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Judgment
THIS is a complaint under Section 17 read with Section 12 of the Consumer Protection Act.
THE complainant took a Marine Insurance Policy (cargo) with the opposite party for a sum of Rs. 10 lakhs for the period from 26.11.88 to 25.11.89. THE policy covers risks to tea and started from the plucking stage to storage covered for 60 days at the destination. THE green leaves plucked everyday is spread out in withering troughs and air is blown through the tea leaves to gradually remove moisture and is kept in the troughs till next morning when proper withering is achieved. THE leaves are then fed into rollers to break the leaf cells and get the juice exposed so as to get oxidation (fermenting) started. Once the leaf reaches optimum oxidation levels, it is fed into dryers where hot air is passed through the oxidised (fermented) leaves and moisture is removed to below 3% levels. At this stage black bulk tea is ready. It is then cleaned and graded according to size, packed and dispatched. On 27.1.89, 19,767 kgs. of green leaves were plucked and sent to the factory for withering process. But the workmen belonging to all the Unions of this factory went on strike from the commencement of the working hours on 28.4.89. and consequently the 19,767 kgs. of tea leaves could not be processed and manufactured into tea. THEy became a total waste. THE first opposite party was duly informed of this and a claim was made under Claim Form dated 23.5.89. According to the complainant, the total out-turn of tea out of the 19,767 kgs. of leaves at 24.65% will come to 4,873 of marketable tea. THE average selling price for April ''89 was Rs. 30.07 per kg. and the total value of 4,373 kgs. made-tea is Rs. 1,46,531/- THE first opposite party appointed a surveyor, but no action has been taken thereon. On 2.4.90, the second opposite party sent a letter to the complainant stating that as loss was due to delays in processing, the leaves consequent on the lightning strike by the workmen, the claim did not fall within the scope of the policy. This amounted to negligence and deficiency of service and hence this claim for payment of Rs. 1,46,531/- with interest at 24%. The opposite parties filed a common counter. It is contended that the claim is barred by time. The claim was rejected on 2.4.90 and the period for preferring a suit or complaint expired on 1.4.91. On merits it is contended that one Mr. Venugopal was appointed surveyor and the surveyor could not give his report due to want of particulars from the complainant. Subsequently only after the letter dated 6.10.91, the complainant wrote a letter dated 12.10.89 and disclosed the value of conversion. It was received on 16.10.90 and verification was made and report was submitted on 23.11.89. As this is a complicated matter involving legal opinion, there was delay in rejecting the claim. According to the opposite parties, the plain meaning of the policy can only be a physical damage done to the subject-matter by the strikers and cannot be stretched to loss or damage that occurs as consequences of non-availability of labour because of strike. Reliance is placed on Exclusion Clause 2(2) under Strike, Riot and Civil Commotion Clause and it is contended that loss or damage proximately caused by the absence, shortage or withholding of labour of any description whatsoever during any strike does not fall Within the ambit of the Policy.
Exhibits Al to A14 and B 1 to B18 are marked by consent. Written arguments filed by the Counsel for the complainant. No oral evidence has been let in on either side.
POINT 1: The complainant has filed this complaint on the basis of Exhibit A1, Policy of Marine Insurance taken by it with the opposite party No. 1 for the period covering from 26.11.88 to 25.11.89. The claim is in respect of the loss sustained by the complainant on 27.4.89 as a result of the strike of the labourers of the complainant''s factory. The claim has been rejected by the opposite party on 2.4.90. It is contended in the counter statement filed by the opposite parties that the complainant must have filed the complaint within one year therefrom i.e., on or before 1.4.91 and as the complaint has been filed only in March'' 92, it is barred by time. The contention has no substance. It has been repeatedly held by this Commission as well as by the National Commission that the claim preferred before the Forums constituted under the Consumer Protection Act falls within the residuary Article 113 of the Limitation Act of 1963 and the period of limitation is three years from when the right to sue accrues. The right to sue accrues in this case accrued on 1.4.90 when the claim was rejected by the opposite parties and the complaint filed on 11.5.92 is well within time. Even if we assume that the right to sue accrued on 27.4.90 on which date the loss occurred, the complaint having been filed on 11.8.92 is well within the three years period. The plea of limitation has therefore to fail. Point 2: Exhibit Al is the Policy of Marine Insurance (Cargo) taken by the complainant with the first opposite party in respect of the tea grown and manufactured by the complainant. The covering is for the period from 26.11.88 to 25.11.89 and the amount of insurance is Rs. 10 lakhs. The risk cover starts from the plucking stage to the storage covered for 60 days at the destination. On 27.8.89, it is the case of die complainant* that 19,767 kgs. of green tea leaves were plucked and sent to the factory for the withering process, but before this process could be completed, there was a strike by all the labourers of the factory from the commencement of the working hours on 23.4.89, as a result the withering process could not be completed and the entire stock of 19.767 kgs. of tea leaves were damaged. The complainant preferred a claim and it has been rejected by the opposite party. There is no dispute about these facts. The case depends entirely upon the interpretation of S trike, Riots and Civil Commotion Clause in Exhibit A1. The clause runs thus: "STRIKE RIOTS AND CIVIL COMMO- TION CLAUSE" (INLAND TRANSIT NOT IN CONJUNCTION WITH VOYAGE) Risks covered : 1. Subject otherwise to the terms, conditions and warranties of the policy on goods against transit risks, this Insurance covers, except as provided in Clause 2 below loss of or damage to the subject-matter insured caused by [Risks Clause] 1.1 Strikes, Locked-out workmen, or persons taking in labour disturbances, riots or civil commotions, 1.2 any terrorist or any person acting from a political motive 1.3 persons acting maliciously Exclusions: 2. In no case shall this Insurance Cover 2.1 loss damage or expense proximately caused by delay inherent vice or nature of the subject-matter insured. 2.2 loss damage or expense proximately caused by the absence, shortage, or withholding of labour of any description whatsoever during any strike, lock-out, labour disturbances, riot or civil commotion. [General Exclusion Clause] 2.3 any claim for expenses arising from delay or other consequential or indirect loss or damage of any kind 2.4 loss damage or expense caused by war, civil war, revolution, rebellion insurrection or civil strike arising therefrom, or any hostile act by or against a belligerent power."
IT is the case of the complainant that the loss and total damage caused to 19,767 kgs. or green tea leaves sustained by it on account of the inability to carry on the withering process is caused by the strike and is covered by Clause 1.1 of the above SRCC clause. On the other hand it is contended by the opposite parties that the case falls under Exclusion Clause 2.2, as the loss and damage was proximately caused by the withholding of labour due to the strike. We will have now to find out which of these two contentions is acceptable. In Clause of 1.1 of SRCC clause, the word used is "strikes" and not "strikers". There is no dispute about this because Exhibit A1, Policy produced by the complainant as well as Exhibit B16, Policy produced by the opposite parties contain the word "strikes" and not "strikers". The damage to the tea leaves as a result of the failure to proceed with the withering process is caused by the strike on and from 23.4.89, and therefore falls within Clause 1.1. If the word used was "strikers", it may be successfully argued as contended by the opposite parties that the clause deals with physical damage to the subject-matter of the insurance done by the strikers. The counter statement filed by the opposite parties also proceeds on the basis as if the word is "strikers". The following is the closing passage of paragraph 8 of the counter: "The policy clearly states that the loss or damage to the subject-matter insured/caused by strikers. The plain meaning for the can only be the physical damage done by the strikers and cannot be stretched to loss or damage that occurs as consequences of non-availability of labour because of strike"
Evidently the opposite parties seems to be under the mis-impression that the word used in Clause 1.1 of SRCC Clause is "strikers" instead of "strikes" which is word used. In view of the explicit language of Clause 1.1 in using the word "strikes" and not "strikers", we are satisfied that the loss and damage sustained by the tea leaves plucked on 27.4.89 was because of the strike which commenced on 28.4.89. The Exclusion Clause 2.2 of the SRCC clause excluding risks of loss, damage or expense proximately caused by the absence, shortage or withholding of labour of any description whatsoever during any strike. Every strike necessary implies refusal by the labourers to work or to work normally and hence involves withholding off labour. This clause therefore takes away the risk cover given by Clause 1.1, for loss or damage to the subject matter caused by strikes. There is thus an apparent inconsistency between Clause 1.1 and Clause 2.2. We are enable to visualise any contingency where Clause 1.1 as it now stands and Clause 2.2 can co-exist. If the word used in Clause 1.1 was "strikers" instead of "strikes" as is now found, there is the possibility of interpreting Clause 1.1 as referring to damage done by strikers and Clause 2.2 as referring to loss or damage proximately caused by withholding of labour. But as the word used in Clause 1.1 is "strikes" and not "strikers", this Clause and Clause 2.2 are mutually inconsistent and irreconcilably repugnant to each other.
IT is the cardinal rule of construction of deeds and documents that the intention of the parties should be gathered from the language used by the parties in such deeds and documents. The function of the Court is to see what the parties have said, they meant and not to determine what they intended apart from the language of the instrument and having done so, to bend the language in favour of the assumption so made. IT is not therefore the function of the Court to substitute the word "strikers" for "strike" in Clause 1.1, which must be read as it stands. Such a substitution would amount to making a new contract. As already pointed out Clause 1.1, as it now stands is irreconcilable with Clause 2.2 which takes away the coverage given by Clause 1.1 as withholding of labour is one of the essential consequences of a strike. IT is also a well established principle of interpretation that a harmonious construction must be given to several clauses in a document, but when it is not possible, as in the instant case, effect must be given to the prior clause. Even otherwise when there is such a repregnancy, ambiguity or doubt betweerj two clauses in a policy of insurance, the contract has to be construed contra proferentem, i.e., against the Insurance Company, as pointed out by the Supreme Court in General Assurance Society Ltd. v. Chand Mull Jain and Another (AIR 1966 SC 1614). We therefore give precedence to Clause 1.1 and hold that the loss sustained by the complainant is caused by the strike and this loss is covered by the policy under Exhibit Al.
THE learned Counsel for the opposite parties has produced Exhibit B18, Opinion given by M/s. Sampathkumar & Associates on the basis of which the claim has been rejected. This is what is said in that opinion : "Your policy clearly states that the loss or damage to the subject-matter insured caused by strikers. THE plain meaning for that can only be the physical damage done by the strikers and cannot be stretched to loss or damage that occurs as consequence of non-availability of labour because of strike".
It is obvious that M/s. Sampathkumar & Associates have proceeded on the bahi that Clause 1.1 of the clause the word strikers is used. It is a matter of fact word used is "strike". This opinion therefore suffers from an incorrect preposition and cannot be accepted. This passage itself shows that there is no decided judicial authority on this aspect. Further it is not known whether this learned author has been dealing with Clause like 1.1 of the SRCC clause in Exhibit A1 where the word used is "strike" and not "strikers". We are therefore unable to accept this statement of law in Arnold''s work on Marine Insurance.
On a consideration of all the facts and circumstances we hold that the loss sustains by the complainant is covered by the policy of insurance under Exhibit A1 and the opposite parties are liable to pay damages.
POINT 3: It is the case of the complainant that the leaves plucked on 27.4.89 weighed 19,767 kgs. According to the complainant at an average out-turn of 24.65%-, the ready-made tea will be of made-tea in April ''89 was Rs. 30.07 per k.g. and 4,373 kgs. It is further stated that the selling price the total value of 4873 will come to Rs. 1,46,531/-. This is not seriously disputed before us, though in Exhibit B8, Surveyor''s report, the loss is assessed on the market value of the green leaves plucked at Rs. 5/- per k.g. and the damage is worked out at Rs. 98,835/-. We prefer the valuation given by the complainant, as, but for the strike the 18,767 kgs. of plucked leaves would have been converted into 1,873 kgs of made-tea and sold for Rs. 1,46,531/. The complainant is therefore entitled to claim this sum of Rs. 1,46,531/- with interest from the date of loss till payment. In the result we order as follows : 1. The opposite parties shall pay to complainant Rs. 1,46,531/- with interest thereon at 12% from 28.4.89 till payment. 2. The opposite parties shall also pay a sum of Rs. 2,000/- as costs to the complainant. Order accordingly.