AI Structured Summary
Not yet generated for this judgment
Judgment
Subhash Chandra, Member
This complaint is filed under section 21 (a) of the Consumer Protection Act,1 986 alleging deficiency in service on account of disallowing an insurance claim under a Marine Cargo policy which was repudiated by the opposite party on various grounds.
As stated by the complainant, the facts, in brief, are that as his company is engaged in export of cotton products, it had obtained a Marine Cargo (Single Voyage) policy from the opposite party on 27.02.2012 covering Cost Insurance and Freight (CIF) plus 10% for a sum of Rs.1,28,35,271/- for 335 bales of 100% cotton and 100% polyester dyed and printed fabrics. The bales were plastic strip bound and were exported from Rajkot to Lubumbashi, Congo from Pipavav port by sea via Dar Es Salaam, Tanzania and by road thereafter by container to the final destination. It is stated that the consignment reached Dar Es Salaam, Tanzania and while being transported by road to the final destination it met with a fire accident due to short circuit in the dash board of the container which spread to the fuel tanks and the tyres and burnt the goods in the trailer on 29.04.2012 near village Kinengembasi, District Mafinga in the region of Iringa (Tanzania) at around 01.00 a m. As a consequence of this fire, the complainant stated that there was total loss of the exported goods and that the matter was reported to the concerned authorities as well as to the opposite party. A survey was under taken by a Tanzania based surveyor approved by the opposite party and also investigated by an investigator, Oriental Surveyors and Assessors Limited, Registered Surveyors, Assessors and Loss Adjusters, Dar Es Salaam.
It is stated that the opposite party kept raising various queries seeking details and documents which delayed the matter for over two years during which period the relevant documents were submitted on three occasions by the complainant. The complainant has averred that while the surveyor has recommended the settlement of the claim on total loss basis, the Regional Claim Committee of the opposite party recommended rejection of the claim. Consequently, the claim was repudiated on 28.11.2014 by the opposite party. The complainant took up the matter with the opposite party on 05.11.2014 which was replied on 16.02.2015. Dissatisfied with the reply, a legal notice was issued on 10.03.2015 by the complainant which was not responded to. The present complaint has been filed on the ground that the rejection of the claim is illegal and arbitrary and amounts to deficiency in service and unfair trade practice. Interest at the rate of 2% above the bank rate at the beginning of the financial order of the claim has been claimed under regulation 9 (6) of IRDA (Protection of Policy Holder Interest) Regulations, 2002 in view of this Commission’s order in Paramount Iron and Steel Works Private Limited vs Oriental Insurance Company Ltd., and Anr., III (2007) CPJ 2 (NC) in CC no. 78 of 2006 decided on 23.05.2007.
Alleging deficiency in service, the complainant has filed the present consumer complaint before this Commission with the following prayer:
a. “Be please to admit this complaint;
b. Be please to direct the opposite party to pay Rs.1,28,35,271/- with 12% interest per annum from the date of 29.04.2012 till the date of actual payment by opponent to the complainant;
c. Be please to direct the opposite party to deposit Rs.50,00,000/- or suitable amount which this Hon’ble forum deems fit as a compensation/ penalty with Consumer Protection Fund because its inhuman, deficient approach and unfair trade practice on the part of the opposite party;
d. Be please to direct the opposite party to pay Rs.1,00,000/- as the cost of this complaint from the opposite party;
e. Be pleased to direct the recovery of the interest and penalty from delinquent officers of the opponent company, who have misused their offices by conniving to delay/ decline the claim by fabricating grounds on which the repudiation of liability is based. The plea is to ensure that their action does not result in the ‘Loss of Public Money as they are supposed to act as Trustees being the representatives of the Insurance Company; and
f. Be pleased to allow any other relief which this Hon’ble Court deem fit”.
The complaint has been resisted by way of written version by the opposite party which has denied the claim of the complaint and has taken the view that the matter cannot be decided in summary proceedings before this Commission. It has been stated that there has been misjoinder of parties between the consignee and the carrier who are necessary parties but have not been impleaded under the Law of Carriage. It has been contended that there was no cause of action for the complainant and repudiation letter dated 28.11.2014 has clearly recorded the reasons for repudiation as below:
i. “That you have not provided us the terms of delivery of goods and receipt of payment by not making available the copy of the written contract/ order entered into by you with the consignee despite numerous requests;
ii. That apart from requests made at point no.1 above, you have not even made available the copies of the correspondence exchanged between you and your consignee/ buyer to determine the terms of delivery and payment and the responsibility of the respective parties to the contract for damages during the transit;
iii. The gross weight of the goods in transit was 27945 kg whereas the carrying capacity of the truck no.T625BTR has been mentioned as 12580 kg and trailer no. T990BUE GVW 8000 kg., in the Motor Vehicle Registration Cards. It is not feasible for a vehicle with registered carrying capacity of 12580 kg to convey goods having a weight of 27945 kg to convey goods having a weight of 27945 kg in addition to the weight of the container;
iv. That neither the copy of the LR of the vehicle carrying the goods nor the copy of the acknowledgment of the damages by the transporters has been submitted. No non-delivery certificate has been given by the transporter;
v. That you have not provided us the follow up details of the intimation given to the Custom Authorities at Tanzania and the treatment of custom duty paid and/ or its claimed refund against the damaged consignment;
vi. Letter dated 04.05.2012 addressed by you to M/s BNM Freight Forwarders Co. Ltd. Tanzania does not mention the LR number vide which the goods were being transported in the truck in reference;
vii. That you have not provided any clarifications to what happened to the metallic seal affixed by the custom department on the container and its whereabouts.
Please note that there are numerous unexplained inconsistencies in the survey and investigation reports. Your liability to explain/ clarify these inconsistencies and to substantiate the loss can be observed from various documents on records as mentioned hereunder:
· The driver stately tried to extinguish the fire after taking out the fire extinguisher from inside the cabin of the truck and when he failed to extinguish the fire, he stately ran here and there and reached a nearby village and returned back along with 3 unnamed villagers and again tried to extinguish fire by throwing sand with the help of those villagers. Having failed to extinguish the fire, the driver thereafter reportedly boarded a car of some unknown person and reached Makambako Police Station which was around 18 km away from the site of accident, narrated the whole incidence of fire to the police and came back to the place of accident. The whole exercise was carried out within a span of two hours, which is practically not possible;
· Since the consignment of goods was in the form of stripped bales, hence 100% damage to the goods was not possible, particularly when goods were stuffed inside a closed container;
· How, at what stage, by whom and why the container doors were opened before the survey was carried out has not been clarified;
· Two causes have been cited for the origin of fire namely:
· That a short circuit was noticed by the driver in his cabin;
· That the brakes got jammed resulting in high friction leading to the tyres catching fire
It is practically not possible for the fire to travel from the driver’s cabin to the rear tyres or the goods getting entirely (100%) damaged from the heat so generated by the burning tyres; the goods having been placed inside the closed contained built of steel structure with heavy metallic steel base.
To resolve various inconsistencies, despite our best efforts and requests made to you during your personal interactions with our officials to provide the supporting information/ clarifications, you did not cooperate and instead preferred to say that whatever information/ clarifications were to be made available had already been submitted to the surveyor and that no additional information/ clarifications could be provided.
Since you have failed to substantiate your claim by ignoring to provide us the requisite clarifications/ documents as mentioned above and in view of the inconsistencies pointed out above, we are unable to consider the claim and deny our liability on the following clauses of Institute Cargo Clauses (A);
a. Clause 11.1 which states that “in order to recover under this insurance the Assured must have an insurable interest in the subject matter insured at the time of the loss;
b. Clause 16: It is the duty of the assured that their servants and agents in respect of loss recoverable hereunder –
Clause 16.1- To take such measures as may be reasonable for the purpose of averting or minimizing such loss;
Clause 16.2 – To ensure that all rights against carriers, bailees or other third parties are properly preserved and exercised
(c ) Your inability to substantiate the claim by clarifying various inconsistencies brought to your notice, is construed as wilful on your part and attracts the provisions of Exclusion 4.1.”
Therefore, it is contended by the opposite party that there is no deficiency in service on its part since information in the proposal form was found to be false as compared to the claim document, with reference to the Bill of Lading for ocean transport, which clearly mentions that transportation from Dar Es Salaam, Tanzania to Lubumbashi, Congo was arranged by the merchant with account of risk of merchant.
It is also contended that insurance is a contract based upon uberrimae fidei (utmost good faith) which has not been met in this case. It is submitted that the invoice relating to the shipment are blank with regard to “terms of delivery of payment” and the contract was of CIF and FOB basis. Therefore, from the invoices it is not clear whether the contract of sale was on CIF basis or FOB basis. In view of the contradiction in the proposal form and the Bill of Lading, the complainant was requested to clarify the matter which it failed to do and relied upon the proforma invoice in contending that the consignment was sent on CIF basis. Hence, the matter was treated as excluded under the exclusion clause no.11.1 of Institute Cargo Clauses A, 2009 [ICC (A) clauses].
It is also contended that the investigation by the opposite party revealed that the details of custom duty paid in Tanzania was not provided on the ground that the consignment was totally burnt in transit to Congo. However, the document provided to substantiate the total loss by the complainant was only intimation by the local Revenue authorities to the Custom authorities stating that the goods have been totally destroyed. According to the opposite party, the complainant has not been able to establish its insurable interest.
The opposite party has also contended that the report dated 04.05.2012 of the Overseas Settling Agents of the opposite party, M/s Toplis and Harding, handling agents of Lloyds who were deputed as Surveyor, and the cargo handling agents B N M Freight Forwarders Co. Ltd., noted that the consignment was handed over to Omar Awadh Transport Co. Ltd., for transportation from Dar Es Salaam to Lubumbashi. The opposite party sought the copy of the lorry receipt/ consignment note from the complainant and the non-delivery certificate for the monetary claim lodged with them. The complainant forwarded the delivery note from B N M Freight Forwarders Co Ltd., which records that the transporter was Omar Awadh Transport Co. Ltd. According to the complainant the delivery note itself was the consignment note. The opposite party contended that this is factually incorrect as these are separate documents. It is accordingly contended that the complainant did not exercise the right of recovery against the carriers under clause 16.2 of ICC (A) clauses. It is also contended, on the basis of the Bill of Lading, that the gross weight of the goods in transit was 27945 kgs whereas the carrying capacity of the tractor trailer was only 12580 kgs and therefore, the incident of transportation and fire is suspect. The opposite party also contends that as the consignment was loaded in a closed container in bales, it was doubtful that the entire cargo would be totally burnt in a sealed container. Opinion of A M Patel Insurance Surveyors and Loss Assessors dated 29.09.2014 has been relied upon to state that the total destruction by fire of 335 bales with not a single piece remaining for inspection was not possible as there was a gap between the tractor and tyres of the trailer on which the container was loaded. Therefore, the circumstances of the loss were held as doubtful. It was contended that there was a possibility of the complainant’s connivance with the carrier. Exclusion 4.1 of the ICC (A) clause is relied upon for the non-liability in view of the wilful misconduct of the complainant. Deficiency in service, therefore, does not arise according to the opposite party. It is also contended that it is a settled law that a detailed examination of evidence cannot be done in a summary proceedings before this Commission as per the judgment of the Hon’ble Supreme Court in Synco Industries vs State Bank of Bikaner (2002) 2 SCC 1.
Parties led their evidence and filed their rejoinder and written submissions. We have heard the learned counsel for both the parties and have carefully considered the material on record.
It is the case of the complainant that the goods were duly covered under the Marine Cargo policy for which the premium had been paid and the loss due to the fire in the truck –trailer was a covered risk. The claim of Rs.1,28,35,271/- is justified by the complainant along with interest, penalty and costs as the opposite party has failed to honour its part of the contract of insurance despite the full cooperation of the complainants. Per contra, the opposite party has justified the repudiation of the claim on the grounds that there were several “unexplained inconsistencies” in the matter as per the reports of Surveyors and Investigators which had not been explained satisfactorily by the complainant. Primarily, it is argued that the total loss by fire of the goods in a closed steel container was doubtful and that no documents to prove the liability of the carrier had been provided despite requests. As insurable interest had not been established by the complainant under the exclusion clause 11.1 of ICC (A) clauses, the claim was not justified/ permissible.
The core issue is the repudiation of the insurance claim on the ground of exclusion. This has been done for various reasons by the opposite party set out in the letter of repudiation dated 28.11.2014. The repudiation is essentially based on the grounds of the circumstances of the fire, the liability of the carrier and the inability of the complainant in establishing his insurable interest since several “unexplained inconsistencies” exist. The cause of the fire is stated by the complainant to be a short circuit in the dash board of the truck and the tyres catching fire on account of high friction due to jamming of brakes. Opposite party has contested this based on the distance of the trailer from the dashboard of the truck and the metallic construction of the trailer and the absence of even an iota of evidence of residue of the burnt consignment which was packed in a sealed metal container. The liability of the carrier for the on ground transportation has not been established by way of any documents by the complainant except for an invoice which has been contested as inadequate by the opposite party. No documents to establish no liability on part of the carrier has been brought on record by the complainant.
From the record, it is evident that the claim under the single voyage has been repudiated on the grounds that have been stated in detail in the letter of repudiation dated 28.11.2014. The complainant has not been able to prove that the fire from the dashboard at the front of the tractor-truck and the fire in the tyres of the trailer when the brakes were applied led to the combustion of the entire stock of material which was being transported in a closed, metal body trailer. Complainant has also not provided any documents to indicate liability of the road carrier as sought by the surveyor except an invoice. He has also not provided any details of the goods having cleared customs at Dar Es Salaam and the absence of the Customs Department’s seal on the container. These have been construed as unexplained consistencies by the opposite party and the claim accordingly repudiated. The claim of the insured has been considered by the surveyor appointed by the opposite party. Clarifications and details sought by the surveyor have not been provided by the complainant in order to facilitate a fair assessm1ent of the extent of loss with reference to the claim.
From the foregoing, it is manifest that the claim of the complainant has been repudiated on various grounds that are reasoned and logical. We are convinced based on the record that there are unexplained inconsistencies in the claim which the complainant has not been able to satisfactorily clarify despite opportunity. It is not the case of the complainant that the surveyor has acted arbitrarily or in an unjust manner. There is no case made out for the rejection of the surveyor’s report which is the basis for the opposite party’s repudiation of the claim. In this view of the matter, the complaint is liable to fail.
In the result, the complaint is found to be without merit and is accordingly, dismissed. There shall be no order as to costs.