State Consumer Disputes Redressal Commission

West Bengal

BHABANI BHAVAN (GROUND FLOOR)

31, BELVEDERE ROAD, ALIPORE

KOLKATA – 700 027





S.C. CASE NO. 09/O/07



DATE OF FILING: 15.3.2007

DATE OF FINAL ORDER: 06.05.2009


COMPLAINANT


M/s. R. Piyarelall Import & Export Ltd.

12, Govt. Place, East, Kolkata – 700 069



RESPONDENT/O.P.



M/s. Tata AIG General Insurance Co. Ltd.

Having its registered office at

Peninsula Corporate Park

Nicholas Piramal Tower, 9th floor

G.K. Marg, Lower Parel

Mumbai – 400 013 and Branch Office at

Tata Centre, 1st floor

43, Jawaharlal Nehru Road

P.S. – Park Street, Kolkata – 700 071



BEFORE : HON’BLE JUSTICE MR. A. CHAKRABARTI, PRESIDENT

MEMBER : MR. A.K. RAY

MEMBER : MRS. S. MAJUMDER



FOR THE COMPLAINANT : Mr. U. C. Jha, Advocate

FOR THE RESPONDENT/O.P. : Mr. R.K. Choumal, Advocate





: O R D E R :


HON’BLE JUSTICE MR. A. CHAKRABARTI, PRESIDENT





This complaint was filed by the complainant company against M/s. Tata AIG General Insurance Co. Ltd. praying for Rs.22,92,252/- as the insured value for damaged goods, Rs.2 lacs as compensation for loss of bank interest, stress and strain, interest on the insured value from 21.9.04 till the date of filing of the petition and interest from the date of filing of the petition till the date of realization.

Facts stated in the complaint in brief are that the complainant, importer and exporter of agricultural products/commodities got insurance coverage for the transit risk of shipment of 35,000.000 M/tones of pulses in bulk into ship’s hold from any port in Canada to any Indian port and thence to client’s warehouse at Kolkata by vessel. M/s. J.K. International Pvt. Ltd. of Australia shipped 22,534.000 M/tones of Canadian Yellow Peas in bulk from Vancouver to Kolkata by M.V. “Aramis-A” and the complainant on receipt of the shipment advices from the shippers applied to the OP for transit insurance cover on the aforesaid shipments for Rs.22,54,00,000/- and the OP assumed the transit risk by issuing three Marine Insurance Certificates. The vessel M.V. “Aramis-A” arrived at Saugor Road Anchorage on 21.12.2003 and commenced discharge of her cargo on 22.12.2003 into Lighters. A meeting was held at the office of the complainant with all the interested parties on 24.12.2003 and an agreement was reached about the procedure to be followed for discharge of the cargo on 27.12.2003. M/s. J.B. Boda Surveyors Pvt. Ltd., M/s. Norman Stewart & Co. and M/s. S.S.G. Associates on behalf of the cargo underwriters, Ship owners P & I Club and the complainant respectively supervised discharge of cargo and survey of the said consignment. The survey reports disclose that the vessel M.V. “Aramis-A” completed discharge of 9570.760 M/tones of cargo on 30.12.2003 and, thereafter proceeded to Kolkata Port with 12,960.000 M/tones of cargo on board.


The complainant reported loss or damage from three lighters and the surveyors assessed the extent of loss by the survey report dated 28.7.04. M/s. National Agricultural Cooperation Marketing Federation of India Ltd. and M/s. Spices Trading Corporation Ltd. surrendered 14 original Bills of Lading and took delivery 14,000.000 M/tones of cargo discharged at Saugor Road Anchorage but no one came forward with 9 original Bills of Lading to the vessels for the purpose of taking delivery of the goods under the said Bills of Lading and consequently the vessel was lying idle at Diamond Harbour Anchorage and was incurring heavy financial loss. The ship owners filed an Admiralty Suit no.14 of 2004 in the Hon’ble High Court at Kolkata for appropriate orders wherein with the consent of the parties the Hon’ble Judge was pleased to appoint joint receivers under whose supervision the surveyors were to take steps to segregate the damaged peas and the peas which were in good condition separately. The vessel M.V. “Aramis-A” arrived at No.2 N.S. Dock on 11.1.04 with 12,960.000 M/tones of cargo on board when she commenced discharge and completed the same on 22.1.04.

When the cargo was being discharged from the said vessel on 21.1.04 and 22.1.04 total 34744 bags were found to have been contaminated, water damaged and in lumpy condition. These 34744 damaged bags were allowed to be discharged as sound consequent whereupon those bags were not included in the damaged cargo kept on the dock of the vessel for inspection and assessment. Dispute arose on the said issue. A final draft survey was conducted on 22.1.04 at No.2 N.S. Dock which revealed that out of Bills of Lading quantity of 22,534.000 M/tones, the vessel discharged 22,325.000 M/tones of cargo resulting in short delivery of 209.490 M/tones. This was actually damaged cargo and not shortage as per paragraph 5 of the order dated 30.1.04 passed by the Hon’ble Judge. The said Admiralty suit was heard and orders were passed thereon recording settlement between the parties and disposal of the suit in terms of settlement. It is contended that the ship owner was relieved of the liability under the contract but the insurer was not so relieved in view of the settlement arrived in the said Admiralty suit particularly when the Insurer was not a party even to the said suit and in terms of Institute Cargo Clauses – “A” (All Risks) the insurer’s liability continued till the insured cargo is delivered at the assureds warehouse.


The Insurer asked their surveyor M/s. J.B. Boda to resurvey the said 34744 bags and a meeting was held at the office of the Respondent on 09.3.04 in presence of all representatives of the interested parties and several points were agreed upon by all concerned. Instead of 1737 bags being 5% of the total 34744 bags, only 171 bags were drawn as samples and the Respondent’s Surveyor M/s. J.B. Boda constantly stood in the way of drawing proper samples from the damaged bags. The analytical reports of M/s. R.V. Briggs and Co. Ltd. attached to the surveyor’s report stated that damaged seeds include fungus affected portion also and the seeds have been damaged by coming in contact with fresh/rain water; the contents of 34744 damaged bags do not conform to a sound sample and the sample is unfit for human consumption for high moisture, foul odour and for the presence of higher percentage of damaged seeds than stipulated in FPA Act, 1954. But in the surveyor’s report dated 10.8.04 it was stated that based on the said analytical result the surveyors were of the opinion that the composite sample that had been tested by the laboratory are well within the permissible limit as stipulated in FPA Act, 1954.

As regards the cause of contamination in 34744 bags, it was noted that based on the nature of damage as observed on the vessels holds and on perusal of the analytical reports the surveyors were of the opinion that cause of contamination of sound peas with partially affected peas was due to dumping of the above one atop another which occurred as a result of careless operation of the stevedores. As regards cause of water damage to the peas inference was drawn that the same had occurred due to sippage of fresh water through the hatch covers. The present complaint was filed on aforesaid facts. Written version was filed by the OP. After evidences were recorded the complaint case was taken up for filing hearing.

Heard Mr. U.C. Jha, the Ld. Advocate for the Complainant and Mr. R.K. Choumal, the Ld. Advocate for the OP.

The first point which falls for our decision is as to whether the claim of the insured is barred by the principles of res judicata. The complainant argues that in the Admiralty suit settlement was arrived at by and between the party and the suit was disposed of on such settlement and Insurer was neither a party to the suit nor to the settlement. Moreover, the said settlement provided clearly that withdrawal of the proceeding was on full satisfaction of the claim of the consignees whereupon neither party shall have claim against each other. The Insurer has argued that the admiralty suit directly dealt with the claim of the insured on account of damage to the cargo and the agreement was “in full and final settlement of all claims for damage to cargo carried on board the vessel.” It is argued by the Insurer that a sum of US$ 170,000 was paid admittedly for the damaged cargo and, therefore, any further claim on account of the damage of the cargo cannot be claimed.

Considering the respective contentions and materials on record we find that the Admiralty suit was disposed of on settlement and the agreement dated 22.01.04 was arrived between the parties and the Insurer was not a party and all claims of the consignees was satisfied whereupon neither party was to have claim against each other. Therefore, when the Insurer was not a party either to the suit or to the agreement, claim against Insurer cannot be treated as covered or thereby barred by the principle of resjudicata.

Now considering the complaint on merit we find that the challenge by the complainant was based on repudiation of the claim of the insured by the Insurer by their letter dated 18.3.05 (Annexure -‘V’ to the complaint). While making a claim under the policy the insured in effect challenges the said letter and the repudiation referred to therein.

We have considered the contentions of Mr. Jha, the Ld. Advocate for the Complainant and Mr. Choumal, the Ld. Advocate for the Insurer and also we have perused the materials on record.

The claim appears to have been lodged on 21.9.04 for a total sum of Rs.45,46,250/- and the matter was being considered by the Insurer for a long period. Admittedly also the complainant submitted documents from time to time. In such circumstance such repudiation by letter dated 18.3.05 solely on the ground that Insurer’s letter date 16.2.05 was not responded drawing a presumption that the insured had no replies to the queries raised by the Insurer in their various correspondences and, therefore, the claim was treated as closed, does not appear to be justified. Such conduct can not be approved particularly when in the self same letter, the Insurer has recorded that the insured was throughout quite prompt in their replies to the Insurer. Before such drastic conclusions there is no reason that the Insurer should not give at least one reminder to the insured drawing its attention to the requirements intimated by the letter of the Insurer dated 16.2.05.

In such circumstances we are of the opinion that such order treating the claim as closed on such ground is not maintainable and is liable to be quashed. This act of the insurer amounted to deficiency in service. Therefore, Insurer is directed to decide the claim of the complainant in accordance with law.

Various other points have been argued by the respective parties relying on the reports of the surveyors, report of the laboratory and other materials on record on the question of damage to the cargo, extent of the damage, reason of the damage and the user of the cargo inspite of damage. But as the matter is being sent back to the Insurance Company for a decision on the claim, the said questions raised in the proceeding before us are left open and the Insurance Company is directed to decide by a reasoned order on available materials the matter in accordance with law expeditiously taking into consideration all such relevant facts.

In view of above findings the judgments referred to during hearing, do not require detail discussion.

In view of the above findings as there is deficiency in service of the Insurance Company already found, the complaint is allowed and the respondent insurance company is directed to decide the claim of complainant in accordance with law by a reasoned order as directed hereinabove within three months from this order and the Respondent is directed to pay Rs.50,000/- to the complainant as compensation and Rs.10,000/- towards the litigation cost within a period of 60 days from the date of order and in default of the payment of the said amounts, the complainant will be entitled to recover the same in accordance with law along with interest @ 9% per annum for the period of default.



(S. Majumder) (A.K. Ray) (Justice A. Chakrabarti)

MEMBER(L) MEMBER PRESIDENT