National Insurance Co. Ltd. vs BHAGCHANDKA HOME APPLIANCES

-ADMITTEDLY the appellant had issued an Inland Transit (Rail or Road) Insurance Policy in favour of the respondent. Vide impugned order dated 10.1.1997 passed by the District Forum it has been directed to compensate the respondent a sum of Rs. 1,12,401/- towards cost of 90 pieces of pressure cooker which were found to be lost on arrival of the consigment with interest @ 18% from the date of loading of the consignment until the payment besides Rs. 5,000/- as compensation for harassment the respondent suffered. The impugned order has been challenged through this appeal solely on the basis of Clause 5 of insurance policy, which is as under: Clause 5: Duration: 5. This insurance attaches from the time the goods leave the warehouse and/or the store at the place named in the policy for the commencement of transit and continues during the ordinary course of transit including customary transhipment, if any (i) until delivery to the final warehouse at the destination named in the policy; or (ii) in respect of transits by rail only or rail and road, until expiry of 7 days after arrival of the railway wagon at the final destination railway station or (iii) in respect of transits by road only until expiry of 7 days after arrival of the vehicle at the destination town named in the policy, whichever shall first occur. N.B. 1. The period of 7 days referred to above shall be reckoned from the midnight of the day of arrival of railway wagon at the destination railway station or vehicle at the destination town named in the policy.

TRANSIT by rail only shall include incidental transit by road performed by railway authorities to or from railway out-agency. 2. The factum of the consignment having been dispatched vide G.R. No. 017187 dated 13.1.1993 to Calcutta through M/s. Kanpur Delhi Goods Carrier (P) Ltd. under Marine TRANSIT Policy in question issued by the appellant as well as its arrival at Calcutta on 6.3.1993 is not in dispute. According to the respondent he was informed for the first time on 23.3.1993 by the transporter that the consignment was short by 90 pieces containing the pressure cooker. The respondent immediately informed the appellant about the shortage and requested for the appointment of the Surveyor. Accordingly the Surveyor was appointed and he assessed the loss at Rs. 1,09,001/-. The respondent preferred the claim but it was repudiated by invoking the above referred Clause 5 according to which the duration of the policy subsists for 7 days after the arrival of the goods at destination and since in this case the goods reached on 6.3.1993 and the delivery was taken on 23.3.1993 and since the policy in question ceased to be in operation after 13.3.1993, the appellant was not liable to accept the claim of the respondent. The main controversy from the aforesaid facts is whether the aforesaid Inland Transit (Rail or Road) Insurance Policy Clause A containing the provision in the form of Clause 5 was part of the insurance policy and was furnished to the respondent at the time of issuing cover note or not. The respondent has placed a covering note and important notice attached and no other documents. According to the Counsel for the appellant this document is enclosed or appended as on endorsement with the policy and in the covering note itself Clause 18 refers to this endorsement, which was tick-marked in the covering note itself. However, during the pendency of the complaint before the District Forum the said Inland Transit (Rail or Road) Insurance Policy Clause A did not form part of the documents filed by the appellant and merely because on the covering note Clause 18 relating to Inland Transit (Rail or Road) Insurance Policy Clause A was tick-marked did not mean that respondent was apprised of this document. Until and unless the consumer is provided the information as to circumstance under which the policy would subsist and claim would be acceptable the consumer cannot be denied the benefit of the insurance cover.

However the District Forum while allowing the complaint of the respondent placed reliance on Consumer Education and Research Society v. LIC, I (1992) CPJ 422, wherein it was held that the requirement relied upon by the respondent may be some internal document of the respondent of which the persons availing the service of the respondent had never been apprised. Another decision referred to and relied upon by the District Forum was M.K.J. Corporation v. United India Insurance Co. Ltd., II (1995) CPJ 112 (NC), wherein it was held that instructions of the Insurance Tariff Advisory Committee are not binding on the insured as long as they are not incorporated in the contract of insurance i.e., the insurance policy issued by the Insurance Company.

IT is a peculiar case in the sense that in the covering note Clause 18 referred to Inland Transit (Rail or Road) Insurance Policy Clause A, but the said document was not enclosed with the insurance policy so as to apprise the consumer about the fact that the insurance policy would subsist until expiry of 7 days after arrival of the consignment at the destination. The circumstance of the appellant having failed even till date in filing the original or the copy of the insurance policy issued by it and has only shoved in one page document namely Inland Transit (Rail or Road) Insurance Policy Clause A, we have no hesitation in arriving at the conclusion that the respondent was not made aware of the aforesaid clause relied upon by the appellant as no relevant document was enclosed or appended with the insurance policy and, therefore, the appellant cannot be allowed to take the benefit of the aforesaid provision. Even if it is presumed that the respondent was expected to know about the provision of Clause 18 tick-marked but in the absence of document in question tick-marking of Clause 18 of the covering note was meaningless. Furthermore, in the affidavit of the respondent, which has not been contradicted by the appellant he stated that he was informed about the arrival of the consignment of Calcutta on 23.3.1993 whereas it had arrived on 6.3.1993. The benefit of doubt needs to be extended to the respondent even on the principles of natural justice as once having obtained the insurance policy he could derive the legitimate benefit arising therefrom. It is a case where the shortage of 90 pieces was neither disputed nor controverted.

TAKING overall view of the matter and in view of the aforesaid reasons we do not find any merit in the appeal and dismiss the same but feel inclined to reduce the rate of interest from 18% to 9% in view of the facts and circumstances of the case. Even otherwise awarding higher rate of interest which is not available in the market to the consumer amounts to unjust enriching the consumer which is neither the object of the law nor is the purpose as under the Consumer Protection Act consumers are entitled to compensation on account of deficiency in service and mental agony and harassment they suffer. Appeal is disposed of in aforesaid terms. The FDR, if any, deposited by the appellant be returned forthwith after completing necessary formalities. A copy of this order as per statutory requirements be forwarded to the parties free of charges and also to the concerned District Forum and and thereafter the file be consigned to Record Room. Appeal disposed of.