2018 Supreme(Del) 693

IN THE HIGH COURT OF DELHI AT NEW DELHI
VALMIKI J.MEHTA, J.
Metro Exporters Private Limited - Plaintiff
Versus
United India Insurance Company Limited - Defendant
CS(OS) No.922 of 2004
Decided On : 16-02-2018

Headnote:

INSURANCE - MARINE - CLAIM - FRAUD - INSURANCE POLICIES ISSUED BY INSURANCE COMPANY IN FAVOUR OF PLAINTIFF - PLAINTIFF ENTERED INTO CONTRACT WITH FOREIGN SELLER FOR PURCHASE OF GOODS - INSURANCE POLICIES COVERED GOODS SHIPPED THROUGH TWO SHIPS - SHIPS ALLEGEDLY SUNK RESULTING IN LOSS OF CARGO - PLAINTIFF FILED SUIT AGAINST INSURANCE COMPANY FOR RECOVERY OF MONEY DECREE - INSURANCE COMPANY CONTESTED SUIT AND PLEADED THAT FRAUD WAS SOUGHT TO BE PERPETRATED UPON IT AS NO GOODS WERE EVER SHIPPED BY SELLER - INSURANCE COMPANY LED EVIDENCE OF CAPTAIN JOSE VARGHESE PALOCCARAN AND SH. ABU BAKAR MOOSA TO PROVE CONSPIRACY HATCHED BETWEEN VARIOUS PERSONS INCLUDING SELLER AND SHIPPING COMPANY TO PLAY MASSIVE FRAUD UPON INSURANCE COMPANIES AND BANKS - COURT HELD THAT MERE EXISTENCE OF BILL OF LADING, MATE’S RECEIPT AND TALLY SHEETS WOULD NOT MEAN THAT GOODS WERE IN FACT SHIPPED - COURT ALSO HELD THAT PLAINTIFF FAILED TO FILE DOCUMENTS WHICH WOULD HAVE SHOWN THAT GOODS CAME WITHIN DOCK AREA OR PORT AREA OR CUSTOMS AREA - COURT FURTHER HELD THAT PLAINTIFF FAILED TO SUE SELLER AND SHIPPING COMPANY WHICH WERE ALSO PART OF FRAUD AND CONSPIRACY - SUIT DISMISSED.

Fact of the Case:

Plaintiff entered into a contract with foreign seller for purchase of 800 M.T. of PVC Resin Suspension Grade. Plaintiff opened a letter of credit upon the seller through its banker. Defendant/insurance company issued two policies in favour of the plaintiff with one policy being for the value of the goods and the second policy was with respect to profit margin of the goods. Plaintiff received a telex message from the supplier of shipping of goods on the vessel OH DAI under the Bill of Lading. Plaintiff informed the defendant/insurance company the details with respect to shipment. It appeared in the newspaper that the vessel OH DAI had sunk in the Bay of Bengal. Plaintiff sent the newspaper cutting to the defendant/insurance company. Defendant/insurance company advised the plaintiff to act as a prudent person and to take steps which are necessary to prevent retiring of the shipping documents. Plaintiff sent notices to the shipping company Tata Financial Limited and Well way Lines who was the shipping agent of the ship OH DAI. Defendant/insurance company contested the suit and pleaded that a fraud is sought to be perpetrated upon it because no goods were ever shipped by the seller from Singapore to the plaintiff/buyer through the ship OH DAI. Defendant/insurance company led evidence of Captain Jose Varghese Paloccaran and Sh. Abu Bakar Moosa to prove conspiracy hatched between various persons including seller and shipping company to play massive fraud upon insurance companies and banks.

Finding of the Court:

Court held that mere existence of Bill of Lading, Mate’s Receipt and Tally Sheets would not mean that goods were in fact shipped. Court also held that plaintiff failed to file documents which would have shown that goods came within dock area or port area or customs area. Court further held that plaintiff failed to sue seller and shipping company which were also part of fraud and conspiracy.

Issues: 1. Whether the plaintiff proved that on or about 11th June 1979 they entered into a contract in writing with one Palmex Enterprises for the purchase of 800 metric tons of PVC Resins Suspension grade (hereinafter referred to as the “said goods”) as more particularly alleged in paragraph 3 of the plaint? 2. Whether the plaintiffs prove that the said goods had been shipped on board the vessel “OH-DAI” as more particularly set out in paragraphs 7, 8 & 9 of the plaint? 3. Whether the plaintiffs are entitled to recover from the defendants the sum of Rs.76,70,056/-together with interest thereon being the amounts payable by the Defendant under the policies of insurance dated 5th September 1979 issued by the Defendants, on account of loss of the said goods as alleged in paragraph 19 and the prayer clause of the plaint? 4. Whether the Defendants prove that the Plaintiffs have not fulfilled the condition precedents before their claim could be entertained and accepted by the Defendants as alleged in paragraph 1 of the written statement? 5. Whether it was obligatory upon the Plaintiffs to prove by independent evidence that the goods in question were in fact loaded on the vessel “OH-DAI” as alleged in paragraphs 1 and 10 of the written statement? 6. Whether the Defendants prove that under the insurance policy issued by them, it was incumbent upon the Plaintiffs to take all reasonable steps for ensuring all the rights against the carriers, bailees or third parties are carefully preserved and exercised as alleged in paragraph 2 of the written statement.? 7. Whether on the Plaintiffs failing to file a suit or take any action against the shipping company and/or the consignor, the Plaintiffs are disentitled for maintaining the claim under the insurance policies as alleged in paragraph 2 of the written statement? 8. Whether the Defendants prove that the Plaintiffs have no insurable interest and hence are not entitled to make any claim under the insurance policies as alleged in paragraph 5 of the written statement? 9. Whether the insurance contracts entered into between the Plaintiffs and the Defendants are vitiated by failure to disclose all material facts as alleged in paragraph 6 of the written statement? 10. Whether the Defendants prove that the Bill of Lading issued and evidencing shipping of the said goods on board “OH-DAI” was issued by a company which has issued a false Bill of Lading as alleged in paragraph 9 of the written statement? 11. Whether it was incumbent upon the Plaintiffs to prove that their goods were lost as a result of the perils of the sea insured against as alleged in paragraph 11 of the written statement? 12. What order. 13. Generally.

Ratio Decidendi: Mere existence of Bill of Lading, Mate’s Receipt and Tally Sheets is not sufficient evidence to discharge the burden of proof upon the plaintiff of the shipment of goods.

Final Decision: Suit dismissed.