. Madhusudana Rao, M.Com., B.L., MEMBER          

    

             Monday, the 22^nd day of February, 2016

 

C.C.No.18 /2013

Between:-

 

M/s. P.S.R. Egg Exporters, Represented by its

Managing Partner, Padala Subba Reddy,

Opp: Raja Ratna Theatre, Mandapeta,

East Godavari District.                                                           …        Complainant

 

                        And

 

1)  United India Insuance Company, Rep. by

      its Divisional Manager, Divisional Office,

      Innespeta, Rajahmundry.

 

2)  United India Insurance Company, Rep. by

     its Regional Manager, Regional Office,

     Daba Gardens, Visakhapatnam.

 

3)  Insurance Regulatory and Development Authority,

     Rep. by its Assistant Director, Consumer affairs

     Department, United India Towers, 9^th Floor,

     3-5-817/818, Basheer Bag, Hyderabad – 500 029.           …        Opposite parties

   

 

 

            This case coming on 10.02.2016 for final hearing before this Forum in the presence of Sri P.A. Chowdary, Advocate for the complainant and Sri M. Sambasiva Rao, Advocate for the 1^st & 2^nd opposite parties and the 3^rd opposite party having been set exparte, and having stood over till this date for consideration, this Forum has pronounced the following:  

 

O R D E R

[Per Smt.H.V. Ramana, President(FAC)] 

This is a complaint filed by the complainant U/Sec.12 of Consumer Protection Act 1986 to direct the 1^st opposite party to pay an amount of Rs.9,45,266/- towards the total claim amount in three claims with interest at 24% p.a. from the date of letter of repudiation till the date of realization and pay damages of Rs.50,000/- for the breach of contract.

2.         The case of the complainant is as follows:- It is submitted that the complainant obtained a Marine Cargo open Policy bearing No.151100/21/11/02/00000090 by paying premium of Rs.67,836/- from the 1^st opposite party covering accidental damage/risk, if any, occurred to the eggs, while on transit anywhere in India covering the period from 24.12.2011 till midnight of 23.12.2012 and insured amount is Rs.6,00,00,000/-. The complainant states that while exporting eggs to various places at different dates and while on transit met with accident and sustained damage on various occasions is as follows:-

No.	Date of accident	Invoice No. & Date	Place of accident	Amount of loss sustained
1.	28.1.2012	444 23.1.2012	Entelly Port area, Kolkatta, West Bengal	4,79,907
2.	12.3.2012	523              11.3.2012	NH-5, Ganjam District, Orissa	2,79,069
3.	17.4.2012	15                         15.4.2012	NH-6, near Rupsa, Balasore Dist, Orissa	1,86,290
			Total	9,45,266

 

Immediately, after the accident, the complainant informed the same to the 1^st opposite party and the surveyor of the 1^st opposite party assessed the loss and submitted the report to the      1^st opposite party.  The complainant also submitted the claim forms along with material documents as required by the 1^st opposite party for settlement of the claim.  On 31.8.2012, the 1^st opposite party repudiated the claim on the ground that the complainant has no insurable interest for claiming amount as detailed above.  The complainant got issued legal notice on 10.10.2012 to the 1^st opposite party and the 1^st opposite party received the same and gave reply on 23.11.2012 with false allegations.  Hence, the complaint.

3.         The 1^st opposite party filed its written version and the same was adopted by the        2^nd opposite party.  The opposite parties denied all the allegations made by the complainant and the complaint is not maintainable either in law of on facts.  It is true that the complainant obtained Marine Cargo Open Policy bearing No.151100/21/11/02/00000090, valid from 24.12.2011 to 23.12.2012.  In the insurance policy handed over to the complainant, the basis of valuation and also the places of transit as well as the terms and conditions of the insurance contract are clearly mentioned. This opposite party states that as per the terms and conditions of the insurance policy, all the dispatches made by the complainant (insured) shall be declared to the 1^st opposite party and failure to do so entitles the 1^st opposite party to repudiate the claims, if any, lodged by the complainant. During the subsistence of the Marine Cargo Insurance policy, the complainant made the following three declarations, which are the subject matter of this complaint.

 

 

First Claim:

Date of consignment	Way bill	Invoice	Lorry No.	Destination	Value        Rs.
23.01.2012	No.429 dated 23.1.2012	No.444 dated 23.1.2012	AP 05 TT 5539	Kolkatta	6,73,241.00

 

Second Claim:

Date of consignment	Way bill	Invoice	Lorry No.	Destination	Value        1Rs.
11.03.2012	No.511 dated 11.03.2012	No.523 dated 11.03.2012	AP 05 Y 7794	Jamshadpur	6,56,376.00

 

Third Claim:

Date of consignment	Way bill	Invoice	Lorry No.	Destination	Value        Rs.
15.04.2012	No.15, dated 15.04.2012	No.15 dated 15.04.2012	AP 05 TU 2289	Kaliachak	5,28,547.00

 

This opposite party submits that in all the three invoices, basing on which the complainant made the three declarations mentioned above, contains a specific condition that “our responsibility ceases soon after the lorry leaves our godown”.  Thus, the consignor/insured/ complainant specifically mentioned in all the three invoices that it has no responsibility for safe delivery of the goods consigned.  It is specifically stated that the responsibility of the consignor/insured/complainant, ceases the movement the common carrier leaves the godown of the consignor/insured/complainant. This opposite party submits that in view of the specific stipulation in the invoice, the complainant has no right, title or interest in the goods sold by it and sent to the consignee through a common carrier. Thus, the complainant has no insurable interest in the goods consigned and consequently its claim is not maintainable. The complainant/insured/consignor did not charge any transit insurance in the invoice. This opposite party submits that under the Marine Cargo Policy issued by it in favour of the complainant, the consignments sent under CIF (Cost Insurance and Freight) alone are covered. Under CIF contracts, the consignor/insured/complainant quotes in the invoice “COST, INSURANCE AND FREIGHT”.  The seller/consignor is required to arrange insurance for the CIF value of the goods for the transit – point to point or from seller’s warehouse to the warehouse of the buyer.  This opposite party submits that in the three contracts mention above, the complainant did not mention the cost of insurance, but only mentioned the cost of the goods (eggs) and the cost of the freight. Hence, the three invoices are not CIF sale contracts. The three invoices mentioned above, are C and F (Cost and Freight) contracts. Under C & F contracts, the obligations and responsibilities of the seller ceases after the goods have been loaded and the responsibility of arranging insurance during transit shall be that of the buyer.  In the three invoices mentioned above, the complainant specifically mentioned that its responsibility ceases the movement the goods leave its godown. Thus, the three invoices mentioned above are C & F contract.  As explained above, the insurance  policy obtained by the complainant is only in respect of CIF contracts, but not for C & F contracts. This opposite party submits that since the three consignments mentioned above are not covered under the Marine Cargo Policy obtained by the complainant, it repudiated it claim.  This opposite party further submits that for the two reasons namely      (i) the complainant has no insurable interest under the three Marine Cargo Declarations since they are C & F contracts and as only CIF contracts are covered under the Marine Insurance Policy and (ii) that the complainant violated the mandatory condition that it should declare all its sales is not complied with, the 1^st opposite party for validly repudiated the claim of the complainant.  Hence, there is no deficiency of service on the part of this opposite party and the complaint is liable to be dismissed with costs.

4.         The proof affidavit filed on behalf of the complainant and Exs.A1 to A12 have been marked.  The proof affidavit filed on behalf of the 1^st opposite party and Exs.B1 and B2 have been marked. The complainant filed written arguments.

5.         Heard both sides.

6.         Points raised for consideration are:

 

1. Whether there is any deficiency in service on the part of the opposite parties?

            2. Whether the complainant is entitled for the reliefs asked for?

            3. To what relief?

         

 

7.  POINT Nos.1 & 2:  The admitted facts are that the complainant obtained Marine Cargo Open Policy (CIF + 10% extra) bearing No. 151100/21/11/02/00000090 vide Ex.A1 and paid an amount of Rs.67,836/- as premium. The said policy is covering the period from 24.12.2011 till midnight of 23.12.2012. The said policy is covering accidental, damage, risk, if any occurred to the eggs while on transit anywhere in India. The complainant also filed the copy of the Partnership deed vide Ex.A2. After submission of all the documents with regard to all three claims, the 1^st opposite party repudiated all the claims on 31.8.2012 vide Exs.A4, A5 and A6 and also filed other material papers along with these exhibits.  After repudiation of the claims, the complainant wrote a detailed letter in respect of printed profroma on the invoice i.e. “our responsibility ceases soon after the lorry leaves our godown”. The complainant submitted that it is a common statement to the customers, who are generally purchasing eggs directly from them, but not those goods which are transporting from their godown to various destinations. He also stated that past 10 years, they are doing the business and also taking the marine insurance policies from the opposite parties, if any accidents occurred during the course of their business, the opposite party settling the claims of the complainant.  He also stated that they are not collecting premium from the consignees, therefore, they have not declared the insurance premium in the invoice. As soon as the opposite party received the information with regard to the accident, the 1^st opposite party appointed a Surveyor and Loss Assessor by name Probal Biswas of Kolkata, he gave a detailed survey report to the opposite party and assessed the total loss as Rs.4,51,818-67ps in respect of the first claim. In the said report, he mentioned that the Lorry is carrying 1104 cartons each containing 210 poultry eggs i.e. in total 2,31,840 eggs. The said Lorry met with an accident under Entally P.S. Junction, Kolkata on 28.1.2012 early morning. The said truck hit from front in the lower middle portion by another vehicle. Due to the heavy impact in the lower middle portion of the truck, completely damaged, the eggs stacked on the lower portion of the stock. The remaining upper middle portion of the stack moved forwarded and collided with upper middle portion of the truck cabin rear wall. The said accident was reported and a case was booked under Section 279/427 I.P.C. and an F.I.R. was registered. The complainant filed invoice, in which he stated that the total value of the goods is Rs.6,73,241/-. They also filed waybill and other material documents before this Forum.

            With regard to the second claim, the complainant submitted the claim form and other material documents to the 1^st opposite party. The said accident is also surveyed by another surveyor’s firm by name Kamal Associates, Berhampur, Ganjam District. The name of the surveyor is Er.Salila. Ku. Satapathi, Chartered Engineer filed his surveyor’s report and stated that he visited the accident place and stated that the truck is carrying 1104 cartons and each carton contains 210 number of eggs and the said accident was occurred near Subalia Village on   NH-5 under Rambha P.S., Ganjam District, Orissa. The said goods were exporting to M/s. Dilip Egg Mart, Jamshedpur, Jharkhand.  A case was lodged by the police and stated on 12.3.2012 at 11-00 PM on the opposite side, a truck bearing No.ORG 3607 came in rash and negligent manner and dashed against the egg loaded vehicle. As per the telephonic instructions given by the opposite party, the surveyor assessed the same and gave his report in which he stated the net loss is Rs.2,27,241-82ps. The complainant filed the waybill and vehicle registration certificate and other documents before this Forum.

            In respect of the third claim, the complainant submitted the claim form and other material documents to the 1^st opposite party. The said accident is also surveyed by another surveyor by name Satya Narayan Gharai, Licensed Surveyor from Kurdha District, Balasore and filed his surveyor’s report and stated that he visited the accident spot and stated that the truck is carrying 1104 cartons and each carton contains 210 number of eggs and the said accident was occurred near Rupsa on NH-60. The said goods were exporting to M/s. National Egg Traders, Kalia Chowk. A case was lodged by the police u/s 279/337 I.P.C.  and met with an accident on 17.4.2012 near Rupsa on NH-60 behind an another vehicle to applied sudden break without prior signal, hence, insured’s driver also applied a break, but the load vehicle skidded, lost control, dashed behind the other vehicle due to inertia of motion, the egg cartons loaded behind the Lorry pushed forward and squeezed the other cartons. As per the telephonic instructions given by the opposite party, the surveyor assessed the same and gave his report in which he stated the net loss is Rs.1,41,212/-. The complainant filed the waybill and vehicle registration certificate and other documents before this Forum. When the opposite parties repudiated the claim, the complainant got issued a legal notice to the            1^st opposite party vide Ex.A7. The opposite party received the same and gave a reply vide Ex.A8. The complainant also filed various documents in respect of earlier settlements made by the 1^st opposite party vide Exs.A9 to A12. 

            The 1^st opposite party filed Ex.B1, in which they requested the complainant to clarify whether the insurable interest is exist at the material time and date of loss or not. They also filed Ex.B2 letter written by the opposite party.  The opposite party submitted that the complainant’s letter dt.1.9.2012 is materially altered by the complainant and the alter date is 10.8.2012 and filed along with the complaint. The complainant is having a malafide intention to somehow or the other to claim the amount from the opposite party. The claims made by the complainant are not true, valid and admissible. The opposite party contended that the complainant has to put strict proof of the allegations, which are not specifically admitted or traversed herein. The complaint may be dismissed with costs.

            The complainant relied on the following citation i.e. M/s. S. Papers Ltd. (through K.K. Jhunjhunwala) Vs. Divisional Manager & Ors., VII-1993(2), in which it was held that the insurance claim – marine insurance policy – insurance against risk for non-delivery of consignment – repudiation of claim on the basis of indefensible grounds – deficiency in service – insurance company is directed to pay the amount for which goods were insured.

The opposite parties argued and filed the material with regard to Insurable Interest of the insured. They relied and filed the instances of insurable interest u/s 9 to 16 of Marine Insurance Act, 1963.

They also relied on Sale of Goods Act u/s 19, in which “property passes when intended to pass:

 (1) where there is a contract for the sale of specific or ascertained goods the property

  in them is transferred to the buyer at such time as the parties to the contract intended

  to be transferred.

(2) for the purpose of ascertaining the intention of the parties regard shall be had to

 the terms of the contract, the conduct of the parties and the circumstances of the case.           (3) Unless a different intention appears, the rules contained in section 22 to 24 are  rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer.

Section 26 Risk prima facie passes with property: Unless otherwise agreed, the goods remain at the seller’s risk until the property therein is transferred to the buyer, but when the property there in is transferred to the buyer, the goods are at the buyer’s risk whether delivery has been made or not:

Provided that, where delivery has been delayed through the fault of either buyer or seller the goods are at the risk of the party in faults as regards any loss which might not have occurred, but for such fault.

Provided also that nothing in this section shall affect the duties or liabilities of either seller or the buyer as a bailee of the goods of the other property.

The opposite party also relied u/s 46, 47 and 49 of Sale of goods Act, in this it is clearly mentioned the rights of unpaid seller and the seller’s lien and termination of the lien.    

As per our observation, the citation filed by the complainant is applicable to the present case on hand and we also gone through the material filed by the opposite party with regard to insurable interest and some of the sections of the sale of goods Act. The main contention of the complainant is that they have insured their goods, which were transported by lorries to all over India under Marine Cargo Open Policy (CIF + 10% extra) when the contingent events occurs, the 1^st opposite cannot repudiate the claim on the pretext of lacking of insurable interest to the complainant. The 1^st opposite party themselves             appointed Surveyors and Loss Assessors as soon as they received the messages with regard to the accidents from the complainant, the surveyors surveyed the accident places and filed their reports.  The concerned police stations registered the cases and gave their reports. The Lorries that are met with accidents filed the requisite documents and also filed the waybills. The main contention of the opposite party is that the on invoices given by the complainant to the consignees clearly mentioned as “our responsibility ceases soon after the Lorry leaves our godown” because of this statement, the complainant is not having any insurable interest and the complainant ceases to be owner of the goods sold to the consignees and he has no insurable interest thereafter.  

The main contention of the opposite party is that the complainant is not declaring all its sales which is contrary to the terms and conditions, but after perusing the terms and conditions, it is no where mentioned that the complainant has to give all the details of the sales which were transported through lorries. In their terms and conditions, it is mentioned that Inspection of records: “the company and/or its agents will have the privilege at any time during the business hours to inspect assured records of dispatches made within the terms of the open policy”.  Basing on this condition, it is the duty of the opposite parties to verify with the records of the complainant as per the terms and conditions of the policy but, it is nowhere mentioned that the complainant to give all the detail of his sales. 

It is clearly mentioned on the face of the policy that the complainant took CIF plus    10 per cent extra, which means costs, insurance and freight. After perusing the policy and invoice, it is clearly mentioned that the value of the goods, packing charges and Lorry advance i.e. freight charges. The complainant also submitted that he is not collecting the insurance charges from his consignees.  But they mentioned the name of the insurance company on the invoice. In our opinion it is not necessary that when the complainant has taken a consolidated policy for a value of Rs.6,00,00,000/-. Mere printing on the invoice i.e. “our responsibility ceases soon after the lorry leaves the godown” the opposite party cannot say that the complainant is not having the insurable interest and to evade their responsibility in paying the claim amount and moreover there is no dispute between the consignor and the consignee with regard to the goods sent by the complainant. The surveyors who were appointed by the opposite parties gave detailed reports to the loss of the goods damaged in the accident. In his report, he has not written anything adverse with regard to the accident and also the damaged goods. Therefore, we opined that it is just and necessary to rely on the report filed by the Surveyors reports and the opposite parties failed to pay the claims even after filing all the documents by the complainant amounts to deficiency in service. The opposite parties are liable to pay the three claim amounts as assessed by their own surveyors i.e. Rs.4,51,819/-, Rs.2,27,242/- and Rs.1,41,212/- with interest and costs. The complainant obtained the policy from the 1^st opposite party and seeking the claim against the 1^st opposite party only.  Hence, the claim against the opposite parties 2 & 3 is dismissed.      

8.   POINT No.3:  In the result, the complaint is allowed in part, directing the 1^st opposite party to pay the three claim amounts of Rs.4,51,819/-, Rs.2,27,242/- and Rs.1,41,212/- with interest @ 8% p.a. from the date of repudiation i.e. 31.08.2012 till realization to the complainant. We further direct the 1^st opposite party to pay Rs.5,000/- towards the costs of the complaint to the complainant. Time for compliance is two months from the date of this order.  

Typed to dictation, corrected and pronounced by us in open Forum, on this the 22^nd day of February, 2016.

    

                   Sd/-xxx                                                                                   Sd/-xxx

              MEMBER                                                                              PRESIDENT(FAC)

         

 

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

 

FOR COMPLAINANT: None.                                         FOR OPPOSITE PARTIES: None.

DOCUMENTS MARKED

 

FOR COMPLAINANT:

 

Ex.A1    Photocopy of Marine Cargo open policy.

Ex.A2    Photocopy of Deed of partnership.

Ex.A3    Photocopy of letter addressed to the 1^st opposite party dt.10.8.2012.

Ex.A4    Photocopy of letter of repudiation dt.31.8.2012 with regard to accident dt.28.1.2012,

  Invoice No.444 along with all material papers submitted to the 1^st opposite party.

Ex.A5    Photocopy of letter of repudiation dt.31.8.2012 with regard to accident dt.12.3.2012,

  Invoice No.523 along with all material papers submitted to the 1^st opposite party.

Ex.A6    Photocopy of letter of repudiation dt.31.8.2012 with regard to accident dt.17.4.2012,

  Invoice No.15 along with all material papers submitted to the 1^st opposite party.

Ex.A7    copy of the legal notice dt.10.10.2012 issued to the 1^st opposite party.

Ex.A8    Reply notice dt.23.11.2012 issued by the 1^st opposite party.

Ex.A9    Bunch of material papers with reference to settlement of claim with reference to

              Invoice No.39, dt.24.9.04.

Ex.A10 Bunch of material papers with reference to settlement of claim with reference to

             Invoice No.185, dt.22.7.07.

Ex.A11 Bunch of material papers with reference to settlement of claim with reference to

             Invoice No.276, dt.4.10.07.

Ex.A12 Bunch of material papers with reference to settlement of claim with reference to

             Invoice No.94, dt.7.7.08.

 

FOR 1^st & 2^nd OPPOSITE PARTIES:-

Ex.B1    Letter dt.16.8.2012 by the 1^st opposite party to the complainant.

Ex.B2    Reply letter dt.1.9.2012 from the complainant.

 

 

                  Sd/-xxx                                                                                       Sd/-xxx

              MEMBER                                                                              PRESIDENT(FAC)