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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
V.K. Jain, Presiding Member
VA Tech Wabag Limited —Complainant
versus
Cholamandalam Ms. General
Insurance Company Ltd. —Opp. Party
Consumer Case No.497 of 2014
Decided on 12.3.2018
For the Complainant:Mr. Yogesh Malhotra, Mr. Lalit Grover, Ms. Seema Sharma, Ms. Nandita Talukdar and Mr. Amit Kr. Singh, Advocates
For the Opp. Party:Ms. Suman Bagga, Advocate
IMPORTANT POINT
In case of ambiguity in a contract of insurance, ambiguity should be resolved in favour of claimant and against Insurance Company.
Headnote:Consumer Protection Act, 1986—Section 21—Insurance—Damage to shipment in course of inland transit—In absence of definition of term tail end transit, nothing prevents Insurer from claiming any particular part of journey, particularly last phase of journey as tail end transit—A term which is not clearly defined and is capable of several interpretations depending upon factual matrix, would be a vague term and benefit of such a term would accrue to insured—In case of ambiguity in a contract of insurance, ambiguity should be resolved in favour of claimant and against Insurance Company—If journey of goods involves multiple cities, tail end transit would begin when goods enter final city in which their journey has to terminate—There was no requirement of entering into a written agreement as to rate and other terms, prior to commencement of transit—Loss having happened before tail end transit, absence of such written agreement would not result in denial of benefit of insurance to complainant—Repudiation of claim was not justified and complainant s entitled to amount assessed by Surveyor. (Paras 5 to 8)
Result: Complaint allowed.
V.K. Jain, Presiding Member—The complainant imported U/F RO membranes from M/s. X-Flow BV Netherlands which arrived by sea at Chennai Sea Port in India. The complainant had obtained two insurance policies, both from the opposite party. The first policy called Marine Cargo Open Policy – Import, insured the shipment from anywhere in the World to anywhere in India and vice-versa. The second policy taken by the complainant covered the goods from anywhere in India to anywhere in India by Road, Rail, Air and Courier.
2. On 21.4.2011, a container truck while carrying membranes from Chennai Port to Nemmeli met with an accident while in transit. On intimation being given to the insurer, a surveyor was appointed to assess the loss to the complainant. The surveyor assessed the loss at Rs.1.60 crores but the claim was rejected vide letter dated 19.4.2012. The aforesaid letter, to the extent it is relevant reads as under:
“In so far as the claim under the Inland Transit cover is concerned, being a transit from Chennai Seaport to your project site, the claim is hit by specific Exclusion Clause No.2. The said exclusion clause reads “2 Excluding……. Tail end transits unless written agreement is taken as to the rate and other terms prior to the commencement of such transits”.
On scrutiny of the Inland transit it is clear that the transit was being on the last / final leg on its transit from Chennai Seaport to your Project site. Being a clear case, as per Exclusion No.2, the contract of insurance had imposed on obligation on you to put the insurer on notice by way of a Witten agreement with rate / terms of such transit. Upon failure to comply with Exclusion No.2, the claim arising from any cause of action during this period transit stood excluded from the ambit of cover.
Upon intimation of claim, the insurer appointed an independent, licensed surveyor. On verification of documents, facts and circumstances of the case, it is clear that insured having not entered into ‘written agreement’ on details of “rate and other terms prior to commencement of transit”, the claim stands excluded under the contract of insurance.
Hence, we have found the claim inadmissible. Al declarations made by the Insured under the contract of insurance ought to answer the description of the terms / conditions / exclusions. Failure to do so as per Exclusion No.2 is a clear breach of agreed terms of the contract of insurance.
For any and all the above said reasons, we regret our inability to entertain the claim as the loss / damage in question stands excluded under Exclusion No.2 of the contract of insurance.”
The rejection of the claim was reiterated vide letter dated 06.12.2012, which to the extent it is relevant reads as under:
“Therefore the claim for the movement / transit of goods from Chennai Port to final warehouse is neither admissible under Import Policy since the import was on CIF Chennai Port basis nor under Inland Transit Policy as Tail end transit is specifically excluded unless written agreement is taken as to the rate and terms of cover before commencement of such transit.
While we regret to deny this claim, we remain committed to offering our best services and meet admissible claims under the contract of insurance”.
3. Being aggrieved from the rejection of the claim, the complainant is before this Commission, by way of this consumer complaint.
4. The complaint has been resisted by the insurer primarily on the ground on which the claim had been rejected. Reliance by the opposite party is placed upon the repudiation letter dated 19.4.2012.
5. The only question which arises for consideration in this complaint is as to whether goods were in tail end transit at the time the truck met with an accident and the goods were consequently damaged. The term ‘tail end transit’ has not been defined anywhere in the insurance policy. In the ordinary parlance, the aforesaid term would mean the final phase of the journey. The contention of the learned
