Future Generali Insurance Company Ltd vs Micron Precision Screw Ltd

REVISION Petition no. 666 of 2013 has been filed against the judgment/ order dated 26.11.2012 of the Haryana State Consumer Disputes Redressal Commission, Panchkula (''the State Commission'') in Appeal no. 1302 of 2012.

THE brief facts of the case as per the respondent/ complainant are that the respondent had obtained two insurance policies of Inland Transit (Road/ Rail) under specific Marine Cargo Insurance Policy vide Policy no. FGI SHB 29 -2008 and policy no. FGI SHB 28 2008 issued on 11.09.2008. The material insured in policy FGI SHB 29 2008 was HEX NUT and packing description as per insurance was 761 cartons packed in 21 PLTS Ground Weight 20900 kgs. Further the material insured in policy no. FGI SHB 28 2008 was HEX NUT and packing description was 324 cartons in 09 PLTS (Ground weight 8015 kgs) as mentioned in the policy. The policies issued were Inland Transit (Road/ Rail) as mentioned in the policies itself.

THE respondent company imported the material from Shanghai China to Nhava Sheva India by sea. When the material reached Nhava Sheva India, the material was inspected by the officials of the insurance company for insurance and insurance policy was issued after inspection for insurance cover of consignment material delivery to the respondent company. The policy issued was Inland Transit (Road/ Rail) which covers loss/ damage of consignment. The specific Marine Transit Policy coverrf transit damage as the consignment material of respondent of HEX NUT dispatched vide invoice no. EURFL08705743 NHA dated 26.07.2008 and SXNHC 8665 dated 24.07.2008 were reached by Truck no. RJ 32 GA 3483 in the factory premises on 15.09.2008 and the same was unloaded on 16th and 17th September 2008. The respondent was stunned to see at the time of receiving and unloading that the material in truck no. RJ 32 GA 3483 was in loose and wet condition and most of the cartons were torn and the material approximately 9 MT., various size materials was without boxes and mixed with each other. It was impossible to segregate the material and the material was damaged and scraps. Moreover the weight material consignment was short by approximately 1200 kg. Respondent submitted that technically on account of damage, threat of nuts were damaged from both sides internally due to mixing and collision with each other and the material became scrap and waste material for the respondent as the boxes were found torn and material were mixed each other in carrying vehicle Truck no. RJ 32 GA 3483. Thus the total loss of 10 lakh was caused to the respondent and the insurance company was liable to pay the transit damage along with compensation with interest and cost.

THE transit insurance was obtained by the respondent from the petitioner insurance company for covering the damage of material in transportation. The respondent had not received the claim amount on account of damage material in transit.

OVERTURNING of the truck no. RJ 32 GA 3483 occurred on the transit route and the same was responsible for the wetting and damage of the material due to rain water as described by occupants of vehicle and other persons. The insurance company was liable for damages of material of respondent due to overturning and the insurance company had wrongly raised the plea just to avoid legal claim of the respondent.

ON 25.02.2010, the insurance company repudiated the claim of the respondent on the ground that the policy issued for Inland Transit (Road/ Rail) does not cover the loss/ damage due to rain water and mishandling by carrier. The petitioner has wrongly repudiated the claim in order to avoid his legal liability.

THE respondent prayed for the following relief from the District Consumer Disputes Redressal Forum, Rohtak, ("the District Forum"). Respondent is entitled for the total loss of consignment of Rs.10 lakh with interest being Inland Transit (Road/ Rail) under specific Marine Transit policy of insurance of the petitioner as the transit/ damage/ shortage of consignment material of HEX NUT dispatched vide invoice no. GHHIC0800110 & 2 both dated 10.06.2008 and bill of lading no. EURFL08705743NHA dated 26.07.2008 and SXNHC8665 dated 24.07.2008 in Truck no. RJ 32 GA 3483 along with interest 18% per annum from the date of damage/ loss; Respondent was entitled for compensation of Rs.7 lakh on account of harassment, mental agony and deficiency in service; Respondent was entitled for litigation expenses of Rs.15,000/ -

IN their report before the District Forum, the petitioner/ opposite party had taken the preliminary objections that the complaint was bad on non -joinder of necessary parties that the respondent/ complainant had failed to implead the carrier M/s Agarwal Transport Corporation who were the necessary parties. The petitioner had further stated that it was totally wrong and denied that the alleged material insured was rightly packed up to the standard of the insurance company. The respondent should be put to strict proof of the same.

IT was alleged that the policy issued to the respondent was the Inland Transit (Road/ Rail) clause B cover loss/ damage to the consignment due to the below perils: (i) Fire; (ii) Lightning; and (iii) breakage of bridges (i) Collision with or by the carrying vehicle; (ii) overturning of the carrying vehicle; and (iii) derailment or accidents of like nature to the carrying railway wagon/ vehicle.

THE issued Inland Transit (Road/ Rail) clause B did not cover the loss/ damage caused due to rain water and mishandling by the carrier. The claim of the respondent had been rightly and legally repudiated on the basis of the survey and investigations done by "Protocol Surveyors and Engineers Pvt. Ltd.". The claim of the respondent was rejected after due diligence and consideration of the evidence available and as per the terms and conditions of the issued insurance policy.

THE intimation regarding the alleged loss had been given to the petitioner after a long period of the alleged occurrence and was a complete after thought and the reason for the same was only malicious intention of the respondent to hide the true facts of the case. As far as short material of approximately 1200 kg was concerned the same was excluded in risks covered as per Clause (B) 4 (4.2) and also the responsibility of the short material was of the carrier and not of the insurance company. Moreover the alleged loss as per the survey report was of Rs.6,13,793/ - subject to the policy terms and conditions. It was specifically denied that the respondent met with a loss of Rs.10 lakh and the petitioner was liable to pay the same.

DISTRICT Forum vide their order dated 26.09.2012 while allowing the complaint observed as under: "The respondent company has not placed on record any evidence in order to prove that the said loss/ damage has been caused due to rain water and mishandling by the carrier. On the contrary the survey report reveals that the repudiation has been based upon the bare opinion of the surveyor vide clause M, i.e., the loss in our opinion took place due to exposure to rain water and or mishandling by the carrier during the course of transit. At this stage it is relevant to mention that the said opinion is not based upon any evidence. In the very next clause N it has been reported by the surveyor that loss is total loss whereas affidavit of Senior Executive of the company in paragraph no. 4 states that as per the survey report, the material (package) was damaged before dispatched from Nhava Sheva Port, Mumbai. As such the contradictory versions have been observed from the evidence. On the one hand as per the affidavit of Senior Executive the material/ package was damaged before dispatch from Nhava Sheva Port Mumbai and on the contrary as per the survey report, the loss has been opined due to exposure to rain water and mishandling by the carriers during the course of transit. Therefore, it is observed that repudiation of claim is merely based upon suspicion, guess work and imagination as is not supported by any evidence. Therefore, repudiation of claim is invalid being not legally justified. In view of the aforesaid discussion and findings the objection of jurisdiction and non -joinder of necessary parties is of no avail to the opposite party.

As per complaint, the complainant has sought compensation of Rs.1.00 lakh on account of loss of material whereas the surveyor has assessed the total loss for a sum of Rs.8,14,943/ - at page no. 7 of the report and was finally assessed the loss after deducting salvage of Rs.2,01,150/ - for a sum of Rs.6,13,773/ -. Admittedly the sum insured qua both the policies is Rs.6,65,055/ - and Rs.17,31,793/ -. The surveyor in his report has specifically declared a case of total loss as it was not possible to segregate bulk quantity mixed/ rusted Hex Nuts for its desired purpose.

Therefore, on the basis of total loss the complainant is entitled for a sum of Rs.8,14,943/ - as assessed by the surveyor. The complainant is also entitled for an interest @ 12% per annum from the date of loss, i.e., 15.09.2008 till its actual realisation. The complainant is also entitled for the compensation of Rs.50,000/ - for the harassment, mental agony and litigation expenses and for taking false defence by the opposite party to repudiate the lawful claim of the complainant. Resultantly the complaint is partly allowed".

AGGRIEVED by the order of the District Forum, the petitioner filed an appeal before the State Commission. The State Commission dismissed the appeal in limini by observing as under: "We have gone through the impugned order and have taken into consideration the facts and circumstances of the case and are of the view that in the instant case, two facts were not denied by the appellant/ opposite parties. First that loss or damages to the consignment of the complainant was caused during the currency of the policies issued by the appellant and in transit. Second that surveyor appointed by the company himself had assessed the loss to the tune of Rs.8,14,943/ - as is discussed by the District Forum in the concluding paragraph of the impugned order. Despite these admitted facts of the case, appellant has denied the claim of the complainant merely on technical grounds. No cogent and convincing evidence in support of the averments had been produced by the appellant/ opposite party before the District Forum, in the absence of which, we feel that District Forum was justified in accepting the complaint and granting the damages to the complainant as per the assessment of the surveyor. Hence, no illegality or ambiguity in the impugned order is found. No merit. Dismissed in limini".

HENCE , the present revision petition.

WE have heard the learned counsel for the parties and have carefully gone through the records of the case. Learned counsel for the petitioner had argued that the State Commission had erred in ignoring the risk clause of the present insurance policy, i.e., Specific Marine Cargo Insurance Policy Clause B Inland Transit (Rail/ Road). The said policy specifically mentions the name of the perils which are covered under the policy. Any other peril which was not mentioned in the risk clause of the policy was not covered under the policy. The learned counsel for the petitioner drew our attention to the relevant portion of the risk clause reproduced hereunder: Risk covered Risk clause This insurance covers except as provided in clauses 2, 3 & 4 below, the risks of physical loss or damage to the insured goods caused by: (i) Fire; (ii) Lightning; and (iii) breakage of bridges (i) Collision with or by the carrying vehicle; (ii) overturning of the carrying vehicle; and (iii) derailment or accidents of like nature to the carrying railway wagon/ vehicle.

THE State Commission had erred in not appreciating the fact that the present insurance policy Specific Marine Cargo Insurance Policy Clause B (Inland Transit (Rail/ Road). was a name based peril policy and only the loss caused by the peril which was expressly mentioned in the list of perils covered under the said policy. However, if the loss was caused due to any peril which was not expressly mentioned in the list of the perils then it was considered that the loss had been caused by the uncovered or excluded peril and the loss was not payable under the policy. In the present case the loss caused due to rain water and mishandling of consignment by the carrier which was not covered under the policy. The fact that the loss was caused due to rain water was admitted by the respondent in their evidence by way of affidavit filed before the District Forum and also in their communication vide letter dated 20.09.2008 with the surveyor.

THE State Commission had failed to appreciate the settled law that the document was always read in totality. In the present case the State Commission has only relied on a certain part of the survey report in isolation and ignored the remaining major, relevant and important parts, specifically the findings of the surveyor. The State Commission had erred in ignoring the clear and reasoned finding of the surveyor that the cause of loss was due to the consignment being exposed to rain water and mishandling by carriers during the course of transit from Mumbai to Rohtak. The learned counsel drew our attention to the relevant parts of the survey report dated 22.08.2009 mentioned below: - "Cause of Damage Exposure to rain water and mishandling by carriers during the course of transit from Mumbai to Rohtak. Survey and Observations During the course of our visit at consignee''s premises on 20.09.2008 we checked the wet/ damaged consignment and our observations are as below: - (e) The consignment was received by consignee in wet/ damaged/ rusty condition as visible externally. (h) Corrugated boxes were wet due to rain water entry during the course of transit. Most of corrugated boxes were torn and material of different sizes mixed up with each other.

(i) The material was rusted due to contact of rain water. Rust was visible on the material. (m) The loss in our opinion took place due to exposure to rain water and or mishandling by the carrier during the course of transit".

THE State Commission had erred in ignoring the fact that the respondent had admitted in the affidavit/ evidence of its Managing Director that the loss occurred due to rain water. He drew our attention to the relevant paragraph of the affidavit of Mr Romesh Vig (Managing Director) of the respondent herein) filed before the District Forum reproduced hereunder : "6 .. Further the material was wet due to rain water in transit from Mumbai to Rohtak besides lorry was covered with tarpaulins "

THE respondent wrote a letter dated 20.09.2008 to the surveyor (i.e., Protocol Surveyors and Engineers Pvt. Ltd.,) wherein the respondent had again admitted that the rain water wet the material in transit from Mumbai to Rohtak. The relevant paragraph of the said letter dated 20.09.2008 read as " Material was wet due to rain water in the transit (from Mumbai to Rohtak) besides the lorry was covered with Tarpaulines .."

COUNSEL for the respondent has however, stated that the orders of the Fora below were absolutely correct and on true appreciation of facts as the truck was overturned due to which the goods had been damaged. He further stated that as per the insurance policy, the only exclusion clauses were 2, 3 and 4 and that the damage to the insured goods was not covered under the said clauses.

WE have carefully gone through the survey report and other documents on file. We note that the respondent had reported that the consignment had been received in wet and damaged condition and the cause of loss was due to the consignment being exposed to rain water and mishandling by carriers during the course of transit from Mumbai to Rohtak. This is clear from the letter addressed by the Managing Director to the Protocol Surveyors and Engineers Pvt. Ltd., dated 20.09.2008 which as reads as under: "Sub : Damage/ Shortage in consignment. Dear Sir, This has reference to the receipt of Lorry no. RJ 32 GA 3483, received on 15.09.2008 and unloaded on 16th and 17th September 2008 vide B/L no. EURFL08705743NHA and SXNHC 865 from Mumbai and Rohtak. The consignment reached at our factory premises in wet and loose condition. While unloading it was noted that most of the cartons were torn and material was in loose condition. Out of 30 pallets, only pallet no. 5, 13, 14 and 18 were in sound condition. Material was wet due to rain water in the transit (from Mumbai to Rohtak) besides the lorry was covered with Tarpaulins. After unloading we take the weight of the consignment and found approximately 1200 kg material is short and approximately 9 M T various size materials is without boxes and mixed each together. It is impossible to segregate the material and these material is scrap for us and this is the total loss of 10 lakh. We request you to kindly settle our claim at the earliest and oblige".

THE surveyor after visiting the consignee''s premises and checking the wet and damaged consignment came to the conclusion that the loss in their opinion had taken place due to exposure to rain water and mishandling of carriers during the course of transit. The total estimated loss was Rs.8,14,943/ - with salvage value of Rs.2,01,150/ -. On the basis of the survey, the surveyor also stated that as per the LR the material/ packing was damaged before dispatch from Nhava Sheva port Mumbai. Further, no accident of vehicle took place between Nhava Sheva and Rohtak. Hence, the surveyor recommended that the underwriters may settle the claim as per the terms and conditions of the policy.

WE find that the policy does not cover damage of the goods due to rain water. There is no evidence on record that the vehicle carrying the goods had overturned. There is no FIR lodged regarding the accident, there is no affidavit of the transport company that was carrying the goods and further the driver of the vehicle carrying the goods had also not been examined. There is also no evidence that any claim was made by the transport company for the damage of the truck that had allegedly overturned. Admittedly, respondent has failed to implead the carrier - M/s Agarwal Transport Corporation, whose evidence would have been crucial to their case if the vehicle carrying the goods overturned and hence caused damage to the consignment. In view of the above -mentioned facts we find that the petitioner was justified in repudiating the claim on the ground that Inland Transit (Road/ Rail) Clause B which does not cover the loss/ damage caused due to rain water and mishandling by the carrier. In view of the above, we allow the revision petition and set aside the orders of the Fora below and dismiss the complaint.