Case: New India Assurance Co. Ltd Vs. G.N.Sainani

2. This appeal is directed against the order of the National Consumer Disputes Redressal Commission dismissing the appeal of the appellant and confirming the order of the Maharashtra State Commission by which order the State Commission had allowed the complaint of the respondent filed under Sections 17/18 ofthe Consumer Protection Act, 1986 (for short the Act). In fact, there were two complaints before the State Commission; in one complaint the claim of the complainant against the appellant was settled for Rs. 5,04,841.23 and the second for Rs. 9,99.500/-. The complainant was also awarded costs of Rs. 500/- in each of the two complaints.3. In this judgment, the appellant M/s. New India Assurance Company Ltd. is described as insurer, the respondent as complainant or assignee and M/s. Ajanta Paper and General Products Ltd. as the consignee or assured.4. The complainant is an assignee of two insurance policies taken out by M/s. Ajanta Paper and General Products Ltd., from the appellant being the insurer. One policy was to insure 244 bales computer wastes computer print out valued at Rs. 5,87,000/- and the second was for 170 bales computer waste computer print out valued at Rs. 4,04,000/- to cover the risk from the port of Antwaro to Bombay. The policies were taken out on February 27, 1984. By letter dated April 12, 1984 the consignee informed the insurer, the appellant herein, that it had been given to understand that due to strike in Indian Ports the vessel s.s. IRISH MAPLE which was bringing the goods, had been diverted to Muscat and the cargo had been discharged there. The consignee, therefore, requested the insurer to cover the risk accordingly. The insurer replied by its letter dated May 4, 1984. It informed the consignee that the consignments in question were required to re-shipped from Muscat to Bombay within 60 days time from the date the same were discharge at Muscat and that failing which there would be no liability of any claim covered under the two policies in question. The consignee again wrote to the insurer on May 21, 1984 informing it that the consignment had not been brought to Bombay by the steamer company and same was still lying at Muscat and further that consignee was arranging to bring the cargo from Muscat in order to avoid further delay, pilferage and damage and also to minimise financial losses. The consignee also stated in this letter that by doing so it was helping the insurer and, therefore, the additional expenditure such as freight from Muscat to Bombay, warehousing charge at Muscat and other incidental expenses that might be levied by the Steamer Company shall be on account of the insurer. It, therefore, requested the insurer to endorse the certificate for covering the risk for forced transhipment from Muscat to Bombay. By letter dated May 24, 1984 the insurer repeated what was written in its letter of May 4, 1984. It had informed the consignee that it was consignees responsibility to arrange for the re-shipment of the consignment to Bombay within the specified time-limit and that insurer would not be responsible for any loss or damage resulting from non-cooperation of the steamer agent of the consignee in arranging re-shipment of Cargo to Bombay. The consignee was specifically told that under no circumstances insurer was liable for additional expenses incurred by the consignee by way of extra freight, warehousing etc. in the process of re-shipment of the cargo from Muscat to Bombay. Again on June 2, 1992 the consignee wrote to the insurer informing it that arrangement was being made to bring the cargo as early as possible. The insurer was, however, requested to extend the validity of the Certificate, while itself agreeing to pay necessary charges for the same. Again on June 8, 1984, the consignee informed the insurer that the shipping company had agreed to bring the cargo and that the subject consignment was being loaded per M. v. MICHEL C which was expected at Bombay Port shortly, it may be noted that earlier the consignment was being brought by s.s. IRISH MAPLE which had off-loaded the consignment at Muscat. The insurer acknowledged the letter of June 2, 1984 of the consignee but at the same time the request of the consignee for extension of the time beyond 60 days was not granted. The consignee was informed that on the expiry of 60 days time limit from the date of discharge at the port of Muscat, the risk under the policy in question would cease.5. The consignee, being the insured, preferred a claim for Rs. 1,74,708.52 and for Rs. 3,99,007.52 on account of shortlanding of the consignment under transshipment and obtained the shortlanding certificates issued by the Bombay Port Trust docks of Bombay. The claim was, therefore, on account of shortage of goods.6. It would appear from the letter dated July 25, 1989 of the insurer to M/s. National Consultants (Proprietor Mr. S.N. Sainani, the complainant) that the policies had been assigned by the consignee in favour of M/s. National Consultants. By this letter the insurer acknowledged letter dated July 18, 1989 of the assignee. The insurer in this letter informed the assignee as underThe vessel carrying the insured consignments had diverted its course, and the consignments were discharged at Muscat, for onward carriage to Bombay. Our Marine insurance cover had ceased at this stage. Moreover no extension of insurance cover was obtained by you.(ii) Insured consignments were discharged at Bombay Ex Michelle C on 30-7-84 where- as claims on ocean carriers were lodged on 16-7-85/17-7-85 respectively, i.e. about a year after discharging of the consignments. Further- more no extension of time-limit was obtained from them to safeguard our rights of recoveries. Our recoveries therefore are lost, as claims against carriers have now become time-barred/suit barred.Owing to the above irregularities/lapses, it will be appreciated that we have no liabilities to meet towards the above subjectJuly 23, 1992 the assignee instituted two complaints before the Consumer Disputes Redressal Commission, Maharashtra State, Bombay against the insurer alleging deficiency while rendering the service. The State Commission considered the question if by not extending the insurance cover during re-shipment and repudiating the insurance claim constituted deficiency in service by the insurer. By the order dated October 29, 1994 it held against the insurer. The appeal of the insurer was dismissed by the National Consumer Disputes Redressal Commission by the order dated September 30, 1996.7. All this narration of events was necessary to understand the issues involved in the appeal.

Court's reasoning:
The interest of the insured must exist in the case of marine insurance at the time of loss and the assured must have some relation to or concern in, the subject of the insurance. The service which the insurer offers is with reference to the goods and the insurable interest has to be in respect of the goods. To put it in other words, insurable interest in property would be such interest as shall make the loss of the property to cause pecuniary damage to the assured. To come under the scope of the word "consumer" as defined in the Act it should be possible for the assured to assign his insurable interest in the goods subject-matter of the policy for the assignee as a consumer to enjoy the benefit of the policy with reference to the goods which are insured. What has been assigned in the present case is the amount of loss suffered by the assured on account of shortlanding of the goods, meaning thereby that right to recover the loss is assigned to the assignee and not that any service is to be rendered under the policy by the insurer with reference to the goods. We are looking at the whole thing from the point of the consumer under the Act with reference to certain relevant provisions of the Marine Insurance Act. Unless the assignee has some insurable interest in the property subject-matter of the insurance until the time the policy terminates he cannot be beneficiary of any service required to be rendered by the insurer under the policy. Admittedly it was much after the goods had reached the port of destination and appropriated that the policy was transferred by the insured to the complainant to recover the amount of loss suffered by the assured. Thus, what is assigned is in effect a mere right to sue for the loss on account of shortlanding of the goods. It is difficult to see as to how it could be said that the respondent, that is the assignee, is the beneficiary of any service under the policy. He may, however, have right to recover the loss from the insurer by filing a suit in a civil court but certainly to seek remedy under the Act he must be a consumer. If the policy had been assigned during the course of its validity and before the goods were appropriated after their arrival at the port of destination, it could perhaps be said that the assignee had beneficial interest therein but not otherwise. By not extending the policy beyond a particular period, that is 60 days, the insurer acted within the terms of the contract of insurance and on that account it could not be said that there was deficiency in service to be provided by the insurer under the policy.It is not necessary for us to examine in depth various provisions of the Marine Insurance Act as in the present case we are primarily concerned with the provisions of the Consumer Protection Act. The policy in question is though designated as Marine Insurance Policy but we think it is more a question of interpretation of relevant clauses of the policy. The Act is not a general law for all remedies. It is for the protection of the consumer as defined in the Act. To succeed in the present case the complainant must show that he is a consumer and that there has been deficiency in service by the insurer. This he has been unable to show. He, therefore, could not maintain complaint under the Act.