Case: Silversons Vs. Oriental Insurance Company Ltd. &amp; Another

final port would give the cause of action to the Insurance Company. The date of discharge at final port could be relied. The insurance policy provides for that only. We are, therefore, of the view that the bar of limitation cannot survive.Since this does not survive, the Insurance Company cannot resist the claim of the complainant. We therefore, hold that even against the Insurance Company, the claim is maintainable. We therefore accept both complaints and proceed to calculate the compensation that would be payable to the complainant.” Both the insurer and the carrier appealed against the order of the State Commission. The National Commission reversed the finding recorded by the State Commission on the issue of deficiency in service and relieved the insurer of its obligation to compensate the appellant by observing that even though the appellant had been intimated about discharge of the cargo at Colombo Port, it did not promptly inform the Insurance Company as per the requirement of Clause 9 of the Institute Cargo Clauses. 6. We have heard Mr. R. Sundarvardan, learned Senior Counsel appearing for the appellant and Mr. Santosh Paul, learned Counsel for the respondents and carefully scrutinized the records. Clause 9 of the Institute Cargo Clauses, which formed part of the policy obtained by the appellant, reads thus: “9 Termination of Contract of Carriage Clause—If owing to circumstances beyond the control of the Assured either the contract of carriage is terminated at a port or place other than the destination named therein or the transit is otherwise terminated before delivery of the goods as provided for in Clause 8 above, then this insurance shall also terminate unless prompt notice is given to the Underwriters and continuation of cover is requested when the insurance shall remain in force, subject to an additional premium if required by the Underwriters, either 9.1 until the goods are sold and delivered at such port or place, or, unless otherwise specially agreed, until the expiry of 60 days after arrival of the goods hereby insured at such port or place, whichever shall first occur, or9.2 if the goods are forwarded within the said period of 60 days (or any agreed extension thereof) to the destination named herein or to any other destination, until terminated in accordance with the provisions of Clause 8 above.” The National Commission interpreted the above reproduced clause and observed: “The question which arises before us is to determine if this period could be said to mean ‘Prompt’ notice within the terms of the policy. Purpose, undoubtedly of requiring prompt notice is to enable the insured to inspect the goods, satisfy themselves about the case of loss/damage and to ascertain of it falls within the terms of Policy or no? In this case no such follow-up action could be taken by the insurers to safeguard their own interest. Prompt notice in our view will mean immediately informing the insurer which normally we have seen is done within 24 hours. It could be extended to 48 to 72 hours but in no case extended to three months. Non-sending of any ‘prompt notice’ to the insurers is a clear case of violation of terms/clauses of the policy by the insured/complainant, thus depriving them of an opportunity to ascertain the full facts and to safeguard its interest. In our view the State Commission went wrong in this case on two counts one relying upon the date of intimation to the complainant being 17.1.1994 which is contrary to record and secondly misinterpreting Clauses 9 and 9.1 of ICC `A which led them to hold the insurers deficient in rendering service with which we do not agree. In our view the violation/non adherence of the clauses 9 on not sending ‘prompt notice’ is crucial enough to agree with the repudiation of the claim of the complainant against the insurers,i.e. the Insurance Company.” Although, the view taken by the National Commission that for availing benefit of the Policy, the insured should give intimation to the insurer within 24 hours or 48 hours or at best within 72 hours appears to be too narrow and we are inclined to agree with the learned Counsel for the appellant that it would be sufficient if intimation is given to the insurer within a reasonable period, but what should be the reasonable period within which the insured should inform the insurer about the loss of goods would depend upon the facts of each case and no strait-jacket formula can be laid down to determine as to what would constitute prompt notice within the contemplation of Clause 9 of the Institute Cargo Clauses. Insofar as this case is concerned, we are convinced that the long time gap of almost three months between the date when the appellant had been informed about discharge of the cargo by MV “Aken” at Colombo Port and the intimation given by the appellant to the insurer was unreasonable and, by no stretch of imagination, it could be construed as a prompt notice.7. Learned Counsel for the appellant made considerable efforts to convince us that after the cargo had been discharged at Colombo Port, the same was reloaded in the container and this should give rise to a presumption that the container had been reloaded on the ship for final destination, but we have not felt persuaded to agree with him. A reading of the averments contained in the complaint leaves no manner of doubt that the appellant knew that the cargo was lying at Colombo Port and the same had not been shipped for final destination.8. The survey report dated 16.12.1993 does show that the barrels (leaking or non-leaking) were loaded in the container, but the same cannot lead to an inference that the container was reloaded for being shipped to Norfolk (USA). In view of the above, we hold that the conclusion recorded by the National Commission that the insurer was not liable to indemnify the appellant for the alleged loss of cargo does not suffer from any legal error. 9.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]Although, the view taken by the National Commission that for availing benefit of the Policy, the insured should give intimation to the insurer within 24 hours or 48 hours or at best within 72 hours appears to be too narrow and we are inclined to agree with the learned Counsel for the appellant that it would be sufficient if intimation is given to the insurer within a reasonable period, but what should be the reasonable period within which the insured should inform the insurer about the loss of goods would depend upon the facts of each case and noformula can be laid down to determine as to what would constitute prompt notice within the contemplation of Clause 9 of the Institute Cargo Clauses. Insofar as this case is concerned, we are convinced that the long time gap of almost three months between the date when the appellant had been informed about discharge of the cargo by MVat Colombo Port and the intimation given by the appellant to the insurer was unreasonable and, by no stretch of imagination, it could be construed as a prompt notice.7. Learned Counsel for the appellant made considerable efforts to convince us that after the cargo had been discharged at Colombo Port, the same was reloaded in the container and this should give rise to a presumption that the container had been reloaded on the ship for final destination, but we have not felt persuaded to agree with him. A reading of the averments contained in the complaint leaves no manner of doubt that the appellant knew that the cargo was lying at Colombo Port and the same had not been shipped for final destination.8. The survey report dated 16.12.1993 does show that the barrels (leaking orwere loaded in the container, but the same cannot lead to an inference that the container was reloaded for being shipped to Norfolk (USA). In view of the above, we hold that the conclusion recorded by the National Commission that the insurer was not liable to indemnify the appellant for the alleged loss of cargo does not suffer from any legal error.