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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Ajit Bharihoke, Presiding Member, Suresh Chandra, Member
M/s Ruchi Worldwide Ltd.
& Anr. —Complainants
versus
United India Insurance Co. Ltd., Through their Branch Manager & Anr. —Opp. Parties
Original Petition Nos.44 & 45 of 2003
Decided on 26.11.2014
(B) Consumer Protection Act, 1986—Section 21—Customs Act, 1962—Sections 18 and 22—Insurance—Import—Damage to consignment—Respondent insurer repudiated claim of respective complainants for loss of custom duty on the plea that complainants had practised fraud on insurance company and they had obtained insurance for custom duty cover after coming to know about loss caused to consignment—It is case of complainants that damage to sugar bags due to coming into contact with water was noticed at the time of unloading of sugar bags from ship—If this is true, then complainants could easily have sought abatement of custom duty under section 22 of Customs Act by bring damage caused to sugar to notice of custom authorities. The complaints are silent on the aspect—Complainants have not approached Commission with clean hands and they have deliberately withheld best evidence i. e. final custom duty assessment order as envisaged under section 18 (2) of Customs Act— Complainants have failed to establish that they actually suffered any custom duty loss—Insurance company cannot be held deficient in service—Complaints dismissed.
Held: It is the case of the complainants that damage to the sugar bags due to coming into contact with the water was noticed at the time of unloading of sugar bags from the ship. If this is true, then the complainants could easily have sought abatement of custom duty under section 22 of the Customs Act by bring the damage caused to the sugar to the notice of the custom authorities. The complaints are silent on the aspect whether or not the complainants after noticing alleged damage to the sugar consignment applied for abatement of custom duty on account of the damage to the imported goods noticed at the time of unloading and if so, whether said plea of the complainants were taken into account by the custom officer while doing final assessment of the import duty chargeable on the consignment? The complainants have failed to place on record the final assessment of duty done by the custom authorities in furtherance of the provisional assessment done under section 18 (1) of the Customs Act. Final assessment orders if produced would have given the clue whether or not the sugar consignments imported by the complainants were damaged and if so, whether or not the complainants at the time of final assessment took benefit of abatement of duty in terms of Section 22 of the Customs Act by bringing the damaged goods to the consignment because of seepage of water. Thus, we are of the view that complainants have not approached the Commission with clean hands and they have deliberately withheld the best evidence i. e. final custom duty assessment order as envisaged under section 18 (2) of the Customs Act. As the complainants have failed to produce the best evidence, we are inclined to draw an adverse inference against them that had they produced the final assessment order, it would have gone against them. Thus, we conclude that the complainants have failed to establish that they actually suffered any custom duty loss. Thus, the insurance company / opposite party cannot be held deficient in service.
In view of the discussion above, we are of the opinion that the complainants have miserably failed to establish their claim. Repudiation of the insurance claims by the respondent is justified. The complaints are, therefore, dismissed. (Paras 21 and 22)
Result: Complaints dismissed.
Ajit Bharihoke, Presiding Member—By this order, we propose to dispose of the above noted consumer complaints involving similar question of law and facts.
2. Briefly stated facts relevant for the disposal of the above complaints are that both the complainant companies placed orders for import of 2000 metric tones each of Brazalian White Crystal Sugar with M/s Susden of Paris. Vendor M/s Susden of Paris shipped the same in 40,000 bags consignment respectively for each of the complainant per M V Alex from Paranagua (Brazil) to Calcutta or Haldia at buyer’s option under the bill of lading no.2 each dated 06.10.1999 in apparent good condition. Invoices were also issued on 06.10.1999.
3. The sugar was imported on CIF basis and the supplier had insured the same against the risk of loss or damage with Llyods of London under certificate of insurance No. C 16864/100358. This insurance did not provide cover in respect of custom duty.
4. The ship was expected to arrive at Calcutta Port on 04.02.2000. Respective complainants approached the opposite party / insurance company and obtained insurance cover in respect of custom duty on payment of premium of Rs.22,478/- for insured sum of Rs.88,00,000/- representing estimated amount of custom duty payable at the respective consignments. Opposite party issued cover note on 02.02.2000 but failed to supply to the complainants their respective insurance policies.
5. That the complainant through their clearing agent submitted the Bills of Entries under prior entry system on 03.02.2000 and after verification by the custom authorities paid Rs.88,66,556/- as custom duty on 11.02.2000.
6. It is the case of the respective complainants that on discharge of the goods from the ship, it was noticed that the part of their respective consignments were damaged because of the sugar bags coming in contact with water during ocean transit.
7. That on claims being lodged, M/s Seas can Services (W. B) P. Ltd., Kolkata were deputed on behalf of the foreign insurers for inspection and assessment of loss. The said surveyors on investigation found certain number of bags short delivered and some of the bags was found burst and torn and water damaged. According to the surveyor, the damage to the cargo was caused as the bags came in contact with water during transit.
8. That the complainants submitted their bill in respect of damage caused to M/s Tata Marine Agencies, the agents of foreign insurers in India and the said claims have been settled by the foreign insurer.
9. That the respondent insurer, however, repudiated the claim of the respective complainants for loss of custom duty vide their repudiation letter dated 29.08.2002 on the plea that the complainants had practiced fraud on the insurance company and they had obtained the insurance for custom duty cover on 02.02.2000 after coming to know about the loss caused to the consignment somewhere during 31.10.1999 to 03.11.1999.
10. Being aggrieved of repudiation of their respective claims, the complainants preferred the consumer complaints alleging deficiency in service on the part of the opposite party.
11. The opposite party resisted the complaints. A preliminary objection was taken that National Commission does not have pecuniary jurisdiction to entertain the complaints because the value of the relied claimed was much less than its pecuniary jurisdiction. On merits, opposite party justified the repudiation on the ground that the insurance contracts itself was invalid because those were obtained by the complainants by concealing material facts that the ship had encountered rough weather during sea passage between 31.10.1999 to 03.11.1999 and as a consequence the bilge sounding pipe for no.4 hold was broken and the water found its way to the hole and caused damage to the consignment. According to the opposite party at the time taking insurance cover for custom duty, the complainants were aware of the damage to the sugar which material fact was not disclosed and, ther
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