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NATIONAL CONSUMER DISPUTES
REDRESSAL COMMISSION, NEW DELHI
Hon’ble Mr. Justice V. Balakrishna Eradi, President;
Mr. Y. Krishan, and Hon’ble Mr. Justice B.S. Yadav, Members
PAREES OFFSET PVT. LTD.—Complainant
versus
UNITED INDIA INSURANCE CO. LTD. & ORS.—Opp. Parties
Original Petition No. 97 of 1993—Decided on 10.1.1995
Counsel for the Parties :
For the Complainant : Mr. Pramod Madane, Authorised Representative.
For the Opp. Parties :Mr. K.N. Bhargavan, Advocate.
Repudiation of liability by an insurance company must be based on relevant facts and circumstances and cannot be arbitrary or unreasonable.
Headnote:
MARINE INSURANCE - INSURANCE POLICY - SECTION 2(1)(d) OF THE CONSUMER PROTECTION ACT, 1986 - INSURANCE COMPANY REPUDIATED LIABILITY - NO DEFICIENCY IN SERVICE - COMPLAINT DISMISSED.
Fact of the Case:
Complainant imported machinery from Czechoslovakia and insured it with the Respondent Insurance Company for transportation from Bombay to Jalgaon. During transportation, one of the trucks met with an accident, damaging part of the machinery. Complainant claimed the insured value of the entire consignment, alleging the whole machine was rendered useless. The Insurance Company repudiated liability based on pre-existing damage to one of the cases containing the machinery, which was not disclosed by the Complainant.
Finding of the Court:
The Insurance Company conducted a detailed investigation and concluded that the Complainant's claim was not tenable. The repudiation of liability was not arbitrary or unreasonable and was made in good faith.
Issues: Whether the Insurance Company was liable for the damage to the machinery.
Ratio Decidendi: The Insurance Company's repudiation of liability was based on relevant facts and circumstances and was not arbitrary or unreasonable. There was no deficiency in service on the part of the Insurance Company.
Final Decision: The complaint petition was dismissed with no costs.
Mr. Justice V. Balakrishna Eradi, President—Shri Pramod Madane, Managing Director of the Complainant Company appeared in person and argued his case and the Respondent-Insurance Company was represented by its advocate.
2. The complainant company had imported a consignment of a 4-colour Offset Machine from Nova Foreign Trade Corporation, Czechoslovakia and it arrived in the port of Bombay under a Bill of Lading dated 23.10.1989. The case of the complainant is that the said consignment was in good order and sound condition when it was landed in Bombay. Since the machine was intended for being installed at the complainant’s factory a Jalgaon, the Complainant entrusted the consignment to one M/s. Mhatarba Transport Company for transportation of the machinery from Bombay to Jalgaon. The machinery is said to have been loaded in two trucks as the whole of it could not be contained in a single vehicle. The transporters issued to the complainants two lorry receipts Nos. 9066 and 9067 dated 25th May, 1990 and the goods were loaded in Truck Nos. MRS 6295 and MRG 1721. The complainant took a out Marine Cargo Insurance Policy from the United India Insurance Company Ltd., Opposite Party, to cover the risk involved in the transportation of the machinery from Bombay to Jalgaon. It is alleged that one of the trucks, namely, MRS 6295 met with an accident enroute near a place called Dhule on 27th May, 1990 and as a result thereof the part of the consignment carried in the said truck sustained extensive damage. The Complainant thereupon, lodged a claim with the insurer for the payment of the insured value of the whole consignment loaded in the two trucks alleging that the whole offset printing machine which was one integral whole had been rendered useless because of the irreparable damage caused to that part of the machinery which was loaded in Truck No. MRS 6295 since the nature of the machine was such that it was impossible to work the machine by replacement of the damaged part alone.
3. The Insurance Company got a spot survey conducted soon after receipt by it of intimation of the loss. Subsequent to the spot survey the insurer again appointed Mr. J.P. Mistry, Surveyor and valuer to conduct a detailed survey and submit a report. Thereafter, according to the complainant, the insurer orally offered to it a sum of Rs. 24 lakhs in full and final settlement with the promise that a complete settlement will follow soon thereafter. Though he is said to have accepted the said offer, the insurer proceeded to further investigate into the matter and finally sent a letter to the complainant dated 2nd February, 1993 in which the Insurance Company totally repudiated its liability on the ground set out therein. The complainant has, therefore, approached this Commission with this complaint petition seeking to recover from the insurer a total amount of Rs. 39,55,000/- with interest thereon at the rate of 18% per annum from the date of the accident, namely, 27th May, 1990.
4. A detailed statement of objections has been filed by the Insurance Company. But, it is unnecessary for us to set out in detail the contentions raised therein, and it will suffice to say that the Insurance Company has emphatically pleaded that the Complainant had suppressed the fact that one of the two cases in which the consignment in question had been packed and placed on board the ship by which it was brought to Bombay was found to have sustained serious damage when it was landed in the port of Bombay and this fact had been specifically noted on the reverse side of the Bill of Entry by the Central Documentation Office, Indira Docks, under date 6.1.1990 by endorsing thereon “one case found in damaged condition. Survey not held”. In spite of the said fact, the Complainant did not get a pre-despatch survey conducted before loading the damaged cases in the two trucks. Several other alleged suspicious circumstances relating to the contract for transporation by road to Jalgaon have been set ou
