P.KANDASAMY vs Oriental Insurance Co. Ltd.

THIS O.P. was earlier disposed of by this Commission by its order dated 16.6.1994 passing an award against the two opposite parties. Both the opposite parties preferred appeals in the National Commission. The National Commission, by its order dated 8.8.1995, set aside the order passed by this Commission and remanded the matter for fresh consideration giving liberty to the parties to let in further oral and documentary evidence.

NOW, the complainant P. Kandasamy is engaged in manufacture of handicrafts and artefacts. In the course of his business, on 23.12.1992, he undertook to supply a consignment of nine specialised wooden carvings to one Mr. D. Vasu of Thilassaipettai, Pondicherry, and he sent the same covered by invoice dated 15.12.1992 through the 2nd opposite party M/s. Southern Roadways Limited. Tine consignment was valued at Rs. 3,41,000/-. Freight charges of Rs. 126.20 was paid. The complainant signed a declaration that the value of the consignment was Rs. 3,41,000/-. The consignment was insured with the 1st opposite party Oriental Insurance Company Limited, on payment of a premium of Rs. 1,147/-. The case of complainant is that when the consignee went to take delivery of the consignment at Pondicherry on 29.12.1992, of the 9 pieces of articles, seven pieces were badly damaged; one partially damaged and one undamaged. On information from the consignee, the complainant made a claim on the 2nd opposite party M/s. Southern Roadways Ltd., but the amount has not been settled. On the same day, the complainant made a claim with the 1st opposite party for a sum of Rs. 2,87,000/-. The Insurance Company appointed a Surveyor for assessing the loss. But inspite of repeated attempts by the complainant for getting the claim settled, he could not succeed. The Insurance Company has been unduly and inordinately delaying settlement raising a dispute on the value of the articles. There has been no response either allowing the claim or disallowing the claim. This amounts to gross deficiency in service on the part of the 2nd opposite party Insurance Company. The value of the articles have been declared and on the basis of that declaration the premium had been paid. Hence, the dispute raised on the value is wholly unsustainable. On account of the attitude of the two opposite parties, the entire business of the complainant is dislocated. He estimates the loss of business due to the said dislocation at Rs. 10,000/- per month from the date of loss till the date of this complaint. The complainant has also suffered mental pain and agony which he values at Rs. 1,00,000/-. The insurer had already taken delivery of all the nine articles as early as March, 1993 for the purpose of salvage. Since all the nine pieces are now with the insurer, the complainant makes a claim for Rs. 3,41,000/- as the value of those pieces. For loss of business he claims Rs. 1,00,000/- and for mental agony also he claims Rs. 1,00,000/-. The 1st opposite party Insurance Company contended that this opposite party issued a Marine Insurance (Cargo) Policy for transport of the wooden carvings bona fide believing the value stated by the complainant. To safeguard the interest of the Insurance Company in case of over valuation Section 20 of the Marine Insurance Act, 1963 has been enacted which provides for repudiation of the claims. The nine wooden carvings are basically made from mango wood. The cost of making the figures of the sizes 84", 72" and 60" would, according to persons proficient with the crafts, be around Rs. 12,0007-, Rs. 7,500/- and Rs. 5,000/- respectively. This opposite party has been uniformly informed by traders conversant with the wooden carvings mat the nine wooden carvings have been over valued, and according to them the total value of the items damaged could not exceed Rs. 70,000/-. In order to have better appreciation of the artistic value of the goods damaged, the 1st opposite party sought the assistance of M/s. Sakthi Associates, Surveyors and Loss Assessors as early as 31.12.1992. They have also solicited the assistance of M/s. Surveyors and General Surveillance of No. 55/2, Sembudoss Street, Madras-1. Under these circumstances, this opposite party is not guilty of any deficiency in service. Therefore, the complaint as against this opposite party is liable to be dismissed.

The contention of the 2nd opposite party M/s. Southern Roadways Limited, is that the consignee did not, at the time of delivery, require open delivery since the packing was in tact. The consignee has not either then or at any time later made any complaint of damage to the consignment. Since the packages have been delivered to the consignee in the same apparent condition in which they were tendered by the consignor to the 2nd opposite party, they were absolved from any responsibility if any damages were found since the Carrier has accepted the consignment without knowledge of the contents therein. This opposite party denies that the damage had occurred to the artefacts as alleged. This opposite party further contends that the articles were carried with due care and no damage could have happened during transit. For these reasons, the complaint cannot be maintained and entertained.

THE points that arise for consideration are (1) whether the 1st opposite party and/ or the 2nd opposite party were/was deficient in service ?; and (2) if so, what relief, if any, can be granted to the complainant ?

The 1st opposite party is the Insurance Company and the 2nd opposite party is M/s. Southern Roadways Ltd. through which the artefacts were sent. We will first take up the case of the 2nd opposite party M/s. Southern Roadways Ltd. According to them, they delivered the packages to the consignee at Pondicherry in the same condition in which they were at the time this opposite party took possession of them. It is not the case of the complainant that the packages were damaged. The only case of the complainant is that after delivery, when the packages were opened, it was noticed that seven pieces were badly damaged; one partially damaged and one undamaged. Admittedly, the consignee took possession of the packages at Pondicherry and he took them in a handcart to the consignee''s house which was 3 kms. away. The complainant''s son himself, as PW 1, would admit that there were chances for the goods being damaged when they were transported from the lorry to the house of the consignee. In these circumstances, it is difficult to hold that the damage had been caused only during the transit in the lorry. This being the case, we cannot hold that the 2nd Opposite party was responsible for the damage caused to the artefacts. Ex. B-10 which is the "Goods Forwarding Note", contains among others the following terms and conditions in Clauses 3, 4 & 19: "3. The Company is not responsible for the internal damages to the contents of packages or damages to unpacked goods or damages to perishable articles by deterioration or damages to brittle articles."

"4. The Company is not responsible for the contents of packages if the packages are delivered in the same apparent condition in which they are tendered for despatch by the consignor." "19. No claim can be made against the Company for damage, short delivery or deterioration of goods, etc., without getting at the time of delivery a certificate of damages and shortages in the form prescribed by the Company from the person in control of the office effecting delivery."

From these terms and conditions, it is clear that the 2nd opposite party Company will not be responsible for internal damages to the contents of the packages, and/or if the packages had been delivered in the same apparent condition in which they were tendered for despatch, and/or if no certificate of damages was obtained from the Company at the time of delivery. The undisputed facts are that the damages are only internal and the packages were delivered in the same apparent condition in which they were tendered for despatch, and the complainant has not obtained the required certificate as in Clause 19. It is therefore manifest that even if the damages had occurred during the transit in lorry, in view of Clauses 3, 4 and 19 of the terms and conditions in the said Goods Forwarding Note, the 2nd opposite party cannot be held liable. In fact, the learned Counsel appearing for the complainant, during the course of his arguments, fairly conceded that there is no case made out as against the 2nd opposite party M/s. Southern Roadways Ltd.

NOW, coming to the 1st opposite party Insurance Company, according to the complainant, nine artefacts have been insured for Rs. 3,41,000/- and the policy is a "valued policy" and that being the case, since the artefacts viz., all badly damaged, partially damaged and undamaged are now in possession of this opposite party Insurance Company, they are liable to pay the insured amount of Rs. 3,41,000/-. It is not in dispute that all the artefacts, contained in the consignment are now in possession of the 1st opposite party Insurance Company. Ex. B-l insurance policy shows that the sum of insurance is Rs. 3,41,000/-. Under the column "Premium", it is mentioned "As Per Bill Attached". Ex. A-2 is the "Invoice" (Bill) given to the consignee by name D. Vasu, wherein the value of each of the nine artefacts has been mentioned and the total has been arrived at Rs. 3,41,000/-. From these, it is obvious that in the policy the value has been agreed to and therefore it is a "valued policy". Even during the arguments, it is admitted by the learned Counsel appearing for the 1st opposite party that the value is an agreed one and the policy is a "valued policy". In these circumstances, according to the complainant, the Insurance Company is liable to pay the value stated in the policy. In this context, the learned Counsel appearing for the complainant read out Section 29 of the Marine Insurance Act, 1960, which deals with "Valued Policy". It is in the following terms: "29. Valued Policy.-(1) A policy may be either valued or unvalued. (2) A valued policy is a policy which specifies the agreed value of the subject matter insured. (3) Subject to the provisions of this Act, and in the absence of fraud, the value fixed by the policy is, as between the insurer and assured, conclusive of the insurable value of the subject intended to be insured, whether the loss be total or partial. (4) Unless the policy otherwise provides, the value fixed by the policy is not conclusive for the purpose of determining whether there has been a constructive total loss."

As per this section, subject to the provisions of the Act, the value fixed by the policy is conclusive of the insurable value of the articles which is Rs. 3,41,000/-. But it is contended by the Insurance Company that under Sections 19 and 20 of the Act, the Insurance is uberrimae fidei, and the assured must disclose the insurer before insurance every material circumstances and this the insured has failed to do. But it is not stated in the written version as to what are the material circumstances that have not been disclosed by the assured/ complainant. It is now stated that the insured failed to inform the insurer the true value of the artefacts. It is submitted that the artefacts were subsequently valued by the Surveyors, and according to them the maximum value is Rs. 70,000/-. But RW 1 examined by the Insurance Company - the Surveyor who examined the artefacts would say that according to him the total loss is Rs. 1,39,432/-. Thus, there is a self-contradiction in the value given in the written version of the Insurance Company and the value given by the Surveyor as its witness RW 1. Be that as it may, the fact remains that the policy is a "valued policy" i.e., the value has been agreed to which implies that before the policy, the Insurance Company inspected the artefacts regarding their value. This being the case, no question of disclosing any material facts by the insured regarding the value of the artefacts arises at all. Hence, we find no substance in the contention of the 2nd opposite party Insurance Company that the value stated in the policy cannot be accepted and the real value has to be found out and only basing on that the Insurance Company can be asked to pay any amount. As mentioned supra, all the artefacts are now in the possession of the Insurance Company. In these circumstances, it looks justifiable that the Insurance Company is liable to pay to the complainant the policy amount of Rs. 3,41,000/-. The complainant has claimed a sum of Rs. 1,00,000/- under the head loss of business. But regarding this, there is no evidence. However, there is no doubt that if the amount is paid by the Insurance Company, the complainant would have made use of it for his business. Considering thus, we are of the view that the complainant can be granted reasonable interest on the said sum. As regards the rate of interest that can be awarded, the observation made by the Supreme Court in its decision in The United India Insurance Co. Ltd. v. M/s. M.K.J. Corporation, III (1996) CPJ 8 (SC) is as follows : "The next question is: what rate of interest the insured-respondent is entitled to get ? In common parlance, when the insured respondent is deprived of right to enjoy his money or invest the money in business, necessarily the loss has to be compensated by way of payment of interest by the Insurance Company. We are informed that as per the directions of the Government of India, the appellant-Insurance Company has no option but to invest the money in the securities specified by the Government of India under which the Insurance Company is securing interest on investment at the rate of 11.3% per annum. Under these circumstances, the appellant-Insurance Company is liable to pay interest @ 12% per annum from January 1, 1991 till date of payment."

In view of this observation of the Apex Court, the complainant can be awarded interest @ 12% per annum on the said sum of Rs. 3,41,000/- from 2.1.1993, the date of claim made by the complainant. Considering the circumstances of the case and also considering the payment of interest on the said sum, we think that no separate amount need be granted under the head mental pain and damages. In the result, the 1st opposite party Insurance Company is directed to pay to the complainant a sum of Rs. 3,41,000/-. with interest thereon @ 12% per annum from 2.1.1993 till payment. We also order the 1st opposite party to pay a cost of Rs. 2,000/- to the complainant. These amounts shall be paid within two months from today. The complaint as against the 2nd opposite party M/s. Southern Roadways Ltd., is dismissed, but without costs. Complaint disposed of.