NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
J.M. Malik, P.M and Dr. S.M. Kantikar, Member
AMIRA FOODS (INDIA) LTD. AND ANOTHER - Appellants
Versus
NATIONAL INSURANCE CO. LTD. - Respondent
Original Petition No. 23 of 2000 with IA/7977/2014 for filing Additional Documents.
Decided on : 07-01-2015

Headnote:

INSURANCE - MARINE - POLICY - GENERAL AVERAGE - LIABILITY OF INSURANCE COMPANY TO FURNISH SECURITY - ADJUSTOR - APPOINTMENT - NECESSITY - INSURANCE COMPANY'S LIABILITY IN ABSENCE OF ADJUSTOR - YORK-ANTWERP RULES, 2004, RULE XXII.

Fact of the Case:

The complainant No.2, a Ukraine based Company, had placed an order for import of rice from India, on complainant No.1, a Public Limited Company. The said cargo was insured with the OP (Insurance Company). The said policies covered the consignment against all risks, including the risk of theft, pilferage, non-delivery, shortage, etc. The said insurance policy is subject to Institute Cargo Clauses A (ICC-A) which was attached to the policy. The Vessel carrying the cargo left the port of Kandla on 20.02.1998, however, some other cargo belonging to some other Port, was discharged at Hodaidah between 27.02.1998 and 05.03.1998. Thereafter the Vessel sailed for Bourgass and reached there, on 19.03.1998. There was some dispute between the ship owners and the receivers/port authorities and the Vessel was upheld for some time at the port of Bourgass. The OP confirmed that in the event the cargo is unloaded at the port of Bourgass, the consignment will be held covered for onward journey upto Nikolaev, the port of destination. On 30.04.1998, the Vessel was reported to have sailed for port of destination Nikolaev, but at 10.15pm, it was detected that intermediate propeller shaft bearing, running hot and when the defect could not be rectified, the main engine was stopped. It was found that the lower housing drain cock screwed brass blank plug had fallen out and oil drained out. The Chief Engineer of the Vessel opined that if engine was run, then damage would probably be sustained to the main thrust and stern tube bearings. It consulted the owners of the Vessel, and was decided that the Vessel MV Bai Ram Abi should be towed away to safety. The Salvage Agreement dated 02.05.1998 was entered into between the MV Bayram Abi, the said Vessel and MT Yarimca, the salvage vehicle which was sailing in the vicinity. The Vessel thereafter commenced its side towage on 02.05.1998 with the help of Vessel MT Yarimca. The Vessel Bayram Abi containing the Insurance Cargo was then anchored at the port of Karaderiz Eregli, Turkey. At the port, at the workshop considered the bearings to be beyond suitable repair and a set of new shells from the manufacturers in Japan was ordered. In the meantime, the owners of the salvage Vessel filed an action in the Court of Eregli, Turkey, against the Vessel Bayram Abi for detention of the Vessel including cargo on it and determination of salvers remuneration. The order passed by the court on 06.05.98 has been placed on record as Annexure P-7. The Master of Vessel MV Bayram Abi subsequently declared General Average and complainant informed this fact to the OP vide its letter dated 07.05.98. The OP was advised that the Tug Owners had demanded a sum of USD 5 million as security deposit from the cargo. However, OP displayed surprise and sought for the information vide copy of the letter dated Annexure P-9. Complainant No.2, vide its letter dated 22.05.1998, asked the OP to take action to clear the situation as enough time had elapsed. After negotiations, the amount of security for cargo was reduced to USD 5 million, 20% of which was required by the Salver in the form of security from the cargo interests. On 23.05.1998, the complainant No.1 and consignors advised the OP that since General Average was declared, it was the responsibility of the OP to provide necessary security to protect the cargo and ensure proper delivery. The deadline for deposit of security was given as 22.05.1998 by the Salvers. This information was given to OP by its own agents in UK, i.e., M/s. W.K. Webster & Co., London, on 24.05.1998. On 29.05.1998, vide letter marked as Annexure P-12, Webster advised the OP to provide reasonable security to Salvers and to deal with the salvage claim directly for minimising the OPs exposure to salvage. However, OP failed to provide the same. Permission was granted by the ship owners to inspect to inspect the cargo because enough time had elapsed, but this option was not given to the complainants by the OP. A Surveyor from the Salvage Association, London having been appointed by Webster inspected the ship on 30.06.1998 and satisfied himself that the salvage services were engaged by the ship for adequate reasons. The main controversy swirls around the question, "who was to give the security, the OP or the Complainant No.1 ".

Finding of the Court:

The Court held that the insurance company was liable to furnish the security in absence of an Adjustor. The Court also held that the insurance company was liable to pay the claim amount with interest.

Issues: 1. Whether, the complainants are consumers, under the C.P.Act, 1986 .
2. Whether, this Commission is barred by the principles of res judicata
3. Whether, this case entails complicated and intricate questions of law and facts and whether, this case should be relegated to the Civil Court
4. Whether, in absence of an Adjustor and his report, the present complaint is not maintainable
5. Whether, the complainants are entitled to the claim sought in the complaint case

Ratio Decidendi: 1. The Court held that the complainants were consumers, under the C.P.Act, 1986, as they had the right to assign the insurable interest in favour of complainant No.2. The Court also held that this complaint was not barred by the principles of res judicata as the previous Bench had not finally adjudicated upon the question of whether the complainant No.2 was a consumer.
2. The Court held that this case did not entail complicated and intricate questions of law and facts and that it could be decided by the Commission. The Court also held that the absence of an Adjustor and his report did not make the complaint not maintainable.
3. The Court held that the complainants were entitled to the claim sought in the complaint case as the insurance company was liable to furnish the security in absence of an Adjustor.

Final Decision: The Court directed the Insurance Company-OP, to pay a sum of Rs. 3,14,84,959/- (Rupees Three Crores Fourteen Lakhs Eighty-Four Thousand Nine Hundred Fifty-Nine only), with simple interest @ 6% p.a. from the date of filing of this complaint, i.e. 30.12.1999, in favour of the complainants. The said amount be paid within 90 days from the date of receipt of copy of this judgment, otherwise, it will carry interest at the rate of 9% p.a., after the expiry of 90 days, till the realisation of amount. There shall be no further order as to costs.