ORIENTAL INSURANCE Company Limited vs HARYANA MILK FOODS LIMITED

FIRST Appeals Nos. 123 & 170 of 1992 are preferred by the same appellant-the Oriental Insurance Company Limited and implead the same primal respondent M/s. Haryana Milk Foods Limited therein. Both the appeals are directed against the common order of the District Forum, Kurukshetra dated 1st of April, 1992 and raise identical questions of law and facts. The parties are agreed that this order will govern both of them.

THE representative facts may be. noticed from First Appeal No. 170 of 1992 arising from Complaint No. 17 of 1992 before the District Forum. THE complainant-respondent is engaged in the business of processing milk products and for that purpose the aforesaid company transports milk from outside stations to its Pehowa Milk Plant by road tankers. THE complainant-Company had insured transit risk, therefor with the appellant concern for a sum of rupees Fifteen crores and paid premium in proportion thereto. On the 9th of December, 1989 a tanker of the respondents bearing No. HNQ 3478 and carrying 10800 kgs. of milk from Barnala to the factory premises at Pehowa met with a serious accident near Patiala. THE damaged tanker being immobilised another tanker had to be arranged and the milk from the accidented tanker was transhiped or shifted thereto and was then brought to the milk plant at Pehowa. Inevitably a delay of few hours took place and the respondent concern was able to salvage milk solids from the consignment of milk. However, the milk solids not fat could not be salvaged resulting in the consequent loss thereof. THE appellant company appointed Mr. R.K. Bansal as loss assessor and investigator who vide his detailed report dated the 25th of January, 1990 assessed a sum at Rs. 16,910/- only as virtually the agreed loss against the, claim of Rs. 17,690-92P made by the complainant. However, the appellant Company procrastinated and did not finalise the claim of the respondent compelling it to give a legal notice dated the 7th of October, 1990 which also evinced no response. Despite repeated protestations later also, the matter was not finalised, compelling the respondent to knock at the door of the District Forum by its complaint dated the 21st of January, 1992. In the connected Appeal No. 123 of 1992 arising from complaint case No. 15 before the District Forum the facts are closely similar. Therein tanker No. HRQ-1046 had similarly met with an accident earlier on the 15th of October, 1989. The loss therein was assessed by Shri A.S. Chadha vide his report dated 23rd of October, 1989 to the tune of Rs. 21,711-1 IP. only (there is a marginal confusion & intermingling of the closely connected facts in the order of the District Forum). Despite protestations and legal notices the claim was not finalised for more than two years and three months when the complaint was preferred on the 21st of January, 1991.

In both the complaints the relief sought was to the tune of the loss assessed in each alongwith interest at 18% and costs, therefor.

ON notices being issued the appellant-Company took up identical pleas in contesting the complaints. The plea of lack of jurisdiction and of there being an inherent vice in the insured subject-matter was taken as a preliminary one, whilst on merits the exclusionary clause of the policy on the ground of delay was taken. It was the case that the passage of mere fourteen hours betwixt the time of the collision and the subsequent transhipment of milk to the factory premises of the complainant was so delayed as to take the case out of the ambit of the insurance cover. The factual background was not put in any controversy. In support of their respective cases, the parties did not lead any oral evidence because as noticed by the District Forum, the facts were not disputed at all. Only documentary evidence in the form of Ex.C-1 to Ex.C-3 was adduced by the complainant whilst the appellants relied on Ex.O-1 to Ex.O-4 in rebuttal. The District Forum in a considered order rejected the jurisdictional objection and on facts held that there was no delay whatsoever and the exclusionery clause sought to be relied upon by the appellant could not be attracted. In the result both the complaints were allowed with the direction that the assessed loss of Rs. 17,690-92 P. and Rs. 21,711-11 P. be paid alongwith interest @ 12% thereon from the date of two months after the submission of the surveyor''s report in each case till the date of realisation.

MR. Gupta, the learned Counsel for the appellant in both the appeals first pressed the jurisdictional objection with some zeal. It was contended that once the appellant-Insurance Company took the stand that the loss was not covered by the risk insured, the jurisdiction of the Redressal Forums under the Act would stand ousted. In assence, he elaborated Para 4 of the grounds of appeal to the effect that once a claim after thorough investigation and consideration has been repudiated by the insurer then the authorities under the Act have no jurisdiction to entertain the complaint. It is unnecessary if not wasteful to examine the aforesaid submission afresh on principle because same is concluded against the appellants by binding precedents. In II (1991) CPJ 402 ''R.S. Oil and General Mills (P) Ltd., Sonepat v. The National Insurance Company Ltd., Calcutta & Others, the identical question was pointedly raised before this Commission as a threshold issue. After a somewhat exhaustive discussion both on principle and on binding and persuasive precedent it was held as under: "To conclude, the answer to the question posed at the very outset is rendered in the negative and it is held that the mere unilateral rejection of the insured party''s claim by the Insurance Company does not perse operate as a jurisdictional bar to seek redress before the Forums under the Act"

It then calls for pointed notice that the aforesaid ratio has been recently affirmed with express approval by the National Commission in an appeal taken against the aforementioned case. Inevitably the primal submission of Mr. Gupta must now fail and is hereby rejected. The District Forum''s finding on this point is affirmed.

MR. Gupta had then attempted to place reliance on the exclusionery clause in the inland transit (rail or road) Tariff which was deemed part of the insurance policy. This runs as under: "Loss, damage or expense approximately caused by delay even though the delay may be caused by a risk insured against".

ON the aforesaid tenuous basis, it was contended that the delay of a few hours in transhipment of the milk to the milk plant for salvage and processing would oust the appellant''s liability. The contention aforesaid has only to be noticed and rejected. What first deserves pointed mention is the fact that the surveyor''s appointed by the appellant concern themselves in categoric terms and in either case held that there was no delay which could be laid at the door of the respondent insured. Shri A.S. Chadha in his report ai page 3 expressly recorded as follows : "The cause of delay of milk in reaching the insured''s place of work is the accident to the vehicle which is beyond the control of the insured. The delay was about 14 to 16 hours over and above the normal journey time from Jagraon to Pehowa which is sufficient cause for spoilage of milk".

Similarly Mr. Bansal in his report again observed: "The cause of delay of milk in reaching the insured''s premises is due to accident to the vehicle carrying the milk which was beyond the control of the Insured, which is sufficient cause for spoilage of milk".

It bears repetition that the appellant Company''s appointed surveyor''s firmly opined as above and not an iota of evidence to rebut that view has been placed on the record by the appellants. The District Forum on an appraisal independently came to the conclusion that in the present case there was no question of delay and we are unhesitatingly inclined to affirm that view. Despite pointed queries, learned Counsel could point to nothing on the record which could possibly substantiate this aspect of his submission either on facts or in law. Lastly and possibly as an argument of desperation, Mr. Gupta took up the plea of exclusion on the ground of inherent vice or nature of the subject matter insured. Our attention was drawn to para 3 of the pre-objections badly setting up this claim.

WE are somewhat surprised at the patently specious plea first taken on behalf of the appellants in their reply and the attempt to support the same. One fails to see what inherent vice exists in the subject-matter of something which is so innocuous as milk, the transport of which had been insured by the respondents to the tune of rupees Fifteen crores and inevitably the payment of large premium thereunder. Labelling cows and buffalows milk as a subject-matter having inherent vice therein can only be a figment of an ingenious imagination. In any case we had asked Mr. Gupta to show us even a title of evidence, to establish that the insured subject-matter had a kind of inherent vice which had directly led to any loss, damage of expense herein. One is tempted to observe that the appellants are. obviously attempting to cluch at a straw. Before, we part with this order another somewhat unsatisfactory feature of the case merits pointed notice. It is not in dispute that both the surveyors appointed by the Company had assessed the. loss without in the least suggesting that the same was in any way excluded from the risk covered. Despite the rendering of their detailed reports dated the 23rd of October, 1989 and 25th of January, 1990, the appellant-Company chose to keep the. claim pending for an inordinately long period. Even the service of a legal notice seeking the finalisation of the claim did not wake them from their slumber. It is surprising that despite the passage of more than two years in each case the company far from satisfying the claim did not even choose to convey any formal denial or repudiation thereof to the insured repeatedly knocking at their doors. The bare reading of the complaints show that right up to the date of their filing, the claims had not been settled one way or another, showing a virtually in excuseable procrastinations on the part of the appellants. Mr. Gupta could not even on his instructions pin-point as to who in the appellant Company had come to a conclusion contrary to the surveyors and what Were, his reasons, therefor. One cannot, but conclude that apart from anything else such callous delay in dealing with the claims of the consumers is per se culpable. ''

FOR the aforesaid reasons, both the appeals are hereby dismissed with costs which are assessed at Rs. 1,000/- in each appeal. The order of the District FORum is affirmed and it is directed that the same, shall be complied within one month from today including the payment of the. Appellate costs imposed, failing which the District FORum will invoke Section 27 of the Act for its necessary enforcement. Appeal dismissed with costs.