United India Insurance Co. Ltd vs Savikar Plyboards Ltd

V.K.Jain, J

The complainant/respondent obtained two separate marine cargo policies from the petitioner company in respect of the consignments of teakwood furniture which the complainant was to export from India to Singapore. One consignment of teakwood furniture comprising of 5 items was sent by the complainant on board MV Parvat, which reached the consignee on 08.02.2002. On checking the furniture, the consignee found it to be in damaged condition and intimated the respondent/complainant which in turn, intimated the insurer and lodged a claim for re-imbursement of loss suffered by it on account of damage to the furniture. Another consignment was sent by the complainant to Singapore on board MV Harbour Vessel bridge and was received by the consignee on 21.02.2002. The said consignment was also found damaged and a claim in respect of the damage to the said consignment was also lodged with the appellant.

The appellant appointed M/s Insight Marine Services Pvt. Ltd. as a surveyor for inspection of the damaged goods and assessing the loss to the complainant. The surveyor assessed the loss to the complainant on account of damage to the furniture. In one case, the loss of the complainant was assessed at Rs.5,59,839/- whereas it was assessed at Rs.5,69,933/- in another case. However, with respect to the packing of the furniture, they reported as under, in both the survey reports:

The consignment- Teakwood Carved Designer Furniture In Golden Glossy Melamine Finish i.e. 5 pieces, was individually packed within poly-woven sheet. Internally, the furniture was wrapped with a layer of bubble polyethylene sheet and with Styrofoam pads placed at the sides. Each poly-woven package (except for 2 packages) was then secured with 2 nylon strapping onto a wooden frame to represent 1 pallet.

As advised, the above mode of packing was said to be customary.

However, taking into consideration of the fragile/delicate nature of the furniture, we are of the opinion that the furniture be packed in thick/firm corrugated cardboard carton. Internally, the furniture be wrapped with multi layers of bubble polyethylene and foam sheets and sides further cushioned with thick Styrofoam and/or hard sponge pads. The carton should be in turn placed onto wooden pallet secured by strapping and/or be crated. Externally, the package could be further marked with precautionary signs, such as fragile, handle with care, keep dry, arrow-up, etc.

Thus, in their opinion, the damage to the goods was attributable to insufficient/improper packing guarded by rough or improper handling causing compression/concussion to the concussion to the furniture during the course of transit prior to clearance from the freight station.

The claims were repudiated vide letters dated 14.06.2002 and letters dated 07.06.2002 which inter-alia reads as under:

Re: Reported damaged to your Teakwood Furniture Covered Under Policy No. 040801/21/01/00083 Claim No.040801/21/01/00004

Kindly refer to M/s Lee Kim International letter No. LKI-77 dated 18.02.2002 conveying us about the damage to the consignment covered under the above said policy.

While going through the captioned claim file and other documents as submitted by you, we observe that the damage to the goods was attributed to insufficiency/improper packings, causing extensive damages to the contents (as physically seen and certified by the average adjusters i.e. M/S Insight Marine Services Pte. Ltd., Singapore) during the course of transit, which is an exclusion clause 4.3 of Institute Cargo Clause (A) All risk of the above policy. Hence your above said claim is not tenable and stands repudiated, which please note.

Re: Reported damaged to your Teakwood Furniture Covered Under Policy No. 040801/21/01/00082 Claim No.040801/21/01/00005

Kindly refer to M/s Lee Kim International letter No. LKI-78 dated 27.02.2002 conveying us about the damage to the consignment covered under the above said policy.

While going through the captioned claim file and other documents as submitted by you, we observe that the damage to the goods was attributed to insufficiency/improper packings, causing extensive damages to the contents (as physically seen and certified by the average adjusters i.e. M/S Insight Marine Services Pte. Ltd., Singapore) during the course of transit, which is an exclusion clause 4.3 of Institute Cargo Clause (A) All risk of the above policy. Hence your above said claim is not tenable and stands repudiated, which please note.

Being aggrieved from the rejection of the claims, the respondent approached the concerned State Commission by way of two separate complaints, one in respect of each of the two claims submitted by them. The complaints were resisted by the insurer primarily on the grounds on which the claims had been repudiated.

The State Commission having allowed the complaints, the appellant is before this Commission by way of these appeals.

The insurance policy issued by the appellant to the complainant required the furniture to be packed in standard packing in pallets containing five packages in one case and in six packages in the other case. Therefore, the only question which arises for consideration is as to whether the furniture which got damaged during the transit from India to Singapore had been packed in the standard packing or not. A perusal of the report of the surveyor would show that the complainant claimed before it that the packing done by them was the customary packing for the furniture. Since the term 'Standard packing' had not been defined in the insurance policy, it was necessary for the surveyor before rejecting the aforesaid claim, to find out as to what exactly was the standard packaging for export of such furniture items from India to another country in ships. Without collecting any such evidence, as regards the standard packing, the surveyor, in my opinion, was not justified in finding fault in the packing done by the complainant and giving his own view as to the manner in which the furniture ought to have been packed. The complainant was required to pack the furniture in the standard packing and not in the packaging which the surveyor later felt to be suitable for packing such articles of furniture. Since the onus was upon the insurer to prove that the furniture had not been packed in the standard packing, the surveyor was under an obligation to at least make local enquiries to find out how the furniture is ordinarily packed before sending the same to a foreign country through the ships. This was more so when the complainant claimed that the packaging done by them was the customary packaging meaning thereby that in the trade, the furniture for export used to be packed the way they had packed the same. The repudiation of the claim without making enquiries as regards the standard packaging, in my opinion, was not justified and cannot be sustained. The view taken by the State Commission as regards admissibility of the claim therefore, does not call for any interference by this Commission in exercise of its appellate jurisdiction.

The learned counsel for the appellant has pointed out that the assessment made by the surveyor was Rs.5,59,839/- in respect of the consignment subject matter of FA No.107 of 2010 and Rs.5,69,933/- in respect of the consignment subject matter of FA No. 108 of 2010. The appeals are therefore, disposed of with the following directions:

(i) In the complaint subject matter of FA No.107 of 2010, the appellant shall pay a sum of Rs.5,59,839/- to the complainant alongwith interest on that amount at the rate and for the duration awarded by the State Commission.

(ii) In the complaint subject matter of FA No.108 of 2010, the appellant shall pay a sum of Rs.5,69,933/- to the complainant alongwith interest on that amount at the rate and for the duration awarded by the State Commission.

(iii) The appellant has deposited some amount with the State Commission pursuant to an interim order passed by this Commission. The said amount shall be released to the complainant/respondent, after three months, alongwith interest which may have accrued on that amount and shall be adjusted out of the amount payable to the complainant in terms of this order. The balance amount if any, shall be paid to the complainant within three months from today.

(iv) The interest on the entire principal amount shall be calculated and paid upto the date on which the said amount was deposited with the State Commission. Thereafter, it shall be calculated and paid on the balance principal amount, if any, after deducting the principal amount deposited with the State Commission, from the date of the said deposit till payment in terms of this order.

(v) The payment in terms of this order shall be made within three months from today.

(vi) No order as to costs.