NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
(From the order dated 14.3.2001 in Complaint No. 74 of 1991 of the State Commission, Andhra Pradesh)
M/s. Key Floppy, a partnership firm.
Rep:Sri B.N. Trehan,
Habshiguda, Hyderabad-500 007 … Appellant
The New India Assurance Co. Ltd.
2413, 206 & 207, II floor, Chennoy
HON’BLE MR. JUSTICE M.B. SHAH,
MRS. RAJYALAKSHMI RAO, MEMBER
For the appellant : Mr.D.Bharat Kumar, Advocate
For the respondent : Mr. Kishore Rawat, Advocate
O R D E R
M.B.SHAH, J. PRESIDENT:
This appeal is filed against the Judgment and Order dated
Admittedly, the relevant facts for deciding the dispute are as under:
.25.10.1988- Issuance of open insurance policy with marine extra endorsement for the period 19.10.1988 to 18.10.1989.
.7.4.1989 A consignment of computer components was received under Invoice dated 7.4.1989, from Tiwan.
.12.4.1989 consignment was received by the Air India and the same was forwarded to Cargo complex vide Challan dated 15.4.1989.
.17.4.1989 The Insurance Company issued a Marine Cetificate-cum-Bill for this consignment.
.28.4.1989. The consignment was sent to
.4.5.1989 The goods were delivered, when shortage was found in cartoon No.21.
.5.5.1989 The Insurance Company was informed of the fact on telephone followed by letter.
8th and 9.5.1989 The Surveyor was nominated and had had conducted the survey.
26.6.1989 The report of the Surveyor. According to him, the
consignment was intact at
.27.6.1989. On the basis of the Surveyor’s report a regular claim was filed before the Insurance Company.
Thereafter, it is the say of the Complainant that he wrote a number of letters to the Insurance Company, but there was no response. Hence, legal notice dated 18.7.1990 was issued claiming Rs.1,74,938/- with interest at the rate of 18% p.a. from 4.5.1989 till the date of its payment.
Subsequently, the complaint before the
State Commission was filed
in the year 1991. The State Commission dismissed the complaint on
At the time of hearing of this appeal, learned Counsel for the Appellant submitted that the policy (Cargo AIR) and the Certificate-cum-Bill stipulates that “all risks” are covered under the insurance policy. Similarly, Clause (1) of the Institute Cargo Clause under heading “Risk covers” confirms the above as under:
“This Insurance covers All Risks of loss or damage to the subject matter insured”.
It is contended that the loss includes pilferage which is wide spread in case of electronic components. Such components are very small in size and have a good high value. Secondly, reliance is placed on the opinion of the Surveyor which, inter alia, states as under:
“As results of my above finding besides detailed study of the relevant documents, I confirm the short receipt of various items mentioned above and also state that the relevant cartons had adequate suitable place to hold the missing items.
In this regard, I would conclude
that the shortage noted above as per my opinion should have occurred during
repacking of the cartons immediately after customs check before handing over to
Indian Airlines for further transit to
This may be seen by the actual
weight of the total consignment as entered in Indian Airlines consignment note
which is 307 kgs, inclusive of additional Hessian
packing provided for 3 cartons as against 307 kgs. (The same weight) mentioned
in the air consignment note of Air
In this case, it is not disputed that
the consignment of computer components consisting of 23 packets meant for the
Complainant, were booked from Tiwan to Bombay by Air
France vide Airway Bill dated 8.4.1989 and on clearance from the customs at
Bombay, the same was booked from Bombay to Hyderabad through Indian Airlines on
28.4.1989 by the Clearing Agent of the Complainant, namely, M/s. Om clearing Agency. The Clearing Agents of the Appellant by
letter dated 23.5.1989 confirmed that packages were intact when they (the
Therefore, admittedly, no shortage was
On 4.5.1989, the Complainant while
taking delivery, asked for the open delivery from the carriers, i.e. the Indian
On 5.5.1989, when the packets were unpacked and opened at the warehouse of the Complainant, it was noticed that there were some blank containers and the Insurance Company was informed on 5.5.1989, after the packets were already opened by the Appellant. The Insurance Company appointed one Mr.K.A.Narasimhacharylu, Surveyor, who had submitted his report on 26.6.1989. The Complainant filed a formal claim 27.6.1989. Keeping in view the facts that the packages were received by the Complainant in intact condition from the Indian Airlines and the Company was informed after the packages were opened, the matter was also referred for detailed investigation.
Thereafter, an Investigator was appointed, who submitted his report dated 3.11.1989 and raised doubts about the genuineness of the claim. In his report dated 21.12.1989 he had referred to the other two claims reported by the insured under similar circumstances and exactly same modus operandi. The survey reports of the other two claims would reveal the similarity of facts as in the present case.
The Investigator, Commander P.M. Mohan Rao (Retd.)
M.B.I.M.A.M.A.S.I.M.I.I.S.A., in his report dated
lot of inferences and conclusions referred to above were drawn on the premises
that 307 kgs. was the gross
weight. The same has been reflected in various
communications from AIR
In fact on the master Air Way Bill No. TRE-8815186 dt.8.4.89 issued by Regency Express Co. Ltd. Taiwan there were two corrections which were duly stamped as indicated below:
(a) Gross weight 307 is struck off and an arrow stamped.
(b) Flight No.KL 882 of 8.4.89 has been corrected by a similar arrow. (The actual flight was AF 179 of 12.4.89 and the correct gross eight was obviously what was reflected in the packing slip i.e. 303.4 and not 307 which was scored off.
FROM THE FOREGOING, ONE COULD LOGICALLY CONCLUDE THAT THE LOSSES, IF ANY, HAD OCCURRED AFTER COMPLETION OF THE VOYAGE OF THE CONSIGNMENT IN THE PREMISES OF THE INISURED EXCEPT FOR
A “chip” found short at
b. Plastic part costing Rs.8 confirmed by the surveyor in carton No.16.
There is no plausible explanation by the insured for the convenient casting away of all the caution in opening the cartons. The insured himself claims to have opened them without any independent witness; and by a very strage coincidence that all the shortages listed have only been found in the package open by the insured; it leads one to the inevitable conclusion that the report of the insured cannot be relied upon.
It is also pertinent to record that presently the cargo complexes of Airports are under tight security surveillance and it is almost impossible to pilfer item by carefully opening and closing the packages. That much time would not be available for any person to indulge in such surreptitious activity.
The investigator also recommended that:
“a. Since the voyage of the consignment is complete when it had reached its destination at Hyderabad i.e. premises of M/s. Kay Floppy, the underwriters do not see to have any liability whatsoever for the losses reported by the insured on his own.
b. There is convincing reason advanced by the insured at any stage why he did not obtain the services of a surveyor before opening any carton. Though he is said to have insisted on open delivery with IAC. The underwriters may consider as a special case to reimburse Rs.8/- towards the cost of shortages confirmed by the surveyor and the fees paid to the surveyor to the insured as a special case. A definite consent be obtained from the insured to preclude him to seek other avenues – since Rs.6/- liability is being admitted by the underwriters.
c. It is strange that the liability is being attempted to be passed on to the underwriters for a patently indiscrete and inconscionable act of the insured after completion of the voyage of the consignment.
d. The insured may be informed that the claim is not payable under the terms and conditions of the policy”.
On the basis of the aforesaid report, the learned Counsel for the Insurance Company submitted that the repudiation of the claim was justified because the Complainant received the consignment from the Indian Airlines by making an endorsement to the effect that “packets intact”. At the time of receiving of the delivery from the Indian Airlines, no open delivery was given. It is to be stated that the Indian Airlines by letter dated 4th May, 1989 informed the Complainant that 23 parcels weighing 307 kgs were received in good and satisfactory condition, and at the time of delivery, it was confirmed that Complainant had made an endorsement “packets in tact” on the documents. Hence, there was no question of effecting the open delivery.
Further, it would be difficult to
accept that some articles would be picked up for pilferage and thereafter a carton would be repacked on this aspect. On
this aspect the State Commission has discussed that out of more than 40,000
items consigned in 23 cartoons nearly 75% of the consignment was concentrated
in cartoon No.21 which consists of 47 items. From the said cartoon the alleged
pilferage items account for 85% in value and 17% in number. Therefore, it was
impossible to pilfer those items in such a selective process except by the
persons who were in possession of the copy of the invoice which displayed the
value and the description of those articles. Those documents were in possession
of the insured or its clearing agent. The State
Commission, therefore, held that there was no proof that any pilferage or
damage occurred during the transit either from Tiwan
The State Commission has also referred
to other evidence, Exhibit A-15, i.e. the letter written by the Clearing Agency,
that 3 packages bearing Nos. 21, 22 and 23 of the consignment contained a
number of different packets sometimes very small components in hundreds. The
packages themselves had wear and tear though intact during their shipment to
In any case, if the Complainant was having any doubt with regard to pilferage, before opening the cartoons, he ought to have informed the Insurance Company. This is required to be stated because, at the time of taking delivery from the Indian Airlines, it is his say that he had requested for open delivery which was not granted by the Indian Airlines on the ground that he had received the consignment in good and satisfactory condition.
Further, as per the Institute Cargo Clauses (AIR), the duration of the insurance cover is as under:
(Page 49, Volume-I)
“5.1 The insurance attaches from the time the goods leave the warehouse or place of storage at the place named herein for the commencement of the transit, continues during the ordinary course of transit and terminates either.
5.1.1 On delivery to the consignee’s or other final warehouse or place of storage at the destination named herein.
5.1.2 on delivery of any other warehouse or place of storage, whether prior to or at the destination named herein, which the assured elect to use either
22.214.171.124 for storage other than in the ordinary course of transit or
126.96.36.199 for allocation or distribution,
.5.1.3. on the expiry of 30 days after completion of discharge overside of the goods hereby insured from the overesea vessel at the final port of discharge,
whichever shall first occur.
clause specifically provides that insurance coverage continues during the
ordinary course of transit and terminates on delivery to the consignees or other final warehouse or destination. Admittedly, the consignee has taken delivery
In the result, there is no substance in this appeal and is dismissed. There shall be no order as to costs.