HIGH COURT OF JAMMU & KASHMIR AT SRINAGAR C.I.A. No.02/2004 Date of Order:13.08.2015 Jehlum Exporters Pvt. Ltd. Vs. Oriental Insurance Co. & ors. Coram: Hon’ble Mr. Justice Mohammad Yaqoob Mir, Judge Appearing Counsel: For the petitioner(s)/Appellant(s): Mr. A. M. Khan. For the respondent(s): Mr. N. H. Khuroo. 1) Judgment and decree passed by the Court of learned District Judge, Srinagar, dated 13.11.2003 is assailed by medium of this Civil 1st Appeal. 2) Suit of the appellant has been decreed for an amount of Rs.18,100/ with interest at the rate of 12% per annum from the date of institution of the suit with costs. 3) The factual matrix which has given rise to the institution of the suit is that the appellant on 28th January, 1986 booked consignment of 36 pieces of Shah Toosh Shawls of the value of Rs.18,28,100(rupees eighteen lacs twenty-eight thousand one hundred) through respondent No.2 from Calcutta to Srinagar Kashmir vide Air consignment No.7396381. 4) On 29Th January, 1986, the appellant got said consignment (36 pieces of Shah Toosh Shawls) of the value of Rs.18,28,100/ insured through respondent No.1-Oriental Insurance Company Ltd. The risk of non-delivery etc. was covered vide inland policy No.31140/48/1532/M-68/86 dated 29.01.1986. When the consignment was not received at Srinagar, appellant approached the respondent No.2 but was intimated that the matter is under investigation and was further informed vide letter No.CCU/CM/4-2/29 dated 31.03.1987 to wait till completion of enquiry as was in progress. Later on appellant was asked by the defendant No.2 to furnish certain documents which were furnished but the final report of enquiry was not made available to the appellant. 5) According to appellant he was informed by respondent No.2 vide letter dated 11.09.1987 that the Company has received claim bill, invoice and non-delivery certificate but the claim being beyond deductible limit, the matter, as such, has been referred to their insurer for approval. It is further stated by the appellant that the respondent No.2 vide legal notice dated 22nd March, 1989, EXPW-1/19 was asked for early payment of compensation of Rs.18,28,100/ but was informed vide noticed No.AD/KC/10739 dated 25th august, 1989, EXPW-1/21, that it was for the insurance company to settle the claim which the insurance company has rejected. The appellant had lodged report of non-delivery. Vide letter dated 19.02.1986, EXPW-1/23, the appellant delivered documents for the settlement of claim. The respondent No.1 had appointed investigator on whose asking appellant provided him the information and the documents including non-delivery certificate of the air consignment. Lackadaisical approach of the respondents constrained the appellant to serve legal notice dated 23.06.1989 upon them but again without any response. 6) It is the case of the appellant that invoice of the Shawls revealed its value as Rs.18,28,100. After proper scrutiny, respondent No.1 covered the risk of non-delivery etc. for the air consignment as against premium of Rs.5,942. Respondent No.2 had admitted that the appellant booked the consignment at Calcutta, however, appellant by means of handwritten declaration declared value of these goods as Rs.18,100/ and made specific declaration that the particulars furnished by him are correct and that he is aware of and accepts general conditions of carriage and the special conditions, more particularly referred to or set out on the back of consignment note. Furthermore, respondent No.2 has stated that in view of declaration that the value of the consignment was Rs.18,100, therefore, there could be no reason to believe that the value of the goods booked was Rs.18,28,100, such claim is an afterthought. The respondent No.2 has also denied willful mistake and negligence. 7) The respondent No.1-insurance company in its written statement has contended that the contract of insurance is based on principles of utmost good faith, it is the statutory obligation upon the person seeking insurance to disclose all the facts truly and correctly. The value of the consignment allegedly containing Shah Toosh Shawls has been declared to the respondent Insurance Company to be Rs.18,28,100/ whereas its actual value was declared as Rs.18,100/. 8) Finally, on the basis of respective pleadings of the parties, following issues have been framed: 1. Whether the plaintiff company booked consignment containing Shah Toosh shawls through defendant No.2 from Calcutta to Srinagar on 28.1.1986? OPP 2. Whether the plaintiff company got duly insured the said consignment with defendant No.1?OPP 3. On proof of issue No.1 whether the said consignment did not reach its destination and was not delivered by defendant No.2 to the plaintiff company at Srinagar? OPP 4. On proof of issue No.3 is the plaintiff company entitled to receive the value of the consignment from the defendants, if so how much and from whom? OPP 5. Whether this court has got no jurisdiction to adjudicate the suit? OPD 6. Whether the suit is barred by limitation? OPD 7. Whether the present suit is not maintainable, if so, how? OPD 9) Learned trial court has returned findings on issues No.1 to 3 and 5 to 7 in favour of the appellant(plaintiff), which findings have not been challenged by the respondents(defendants). 10) So far as finding on issue No.4 is concerned appellant has been held entitled to an amount of Rs.18,100/ along with interest when according to appellant he is entitled to an amount of Rs.18,28,100. The finding returned on issue No.4 as such is assailed in this appeal. 11) The reasoning for recording finding on issue No.4 by the trial court is that the claim of Rs.18,28,100/ is an afterthought. The appellant in his statement, recoded by the trial court has deposed that the value of the consignment was Rs.18,28,100/ but perusal of EXPW ¼ which is the Air Consignment Note delivered to the appellant by respondent No.2 at the time the company booked the consignment shows that the appellant himself has valued the consignment at Rs.18,100/. This value for carriage is specifically mentioned in the said Consignment Note and has obviously been done at the instance of the appellant who has affixed his signatures on the Air Consignment Note. The value for carriage as per this Note is only Rs.18,100. Under the terms and conditions of contract, the respondent No.2 was obliged to carry the consignment to Srinagar and deliver it to the appellant but had failed to do so, therefore, is bound to reimburse the appellant company to the extent of Rs.18,100/ with interest. Learned trial court has further opined that the claim of appellant for an amount of Rs.18,28,100/ cannot be considered and granted in view of clause 5(c) of the conditions of contract. Clause 5(c) reads as under: “The charges of carriage having been upon the value declared by shipper, liability shall in no event exceed the shipper’s declared value for carriage stated on the face of the Airway bill and in the absence of such declaration by shipper, the liability of Corporation shall not exceed Rs.160/- (one hundred and sixty only) per kilogram of goods destroyed, lost or damaged, all claims shall be subject to proof of value.” 12) The said contract is between the appellant and respondent No.2. The conditions of contract are given in detail overleaf the Air Consignment Note (Airway Bill No.7396381) exhibited as EXPW ¼. The conditions of contract will definitely govern and bind the appellant and respondent No.2. As per Clause 5(c), the liability of shipper is limited to the value declared for carriage purposes which is one percent (1%) of value of the consignment. Value of consignment is Rs.18,28,100. When same has been booked with respondent No.2, in the form under the head “Instructions for dispatch of goods” prescribed by Indian Airlines, it is clearly indicated that the consignment consists of 36 pieces of Shah Toosh Shawls weighing 14 kgs, value for carriage, one percent(1%) is shown as Rs.18,100/ whereas for custom value of consignment is shown as Rs.18,28,100. The said form has been proved and exhibited as EXPW- 1/2. 13) Clause 5(c) of the conditions of contract in- between the appellant and respondent No.2 vis- à-vis limited liability of shipper will not absolve rather exonerate respondent No.1 from its liability to which it is bound by its own terms and conditions of the policy issued in favour of the appellant. The terms and conditions of the insurance policy exhibited as EXPW-1/7 in its clear terms provide that: Sum insured =Rs.18,28,100/- marine premimum@.30% =Rs.5484/- war/SRCC@.25% =Rs.457/- stamp duty =Rs.1/- Total =Rs.5942/- 14) The terms of contract as recorded in the insurance cover exhibited as EXPW-1/7 would reveal that the risk on account of T.L.O, T.P.N.D and S.R.C.C, from Airport to Airport city office at Kashmir is covered. T. P. N. D stands for theft, pilferage and non-delivery which falls in Clause (11) of the insurance policy. Then in the form annexed under the head “The Oriental Insurance Co. Ltd.” the procedure in the event of loss or damage for which insurance company is liable, is divided into sub-heads. The case of the appellant falls under the head “Theft, Pilferage and Non-Delivery (Insured value). Its Clause (B) reads as under: “It is hereby agreed that this Policy covers the risk of Non- delivery of an entire Package for which the liability of the Ship owner or other Carrier is limited, reduced or negative by the Contract of Carriage by reason of the value of the goods.” This clause clearly indicates that the insurance company covers the risk of non- delivery in its entirety so is its liability minus the liability of the shipper to the extent it is limited to the value fixed for the carriage purposes. 15) Learned trial court while recording finding on issue No.4 has referred to the marine policy form under the head “Institute Strikes Clauses AIR (CARGO)”. While quoting Clauses 1.1 and 1.2, has opined that no such case has been set up nor proved i.e. damage by strikes, lockout, labour disturbances, riots, civil commotions or any terrorist or any person acting from a political motive. It is to be made clear that the insurance company has also received premium for the risk T.P.N.D i.e. theft, pilferage and non-delivery, therefore, said clauses 1.1 and 1.2 would not operate against the appellant. 16) The trial court has further negatived claim of the appellant on the ground that there is no evidence on record to show that the subject matter insured had left the warehouse premises or place of storage at the place named for the commencement of the transit and in this connection referred to clause 3.1 of the Institute Strikes Clauses AIR (CARGO). In the process, learned trial court has lost sight of two important documents, Viz. (1) non-delivery certificate dated 17.12.1986 exhibited as EXPW-1/29 issued from the office of Indian Airlines certifying therein that they have not been able to deliver the consignment Shah Toosh Shawls to the consignees as the same has not been received at the Station at Srinagar which had been booked at Calcutta Airport on 28.01.1986, and (2) document addressed to the appellant by the Commercial Manager of the Indian Airlines exhibited as EXPW-1/9 dated 14th February, 1986 where-under after offering apology for inconvenience, the appellant has been informed that on preliminary investigation, it appeared that the shipment in question has possibly been moved to Delhi ex Calcutta, they have taken the matter with the concerned office through telecommunication channel and are expecting further communication shortly. The appellant has been asked to bear with them. 17) It is clearly proved that the consignment was delivered to the respondent Indian Airlines at Calcutta and then it is also proved that same had been moved to Delhi ex-Calcutta. When it is so, how could it be opined by the trial court that the appellant has failed to prove that the consignment had not left the warehouse of the Indian Airlines at Calcutta. Thirty-three (33) documents as have been proved and exhibited during the course of trial regarding the claim of the appellant are noticed in the trial court judgment i.e. 1. Certificate issued by Registrar of Companies Jammu and Kashmir under No.D/Regn/506/1604 dated 3.9.1986 regarding change of name of Company from Jehlum Handicrafts Pvt. Limited to Jehlum Exporter Pvt. Limited. 2. Air Consignment Note No:7396381 regarding booking of one packet with value of carriage Rs.18,100/-EXPW-1/4; 3. Marine Cargo Insurance Policy No.31140/48/1532/M-68/86 dated 29.1.1986 and its terms and conditions. EXPW-1/7; 4. Invoice dated 28.1.1986 regarding dispatch of goods from Calcutta to Srinagar through Indian Air Lines Cargo EXPW-1/5; 5. Letter of the plaintiff dated 28.1.1986 to Divisional Manager Oriental General Insurance Stephan House Calcutta requesting for providing insurance cover regarding 36 pieces of Shah Toosh shawls. EXPW-1/6; 6. Telegram regarding non-receipt of Air Consignment No.7396381 at Srinagar destination.EXPW-1/8; 7. Reply of defendant No.2 dated 14.2.1986 regarding preliminary investigation regarding non- delivery of the shipment.EXPW-1/9; 8. Letter of defendant 2 dated 18.2.1986 informing the plaintiff that the claim matter has been referred to Insurer for accord of necessary permission.EXPW-1/10; 9. Letter of defendant dated 19.2.1986 asking the plaintiff to submit documents. EXPW-1/11; 10. Letter of defendant No.2 dated 17.11.1986 asking the plaintiff to submit original documents etc. pursuant to letter dated 19.2.1986. EXPW-1/12; 11. Letter of defendant No.2 dated 31.3.1987 reminding the plaintiff to submit the relevant papers as directed earlier.EXPW-1/13; 12. Letter of defendant No.2 dated 9.6.1987 directing the plaintiff to furnish the original documents as advised earlier within a fortnight.EXPW-1/14; 13. Duplicate claim bill of plaintiff dated 23.6.1987.EXPW-1/15; 14. Invoice dated 28.1986 regarding 36 pieces of Shah Toosh shawls. EXPW-1/3; 15. Certificate of defendant No.2 dated 12.3.1986 regarding non-receipt of the parcel in Srinagar. EXPW- 1/17; 16. Letter of plaintiff dated 23.6.1987 to defendant No.2 asking for payment of compensation. EXPW-1/18; 17. Communication of defendant No.2 dated 11.9.1987 directing the plaintiff to submit C/Note in original. EXPW-1/7; 18. Legal notice dated 22.3.1989 issued by plaintiff to defendant No.2. EXPW-1/19; 19. Legal notice dated 23.6.1989 issued by plaintiff to defendant No.2.EXPW-1/20; 20. Reply dated 25.8.1989 on behalf of defendant No.2 to the plaintiff’s legal notice. EXPW-1/21; 21. Communication of plaintiff dated 18.2.1986 addressed to defendant No.1 seeking immediate settlement of the claim. EXPW-1/22; 22. Letter of plaintiff dated 19.2.1986 to defendant No.1 seeking compensation for the total loss amounting to Rs.18,28,100. EXPW-1/23; 23. Letter of Investigator dated 21.2.1986 of defendant No.1 to plaintiff. EXPW-1/24; 24. Statement of the plaintiff made at Calcutta in connection with insurance claim. 25. Receipt of the plaintiff regarding certain quarries concerning the shawls. Ex.P.W1/26. 26. Details furnished by the plaintiff to the appointed Investigator. Ex.P.W1/25. 27. Certificate dated 17.12.1986 regarding non- receipt of the consignment of Shah Toosh. Ex.P.W1/29. 28. Reply of defendant No:1 dated 16.12.1986 to the legal notice of plaintiff. 29. Legal notice of plaintiff dated 23.6.1986 to defendant No:1 EX.P.W1/31. 30. Auditor’s report dated 31.7.1985 issued by B.R. Sobti and Company. EX.P.W1/32. 31. Communication of defendant No:1 dated 5.1.1987 regarding insurance premium rates.Ex.P.W1/33. 32. Letter of defendant No:1 regarding double insurance cover.Ex.P.W1/35. 33. Letter of defendant No:1 dated 15.1.1987 regarding transit insurance.Ex.P.W1/34. 18) Most material proved documents stand referred to hereinabove at para 16. In the stated background, finding recorded by the trial curt disentitling the appellant from claiming the total amount of Rs.18,28,100/ is not tenable. The respondent Insurance Company is liable to indemnify the appellant, for the damage, as the risk was fully covered. The respondent Insurance Company cannot backtrack from the binding terms and conditions of the insurance policy contract. The insurance company, as such, is held liable. The finding on issue No.4 recorded by the trial court shall stand modified accordingly. 19) Keeping in view the whole gamut of the case, the appellant is also held entitled to interest @6% per annum chargeable from the date of decree of the trial court till its final realization. 20) For the facts, reasons and findings recorded, suit as has been decreed only for an amount of Rs.18,100/, is decreed for the whole value of the consignment i.e. Rs.18,28,100(rupees eighteen lacs twenty-eight thousand one hundred) with interest @ 6% per annum from the date of decree of trial court with costs payable by the respondent No.1-Insurance Company minus the limited liability of Rs.18,100/ to which respondent Indian Airlines has been held liable as being one percent(1%) of the total value of the consignment for the carriage purposes. 21) Appeal succeeds to the extent indicated. Decree be drawn up accordingly. 22) Copy of the judgment and decree be certified to the trial court. Trial court record be sent back (Mohammad Yaqoob Mir) Judge Srinagar 13 .08.2015 “Mohammad Altaf”