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,
H.NO.10, Kaityanagar,
Habshiguda, Hyderabad-500 007 … Appellant
Versus
The New India Assurance
Co. Ltd.
2413, 206 & 207, II floor, Chennoy
Trade Centre,
BEFORE:
HON’BLE
MR. JUSTICE M.B. SHAH,
PRESIDENT
MRS.
RAJYALAKSHMI RAO, MEMBER
For the appellant : Mr.D.Bharat Kumar, Advocate
For the respondent : Mr. Kishore Rawat, Advocate
Dated
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
packages) reached
Therefore, admittedly, no shortage was
found at
On 4.5.1989, the Complainant while
taking delivery, asked for the open delivery from the carriers, i.e. the Indian
Airlines at
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.)
B.E., M.I.E.,
M.B.I.M.A.M.A.S.I.M.I.I.S.A., in his report dated
“CONCLUSION:
The whole
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.
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.
OTHER
FEATURES:
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
to
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)
DURATION
“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
5.1.2.1 for storage other than in the
ordinary course of transit or
5.1.2.2
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.
This
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
on
In the result, there is no substance in this appeal and is
dismissed. There shall be no order as to
costs.
Sd/-
…………………………….J.
(M.B.SHAH)
PRESIDENT
Sd/-
…….………………………...
(RAJYALAKSHMI RAO)
PRESIDENT