PER SHRI. S.S. PATIL - HON’BLE MEMBER :
1) This is the case of deficiency in service on the part of Opposite Parties as they repudiated the insurance claim of the Complainant, on the frivolous ground and thereby caused the financial loss to the Complainant.
2) The facts of the case as alleged by the Complainant are as follows –
The Complainant is dealing in the business of importing of commodities from abroad. In the month of April,03 the Complainant had imported 500 MT(Metric Tons) of Palm Oil from Indonesia. The Complainant had taken Marine Cargo Policy from the Opposite Parties bearing No.020100-21-02-03405 and duty endorsement No.020100-21.3.30027 effective for 6 months from 06/04/03 from Indonesia port to Mumbai covering Crude Palm oil (being insured subject matter). The consignment was to be brought on board vessel MV Theresa II under bill of lading.
3) The Complainant paid the premium for the above said policies. The consignment was shipped on board vessel Theresa II. It was in good order and in sound condition. Full quantity of 500 MTS of Palm Oil was loaded on the board. However, the ship arrived at Mumbai Port and the consignment was received by the Complainant. A shortage of 17.38 M.Tons of oil was found in the said consignment. The Opposite Party was contracted and informed about the loss (shortage). The Opposite Party appointed the surveyor M/s. Inscape Services who surveyed the loss and gave its report on 25/04/03.
4) As per the terms of the policy, an excess clause was applicable at .5% of the total consignment (Insured quantity). Therefore, 2.5 M.T. is allowed to be deducted from the shortage quantity for claiming the insurance. Thus the total shortage quantity 17.380 – 2.5 M.Ts (standard .5% deduction) = quantity of 14.88 MTS is insurable amount. The Complainant could claim the cost of this quantity of Palm Oil. According to the Complainant, the cost of 14.88 MTS of Palm Oil was Rs.3,55,444/-. The Complainant has further averred that the Opposite Party was also liable to pay the loss of duty claim amounting to Rs2,45,425/- plus the surveyors fee of Rs.5,250/- total amount being 6,06109/-.
5) The Complainant then filed his insurance claim with the Opposite Party on 17/05/03 but the Opposite Parties rejected the said claim vide its letter dtd.25/05/04 on the following grounds –
“Ordinary leakage I exclusion under the Policy as per 4.2 ICC.” As per the Complainant, this repudiation of the claim was illegal and arbitrary. The Complainant vehemently stated that there was no leakage. The shortage was ascertained by the surveyor at the time of taking delivery of the consignment. The Complainant further alleged that the Opposite Party is guilty of deficiency in service as well as unfair trade practice. The Complainant finally has sought the following reliefs.
a) The Opposite Party to pay the genuine claim of the Complainant worth Rs.3,55,444/- with interest at Rs.18 % p.a. from the date of claim till realization.
b) Also the Opposite Parties should pay to the Complainant the loss of duty claim of Rs.2,45,415/- with interest at 18 % p.a. as above alongwith the surveyors fee of R.5,250/-.
Total claim being of Rs.6,03,109/-. Again interest on this amount till realization. The Complainant also prayed for compensation of Rs.5 Lac for loss of his business with interest on this amount and Rs.50,000/- towards the cost of this complaint.
6) The Complainant has attached the Xerox copies of the following documents in support of his complaint.
a) Policy document bearing no.020100/21/02-03405.
b) Survey report of surveyor Inscape Services dtd.25/04/03.
c) A letter dtd.30/04/03 from surveyor to the Complainant.
d) Claim bill dtd.17/05/03.
e) Letters of the Complainant to the Opposite Parties for settling the claim, dtd.17/05/03, 28/06/04, 12/08/04, 11/010/04.
f) Letter of repudiation from Opposite Party, dtd.25/05/04 addressed to the Complainant.
g) Letters dtd.05/12/03 and 18/08/03 from the Complainant to the Opposite Party.
h) Letter dtd.17/05/03 of the Complainant to the Opposite Party.
7) The Complaint was admitted and notices were served on the Opposite Parties but, the Opposite Parties did not appear before the Forum in the year 2005. Therefore, ex-parte order was passed against the Opposite Parties. Complainant then filed his affidavit in evidence and written argument wherein it reiterated the facts mentioned in the complaint. The Forum then passed a final order allowing the complaint on 13/04/07.
8) The Opposite Party then preferred an appeal in the Hon’ble State Commission against the order of this Forum dtd.13/04/07. The appeal was allowed setting aside the order of this Forum.
9) The relevant order of the Hon’ble State Commission in brief is as follows -
“Matter is remitted back to the Forum below subject to payment of cost of Rs.10,000/- payable to the original Complainant within 45 days from the date of receipt of this order with direction that original Opposite Parties shall be given an opportunity to file their written statement and then the Complainant shall be allowed to file rejoinder if any, and after parties led their respective evidence as per Sec.13 of Consumer Protection Act, 1986, dispute be settled according to law etc.” This order was passed on 02/06/09.
10) Accordingly as per the above order the compliant was remitted to this Forum. After receipt of the order dtd.02/06/09, passed by the Hon’ble State Commission, Maharashtra, notice was again served on the Opposite Parties. Opposite Parties appeared before this Forum through their Ld.Advocate. they filed their joint written statement wherein they denied almost all the allegations made in the complaint and specifically stated that the Complainant had taken the policy for commercial purpose and therefore, Complainant is not a ‘Consumer’ within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986.
11) The Opposite Parties have further averred that the surveyor had surveyed the loss and he had opined in his survey report that “Normal shortage, arising from adherence of product, remaining in the vessel’s cargo tanks lines, barge tanks, and motor lorries transporting cargo from Mumbai Dock to storage pace, operational & handling loss viz leakage, spillage etc. at various stages of operation from load port to consignee’s final destination.” The Opposite Parties have further submitted that the claim falls under the following exclusion clause 4.2
4 : In no case shall the insurance cover
4:1 …………..
4.2 “Ordinary leakage, ordinary loss in weight or volume or ordinary wear and tear of the subject matter insured.”
And therefore, the Opposite Parties rejected the claim as it does not fall within the purview of the policy.
12) The Opposite Parties have further asserted that the Complainant had not produced any documentary evidence to substantiate the alleged shortage. They also had not filed document supporting the monetary claim in respect of the alleged shortage. Therefore, the Opposite Parties have finally prayed that the Complainant is not entitled to any relief prayed for by it (the Complainant).
13) The Complainant then submitted rejoinder to the written statement of the Opposite Parties. The Complainant also submitted it written argument wherein it reiterated the facts mentioned in the complaint. The Opposite Parties also submitted their written argument wherein they reiterated the facts and points raised by them in their written statement. Copies of the I.C.C.A. and citations were also submitted.
14) We heard the Ld.Advocates for both the parties and perused all the above document submitted by both the parties. Our findings are as follows -
In the month of March, 2003 the Complainant had imported 500 Metric Tons of Palm Oil from Indonesia. For this purpose, the Complainant had taken Marine Cargo Policy No.020100-21-02-03405 from the Opposite Party to cover any loss or damage to the 500 MTS of Palm Oil during the journey from Indonesia to India upto the tanks at Haji Bandar in Mumbai Port. The Policy was valid for 6 months from 06/04/03. The crude palm oil was to be carried from Indonesia to Mumbai on board vessel MV Theresa II. The consignment was loaded on this Vessel on 29/03/03 and arrived with the consignment at Mumbai Port on 20/04/03. On 20/04/03 the vessel was discharged. The Complainant was supposed to receive the consignment in barge at mid stream.
15) A Sec.64 UM2 of Insurance Act prescribes the appointment of a licensed surveyor by the Opposite Party. Accordingly the Opposite Party had appointed a surveyor “Inscape Services” to survey the shortage of Palm Oil during the journey from Indonesia to Mumbai. Accordingly the surveyor attended MT Theresa II at Mumbai Harbor on 20/04/03. We have taken into consideration the report of this surveyor. The surveyor supervised the discharge of cargo from the vessel MT Theresa to barge of the Complainant and from barge to tank lorries. The surveyor also supervise the weighing of the tank lorries at nominated weigh bridge and further weighing of the cargo at storage of the consignee.
16) The Ullage report on arrival at Mumbai and before discharge is important. As per this Ullage report the total quantity of the Palm Oil in the Vessel tank was 500.107 MTS. The B/L quantity was 500 MTS. Thus, there was excess of .107 MTS which is negligible. The surveyor has further stated that after discharging cargo the ship tank was inspected & the same was well drained and empty. After receiving the cargo the barge tanks were gauged and the quantity received in barge was ascertained using calibration table. The inlet/outlet valves of the barge were closed and sealed. The barge arrived at Haji Bandar. On arrival, the surveyor gauged the barge tanks and found the quantity 475.650 MTS. This Palm Oil was transferred to tank lorries. All the inlet, outlets and manhole covers at the tank lorries were closed and sealed with official monogram of the surveyor. The surveyor witnessed the weighment of the tank lorries containing palm oil at insured’s storage installation. The seals of tank lorries on arrival at storage installation were intact. The tank lorries were weighed at the installation bridge for gross weight and after unloading for tare weight to ascertain net weight of the cargo. After unloading the cargo the supervisor inspected each tank lorry to ensure that there I no oil left in the tank lorry. The surveyor reports that, the quantity of Palm Oil received at M/s. Raj Oil Mills, Mumbai is 482.620 MTS. Therefore, the shortage of Palm Oil received the Complainant was 17.380 MTS at Raj Mills.
17) The surveyor has observed that the shortage of the Palm Oil, 17.380 MTS. can be attributed to the following reasons –
a) “Normal shortage arising from adherence of the product remaining in the Vessel’s cargo tank, lines, barge tanks and motor lorries transporting cargo from Mumbai Dock to storage installation.”
b) “Operational and handling loss viz leakage, spillage, etc. at various stages of operation from load port to consignee’s final destination.”
c) The shortage can also be attributed to ship’s experience factor, accuracy of ship’s tank calibration.
d)The shortage can also be attributed to skilful pilferage during transit.
In view of this report we observed that, what loss is covered under the Marine Insurance Policy. The Institute Cargo Clause (A) stipulates “Risks covered”.
“This insurance covers all risks of loss to the subject matter insured, except as provided in Clause 4,5 and 7 below.”
18) The Opposite Party repudiated the claim as per exclusion clause 4.2 which stipulates “In no case shall the insurance cover, ordinary leakage, ordinary loss in weight or volume or ordinary wear & tear of the subject matter insured i.e. ordinary leakage, ordinary loss in weight. However, the perusal of the survey report does not disclose that there was a leakage of Palm Oil from any of the tanks either of main vessel, or barge tanks or tanks lorries. On the contrary the report specifically states that the valves, outlets and inlets were checked by its supervisor and that thy were found intact/and sealed. Even the Ullage report of the tank vessel shows excess of .107 MTS Palm Oil at Mumbai Harbor mistream. This quantity of 500.175 MTS was transferred to the tanks of barge infront of the surveyor. That time also the tanks were inspected by the surveyor and the tanks were found fit to receive the subject oil. When the barge arrived at Haji Bandar the quantity was 475.650 MTS. At this stage the surveyor noticed the shortage in the Palm Oil consignment.
19) At Haji Bandar, the consignment was transferred to 28 tank lorries. After filling these tankers, the inlets, outlets man whole covers were closed and sealed by the surveyor. During the transit from Haji Bandar to Raj Oil Mills (Insured’s Storage Place) these tank lorries were weighed. At first time the tank lorries were weighed at Vijay Fair Scale. Here the net weight of the Palm Oil in 28 tanks lorries was found to be 484.190 MTS by the surveyor. Thereafter when the tanks lorries reached at their final destination at Raj Oil Mills (Insured’s Storage Installation), again the consignment loaded in 28 tanks lorries was weighed infront of surveyor at installation weigh bridge before weighing the seals were verified and they were intact. At this stage the consignment was found to be weighed as 482.620 MTS, showing 17.38 MTS shortage.
20) The surveyor has specifically stated that the inlets, outlets, manhole covers were closed and intact. So there can not be any leakage. He has not averred he or his supervisor found any leakage to any of the tanks carrying the Palm Oil. Still at the last conclusion para he attributes the shortage to operational and handling loss viz leakage, spillage etc. Thus, the surveyor is making contradicting statement to what he has earlier described the entire journey of the consignment from the vessel tank to the Raj Oil Mills. In view of these facts and circumstances of this case, we do not find that the shortage received by the insured is a ordinary leakage, loss in weight or volume of the Palm Oil.
21) In our view, the Complainant (insured) received 482.620 MTS of Palm Oil and thus received shortage of 17.38 MTS of the Palm Oil which was covered under insurance policy. This shortage does not fall under clause 4.2 of the Institute Cargo Clause A as there was no any ordinary leakage, ordinary loss in weight. The ordinary loss is already taken into account as .5% of the total sum insured and as such the Complainant has deducted 2.5 metric tons from the total shortage and claimed the cost of only 14.880 MTS.
22) Therefore, from the points discussed above we are of the considered opinion that the Complainant is entitled to cost of 14.88 MTS of Palm Oil paid to the exporter at Indonesia in March, 2003.
23) The Opposite Party is to ascertain the cost of the 14.88 MTS paid by the Complainant as per the commercial consignment dated March, 2003. Hence, we pass the following order –
O R D E R
i.Complaint No.227/2005 is partly allowed.
ii The Opposite Parties No.1 & 2 are jointly and/or severally liable to pay the insurance claim of the Complainant.
iii.Opposite Parties No.1 & 2 are directed to pay to the Complainant jointly and/or severally the cost of 14.88 Metric
Tons of Palm Oil paid by the Complainant to the Supplier in Indonesia with 9 % interest on the said amount
from 25/05/2004 till the realization of entire amount.
iv.Opposite Parties No.1 & 2 are also directed to pay jointly and/or severally Rs.5,000/-(Rs.Five Thousand Only) to
the Complainant for the cost of this complaint.
v. Opposite Parties No.1 & 2 are also directed to comply with, jointly and/or severally the above said order within
30 days of the date of receipt of this order.
vii. Certified copies of this order be furnished to the parties.
