PAWAN EXPORTS (PVT.) LTD vs Oriental Insurance Co.Ltd

THIS appeal has been filed by the complainant against the order dated 30.4.93 of the District Forum-I dismissing the complaint.

BRIEFLY the facts are that the complainant despatched a machine by a truck vide goods receipt dated 25.6.89 from Vapi to their factory at Sahibabad through M/s. Jaipur Golden Company (P) Ltd., New Delhi (hereinafter referred to as the transporter). They, on 27.6.89 got the machinery insured from respondent No. 1 upto their factory against ''all risks, strike, riot and civil commotion'' for Rs. 1 lac. When the goods were being unloaded by the labor in the factory premises, the crane gave way and the machinery fell down and got damaged. The respondent was informed immediately and they appointed a surveyor to assess to loss, who assessed it as Rs. 35,100/-. They paid Rs. 1,170/- to the surveyor as his fee. However, the complainant''s claim was not allowed by the respondents. Consequently they filed a complaint. The respondents contested the claim and inter-alia pleaded that the loss was not caused during transit. They further stated that it was possible that the complainant might have obtained the insurance after the machinery had been damaged.

The learned District Forum held that when the vehicle had arrived safely at the complainant''s factory the risk covered under the policy was over. It further held that the insurance policy might have been obtained by the complainant with ulterior motive as the machinery was despatched on 25.6.89, whereas it was got insured two days after the date of departure of the truck from Vapi i.e. on 27.6.89. Consequently the complaint was dismissed by it. The complainant has come up in appeal to this Commission.

THE first question that requires determination is, as to what the word ''transit'' means. In order to determine this it is necessary to read Clause 5 of the policy which reads as follows:- "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 transshipment, if any, until delivery to the final warehouse at the destination named in the policy or 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."

According to the clause the goods are insured from the time the goods leave warehouse and continue to be issued till delivery to the final warehouse at the destination named in the policy. It is thus clear that unless the goods are delivered to the warehouse, insurance policy covers them. THE delivery includes unloading of the goods. THE word transit has been defined in Stroud''s Judicial Dictionary (5th Edition) as follows:- "Goods on lorries which arrived at the consignee''s depot after working hours, and were taken into the depot but not unloaded, were still "in transit within the terms of the carriage agreement."

In view of the aforesaid discussion we are of the view that unless the machinery was unloaded in the factory of the complainant it would be deemed to be in transit for the purpose of the insurance policy. THErefore, the respondent is liable to reimburse the complainant regarding the loss suffered by the complainant due to fall of machinery during its unloading in the factory premises. The second question that arises for determination is whether the goods had been damaged before they were got insured. There is nothing on the record to show that the goods had been damaged when the insurance was taken by the complainant. It is true that the goods were loaded on 25th June and the insurance was taken on 27th June 1989, but this fact alone does not lead to the conclusion that the goods had been damaged before 27th June''89. The damage to the goods before the date of insurance is required to be proved by the respondent. In the present case they have failed to do so. Therefore, the plea taken by them has no substance.

THE third question that arises for determination is, to what amount the complainant is entitled to get from the respondent on account of loss suffered by them. THE surveyor assessed the loss at Rs. 35100/-. THE respondent''s Counsel has not been able to show that the assessed loss is not correct. Consequently we allow the same. THE complainant paid an amount of Rs. 1,170/- as surveyor''s fee. THEy are also entitled to get the same from the respondent. Thus in all they are entitled to get Rs. 36,270/- on this count. THE complainant is also entitled to interest on that amount @ 18% p.a. from 25.8.89 till the date of payment. THE amount of interest from 25.6.89 till the date of filing the complaint i.e. 19.8.92 comes to Rs. 20,578/-. THE total amount comes to Rs. 55,848/- or say Rs. 56,850/-. The complainant has further claimed an amount of Rs. 10,000/- as compensation for mantal torture, and harassment. A person pays premium and gets the goods insured so that he may be able to recover the loss in case goods are damaged. However, it has been seen that the Insurance Company on frivolous grounds repudiate their liability. This is a case of that nature. A person does suffer mental torture and harassment if his just claim is repudiated by the Insurance Company. Taking into consideration all the aforesaid circumstances we allow Rs. 7,500/- as compensation for mental torture and harassment. In the abovesaid view I am fortified by the decision of the National Commission in M/s. Shadi Ram Raghubir Sharan v. National Insurance Co. Ltd. II (1993) CPJ 150 (NC) wherein it was obsorved that the Insurance Company was guilty of deficiency in service in having neglected to settle the claim within a reasonable time and had caused harassment, pain and expense to the complainant. In view of the said proposal reached by it, it was the duty of the District Forum to award to the complainant interest on the amount which is found to have been covered by the policy as also reasonable compensation for harassment, pain, inconvenience and expenditure suffered by the consumer.

FOR the aforesaid reasons we accept the appeal with cost of both the Court and direct the respondent to pay amounts of Rs. 56,850/- with interest (5) 18% p.a. from 20.8.92 till the date of payment and Rs. 7500/- within a period of three months failing which action shall be taken against them u/Sec. 27 of the Consumer Protection Act. Costs of the District FORum and State Commission Rs. 3,000/-. Appeal allowed with costs.