New India Assurance Co. Ltd. vs RAMACHANDRAN And CO.

THIS revision petition is filed against the order passed by the State Consumer Disputes Redressal Commission, Andhra Pradesh whereby the State Commission directed the petitioner before us to pay Rs. 5,726/- to the respondent company for the value of 17 quintal chilies with cost of Rs. 1,000/-. The case of the respondent/complainant before the District Forum was that he had taken a marine policy (Cargo) from the petitioner. The said policy was not only renewed from time-to-time but the amount of Rs. 10 lakhs which was in the year 1992 was increased to Rs. 20 lakhs on 11.3.1992 and thereafter to Rs. 30 lakhs on 13.3.1992. During the subsistence of the policy, complainant despatched on 17.4.1992, 274 bags of dry chilies weighing a total of 90 quintals in net, through Lorry bearing No. MKS-6301 to Delhi, the consignee being M/s. Ram Krishan Kailash Chand, Commission Agent at Delhi. On 25.4.1992 the complainant learnt from the 1st respondent that the driver of the said Lorry sold away part of the consignment goods en route about 17 quintals. The complainant/respondent thereafter took possession of the remaining stock and lodged a claim with the petitioner for the losses. The Surveyor visited the site and checked up the record of the respondent and found that value of stock which had been despatched by the complainant was Rs. 48,73,500/- whereas the policy was for Rs. 30,00,000/-. The petitioner accordingly repudiated the claim.

THE complainant alleged that right from beginning on 9.1.1992, no policy was delivered to him except cover note and declaration forms, which were to be submitted by the complainant to the Insurance Company. THE conditions of the policy relied upon by the petitioner, were admittedly never communicated or otherwise made known to him nor accepted by the complainant. THE said condition No. 2 of the Marine Open Policy reads as under: "Warranted that until completion of this contract the assured is bound to declare each and every despatch coming within the scope of the policy to the company''s office at Warangal in the declaration sheet intended for this purpose within 24 hours of the receipt of the relative documents of each despatch without any commission whatsoever. Should the insured wilfully fail to report despatches covered by this policy, the policy to all subsequent despatches shall at the company''s option stand null and void."

The complainant contended that all the consignment in respect of which declarations were filed from time-to-time have admittedly to be covered by the said policy to the extent of Rs. 30 lakhs and the Insurance Company was not concerned with the goods which were despatched and which were not covered by the declarations. It has not been disputed before us that the policy documents had not been supplied to the complainant until the loss had taken place. Therefore, the condition that the parties to a contract should be bound, has to be viewed in that light. It is not in dispute that Insurance Company from time-to-time went on increasing the value of the policy from Rs. 10 lakhs to Rs. 20 lakhs and from Rs. 30 lakhs to Rs. 30 lakhs and had collected premium for it. Insurance Company had also issued the declaration forms. There is no letter issued by the Insurance Company wherein insured was made particularly aware of the said condition No. 2. Counsel has tried to take advantage of the decision passed in the case of Oriental Insurance Co. Ltd. and Another v. Modern Insulators Ltd., I (1997) CPJ 48 (NC), by a Bench of four i.e., President with three Members of this Commission, and had heavily relied upon the following passage: The respondent-complainant submitted that only the cover note and the schedule to the insurance policy were supplied by the opposite party and that the terms and conditions incorporated in the standard policy had not been communicated to the insured. The cover-note inter alia mentions that the risk is subject to the usual terms and conditions of the standard policy and it is equally the responsbility of the respondent to call or these terms and conditions even if they were not sent by the appellant as alleged.

That particular judgment was rendered in the peculiar facts of that case. In any event, it is prima facie responsibility of the Insurance Company who have knowledge about the terms of policy to communicate the terms and conditions to the insured and they cannot sit back after issuing the cover note. If they do not do so within a reasonable time they do so at their own peril. In the present case when Insurance Company not only accepted the premium but also issued cover note on each occasion when the value was enhanced had more than enough time and opportunity to communicate the terms and conditions to the insured. Even at the time of giving the declaration forms to the insured they should tell the complainant that to cover the risk, the declaration must be filed with the Insurance Company of every consignment. No document has been pointed out wherein the Insurance Company may have pointed out that the limit applies to the total despatches whether declared or not. In that view of the matter Insurance Company cannot take shelter behind this uncommunicated clause and the Fora below have rightly decided the case against it and called upon the Insurance Company to compensate the insured for the losses to the extent mentioned above. In view of the above observations we do not find any infirmity with the concurrent finding of the Fora below. No case is made out for us to interfere with the impugned order under Section 21(b) of the Consumer Protection Act. The revision petition is accordingly dismissed. Revision Petition dismissed.