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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Rekha Gupta, Presiding Member
National Insurance Co. Ltd. —Petitioner
versus
A.S. Moosani and Co. —Respondent
Revision Petition No.4068 of 2010
(Against the Order dated 30/07/2010 in Appeal No.355/2008 of the State Commission Andhra Pradesh)
Decided on 19.5.2017
For the Petitioner:Mr. Yogesh Malhotra, Advocate
For the Respondent:Mr. K. Maruthi Rao and Mrs. K. Radha, Advocates
IMPORTANT POINT
Respondent is duty bound to declare each and every consignment’ before it leaves Respondent’s premises.
Headnote:Consumer Protection Act, 1986—Sections 15, 17, 19 and 21—Insurance—Marine Cargo (Open Declaration) Policy—Loss of consignment due to accident of tanker— Respondent/Complainant had failed to declare to Petitioner each and every shipment without exception and on other hand insured admittedly picked and chose its right as to which consignment was to be insured—Respondent was duty bound to declare each and every consignment’ before it left from Respondent’s premises and there is nothing in insurance policy to suggest that Insured/Respondent had liberty to pick and choose as to which consignment has to be covered or not—This could lead to fraud in connivance with employees of Petitioner to file a claim by declaring only dispatches which were not above board or when a mishap occurs—Even Surveyor appointed by Carrier was of opinion that tanker had not suffered damage which could had to full leakage and further there was no evidence of leakage of H. Phenol—Petitioner cannot be said to have committed deficiency in service in repudiating insurance claim of Respondent—Order of State Commission set aside and complaint filed by Respondent/Complainant dismissed. Held: From the above, it is an admitted fact that the Respondent/Complainant had failed to declare to the Petitioner each and every shipment without exception and on the other hand the insured admittedly picked and chose its right as to which consignment was to be insured.
In view of the above extract of Special Condition No.1 of the Policy in question, viz., “each and every consignment must be declared before dispatch of goods” I am of the view that that the Respondent was duty bound to declare ‘each and every consignment’ before it left from the Respondent’s premises and there is nothing in the insurance policy to suggest that the Insured/Respondent had liberty to pick and choose as to which consignment has to be covered or not. This could lead to fraud in connivance with the employees of the Petitioner to file a claim by declaring only dispatches which were not above board or when a mishap occurs. Even in the instant case, the surveyor appointed by the carrier was of the opinion that the tanker had not suffered the damage which could had to full leakage and further there was no evidence of the leakage of 16.620 Kgs. of H. Phenol.
A similar issue has been covered extensively by the Hon’ble Supreme Court in the case of “Suraj Mal Ram Niwas Oil Mills Private Ltd. Ltd. Vs. United India Insurance Company Ltd, reported in Supreme Court Cases (2010) 10 SCC.
The facts of the above cited case are totally applicable to the facts of the present case, as the conditions of the policy had been violated and the sum assured exhausted in January, 2005 itself thus, Petitioner cannot be said to have committed deficiency in service in repudiating the insurance claim of the Respondent.
In view of the above discussion, present Revision Petition is allowed and the order of the State Commission is set aside. Consequently, the Complaint filed by the Respondent/Complainant also stands dismissed. (Paras 16 to 20)
Result: Revision Petition allowed.
Rekha Gupta, Presiding Member—The present Revision Petition has been filed against the Order dated 30.07.2016 passed by A.P. State Consumer Disputes Redressal Commission at Hyderabad (for short, ‘the State Commission’) in First Appeal No.355 of 2008.
2. The brief facts of the case as per the Respondent/Complainant that on 3112.2004, Respondent obtained a Marine Cargo(Open Declaration) policy bearing No.551201/21/04/44000067 for Rs. One crore valid from 31.12.2004 to 30.12.2005. The Respondent /Complainant submitted monthly declarations declaring the consignments for which insurance cover was required from January to August, 2005 worth Rs.49,26.489/-, by covering consignments of acetic acid, methanol, formic acid, formaldehyde, phenol, acetone, aniline oil and chemicals. On 03.09.2005, the Respondent imported 100 MT of Hydrated Phenol from Republic of Korea. The shipment was received at Kandla port in Gujarat and the consignment weight was 16,620 KG and valued worth Rs.9,50,987/-. It was loaded in a Tanker No. GJ-18-T-1368 LR No.7676 through M/s. Arab Road Lines for transportation from Kandla to Hyderabad, the tanker met with an accident and fell down from the bridge into the river on 06.09.2005 due to which the entire consignments of Hydrated Phenol was lost. On 07.09.2005, the Respondent was received the intimation of the said loss from the carrier. On 08.09.2005, the Respondent informed the same to the Insurance Company and also submitted its claim. The Surveyor appointed by the carrier submitted his report and thereafter on 23.08.2006, the Petitioner appointed an investigator who submitted his report on 23.08.2006. On 20.09.2006, the Petitioner repudiated the insurance claim of the Respondent on two grounds i.e. (i) as per the investigator’s report, the sum insured of Rs.one crore in the above policy had been exhausted within 18 days of taking of the policy (ii) proper post-accident precaution was not taken immediately after the accident. Thereafter, on 22.11.2006, the Respondent has served a legal notice to the Petitioner, which was duly replied by the Petitioner Company on 10.11.2007. The Respondent contended that sum assured could be exhausted only on the basis of declarations made to the Petitioner. It cannot be said that the sum insured was exhausted in the first 18 days based on the total sale/purchase made by the insured in the absence of any declarations from the insured. The insured reserve his rights to decide and declare which consignments were to be insured. The insured carried out a lot of business, but at the same time he did not want all the business and transaction, covered under the insurance policy and he had the choice as to which consignment was to be covered or not. Accordingly, in the present case, the Respondent had given monthly declarations as required till August, 2005 covering the consignments worth of Rs.49,26,489/- and premium payable thereon was Rs.6,897.08/-. The balance premium available as on 10.09.2005 was Rs.14,868.92/-. The consignment covered in the accident was included in the declaration made in September, 2005 covering the value of Rs.39,90,140. Hence, the repudiation of the claim was not justified. It was also submitted that in the event of any ambiguity in any clause or where two interpretations were possible, an interpretation which favours the policy-holder should be given. Hence, having no other alternative, the Respondent filed a Consumer Complaint before the District Forum with the following prayers;
“1) To direct the Opposite Party to pay a sum of Rs. 9,51,986.41 paise along with interest @ 12% per annum from 6.9.2005 till date of payment.
2) To direct the Opposite Party to pay a compensation of Rs.10,000/-
3) To grant costs of the complaint and legal expenses.
4) And pass such other relief or reliefs as this Hon’ble Forum may deem fit and proper in the circumstances of the case.
3. The Petitioner/Opposite Party filed his written statement denying therein all the
