Dasondhi Mal Kapal Dev vs ORIENTAL INSURANCE CO. LTD.

COMPLAINANT and the Opposite Party No. 1 before the State Commission have filed these Appeals against the judgment and order dated 1.2.2008 passed by the State Consumer Disputes Redressal Commission, Delhi (in short, ''the State Commission'') in Complaint Case No. C -378/99 wherein the State Commission allowing the complaint has directed the Opposite Party Insurance Company to pay a sum of Rs. 9,76,000 to the Complainant towards the insured value of the consignment along with a lump -sum compensation of Rs. 50,000. Facts:

Complainant Firm which is engaged in the business of manufacture and export of Jewellery sent an export consignment of gold jewellery worth US$ 28,280 (equivalent to Indian Currency Rs. 9,76,000) to its importer, M/s. Fine Arts in U.K. through Respondent No. 2 -Swiss Air Transport Co. Ltd. (OP. No. 2 before the State Commission and hereinafter to be referred to as "the Air Carrier") vide Air Bill No. 085491 -2352 on 27.10.1994. The consignment was insured under a "All Risks" Marine Insurance Policy with the Appellant in First Appeal No. 247/08 and Respondent in FA No. 148/08 (Opposite Party No. 1 before the State Commission and hereinafter to be referred to as the ''Respondent'') for a sum of Rs. 9,76,000. The policy was valid from 27.10.1994 to 25.11.1994 as in terms of Clause 5 of the Institute Cargo Clauses it was to be terminated on the expiry of 30 days after unloading the subject matter insured from the aircraft at the final place of discharge. The export was carried out through the MMTG.

CUSTOMS Authorities at the IGI Airport conducted proper inspection of the contents of the consignment physically and the jewellery was packed securely in a tin box which was sealed. The cleaning agent of the consignee, M/s. Fine Arts contacted H.M. Customs and Excise, Birmingham Airport for delivery after getting the release order from Barclays Bank. On examination of the consignment on 12.7.1995, it was found by the Customs Authorities that though the wax seals were intact on the tin box but the entire jewellery was missing from it. On receiving the information, Complainant wrote letters to the Indian Custom Authorities and the Air Carrier. Indian Custom Authorities did not respond to the letters. However, the Air -Carrier denying its liability advised the Complainant to approach the Respondent Insurance Company. Complainant lodged the claim with the Respondent Insurance Company which was repudiated vide letter dated 6.3.1998 on the grounds that the loss had not taken place during the currency of the policy and the Complainant had no insurable interest in the consignment. According to the Complainant, as the loss occurred during the transit the Insurance Company was liable to indemnify the loss. Complainant, being aggrieved, filed the complaint before the State Commission. On being served, Respondent Insurance Company entered appearance and filed its written statement taking the preliminary objections that the Complainant has no locus standi to file the complaint as it was neither the consigner nor the consignee nor even the endorsee of the Airway Bill under which the consignment was dispatched; that the Complainant took the Insurance Policy without an insurable interest in the goods; that the loss had not taken place during the subsistence of the policy. On merits, it was pleaded that the MMTC Ltd. was the seller and the order for purchase of the goods was placed by the overseas buyer only upon the MMTC Ltd. and therefore, the Complainant was not having any right over the overseas consignment; that the Complainant had received the payment of the goods which were consigned to the importer; that the Insurance Company is not liable to indemnify the insured.

STATE Commission after considering the facts, pleadings and evidence led by the parties and relying upon the ''Examination Report'' and ''Certificate of Loss'' issued by the H.M. Customs and Excise, Birmingham Airport, held that the Insurance Company was liable to indemnify the Insured as the loss had taken place during the transit and the validity of the policy. Accordingly, State Commission allowed file complaint and directed the Respondent Insurance Company to pay a sum of Rs. 9,76,000 to the Complainant towards the value of the consignment along with a lump sum compensation of Rs. 50,000 for mental agony and harassment.

STATE Commission in its order observed as under: 17. It is a clear case of loss during the transit because of ''Examination Report'' and ''Certificate of Loss'' issued by H.M. Customs and Excise, Birmingham Airport that wax seals were intact on the tin box but the entire jewellery was found missing and possibility of loss at UK was not at all there. This fact demonstrates that the loss had taken place in transit only for which the OF No. 1 alone is liable to indemnify the loss. 18. The contention of the Counsel for the OP that this insurance terminated on the expiry of 30 days after unloading of the subject matter issued from the aircraft at the final place of discharge does not hold water. It was not a case of unloading but it was a case that empty box was found at the destination with wax seals intact meaning thereby that the loss occurred when the goods were in possession of the OP No. 2 and as such the loss occurred within validity of the period of the policy issued by the OP No. 1.

Dissatisfied with the order passed by the State Commission, both, the Complainant and the Opposite Party No. 1, have filed separate Appeals. First Appeal No. 148/08 has been filed by the complainant seeking interest on the awarded amount while the First Appeal No. 247/08 has been filed by the Respondent Insurance Company for setting aside the impugned order. We have heard the learned Counsel for the parties at length.

LEARNED Counsel appearing for the Complainant contends that the State Commission has committed an error in not granting the interest as the Respondent had withheld the full insured amount of the consignment for a long period without any plausible reason.

LEARNED Counsel appearing for the Respondent Insurance Company contends that the complaint filed by the Appellant was not maintainable in law as the Complainant was having no locus standi in the case. He was neither the consignor nor consignee nor even the endorsee of the Airway Bill under which the goods were consigned to the foreign buyer; that the Complainant being none of these parties, has no insurable interest in the goods exported; that the Complainant has failed to prove that the loss had taken place during the currency of the policy; that the consignment of jewellery was dispatched on 27.10.1994 whereas the loss was detected on 12.7.1995; that the policy commenced only on 27.10.1994 and expired on or about 25.11.1994 in terms of Clause 5 of the Institute Cargo Clauses which provides that the policy has to be terminated at the latest on the expiry of 30 days after unloading the subject matter insured from the aircraft at the final place of the discharge. The facts are not in dispute before us. The consignment of jewellery was dispatched on 27.10.1994. The consignment was insured with the Respondent Insurance Company for Rs. 9,76,000. As per Clause 5 of the Institute Cargo Clauses the policy was valid from 27.10.1994 to 25.11.1994 as it was to terminate at the latest on the expiry of 30 days after unloading the subject matter insured from the aircraft at the final place of discharge. The consignment reached at the destination, i.e. Birmingham Airport on 28.4.1994 and remained with the customs authorities for 8 -9 months. On 12.7.1995, on examination of the consignment, it was found by the customs authorities that though the wax seals on the tin box were intact but the jewellery contained therein was missing. There is no evidence on record to show as to when actually the loss had occurred. In the absence of any such evidence, it cannot be held that the loss had taken place during the subsistence of the policy. Loss could have occurred any time between 27.10.1994, when the goods were loaded in the aircraft and 12.7.1995 when it was detected by the Customs Authorities in UK that the goods had been stolen from the box whose seals were intact. If the loss had taken place during the currency of the policy, the Insurance Company was liable to indemnify the insured for the loss suffered by it. There is no evidence on record to show as to when loss occurred, i.e.; whether during the validity of the policy or after the expiry of the policy period. The Insurance Company could be made liable only if the loss had occurred during the validity of the policy from 27.10.1994 to 25.11.1995. There is no evidence on record to prove that the goods were stolen during this period. It cannot be assumed simply because the seals were found to be intact on 12.7.1995 that the theft had taken place during the validity of the policy from 27.10.1994 to 25.11.1994. State Commission has wrongly relied upon the "Examination Report" and the "Certificate of Loss" issued by the H.M. Customs and Excise, Birmingham Airport to conclude that the loss had occurred during the validity of the policy. The assumption made by the State Commission is erroneous and not based on any evidence.

FOR the reasons stated above, the impugned order passed by the State Commission is set aside and the First Appeal No. 247 of 2008 filed by the Respondent Insurance Company is allowed. Consequently, the First Appeal No. 148 of 2008 filed by the Complainant seeking interest on the awarded amount is dismissed. No order as to costs. Pursuant to the order dated 17.7.2008 of this Commission, Respondent Insurance Company deposited a sum of Rs. 5,00,000 with this Commission which had been withdrawn by the Complainant on furnishing adequate security to the satisfaction of the Registrar of this Commission. Since we are allowing the appeal filed by the Respondent Insurance Company, we direct the Complainant to refund the withdrawn amount to the Insurance Company within a period of eight weeks from today failing which the amount shall carry interest @ 6% p.a. from the date of withdrawal till payment. Registry is directed to refund the sum of Rs. 35,000 deposited by the Respondent Insurance Company as statutory deposit along with accrued interest.