Case: New India Assurance Co. Ltd Vs. M/S. Hira Lal Ramesh Chand


Decision reasoning: 1[ds]Re : QuestionHaving regard to clause (8) of Institute Cargo clause (A) relating to duration, the insurance cover attaches from the time the goods leave the warehouse of the assured and terminates either on delivery at the consignees final warehouse or store at the destination named in the policy (or on delivery to any other warehouse or place of storage, which the assured elects to use) or on the expiry of 60 days after completion of discharge of the goods from the vessel at the final port of discharge. The insurance cover commences when the consignment leaves the warehouse or place of storage at the place named in the policy for commencement of transit and the cover continues during transit and continues until the consignment reaches the final destination specified in the policy as the consignees warehouse. Where the consignment is temporarily stored on arrival at an interim destination (as for example on the dock, or in the shipping lines warehouse or in the custom warehouse, pending onward journey to the consignees warehouse mentioned as final destination in the policy), the cover would remain only for a period of 60 days from the discharge of the consignments from the ship irrespective of whether consignment is put on onward journey to the consignees warehouse/storage place, or not.17. In view of the insurance cover extending `warehouse to warehouse the consignments are covered by insurance not only during the sea journey, but beyond as stated in the policy. Therefore the contention of the insurer that the insurance cover is available only in regard to maritime perils that is perils relating to or incidental to the navigation of the sea may not be correct. Having regard to section 4 of the Marine Insurance Act and the terms of the policy undertaking insurance cover against wider risks, the policy of insurance would cover the loss not only while goods or navigating the sea but also any loss or damage during transit from the time it leaves the consignors warehouse till it reaches the consignees warehouse. The cover against risks will however cease on the expiry of 60 days after discharge of the consignment from the vessel at the final port of discharge, if the goods do not reach the consignees warehouse or place of storage for any reason within the said 60 days.There is a difference between marine insurance policies which extend cover only against marine losses or maritime perils (as enumerated) and marine `extra insurance policies which extend cover against all risks from consignors warehouse to consignees warehouse which include not only the sea journey but also the land journey at either end. The decision in Concord of India Insurance Co. (supra) of the Kerala High Court and the decision of this Court in Bihar Supply Syndicate (supra) relate to marine insurance policies and not to mixed sea/land risks policies or to marine `extra insurance policies. They are not of assistance while considering the scope of a policy covering all risks including ICC(A), ITC(A), IWC(Cargo), ISC (Cargo). In fact in Peacock Plywood (P) Ltd. v. Oriental Insurance Co. Ltd. [2006 (12) SCC 673 ], this Court held that where the policy contained a wider term of risk coverage, the decision in Bihar Supply Syndicate (supra) will not apply. In Peacock Plywood, the extended warranty clause in the insurance policy specifically extended the coverage to include the risks of theft, pilferage and non-delivery. In view of it, this Court held that a claim by way of constructive total loss on account of a ship being stranded on sea on account of its unseaworthiness was maintainable, although the goods themselves were not damaged. In that case when the ship carrying the goods got stranded at a port due to its unseaworthiness, the assured took steps to recover the value of the cargo with a view to minimize its total loss due to non delivery, but found that the cost of recovering and getting the cargo back to the destination port would be more than the value of the goods. Therefore the assured effected sale of the insured goods at the port where ship was stranded. Insurer was found liable to pay the insured value of the goods (less the amount actually recovered by such(ii) and (iii)We have considered the detailed submissions made by learned counsel. We have also considered the material that was placed before the Commission. We find on a careful consideration that the Commission has not addressed itself to the relevant issues. It is no doubt true that the complainants had booked the consignments showing the consignee as `unto order thereby indicating that the goods covered by the Bills of lading should be delivered only to the holder/endorsee of the Bills of Lading. There is also no doubt that the original documents were not cleared/retired by the buyer `Atlanta Rugs Inc. and that the original documents were ultimately returned by the foreign correspondent Bank to Punjab National Bank and they are lying with Punjab National Bank. There is also no doubt that the consignments were insured against all risks of loss and damage.32. The basic and fundamental averment and proof required in a case of this nature is that the consignments had been lost or damaged in transit or that when the holder of the documents applied for delivery, the goods were not delivered on account of the same being irretrievably lost that is having been pilfered, stolen, lost or misdelivered. But there is no such averment or evidence that the consignments were lost or damaged. Nor is there any averment that the holder of the documents of title applied for delivery of the consignments, and was denied or refused delivery on account of non-availability of the consignments either due to pilferage, loss or misdelivery. When there is no allegation or proof of Sun Trust Bank having applied for delivery and refusal of delivery, it is inconceivable how the complainants can maintain a claim against the insurer.33. Failure of the buyer to make payment and take delivery is not a `loss of consignment which is covered by the Insurance Policy. The complainant should make out a case of actual `loss of the consignment covered by the contract of insurance or non-delivery of the consignment, that is refusal to meet a demand for delivery. The question is whether the complainants have proved such loss or non-delivery. The case of the complainant as put forth in the complaint and reiterated in the affidavit is that they have dispatched the consignment to Atlanta, that the consignments were insured against all risks; that the buyer did not retire the documents by making payment; that they do not know what happens to the consignments and that therefore the Insurer ought to have paid them the value of the consignment and failure to do so amounted to deficiency in service as contemplated under the Consumer Protection Act, 1986. We are afraid that these are not allegations or proof of loss or non-delivery sufficient to foist any liability on the insurer.34. Another question that arises for consideration is whoresponsible for transshipment anddelivery. Admittedly Overseas Containers was only a non-vessel owning common carrier (NVOCC) and not the actual shippingline. Necessarily therefore Overseas Container had to entrust the consignment to an actual shipping line for transportation and the Master Bill of Lading given by the shipping line would show the Overseas Containers as the consignee entitled to receive the delivery. The very fact that the Master Bill of Lading is not given to the consignors/complainants and the fact that the complainants did not demand for the same shows that they did not intend to apply for delivery directly from the shipping line that carried the consignments but only intended that delivery should be from Overseas Containers which had issued the Bill of lading. As the contract for carriage was between complainants and Overseas Containers and as the Bills of Lading issued by the Overseas Container showed that the consignments were deliverable to the order of the complainants, necessarily Overseas Containers were expected to take delivery of the consignment at Atlanta from the shipping line which actually transported the consignments and then deliver it to the holder of the documents of title who seeks delivery. If that is so, the Overseas Containers were entitled to take delivery from the shipping line which transported the consignment and there was nothing collusive, clandestine or irregular about delivery of consignments being taken by Overseas Containers from the shipping line, as it had entrusted the consignment to the shipping line for transportation.35. There is no averment or proof that the consignments did not reach the destination namely the Port at Atlanta or that the goods were not taken delivery by the Overseas Containers. There is no averment as to whether the holders of the documents namely the Sun Trust Bank applied for delivery or attempted to take delivery of the consignment and store them in a bonded warehouse and whether they were refused delivery within the insurance cover period.36. The insurance cover was in regard to all risks from consignors warehouse to consignees warehouse. There is no dispute as to what is the consignors warehouse as the complainant is clearly shown as the consignor. The difficulty arises about the consigneesdoes not obviously refer to complainants warehouse as admittedly the complainants were not having any warehouse in Atlanta (USA), nor were they the holders of the documents. The `consignee at the relevant time could only be the Sun Trust Bank in whose favour the documents had been endorsed. But it is not the case of the complainant that Sun Trust Bank as the holder of the documents of title sought delivery of the consignments from the customs warehouse or steam ship line or from Overseas Containers. Where there is no effort on the part of the `consignee to take delivery from the shipping line/customs warehouse, the duration of insurance cover cannot be infinite or indefinite. In such circumstances the risk cover would terminate on the expiry of 60 days after completion of discharge overside of the insured shipment from the Overseas vessel at the final port of discharge at Atlanta having regard to clause 8 of Institute Cargo clause. It is not the case of the complainant that within that time (of 60 days), delivery was sought by the holder of the documents and that such delivery was refused. It is also not the case of the complainants that the consignments were unauthorizedly delivered to Atlanta Rugs or that such delivery was within 60 days of the landing of the consignments at Atlanta. In the absence of any averment or evidence as to when the consignments were discharged from the ship at Atlanta and an averment that within 60 days of the landing of the consignments at Atlanta the holder sought delivery and delivery was refused, the question of the Insurer being made liable for non delivery does not arise. After 60 days of the landing of a consignment even if the consignment is destroyed, lost or mis-delivered, it is no concern of theis unfortunate that the Commission disposed of the matter without examining the terms of the policy and obligations undertaken by the insurer. In fact, having regard to the nature of issues involved, this was more appropriately a matter for civil court. Be that as it may.38. Another significant aspect is that the consignments were being continuously sent from August, 1994 to July, 1995 by M/s. Ratan Chand Deep Chand and from March to June, 1995 by M/s. Hira Lal Ramesh Chand without making any effort to ascertain the fate of the earlier consignments. Even when they learnt none of the documents relating to the consignments had been retired by the buyer, they merely gave the oral intimation to the insurer that too on 2.2.1996 about the non-retirement of the documents. No claim was lodged with the insurer in writing. The allegation that orally a claim for `loss of goods was made on 2.2.1996 cannot be true as according to complainants themselves till that date they had no knowledge that the consignments had been either lost or wrongfully delivered. In fact the complainant have not produced even a single document making a claim on the insurer on the ground that the goods had been lost or not delivered.The complainants have failed to plead and make out a case of loss, in respect of each and every consignment, either during transit or within 60 days of the consignments being discharged from the ship at Atlanta Port. They merely proceed the assumption that the Insurer is liable when the documents are not retired by the buyer, which, to say the least, is untenable. As there is no averment or proof that the consignor or the foreign correspondent Bank holding the documents of title or any person authorized by the said Bank applied for delivery within 60 days of the goods being discharged, and as there is no averment or proof that the consignments were lost or wrongly delivered within the said period of 60 days, the liability and responsibility of the insurer under the policy of insurance came to an end with reference to each of those consignments. Consequently the claim of the complainants against the insurer is liable to be rejected.41. The Commission has referred to the delay of nine months on the part of the Insurer in repudiating the claim, after receiving the surveyors Report, and the failure to furnish a copy of the reports to the complainants as deficiency in service. But what is overlooked is that the complainants did not lodge any claim in writing. At all events, they did not produce any document showing the lodging of claim. It was on a mere oral intimation on 2.2.1996, the investigation by surveyor was set in motion. Further the contents of the report had already been notified to the complainants by the surveyor in the telexes dated 4.3.1996 and 1.4.1996. Therefore, the finding of deficiency in service was not warranted.42. In this view of the matter, it is unnecessary to consider the counter claim of the respondents 1 to 3 in CA No.4307 of 2003. Nor is it necessary to consider whether such counter claim is maintainable in an appeal under section 23 of the Consumer Protection Act, 1996.