IMPORTANT POINT
Rights and obligations of parties to an insurance contract are governed by the terms of the contract which have to be strictly construed, and there is no exception can be made on the ground of equity.

JUDGMENT

D.K. Jain, J.—

1. This appeal, by special leave, is directed against the judgment and order dated 12th July 2002, delivered by the National Consumer Disputes Redressal Commission (for short “the National Commission”) in First Appeal No. 354 of 1996, whereby it set aside order dated 24th June, 1996 passed by the Consumer Disputes Redressal Commission, Rajasthan (for short “the State Commission”) and held that the respondents - insurance company was justified in repudiating the insurance claim of the appellant.

2. Both the respondents are the same insurance company, the first being the registered and head office and the second its local branch office.

3. Shorn of unnecessary details, the facts material for the purpose of disposal of this appeal may be stated thus:

The appellant company is engaged in the business of manufacture and sale of “Bhisham” brand mustard oil and cakes. They had obtained an open transit insurance policy from the respondents covering “all types of edible oils in tins...” transported by rail/road (which had to be declared) from Jaipur to anywhere in India. Initially, the liability of the respondents was limited to `10 lakhs but during the relevant period, the limit was enhanced to `1 crore. The insurance policy was subject to certain conditions attached as schedule to the policy. Additionally, the cover note also contained the following special condition and warranty:

“Each & every consignment must be declared immediately before dispatch of goods.”

4. On 14th August 1992, the appellant dispatched 1194 tins of oil valued at ‘ 5,84,790/- from Jaipur to Dharamnagar by rail and from Dharamnagar to Agartala by road to one M/s Sree Sree Kaibalia Bhandar, Agartala.

5. The railway wagon carrying the said goods met with an accident on 28th September 1992, resulting in extensive damage to the consignment.

6. It is an admitted fact that the appellant did not inform either of the two respondents herein about the said accident till 30th September 1992 but claims to have informed their Agartala office on 28th September 1992 itself, who had also appointed a surveyor. The consignment, in damaged condition, was forwarded to Agartala by road on 29th September 1992. The challans bearing Nos. 40336, 40337 and 40338 prepared by the road carrier M/s Paul Brothers clearly mentioned the damaged state of the goods. The said goods were received by the consignee on the same day.

7. On 30th September 1992, the consignee informed the Agartala branch office of respondent No. 1 about the damage to the goods. The road carrier, M/s Paul Brothers also reported the matter to the respondent No. 2, herein. Subsequently, on 3rd October 1992, the road carrier issued a shortage/damage certificate stating that 153 tins were handed over in fully empty condition and in the remaining 1041 tins, there was shortage of oil.

8. It appears from the report of the surveyor, one Mr. Tapan Kumar Saha, that the Agartala branch of respondent No.1 had issued instructions for survey on 28th November 1992. On 10th November 1992, he submitted his report whereby he assessed the total loss at ‘4,39,178/- payable by the respondents. The said report was also communicated to respondent No. 2.

9. On 6th August 1993, another surveyor, Mr. S.K. Bakliwal, was appointed by respondent No. 2, who reported that during the period from 1st April 1992 to 14th August 1992, the appellant had only declared dispatches worth ‘91,22,778/- whereas the total dispatches by the appellant during that period were to the tune of ‘1,43,59,303/-.

10. Respondent No. 2 thereafter requested Mr. Tapan Kumar Saha to segregate the damage caused to the goods at the place of accident, and the subsequent damage that occurred during the transportation of the damaged consignment to Agartala. In his report dated 22nd March 1994, the surveyor observed that loss of oil due to the railway accident was 2,048 kgs. and from Dharamnagar to Agartala, it was 10,676 kgs.

11. On 23rd August 1993, the ap