- (1.) THESE appeals under section 23 of the Consumer Protection Act, 1986, are filed against the common order dated 31. 1. 2003 passed by the national Consumer Disputes Redressal Commission, New Delhi ('commission' for short) allowing in part OP No. 45 of 1997 and OP No. 49 of 1997. OP No. 45 of 1997 was filed by M/s Hira Lal Ramesh Chand and its partner Rajender Kumar Jain (respondents 1 and 2 in CA No. 4306/2003 ). OP No. 49 of 1997 was filed by M/s Ratan Chand Deep Chand and its two partners (respondents 1 to 3 in CA No. 4307/2003 ).
(2.) AS the ranks of parties differ in the two appeals and as some parties were given up before the Commission, for convenience, we will also refer to the parties as follows : New India Assurance Co. Ltd. , as 'appellant' or 'insurer'; M/s Hira Lal Ramesh Chand and its partners (Respondents 1 and 2 in the first matter) and M/s Ratan Chand Deep Chand and its partners (Respondents 1 to 3 in the second matter) as the 'complainants'; M/s niranjan Shipping Agency Pvt. Ltd. , (third Respondent in the first matter and fourth Respondent in the second matter) as 'niranjan Shipping'; Punjab national Bank (fourth Respondent in the first matter and fifth Respondent in the second matter), and Bank of Baroda (sixth Respondent in the second matter) by their names; Atlanta Rugs Inc. as the 'buyer'; and Overseas container Lines Inc. (the Non-Vessel Owning Common Carrier acting as shipping Agent) as 'nvocc' or 'overseas Container'. The case of the complainants, in brief, is as follows : Complainants are manufacturers of Rugs and Durries, carrying on business at Mirzapur, up. In pursuance of orders placed by Atlanta Rugs Inc. , Atlanta (for short the 'buyer'), M/s. Hira Lal Ramesh Chand dispatched 17 consignments of rugs and durries of the value of US $ 4,06,096 between 15. 3. 1995 and 29. 6. 1995; and M/s. Ratan Chand Deep Chand dispatched 38 consignments of the value of US $ 8,87,973 between 23. 8. 1994 and 4. 7. 1995. The consignments were entrusted to M/s Overseas Container Line Inc. , a non-vessel owning shipping Agent represented by its Agent Niranjant Shipping agency (P) Ltd. , for transhipment from Mumbai to Atlanda (USA ). The Bill of Lading issued by Overseas Container in regard to each of the consignment showed the consignee as "unto order" and party to be notified as "atlanta Rugs Inc. ". All the consignments were insured by the consignors, with the New India Assurance Co. Ltd. The original documents relating to the consignments were forwarded by Niranjan Shipping to the bankers of complainant - Punjab National Bank. The complainants obtained credit facilities from Punjab National Bank by discounting the Bills and endorsed the Bill of Lading in favour of the said Bank. The said Bank, in turn, forwarded the original documents of title to its agent Sun Trust Bank (earlier known as Trust Company Bank) Atlanta, for collection, by endorsing the documents in their favour. The buyer (Atlanta Rugs Inc.) did not make payment and obtain release of the documents of title. They therefore made efforts to contact the buyer and the shipping Agent-Overseas Container. They were also not able to locate them. Nor were they able to find out the whereabouts of the consignments. Therefore they telephonically lodged an oral claim with the insurer on 2. 2. 1996 seeking payment of the value of the consignments. The insurer directed them to get in touch with their Surveyor-cum-Claim Settlement Agent at Atlanda -- M/s. Toplis and Hoarding Inc. They accordingly requested the said Surveyor to inquire and investigate the matter and issue necessary certificates. The surveyor submitted their reports to the Insurer, but failed to furnish copies thereof to the complainants. Their claim was not settled by the Insurer for more than a year in spite of reminders. Such failure amounted to deficiency in service and consequently the insurer became liable to pay the value of the consignments and the other amounts claimed, as compensation. The complainants sought a direction to the New India Assurance Co. Ltd. (appellant) to pay the following amounts as compensation : JUDGEMENT_1038_TLPRE0_2008Html1.htm
(3.) THE Appellant - Insurer, the opposite party - Respondent in the two complaints, resisted the said claims. It contended that the claim was not maintainable as none of the consignments were lost or damaged in transit. According to them, the investigation report of the surveyor disclosed that one Kumar Chaudhary was the common President of M/s. Overseas container Lines Inc. (the shipping Agent) and M/s. Atlanta Rugs Inc. (the buyer) and that the said Kumar Chaudhary had admitted to the surveyors that the consignments had all been received by the buyer. If the buyer, having taken delivery of all the consignments, failed to pay the value of the consignments, such non-payment of price by the buyer or non-realisation of the price by the seller, will not be a maritime peril giving rise to a claim against the Insurer under a Marine Insurance Policy. When the insured consignments had been delivered to the buyer, it cannot be said that there is a loss of the consignments. The claims were repudiated on 4. 3. 1997. The reasons for repudiation were furnished to the complainants by the Insurer as also by the surveyors. There was thus no deficiency in service. It was also pointed out that when the goods are entrusted to a sea going vessel, a master bill of lading is issued by the vessel/shipping line showing the particulars of consignments and the names of the consignees and the said Master Bill of lading was not part of the documents of title. The failure on the part of the complainants to take any action against the buyer and the manner in which the transactions were conducted, gave room for doubt that there has been a collusion between the complainants and the buyer to foist false claims against the insurer. The Insurer also prayed that the detailed reasons for repudiation given in its letter dated 4. 3. 1997 be read as part of its written statement. The relevant portions of the letter of repudiation are extracted below : "the buyer had taken delivery of all the consignments but has not paid your Company for the same. Non-payment of the price by the buyer is not an insured peril under the captioned policies and hence your claim falls beyond the scope and ambit of the policies issued by our company. xxxx instead of taking up the matter with your buyer for the payment of the price of the said consignments, you thought it fit to take no action whatsoever against your buyer. xxxxxx D) You have failed and neglected to act with reasonable dispatch as required by Clause 18 of the Institute cargo clauses (A) to which the above polices were made subject to. Clause 18 reads as under : 'it is a condition of this Insurance that the Assured shall act with reasonable dispatch in all circumstances within their control'. The consignments were shipped from Bombay to Atlanta between the months of August 1994 to July 1995. However, your company has informed our company and our aforesaid Surveyors of the alleged loss allegedly suffered by you only in the first week of February, 1996. As you have failed to act with reasonable dispatch as required by the said policies, our company is not liable to pay any amount under the captioned policies. E) As you are aware, it is a conditions of the policy that a certificate of loss/damage should be obtained from our Surveyors who are the company's agents at the Port of discharge. It is an admitted position that no such certificates has been obtained by your company. In view of breach of the aforesaid condition our company is not liable to pay any amount to your company under the captioned policies. G) We have to state that under the aforesaid policies, we had agreed to insure that consignment subject to Institute Cargo Clause (A ). Clause I of the said Institute Cargo Clause (A) clearly stipulates as under : 'this insurance covers all risks of loss or damage to the subject matter. . . . . ' as is pointed out by the surveyors, that the consignment under the captioned policies have been received by the buyers. In view thereof, there is no loss and/or damage to the subject matter i. e. the said consignments entitling your company to seek an indemnity from our company. H) Records in our possession show that you kept on sending consignments to your buyer without caring to ascertain if the buyer was financially solvent and would make payment in respect of the consignments shipped to you. In view thereof, we have to state that the alleged loss is also attributable to the aforesaid willful misconduct on the part of your company under provisions of Institute Cargo Clause (A) -clause 4. 1 and section 55 of the Marine Insurance Act, 1963. I) You will appreciate that our company has agreed to indemnify you for the loss and/or damage suffered to the consignments during its journey from your company's warehouse to the buyers warehouse due to the insured perils. Financial insolvency and/or refusal of the buyer to pay for the price of the said consignments is not one of the perils insured under the captioned policies and hence your company cannot seek any indemnity under the captioned policies. Initially, there were four common respondents in both the complaints. The Divisional Office, Regional Office and Head Office of New India assurance company Ltd. were respondents 1 to 3. Overseas Container Lines inc. , was the fourth Respondent. By order dated 10. 11. 2000, the commission directed the complainants to implead M/s Atlanta Rugs Inc. (Buyer), M/s Niranjan Shipping Agency Pvt. Ltd. (Forwarding Agent of the complainants, as also the agent of Overseas Container Lines Inc.), Punjab national Bank and Bank of Baroda (Bankers of complainant), Sun Trust bank, earlier known as Trust Company Bank (the foreign correspondent bank of Punjab National Bank) as they were proper and necessary parties. Accordidngly, M/s Atlanta Rugs Inc. , Niranjan Shipping Agency (P) Ltd. , punjab National Bank and Sun Trust Bank, were impleaded as respondents 5 to 8 in OP no. 45 of 1997. However, subsequently respondents 4, 5, and 8 were given up by the complainants as service could not be effected and their names were deleted from the array of parties and consequently, when the matter was heard, the respondents in OP No. 45/1997 were the insurer, M/s niranjan Shipping Agency (P) Ltd. , and the Pubjab National Bank. Similarly, the said four persons as also Bank of Baroda were impleaded as respondents 5 to 9 in OP No. 49 of 1997. But later, the three respondents who could not be served were given up and deleted and at the time of hearing the respondents were the insurer, M/s Niranjan Shipping Agency (P) Ltd. , Punjab National Bank and Bank of Baroda.;