Case: United India Insurance Co. Ltd Vs. Leisure Wear Exports Ltd. &amp; Others

3) The appellant - United India Insurance Company Ltd. is the non-applicant whereas the respondent - Leisure Wear Exports Ltd. is the complainant in the complaint filed before the State Consumer Commission, Punjab out of which these appeals arise.4) The respondent/complainant is engaged in the business of sale of various kinds of hosiery goods and ready-made garments at Ludhiana. They also import and export the goods in which they trade. On 13.06.1996, the respondent obtained from the appellant one Open Marine Policy (Cargo) bearing No.201002-21-99-042-96. The respondent also paid necessary premium. The policy covered the risk of all kinds of hosiery goods and ready-made garments kept in wooden and cardboard cases sent from any part of India to any friendly country in the world. The policy covered the risk under Institute Cargo ClauseInland Transit Clauseand risk of war, SRCC, Riots, Strike valid forto warehouse at finalThe insurance covered the risk of the insured goods to the extent of Rs. 2 crores. It was subject to terms and conditions as were mutually agreed upon. The policy was for the period from 13.06.1996 to 12.06.1997.5) The respondent received one order from one party-M/s Magna Overseas, Moscow for supply of hosiery goods and ready-made garments to them at Moscow. The respondent accordingly dispatched 320 cardboard cartons in two separate consignments – one was under cover note No. LDRO/26948 dated 20.06.1996 worth Rs.49,63,200/- and another was under cover note No. LDRO/28051 dated 28.06.1996 worth Rs.31,68,000/. The respondent duly notified these transactions to the appellant(insurer). The export was to be made from Ex. Ludhiana to Moscow.6) The consignments reached Mumbai Port and from there, it was loaded in the ship for its final destination-Moscow. The consignments landed at port Odessa in Ukraine and from there, the consignment was moved by road to Moscow. When the delivery was taken at Moscow, it was found short of 142 and 139 cartons respectively.7) The matter was then reported to the Insurance Company who, in turn, appointed M/s Ingostarkh Insurance Company Ltd., Moscow as the surveyors to investigate into the matter and assess the loss. The surveyors confirmed the short delivery of the cartons. In terms of policy, the claim for the loss sustained by the consignee was lodged with M/s Ingostrakh Insurance Company in the first instance. They did not settle it and hence the consignee authorized the respondent to file the claim against the appellant for recovery of the loss sustained by them due to loss of their goods.8) The respondent then filed two separate complaint petitions under the Consumer Protection Act before the State Consumer Commission, Punjab against the appellant (Insurance Company) on the strength of the policy issued by the appellant in their favour claiming compensation for the loss of their goods while in transit and which were duly insured by the respondent under the policy dated 13.06.1996. In substance, the case of the respondent in their complaint was that since the goods, which were lost, were admittedly got insured by the respondent with the appellant and, therefore, the respondent are entitled to claim compensation for the loss sustained by them from the appellant on the strength of the policy which covered such loss. It was alleged that the policy was admittedly in force when the loss occurred and hence the appellant cannot deny their liability to compensate the respondent for the loss caused to the goods of the respondent.9) The appellant filed their written statement and admitted the factum of issuance of policy in respondents favour so also the factum of the loss of goods sustained by the respondent while the goods were in transit. Their main objection was that the respondent had no right to file the complaint and claim compensation from the appellant on the strength of policy in question. It was alleged that since the respondent had already assigned the policy in question in favour of their consignee, i.e., M/s Magna Overseas to whom the goods were sent by them and, therefore, it was for the consignee/assignee to file the complaint for realization of the loss amount from the appellant (insurer) on the strength of the assignment of the policy. It was, therefore, alleged that once the respondent made the assignment of the policy in favour of the consignee then in such event, they lost all their rights and interest in the policy qua the insurer and hence had no locus to file the complaint against the appellant. The complaint was, therefore, liable to be dismissed on this ground alone. Parties filed their evidence.10) The State Consumer forum vide order dated 31.12.1999 allowed both the complaints and awarded Rs.19,90,000/- in all to the complainant/respondent by way of compensation in each complaint. The compensation awarded to the respondent comprises of the reported value of the loss of the goods, 10% towards moral loss, 15% towards loss of earning and interest at the rate of 12% payable from 07.11.1996 till realization.11) Felt aggrieved, the appellant filed the appeals before the National Consumer Disputes Redressal Commission, New Delhi out of which this appeal arises.12) By impugned order, the National Consumer Disputes Redressal Commission dismissed the appeals and upheld the order of the State Consumer Commission.13) Felt aggrieved, the Insurance Company has filed these appeals by way of special leave before this Court.

Court's reasoning:
28) The respondent was, therefore, legally entitled and had the locus to file a complaint against the appellant on the strength of contract of insurance policy for enforcement of their all contractual rights available to them under the insurance policy for claiming compensation for the loss caused from the appellant and the complaint so filed by the respondent could not be dismissed as not maintainable on the ground of locus. It was thus rightly held asIn view of foregoing discussion, we are of the considered opinion that in any event, the complaint filed by the respondent (insured) was maintainable and that the respondent had the locus to file the complaint against the appellant. It was, in our view, saved by Section 17 of the Act and by the authorization letter dated 04.07.1997, issued by the consignee infavour.32) Both the Authorities, i.e., State forum and National forum (as the first appellate authority) were, therefore, justified in overruling the objection of the appellant and were justified in holding that the complaint filed by the respondent was maintainable and the respondent was legally competent to file such complaint.