National Insurance Company Ltd. vs MIHIJAM VANASPATI LTD.

IN these batch of appeals, limitation petitions have been filed for condoning the delay. According to the office report, limitations expired on 30.1.2003 whereas the appeals have been filed on 12.3.2003. It is stated that certified copies of the impugned orders were made available to the appellant on 4.2.2003 albeit the application for the copies were made on 23.12.2002 itself. Heard the learned Counsel for the parties and perused the petitions. For the reasons stated therein, let the delay in filing the appeals be condoned. 1. National INsurance Company Limited is the appellant before us against the judgment and order dated 31.12.2002 passed on the file of District Consumer Forum, Dhanbad, whereby the appellant has been directed to pay the claim amounts in terms of the policy i.e. Rs. 1,71,675/-, Rs. 1,90,417/- and Rs. 4,16,115/- respectively alongwith communicative interest at the rate of 9% (nine per cent) in all the cases besides a sum of Rs. 50,000/- (Rupees fifty thousand) by way of compensation due to mental agony and physical harassment.

THE short facts giving rise to the disputes are that the complainant obtained a Marine Cargo Insurance Policy for Rs. 1 crore for transporting the edible oil by road from one corner to another, in India, to its factory premises which was effective from 12.7.1995 to 11.7.1996 on payment of (sic.) Rs. 24,400/-. During the subsistence of the policy, the tanker carrying Degummed oil, met with an accident on 14.8.1995 resulting loss to the extent of Rs. 1,71,675/- (in Appeal Nos. 139/2003 and A/140/2003 the tanker met with accident on 5.12.1995 and 30.9.1995 respectively resulting loss to the extent of Rs. 1,90,417/- and Rs. 4,16,115/- respectively). THE complainant accordingly informed the appellant Insurance Company regarding the accidents. On receipt of information, the Insurance Company appointed M/s. Bhadra & Associates to investigate and assess the loss due to the aforesaid accident. THE Surveyor submitted the report recommending the claim of the complainant. However, the report was neither made available to the District Forum nor before us. From the materials available on record, it appears that the Surveyor has recommended the claim in toto. Unfortunately, the Insurance Company did not respond to the said recommendation and accordingly the insured has to approach the grievance cell of Insurance Company at Hqrs. Calcutta including the Regional Office at Patna. On their intervention, the appellant initiated the claim proceedings and has written a letter to the effect that the claim could not be processed because of continuous absence of the Branch Manager on account of his illness. Surprisingly after six months, the claims of the insured were repudiated on 31.8.1998 on the ground that the alleged consignments were not covered under the declared consignment in terms of the contract. THE learned District Forum, on consideration of the materials on record has passed the impugned order which is under challenge before us as stated above. Mr. Alok Lal, learned Counsel, appearing on behalf of the Insurance Company has challenged the orders, mainly, on the ground that since the insured failed to declare the consignment in terms of the provisions of the Marine Insurance Act (in short 1963 Act) and hence no relief can be allowed in term of the policy. Further weekly return as agreed upon has also not been filed either. While enlarging his argument, it is submitted that even though the insured assured the Insurance Company that it will declare the consignments on weekly basis, but for the reasons best known to the insured, it never did so. It was then submitted that the complainant is not a consumer within the meaning of the Consumer Protection Act (in short Act) and hence the very initiation of the proceedings under the said Act is wholly misconceived and uncalled for. In support of his contention, the learned Counsel relied upon the decision in the case of United India Insurance Company v. Suraj Mal Ram Niwas Oil Mills (P) Ltd., reported in I (2003) CPJ 82 (NC), and also referred Section 20 of the Act, 1963.

In opposition, however, learned Counsel, appearing on behalf of the complainant/respondent supported the orders of the District Forum and further submits that the insured was not required to declare the consignments which are known to the insurer in terms of Clause (b) Sub-section (3) of Section 20 of the Act, inasmuch as, the insurer has already been informed that the insured is receiving tankers on F.O.R. basis and hence the consignment is not required to be declared. However, other consignments will be declared on weekly basis, as informed vide letter dated 2.7.1995, which is on record.

IN order to appreciate the rival contentions of the parties, it is relevant to notice Section 20 of the 1963 Act as under : "20. Disclosure by assured-(1) Subject to the provisions of this Section, the assured must disclose to the insurer, before the contract is concluded, every material circumstance which, is known to the assured and the assured is deemed to know every circumstance which, in the ordinary course of business, ought to be known to him. If the assured fails to make such disclosure, the insurer may avoid the contract. (3) IN the absence of inquiry the following circumstances need not be disclosed, namely,- (a) any circumstance which diminishes the risk; (b) any circumstance which is known or presumed to be known to the insurer. The insurer is presumed to know matters of common notoriety or knowledge and matters which an insurer in the ordinary course of his business as such ought to know; (c) any circumstance as to which information is waived by the insurer; (d) any circumstance which it is superfluous to disclose by reason of any express or implied warranty."

Mere perusal of the provisions as quoted above, it is quite apparent that the circumstances which are known to the insurer are not required to be declared. In the instant case as stated above, the insured has categorically informed the Insurance Company that the consignment of the edible oil received on the basis of F.O.R. shall not be declared. However, other consignments will be declared and, that too, on weekly basis. Accepting the statement of the insured as far back as in July, 1995, the Insurance Company has accepted the premium amount of Rs. 24,400/- in advance for the open marine policy meaning thereby that the Insurance Company accepting the premium after agreeing to the terms of the complainant to the effect that the consignment will be declared on weekly basis, which, in fact, has been accepted by the Insurance Company as is evident from its letter dated 13.7.1995, wherein a request has been made to send consignment note before commencement of journey.

ACCORDING to Mr. Lal, even after having agreed by the insured, the weekly report was not submitted which amounts to contravention of the terms and conditions of the policy including the provisions of the Act. A copy of insurance policy has been produced in course of hearing wherefrom it does not appear that such clauses regarding submission of weekly report of the consignment is envisaged, in any way. We have also examined the Act and nowhere it has been mentioned that weekly report has to be submitted. Only Section 20 of the 1963 Act which had been quoted in extenso above, envisaging the declaration of the consignment in certain cases. Except the requirement of declaration in terms of the Section 20 of the Act, there is no provision requiring filing of weekly report. So far the consignment in dispute is concerned, the insurer was aware of the details of the consignment and such declaration as required in Section 20 of the Act, was not at all necessary in view on Clause (b) of Sub-section (3) of Section 20 thereof since the details of the consignment were known to the insurer. It was mere request on the part of the Insurance Company to declare the consignment on weekly basis. The request will neither in any way, override the provision of the Act nor contractual terms and conditions of the policy. As stated above, on receipt of the information regarding accident, the Investigator was appointed to assess the loss who, on proper inspection and verification, has accepted the claims of the insured but for the reasons best known to the Insurance Company, the said recommendations have not been acted upon, on the contrary, the entire claim was repudiated on non est ground. In the case in hand, the claim of the insured was negatived after more than three years of the accident. This is a clear deficiency in service on the part of the Insurance Company. The submissions regarding jurisdiction of Consumer Court on the ground of the complainant being not a consumer has to be rejected outright being fallacious and against the law laid by this Commission, National Commission including Apex Court of the country. However, in my view, the amount of compensation seems to be excessive in the facts and circumstances of the case and accordingly it is reduced to Rs. 10,000/- (Rupees ten thousand only). In view of aforesaid discussion, we are not inclined to interfere with the orders passed by the District Forum. The findings recorded are based upon correct appraisal of the evidence on record and, as such, we do not find any illegality and/or infirmity in the orders impugned. Accordingly all the three appeals aforesaid fail and are dismissed but without cost.

BEFORE we part with the cases, we direct the appellant Insurance Company to comply with the modified order of the District Forum within three weeks from the date of receipt and/or production of copy of this order failing which the complainant will be at liberty to execute the order in accordance with law including the remedy available under Section 27 of the Act and in that event, the complainant will be entitled to interest at the rate of 18% per annum from the date of this order till the date of realisation. Let a copy of this order be sent to the parties and/or their respective Counsels forthwith for needful. Appeal dismissed.