HAYAGRIV TEXTILE INDUSTRIES PVT. LTD. vs United India Insurance Co. Ltd.

THE complainant insured and the consignor of polyester texturised and twisted yarns who sent the consignment by truck from Kadi to Shivandi has claimed Rs. 2,46,182/- for the damages for short delivery of the goods and has claimed the interest on Rs. 4,58,695/- for the delayed payment of the said amount for the damages. THE complainant is the manufacturer of yarn and has taken special declaration insurance policy for Rs. 11.50 crores covering risk of the goods despatched by the complainant. On5.7.89 the complainant despatched 3638 cheeses Polyester texturised and twisted yarns packed in 144 cartons weighting 6379.140 kgs. valued at Rs. 11.72 lakhs from Kadi factory to Shivandi through Mehta Road-lines of Ahmedabad. THE G.C. Note No. 255 dated 5.7.89 was issued by the transporter to the consignor for the said consignment. THE track met with the accident on 6.7.89 at Vasai Camin Bhiwandi Road near Payagon village and fell on the side of the road in the fields having water and heavy damage to the goods was caused. THE police was informed and panchnama was prepared by the police and the opposite party appointed R.B. Davar of Bombay to survey the damages. THE surveyor submitted the report and also suggested for the investigation. THE complainant claimed Rs. 7,04,877/- for the damages but was paid only Rs. 4,58,695/- and did not pay Rs. 2,46,182/- for the shortage of goods. THE complainant was informed by the opposite party by letter dated 13.8.91 (Exh.19) that the claim was under process and will be finalised at the earliest. Ultimately the complainant was informed by the opposite party by letter dated 21.6.91 (Exh. 23) that the claim was settled at Rs. 4,58,695/- as per the recommendation of the surveyor. THE surveyor had not made any recommendations for the shortage claimed by the complainant and had only assessed the damages for loss. THE complainant was also informed by said letter that the claim for the shortage of goods was not considered as he could not substantiate the shortage by producing the certificate from the transporter and that was why the Insurance Company settled the damages claim at Rs. 4,58,695/- in full and final settlement of the above claim. In the said letter the letter dated 30.11.90 by the complainant to make further payment of Rs. 2,46,182/- against the shortage of 896 cheeses was also referred. THE complainant being aggrieved by non-payment of the shortage of the goods has filed the complaint.

THE contention of the opposite party is that the surveyor had not recommended for the damages for the shortage of the goods and complainant was already paid for the damages for full and final settlement of the claim and, therefore, the complainant is not entitled to any amount. THE insurance coverage is admitted by the other side and there is no dispute to that effect. THE contention that the surveyor had not recommended for the shortage of the goods is not correct as surveyor in the report (Exh. 21) had not made any such recommendation. THE surveyor had carried out the survey and observed that when inspected the truck was lying on its drivers side facing Vasai Road on the left hand side about 15 ft. below the road in water and part consignment was in water. THE panchnama was made on 7.7.89. Subsequently the cartons were taken to consignees godown at Jaylaxmi Warehouse in Anjurpata and 73 cartons out of 144 and 1036 cheeses in loose were received by the consignee''s godown. All the cartons were opened up and the contents cheesed up and the surveyor assessed the damage. THE surveyor specifically held that the finished quantity was 144 cartons 3638 cheeses. Out of that 73 cartons i.e. 1706 cheeses and 1036 loose cheeses were found i.e. 2742 cheeses were totally found out 3638 cheeses which was invoiced quantity and shortage was 896 cheeses. THE surveyor has specifically stated that "as regards the shortage of the cheeses we strongly recommend to enquire about the circumstances and cause of such a huge shortage of the said cheeses reported by the consignees". THE surveyor assessed the damage only of the yarn which were found and did not survey for the shortage and recommended for the investigation. THE surveyor had prepared the report on 1.9.89 while the payment was made on 20.9.90 for the damages to the goods and no claim for shortage was settled by the opposite party. On the recommendation of the surveyor, the opposite party directed for the investigation by the Claims Minimization Bureau which prepared the report in April/May 1990. The investigation was thoroughly carried out and the investigator recorded the statement and verified the documents. For justifying the shortage the investigator recorded that the report of the surveyor indicated that cones were heavily damaged including the cones which were salvaged in the form of cartons. This clearly indicates that pressure and drifting force of water must be very powerful at the relevant time. The investigator informed that they could ascertain the reason for the loss of the yarn and stated that the good were scattered due to the overturning of the truck and the cartons were turned out due to rain and impact. Some of them had fallen in the water. The water was not static but water level was increasing and receding due to rain as well as tides etc. Due to such phenomena, loose cones got drifted away in water from nearby culvert. They also observed that enquiry revealed that there was heavy rain during the morning hours of 9 a.m. to 3 p.m. and water was gushing from the field where the truck was lying towards the culvert side and due to the force of rain coupled with high tide the current of water was powerful and capable of sweeping away even the whole of carton and hence scattered cones must have been washed away or have been drifted away at a long distance and might have embedded with mud and sand in field situated in the area and other side of culvert. In the final conclusion the investigator stated that the loss of the quantity mentioned in the survey report might have been due to drifting into the water, its embedding with earth and sand in several fields from where the water passes and also few cones remained lying in the grass of the side banks of culvert and other paddy fields being invisible to persons engaged to recover cones at material time.

From the report of the surveyor and the investigator it is clear that the shortage is of 896 cheeses i.e. 1340.13 kgs. and there were convincing reasons for the shortage. As such the surveyor or investigator did not suspect any malpractice by consigner or godown keeper. The shortage is, therefore, established by the complainant.

THE complainant was called upon to produce the shortage report but he could not produce it and investigator has recorded the reasons for that. It is stated in the report that the transporter was not co-operative because of some dispute over previous bill and, therefore, refused to give the shortage report. THE complainant has also stated that fact and, therefore, the consigner''s copy of the transport receipt (Exh. 24) was produced by the complainant. In the receipt endorsement was made that the open delivery was refused by the transporter and the delivery was accepted under protest and subject to the surveyor''s assessment. THE investigator in the addendum (Exh. 26) has clearly stated that the transport company did not issue the damage/shortage certificate to the insured. THE complainant insured was trying to get the damage/ shortage certificate from the carrier and at the initial stage the relation between the insured and transport company was very cordial and assured to issue the certificate but due to some problems arising out of settlement of old bills relation got strained and ultimately the transport company refused to issue the certificate. It is also recorded that from the claim papers it can be observed that while taking delivery from the transport company, the warehousing agent of the insured M/s. Jailaxmi Warehousing Corp. vide their receipt No.1400 dated 7.7.89 issued to M/s. Mehta Road Lines confirmed the condition of the goods in which the transport company had delivered the goods. We have discussed above the endorsement made on that receipt. THE complainant therefore could not produce the shortage certificate of the carrier. However, the shortage is established by other evidence and surveyor as well as investigator accepted and justified it. We, therefore, hold that short delivery was caused by the carrier as discussed above and the complainant was caused the damages for the goods which were short delivered. THE complainant''s grievance is that the report of the surveyor and of the investigator was not given to the complainant and, therefore, they requested to produce before the Commission and accordingly the other side has produced the said reports on record. It is clear from the record that the complainant was all the while insisting the damages for short delivery. The complainant was not paid the amount claimed for the short delivery and was paid only Rs. 4,58,695/- for the damage to the goods and have not for the short delivery and the Insurance company tried to justify the same on the ground that the surveyor had not recommended it. As discussed above, the surveyor had not made recommendations not to pay for short delivery but had only recommended for the investigation which was ultimately carried out and the investigator had also justified the short deli very. The opposite party had, therefore, wrongly not paid the damages for the short delivery and informed accordingly to the complainant by letter dated 21.6.91.

THE surveyor submitted the report in September 1989 and the amount of Rs. 4,58,695/- was paid on 28.9.90. THE contention of the opposite party is that the amount of Rs. 4,58,695/- was paid in full and final discharge of the claim and, therefore, the complainant is not entitled to any amount demanded. It is true that in the receipt (Exh. 22) it is printed that "Received from United India Insurance Co. Ltd. the aforesaid sum in full and final discharge of claims upon them, as per the particulars in R.O. Letter No. ARO/Marine/10935/90 dated 18.9.90". Admittedly, at that particular time the dispute between the parties was about the damage for the short delivery and the amount of Rs. 4,58,695/- was paid only for the damages to the goods. In view of the admitted position that no amount was paid for the shortage of the goods inspite of the insistence of the complainant, the printed contents of the receipt could not be attached much value and the complainant cannot be deprived of the legitimate amount for the shortage of the goods. As discussed above, the shortage of the goods was justified and the Insurance Company was liable to pay the damages for the shortage of the goods. THE opposite party Insurance Company while making the payment of the damaged goods on 28.9.90 was not settling the claim for the short delivery but was settling only the claim for the damage to the goods. In view of the admitted position, the complainant cannot be deprived of the legitimate right to get the damages for the shortage of the goods nor the other side can be allowed to take undue advantage of such printed contents of the receipt. THE complainant can be deprived of the additional claim for the damages provided both the parties are clear that the claim was settled when the particular amount for which receipt of full and final settlement was issued by the complainant. Any subsequent claim after that cannot be entertained under the contract itself. But the parties should be clear about the settlement of the dispute under the contract. If the Insurance Company was not settling the particular dispute claiming that they were not bound to pay the compensation for that the surveyor had not recommended for that, it cannot assert that the claim was fully and finally settled by the said receipt. In view of this we hold that by stating in the receipt that the claim was "settled fully and finally" would not deprive the complainant from claiming Rs 2,46,182/- for the damages for short delivery of the goods. THE insurance coverage is clear. THE opposite party has undertaken the liability for such loss and as insurer, the opposite party should honour the obligation undertaken by it. In view of above it is not necessary for us to refer to the judgments of the National Commission in United India Insurance Co. Ltd. v. Upadhyayula Mohan Rao & Anr. I (1993) CPJ 23 (NC); Kilaru Jogendru Narayana Prasad v. The Divisional Manager, Oriental Life Insurance Co. Ltd. & Anr. I (1992) CPJ 41 (NC); Col. Bhim Singh v. Regional Manager, National Insurance Co. Ltd. & Anr. 1992 (1) CPR 439 and United India Insurance Co. Ltd. v. Rajesh Kumar Amratlal Brahmabhatt I (1993) CPJ 218 (Guj.) referred by the learned Advocate for the opposite party. The principle of law is always required to be appreciated in relation to the facts of each case. We, therefore, hold that the opposite party is liable to pay Rs. 2,46,182/- for the damages for short delivery of the yarn. The complainant has also claimed interest for delay in payment of Rs. 4,58,695/- as the report of the surveyor was made on 1.9.89 and the amount was paid on 18.9.90. Practically after the period of one year the complainant was paid for the damages. It is clear that after the report of the surveyor was submitted, the investigation was required to be made as recommended by the surveyor and it took considerable time and, therefore, the claim could not be settled within reasonable time. Considering the facts and circumstances of the case, it cannot be accepted that undue delay was caused in making the payment for the accepted damages. The complainant therefore should not be allowed interest as claimed. ORDER The opposite party United India Insurance Co. shall pay Rs. 2,46,182/- with 12% interest from 18.9.90 till realisation and the cost of Rs. 3000/- within one month from the date of receipt of the order and shall bear its own cost. Complaint allowed with costs.