At, National Consumer Disputes Redressal Commission NCDRC
By, THE HONOURABLE MR. JUSTICE V.K. JAIN
By, PRESIDING MEMBER
For the Appellants: Kishore Rawat, L.K. Tyagi, Advocates. For the Respondents: Nemo.
This matter was heard in part on 5.3.2020. Today also no one is present for the complainant/respondent No.1. I have, therefore, heard the learned counsel for the appellant.
2. The complainant obtained a marine cargo/ inland policy from the appellant company for period from 07.03.1996 to 06.03.1997, which inter alia, covered loss of or damage to the subject matter insured except as provided in the exclusion clauses. The complainant sent three consignments of goods to 3 different buyers, through respondent No.2 Green Roadways on 20.11.1996. Punjab National Bank was the consignee in respect of all five consignments as is evident from a perusal of the Goods Receipts. The complainant had taken credit facility against the aforesaid Goods Receipt from its banker. The Goods Receipts were sent by the complainant to its bank which was to collect the price of the good from the purchasers, release the Goods Receipts to the purchasers on receipt of the sale price and thereafter the goods could be delivered by the carrier to the purchaser against the production of the Goods Receipts. The case of the complainant in nutshell is that the goods were released by the carrier to the purchasers without the purchasers having paid for the goods to its bank and without they having collected the Goods Receipts from the bank. An FIR was lodged by the complainant against the carrier as well as against the purchasers on 09.04.1997 and thereafter, the claim for reimbursement in terms of the insurance company was lodged with the appellant on 12.05.1997. The claim however, was rejected by the insurer vide letter dated 19.01.1998, which to the extent it is relevant reads as under:
“On the basis of enquires made, it was revealed that the said consignment had reached its destination and was delivered to the consignee. As such no physical damage &/or loss had occurred to the consignment. It may, also, be noted that our policy covers physical damage/ loss to goods sent. It does not cover any trade related disputes &/or losses of like nature between the Consigner and Consignee.”
3. Being aggrieved from the rejection the complainant approached the concerned State Commission by way of consumer complaint impleading the insurer as well as carrier as the opposite parties in the complaint.
4. The complaint was resisted by the insurer primarily on the ground on which the claim had repudiated, it was also stated by the insurer that the carrier had already admitted having delivered the goods to the consignee.
5. In its written version that the carrier alleged that the complainant had sent damaged and useless goods on noticing which the purchasers did not get the Goods Receipts released. Thereafter, the complainant pressurised them to give open delivery of the damage goods to the purchasers without release of the Good Receipts.
6. The State Commission vide impugned order dated 19.03.2008 directed the insurer as well as carrier to joint and severally pay amount of 11,18,966/- to the complainant towards the cost of goods along with interest on that amount @9% p.a. w.e.f. 21.10.1997 when the consumer complaint was instituted.
Being aggrieved from the order passed by the State Commission the insurer before this Commission by way of this appeal.
7. A perusal of the FIR lodged by the complainant at Police Station Feteh Nagar in District Udaipur on 09.04.1997 would show that he had expressly stated in the said FIR that the carrier had delivered goods worth Rs.11,18,966.83 ps. to the purchasers without surrendering the consignee copies of the Goods Receipts and had there by cheated the complainant. It is thus evident that this is not a case of loss of or damage of the goods. Neither the goods were damaged nor had they gone missing or stolen. This is not even a case of misdelivery of the goods. This is a case where the carrier delivered goods to the purchasers without insisting upon production to the Goods Receipts which the purchasers could have obtained from the bank/ complainant against payment of price of goods.
8. Whether the loss to the insurer in such a situation would be reimbursable by the insurer or not came up for consideration of the Hon'ble Supreme Court in ‘New India Assurance Co. Ltd. Vs. Hira Lal Ramesh Chand & Ors.’ [III (2008) CPJ 6 (SC)] dated 13.6.2008.
In Hira Lal Ramesh Chand & Ors. (supra), the Complainant had sent consignments of goods against Bills of Lading in which the name of the consignee was shown ‘unto order’ whereas the name of the purchaser Atlanta Rugs Inc. was shown as the party to be notified. The purchaser Ms. Atlanta Rugs Inc. did not make payment to the bank and did not obtain release of the documents which would have entitled it to obtain delivery of the goods from the shipping line. Since the complainant had taken an insurance policy from the appellant New India Insurance Co. Ltd. consumer complaints were filed by it, seeking reimbursement in terms of said policy. The complaints were resisted by the insurer on the ground that none of the consignment loss or damaged in transit since all the consignments had been received by the buyers. It was contended by the insurer that if the buyers having taken delivery of the consignee fails pay the value of the consignment such non-payment will not be a marine peril giving rise to a claim against the insurer under the Marine Insurance Policy. This Commission having allowed the consumer complaints, the insurer approached the Hon'ble Supreme Court by way of appeals. Allowing the appeals filed by the insurer the Hon'ble Supreme Court, inter alia, observed and held as under:
“31. We have considered the detailed submissions made by learned counsel. We have also considered the material that was placed before the Commission. We find on a careful consideration that the Commission has not addressed itself to the relevant issues. It is no doubt true that the complainants had booked the consignments showing the consignee as ‘unto order’ thereby indicating that the goods covered by the Bills of lading should be delivered only to the holder/endorsee of the Bills of Lading. There is also no doubt that the original documents were not cleared/retired by the buyer ‘Atlanta Rugs Inc.’ and that the original documents were ultimately returned by the foreign correspondent Bank to Punjab National Bank and they are lying with Punjab National Bank. There is also no doubt that the consignments were insured against all risks of loss and damage.
33. Failure of the buyer to make payment and take delivery is not a ‘loss’ of consignment which is covered by the Insurance Policy. The complainant should make out a case of actual ‘loss’ of the consignment covered by the contract of insurance or non-delivery of the consignment, that is refusal to meet a demand for delivery. The question is whether the complainants have proved such loss or non-delivery. The case of the complainant as put forth in the complaint and reiterated in the affidavit is that they have dispatched the consignment to Atlanta, that the consignments were insured against all risks; that the buyer did not retire the documents by making payment; that they do not know what happens to the consignments and that therefore the Insurer ought to have paid them the value of the consignment and failure to do so amounted to deficiency in service as contemplated under the Consumer Protection Act, 1986. We are afraid that these are not allegations or proof of loss or non-delivery sufficient to foist any liability on the insurer.”
9. It would thus be seen that when the goods are not loss or damaged but are wrongful delivered by the carrier to the purchaser without the purchaser having retired the documents by making payment to the banker of the consigner, this would not be a case of loss of or damage to the goods subject matter of the insurance policy the goods having been actually delivered though wrongfully to the purchaser. As noted earlier this is complainants’ own case that the goods were delivered by the carrier to the purchasers in connivance with them, meaning there by that goods had safely reached their destination and only thereafter, they were delivered to the purchasers without production of the Goods Receipts by them. This is also not the case of the complainant that either they or
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the banker had presented the Goods Receipt to the carrier and there upon the carrier had denied or refused to deliver the goods. Therefore, in view of the decision of the Hon'ble Supreme Court in Hira Lal Ramesh Chand & Ors. (supra), the loss the complainant in such circumstance will not be covered under the insurance cover taken by them. 10. For the reasons stated hereinabove, the impugned order cannot be sustained qua the appellant company and the same is hereby set aside. Consequently, the consumer complaint stands dismissed only qua the appellant. The order of the State Commission qua the Carrier which is respondent No.2 in this appeal, however, remains unaffected by this order. The statutory deposit as well as the amount which the appellant company deposited with this Commission in compliance of its interim order shall be released to the appellant alongwith interest which may have accrued on those amounts.