New India Assurance Co. Ltd. vs G.N. SAINANI

THE New India Assurance Co. Ltd., is the Appellant in this Appeal No. 792 of 1994. First Appeal No. 402 of 1995 is also between the same parties and on the same facts and, therefore, this common order will dispose of both these appeals. THE respondent in these appeals is Mr. G.N. Sainani, Proprietor of M/s. National Consultants, Bombay. Mr. G.N. Sainani, the respondent herein, had alleged in his complaint before the Maharashtra State Commission that he was an assignee of two insurance policies mentioned in those complaints, issued in favour of M/s. Ajanta Paper & General Products Ltd., Bombay which have been wrongly repudiated by the Appellant, namely, M/s. New India Assurance Co. Ltd. THE facts as stated by the complainant were that his clients, M/s. Ajanta Paper & General Products Ltd., had placed an order on M/s. Celpaco Inc. of France, who despatched goods so ordered by a ship "SS Irish Mapel" from Antwerp to Bombay under Bills of Landing Nos. 78 & 103 dated 11.2.84. M/s. Ajanta Paper & General Products Ltd. (hereinafter referred to as Consignee) requested the New India Assurance Co. Ltd. by their letter of 27.2.84 to issue insurance policies covering 244 bales of the value of Rs. 5,87,000/- and 170 bales for the value of Rs. 4,04,000/-. Two policies were issued by the Insurance Company in their name covering the consignments against all risks from Port Antwerp to Bombay. However, as there was a strike at the major ports in India around the time of arrival of "SS Irish Mapel", she was diverted to Muscat, which fact was intimated to the Insurance Company, which in. turn acknowledged it, and informed the consignee to see that both the consignments are re-shipped from Muscat to Bombay within 60 days time limit from the date they were discharged at Muscat. THE consignee by their letter dated 21.5.84 informed the Insurance Company that they were arranging to bring this cargo from Muscat to avoid any further delay, pilferage and damage so as to minimise the financial loss and further stated that additional expenses, if any, in this regard would have to be borne by the Insurance Company. THE consignee also requested the Insurance Company for endorsing the insurance certificate to cover the risk of forced transhipment from Muscat to Bombay. THE Insurance Company, however, refused to bear the expenses of any extra freight and warehousing etc., on this account and also reiterated that the risk under these policies will cease on the expiry of 60 days. THE consignee informed the Insurance Company vide their letter of 8.6.84 that the aforesaid two consignments were loaded per M.V. ''MICHEL'' ''C'' and the same were expected at Bombay Port shortly. However, on landing at Bombay, it was found that the consignment was short of what was despatched and the consignee obtained a short landing certificate from the Port authorities of Bombay. THE shortages were intimated to the Insurance Company.

THE main point in the complaint is that the Insurance Company refused to extend the cover of risk, which they were obliged to do, for the period of retranshipment and because of which they repudiated their claim for shortages at the time of landing at Bombay. This act of the Insurance Company, according to the complainant, constitutes a clear deficiency in service. In other words, had the Insurance Company extended the period of cover of risk beyond 60 days, the complainant would have been entitled to receive the claim from the Insurance Company and it is because of non-extension of this cover that they had to suffer. It is necessary to have a look at the relevant clauses in the Marine Policy taken by the complainant for a decision in this case. Clause 8 deals with the duration of the cover of risk and Clause 8.1.3 is clear that it terminates on the expiry of 60 days after completion of discharge overside of the goods hereby insured from the oversea vessel at the final port of discharge. This is not in dispute that the final port of discharge was Bombay and that the ship was diverted to Muscat because of the strike at the Bombay Port. Clause 8.3 of the Marine Policy, however, reads as follows : "This insurance shall remain in force (subject to termination as provided for above and to the provisions of Clause 9 below) during delay beyond the control of the assured, any deviation, forced discharge, reshipment or transhipment and during any variation of the adventure arising from the exercise of a liberty granted to ship owners or charters under the contract of affreightment."

In other words, the period of delay beyond the control of the assured is covered by Clause 8.3. Clause 9 which has been quoted both by the complainant as well as the Insurance Company reads as follows : "If, owing to circumstances, beyond the control of the assured, either the contract of carriage is terminated at a port or place other than the destination named therein or the transit, is otherwise terminated before delivery of the goods as provided for in Clause 8 above, then this insurance shall also terminate, unless prompt notice is given to the underwriters and continuation of coverage is requested when the insurance shall remain in force, subject to an additional premium if required by the underwriters either until the goods are sold and delivered at such port or place, or, unless otherwise specially agreed until the expiry of 60 days after arrival of the goods hereby insured at such port of place whichever shall first occur or if the goods are forwarded within the said period of 60 days or any agreed extension thereof to the destination until terminated in accordance with the provisions of Clause 8 above".

LOOKING at the facts of the case we find that the complainant had promptly informed the Insurance Company on 12.4.84 requesting them to extend the cover of risk and agreeing to pay necessary charges for the same vide their letter dated 2.6.84. It may be noticed that the consignment was discharged in Muscat on the 12th April, 1984 the date the assured had informed the Insurance Company about diversion of the ship due to strike at Bombay port. By another letter dated 8.6.84, the assured also informed the Insurance Company that the consignments were being loaded per M.V. ''MICHEL'' ''C'' for being brought to Bombay. In the face of these two intimations, which are not in dispute, the assured has complied with the requirements of Clause 9 cited earlier. The question for consideration is whether after the compliance of the requirement of Clause 9, as regards information on diversion of the ship, and their further transshipment to the final port of destination, the Insurance Company was under an obligation to extend the period of cover beyond 60 days. In our view, in a situation, as in the present case, where the ship could not reach Bombay in the first instance because of strike at the Bombay port, and finally the consignment reached beyond the period of 60 days due to circumstances beyond the control of the assured, it was incumbent on the insurance Company to extend the cover of insurance. If we read Clause 9 alongwith Clauses 12 and 18, a responsibility is further placed on the Insurance Company to reimburse the assured for any extra charges properly and reasonably incurred in unloading, storing and forwarding the subject matter of the consignment to which it is insured in a situation where the insured transit is terminated at a port other than that to which the subject matter is covered (Clause 12) subject to the condition that the assured, shall act with reasonable despatch in all circumstances within their control (Clause 18). Unfortunately, the Insurance Company did not extend the period of insurance in spite of timely intimation and genuine request by the assured and, thereafter, repudiated the claim saying that the transhipment from Muscat to Bombay was not within the period of 60 days. The State Commission of Maharashtra, having taken note of the circumstances and facts of this case, held that there was clear deficiency on the part of the Insurance Company in not doing so. We are fully in accord with this finding of the State Commission. Another objection raised by the Insurance Company on the point of limitation in filing the complaints before the State Commission has also been dealt with in their order holding that the complaint was filed within the period of limitation.

NOW, we come to the question as to whether the respondent in this case, namely, Mr. G.N. Sainani, proprietor of M/s. National Consultants, Bombay, to whom these policies have been assigned by M/s. Ajanta Paper and General Products Ltd. Bombay, is entitled to claim the relief from the Insurance Company. The State Commission in their order has discussed the provisions in respect of assigning of the marine policies. Section 52 of the Marine Insurance Company Act, 1963, which deals with the assignment of the policies, reads as follows : (a) A marine policy may be transferred by assigning unless it contains terms expressly prohibiting assignees. It may be assigned either before or after the loss. When a marine policy has been assigned so as to pass the financial interest in such policy, the assignee of the policy is entitled to sue thereon in his own name and the defendant is entitled to make any defects arising out of the contract which he was having entitled to make it if the suit has been brought in the name of the person by or on behalf of whom the policy was effected. (c) The marine policy may be assigned by endorsement thereon by another expectomar. A reading of this section clearly indicates that a marine policy can be assigned, unless there is a prohibition to do so specifically, any time before or after the loss by endorsement and such assignee is entitled to sue in his own name, and claim benefits in this regard. We agree with the State Commission that this provision creates a valid interest in Mr. G.N. Sainani to file this complaint and pursue it.

After having considered the arguments of the Counsel for the appellant and the respondent in these appeals and gone through the order of Maharashtra State Commission, we do not find any reason to interfere with their order dated 29th October, 1994. Hence we dismiss these appeals with no order as to costs. Appeals dismissed.