National Insurance Co. Ltd. vs K.D. GODBOLE

THIS is a Revision Petition of 6th December, 1990 against the Order of the State Commission of Maharashtra The State Commission awarded compensation for the loss of goods amounting to Rs. 21,960/- to the complainant. THIS amount is to carry interest at the rate of 12 per cent per annum from the date of that order till the actual date the payment is made to the complainant. In addition, a sum of Rs. 2,000/- was awarded by way of costs of litigation before the District Forum and the State Commission.

THE respondent, who was the complainant before the District Forum and the appellant before the State Commission, had insured 19 items of household effects for transporting them from Merrut to Bombay. For this purpose he had, according to him, asked for an "All risks" policy on the 14th May,1985, by paying premium at the rate of 1 per cent of the declared value of the goods. On opening the packages after arrival of the truck in Bombay and after taking delivery of the goods, the complainant is stated to have found the goods to be completely damaged. THE Order of the State Commission cited above is founded on the presumption that the Insurance Policy the respondent had taken covered "All risks" in transit On the question of liability of the revision petitioner Insurance Company, under the policy of insurance the State Commission observed "The only point that survives for our consideration is whether on the basis of the application (proposal) made by the complainant he intended to obtain "All risks" policy for his consignment of goods. Our answer is in the affirmative ...". This is followed by the reasoning in support of this conclusion of the Commission. Finally the State Commission observes "From the aforesaid discussion it clearly emerges that the 1% payment of the total value of the goods insured covers ''All risks'' including breakage... We find from the application of the complainant that he clearly asked for ''All risks'' policy, but the cover note has been issued showing ''Restricted risks'' policy by the Insurance Company." However, on the ground that (i) the respondent complainant had asked for an ''All risks'' policy, (ii) that it cannot be asserted with certainly whether the premium rate is 2 per cent for ''All risks'' and 1 per cent for ''Restricted risks'' or that 1 per cent can also be for ''All risks'' and (iii) because of the failure of the Insurance Company to reject the request of the respondent complainant for ''All risks'' policy, the State Commission held that it was an All risks'' policy and the claim of the respondent complainant had been wrongly rejected by the petitioner Insurance Company on the plea that the Insurance Policy was for ''Restricted risks'' only.

On a reference to the Insurance Cover of 14th May, 1985 we find that the scope of the risks covered is clearly defined therein: "Risk covered against Road Risk, Theft, Short delivery of the complete packages."

IT is abundandy clear that the Insurance Cover was for ''Restricted risks'' and not for ''All risks''. IT is a well-known maxim of law of evidence that when there is a written contract between the parties and wherein all the terms of the transaction have been reduced to writing and there is no ambiguity therein, it is not permissible to rely on oral or other evidence state to determine as to what the precise agreement between the parties was. In this case, according to the appellant Insurer, premium charged at 1 per cent was for ''Restricted risks'' policy though the State Commission did not accept that it could be conclusively established that the rate of premium charged was for ''Restricted risk'' and not for ''All risks''. IT may be that the respondent complainant intended to obtain an ''All risks'' policy but he had eventually accepted a ''Restricted risks'' policy. He, now, cannot set up a set up a claim that he had obtained an ''All risks'' policy. During the course of the hearing it was noticed that there were many other laches on the part of the respondent complainant which make it very doubtful whether his claim against the petitioner Insurance Company can be sustained at all even if it is presumed that it was an ''all risks'' policy.

IF the goods were severely damaged in transit, it was incumbent on the part of the insured to have lodged a claim against the carrier. He did not do so. His Counsel at the hearing could not explain as to why he did not do so. Again he had, in his application for insurance, given a list of only 19 items of household effects whereas the truck in which they were carried, the total number of packages loaded at that time was 60. The Insurance Cover declares "consignment said to contain household goods and personal effects in a full truck load as per the list attached". The insured was a party to this declaration which did not disclose that the full truck load had 60 items as against 19 declared. In short the insured had made a misdeclaration. It may be noted that the petitioner is very selective in insuring household goods and personal effects in transit. This type of insurance business is described as "accommodation business". This is also relevant because he might have declined to insure if the insured had declared that other 41 packages were loaded in the same truck.

IT has been claimed that the packages at the time of delivery were "severely damaged" and the damage was "extensive and irreparable". This naturally raises the question as to how the packages came to be damaged in transit while they were in the custody of carrier. The cause of the accident could have been ascertained through the carrier. This was not done and significantly there was no claim made against the carrier. The Counsel for the Respondent Insured could not explain this. On the other hand, no damage certificate was obtained from the carrier. In fact according to the Insurer, the Respondent Complainant gave a clear receipt of goods to be transport company.

THIS is particularly important because the 19 packages covered by the insurance consisted of items which cannot ordinarily break or get damaged, such as Godrej Almirah, Sewing Machine, Iron Cots, Table Fan, Pedal Cycles, Quilts, Blankets and furniture presumably wooden. The total number packages booked in the carrier was 60 of which only 19 were insured. If the insured packages were ''severely damaged'' the remaining packages are not likely to have escaped a similar-fate. In that context the factum of the insured having not lodged a complaint with the carrier and having taken delivery against a clear receipt makes his claim against the insurer dubious. The Counsel for the revision petitioner also emphasized that in the claim form, the salvage value was declared as Rs. 24,400/- which was equal to the insured value, and this could not be true if the insured goods were severely damaged.

There is thus ample evidence to show that the respondent complainant''s claim on the Insurance Policy is not free from penumbra of doubt

KEEPING in view all these serious infirmities especially in particular our conclusion that the policy of insurance was a ''restricted risks'' policy, we are of the view that the State Commission has exercised its jurisdiction with material irregularity which is likely to result in miscarriage of justice. The order of the State Commission is set aside and the complaint before the District Forum is dismissed as without merits. There is no order as to costs. Complaint dismissed.