National Insurance Co. Ltd. , RATHI ROADWAYS vs Venus Traders

BOTH these appeals are being disposed of by this order as both arise out of the same order passed by the State Consumer Disputes Redressal Commission, Tamil Nadu at Madras in O.P. No. 19 of 1992 filed by Venus Traders (who is respondent No. 1 in both the appeals).

THE facts as appear from the complaint are that the complainant had an Open Marine Policy taken from the National Insurance Co. Ltd. (appellant in Appeal No. 271 /92). Two consignments each of 135 bags of turmeric of the total value of Rs. 1,60,965/- were entrusted to the Carrier, M/s. Rathi Roadways (i.e., Appellant in F.A. No. 278/92) under the Lorry Receipt No. 17576 dated 24th April, 1989 and 17671 dated 16th May, 1989 for carriage from Erode to Calcutta. Due declarations under the policy were sent to the Insurance Company. THE consignee named in both the L.R.s is Canara Bank, Calcutta. THE original Lorry Receipts along with other documents were sent by the consignor Venus Traders to Canara Bank in Calcutta. THE ultimate buyer of the goods was Madhu Trading Co., Calcutta. THE ultimate buyer had to make payments to the Canara Bank, get endorsement on the Lorry Receipts in its favour and take delivery of the goods. THE consignments were taken by the Carriers to Madras and from there those were booked by railway to Shalimar which was the railway shed. As appears from the Investigation Report and was pointed out by the Insurance Company, the said consignment arrived at Shalimar on 30.6.89. THE Carriers with the help of Commercial Tax Permit of Madhu Trading Co. and R/R, had taken delivery of the consignment from Shalimar and removed them to their godown. THE second consignment reached Shalimar on 26th May, 1989 and the delivery was taken on the same day on completion of Commercial Tax formalities and were taken to their own godown. It appears that the Carriers subsequently delivered the consignments to the ultimate buyer without the production of the necessary endorsement from the Canara Bank, Calcutta meaning thereby that the buyer got the goods without making any payment. THE Bank returned the Lorry Receipts to the consignor. THE consignor asked the carriers to deliver the goods but they failed to do so. THEreupon the consignor filed a complaint before the State Commission for the recovery of Rs. 1,60,965/- from the carriers as well as from the Insurance Company. The defence of both the respondents was similar. According to them, the consignments had reached the destination, namely, Calcutta and were taken delivery by the ultimate buyer Madhu Trading Co. and that the buyer had also issued two demand drafts in favour of the consignor complainant for Rs. 70,000/- each towards part payment of the consignment. It is on account of some dispute between the buyer and the consignor that a false complaint has been filed by the consignor.

Before the State Commission, a partner of the complainant firm filed an affidavit to the effect that the two demand drafts of Rs. 70,000/- each have nothing to do with the consignments in question and that those had been received as part payment towards consignment sent to M/s. Madhu Trading Co. under Lorry Receipt No. 84095 dated 12th July, 1989 and Lorry Receipt No. 84103 dated 23rd August, 1989 through M/s. South Assam Carriers Pvt. Ltd. After giving credit to the sum of Rs. 1,40,000/- the claim for Rs. 37,340/- has been made against M/s. South Assam Carriers Pvt. Ltd. in a separate complaint.

THE State Commission found that the two consignments in question have not been delivered by the Carriers to the Consignee or his transferee in accordance with the terms of the contract, against the Lorry Receipts and instead, the goods have been delivered to the buyer un-authorisedly. THE Commission, therefore, held that the insurer was liable for mis-delivery in the same way as in the case of non-delivery. THE Carrier was also held liable for wrong delivery. As a result an award for Rs. 1,60,695/- with interest @ 18% from 16th May, 1989 till payment was made against both the opposite parties, i.e. Carriers and the Insurance Company jointly and severally. Feeling aggrieved, the Insurance Company has filed Appeal No. 271 of 1992 while the carriers have filed Appeal No. 278 of 1992. We have heard both the parties and gone through the records of the case. First we take the appeal filed by the Insurance Company. A copy of the Insurance Policy is on the record. The relevant portion of the policy for the purpose of this order is as follows: Duration 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.

The contention of the Insurance Company is that the goods safely reached the final destination and in any case, the policy came to an end after the expiry of 7 days after the arrival of the railway wagon at the final destination Railway Station under Clause (ii). We are of the opinion that the said argument has force. The Lorry Receipts have been filed and this shows that the consignments were booked for Calcutta. It is an undisputed fact that after taking delivery at Shalimar, Railway Station the carriers took the goods to their own godown at Calcutta. Therefore, under Clause (i) as the consignment reached safely to the final warehouse, the duration of the policy in respect of the consignment came to an end.

UNDER Clause (ii) also the duration of the policy came to an end after the expiry of 7 days after arrival of the railway wagon at the final destination Railway Station. In the present case, the transit of the consignment was by rail and road. It is not the case of the complainant that the loss occurred within 7 days after arrival of the consignment at the destination Railway Station. Otherwise also this is not a case of loss of consignment. Even according to the State Commission, it is not a case of non-delivery of consignment but it is the case of mis-delivery. The consignment reached the ultimate buyer safely. We are of the opinion that there is a lot of difference between mis-delivery and non-delivery. The Insurance Company was, therefore, justified in disowning liability and there was no deficiency or negligence on its part in the rendering of service by the Insurance Company. Now, we take the appeal filed by the carriers. The carriers have now included a plea in their memorandum of appeal that they had received oral instructions from the consignor to deliver the goods to the ultimate buyer without due endorsement from the consignee, i.e., Canara Bank. No such plea was taken before the State Commission and therefore, this plea is clearly the result of an afterthought.

IT has also been alleged by the carriers in the memorandum of appeal that no notice was given under the Carriers Act and therefore, the complaint filed after more than six months is time barred. We are not impressed with the argument. That limitation will apply only if a suit or claim is filed under the Carriers Act. But present claim has been filed under the Consumer Protection Act. For proceedings under this Act, this Commission has consistently held that principles of "the Limitation Act shall be taken into consideration while dealing with complaints under the Act.

FOR the above reasons, we dismiss the Appeal No. 278 of 1992 filed by M/s. Rathi Roadways with costs which we assess at Rs. 2,000/- to be paid by the appellant in equal shares to the respondents of this appeal. We allow the Appeal No. 271 of 1992, filed by the Insurance Company and set aside the impugned order so far as it is against the Insurance Company. We make no order as to costs in this appeal. Ordered accordingly.