1. THE relevant facts of the case are briefly summarised below.
2. A partnership firm by the name and style M/s. Overseas Trading Corporation entered into an import contract with M/s. A.B.J. International Limited, Hongkong for import of 199.125 Metric Tons of P.V.C. Resin of particular grade and specifications in November, 1989. The importer insured the above goods with Respondent Insurance Company for Rs. 24.50 lakh against all risks.
The complainant M/s. Uniplas India Limited purchased the aforesaid goods for Rs. 26,69,745.50 on "High Seas Basis" from the Importer. In consequence the title of the goods in the relevant bill of lading was transferred to the complainant. The shipping company had shipped these goods on nine bills of lading (No. 87 to 95 all dated 22.11.1989).
After arrival of the ship at the Bombay Port the cargo was unloaded on or about 15.1.1990. Out of the goods despatched on nine bills of lading goods in respect of 6 bills of lading (No. 90 to 95) could not be located at the time of unloading. Eventually after search goods of the bill of loading ( No. 95) were partly traced on 13.2.1990. In respect of this bill of lading 9 pallets could be delivered and there was a shortage of 5247 Kgs. of P.V.C. Resin of the requisite grade and specification.
3. THE goods in respect of bill of lading No. 95 referred to above were surveyed on 14.2.1990 by a Surveyor appointed by the Shipping Company and the same was confirmed by the Surveyor conducted by the Assistant Collector of Customs again on 14.2.1990 and also by the Surveyor appointed by the Respondent Insurance Company in his report dated 22.2.1990.
Further on the basis of a joint survey by the agent of the Shipping Company, the Port Trust and the Insurance Company (M/s. J.B. Boda & Co.) and the Customs arranged on the directions of the Port Trust sometimes after 12th October, 1990 and after taking the opinion of the Customs Test Laboratory of the samples of the material which were offered by the Port Trust as possibly pertaining to consignments against the concerned bill of ladings, the Port Trust issued short landing certificates of 18 pallets each in respect of five bills of lading (No. 90 to 94) and 9 pallets in respect of the sixth bill of lading (No. 95) already referred to above. While the investigations were going on, the complainant lodged a claim on 14.5.1990 for Rs. 14,28,619/- (Rs. 1,88,307/- in respect of bill of lading No. 95 plus Rs. 12,40,312/- in respect of bills of lading (No. 90 to 94). It had also filed a suit against the carriers i.e. the Shipping Company for the loss of cargo but limited to 10,800 dollars or Rs. 3,78,000/- only.
4. IT was explained by the complainant in his complaint and in its rejoinder affidavit that the claim against the Shipping Company was so limited because of the legal advice received by them. At the hearing, it was further explained that according to the Brussels Convention of 1992 on International Maritime Law and (The Indian) Carriage of Goods by Sea Act 1925 passed by Parliament to enforce that convention in India, the liability of a sea carrier is limited to 100 dollars per package or unit (pallet) Rule 5 of Act IV of the schedule to the Act of 1925 refers. This works out to 10,800 dollars in this case. On the advice of the respondent insurer, however, the complainant has taken action to amend his suit. The full value of the loss is Rs. 14,28,619.50 and has requested the respondent Insurance Company to pay for the expenses having to be incurred for amendment of the suit and the fee of the lawyers etc. The Respondent Insurance Company has however kept silent on this aspect in spite of repeated requests from the complainant. The complainant has also stressed that the ultimate beneficiary of this amendment, if he succeeds in his suit, will be the insurer.
The case came up for hearing before this Commission on 24.10.1991 when the Respondent Insurance Company was directed to take a final decision on the claim within six weeks. The Respondent Insurance Company has offered to pay the Insurance claim to the extent of Rs. 7,13,533.56 only making a deduction of Rs. 7,15,085.94 as per details given below : - Total amount of claim Rs. 14,28,619.50 Less :
a) For the alleged failure of the complainant to take delivery of the material offered by the Bombay Port Trust: Rs. 1,15,685.94/-
b) For the alleged fault of the complainant in filing suit against the Ocean Carrier for Rs. 3,78,000/ instead of Rs. 13,38,284.10 : Rs. 5,99,400.00/- Rs. 7,15,085.94 Rs. 7,13,533.56
During the hearing the counsel for the Respondent Insurance Company could not explain the justification for the deductions made from the insurance claim. It has been established finally by the short landing certificates issued by the Port Trust that no goods in respect of five bills of lading (No. 90 to 94) were delivered to the complainant. The alleged failure to take delivery of the material offered (which is the basis of deduction of Rs. 1,15,685.94 by the insurer) would not therefore arise. The complainant has explained that there was mistake in identification of goods offered for delivery by the Port Trust and this was eventually established when the Port Trust issued short landing certificates.The counsel for the respondent could not explain what was the fault on the part of the complainant in filing a suit limited to Rs. 3,78,000 -as per the law on the subject against the Shipping Companies. In any case as per the directions of the Respondent Insurance Company the complainant has eventually moved the Court for amendment of his suit for the full amount against the Shipping (Company. The Respondent Insurance Company has not chosen to justify the filing of the suit against the Shipping Company in excess of the ceiling on the legal liability of the Shipping Company unless it was the intention that if a suit for the full amount is filed, the case would became subjudice so far as the consumer forums are concerned and this Commission, in accordance with its earlier decisions, would forbear to undertake a parallel and concurrent adjudication.
5. FROM the facts cited above there is no doubt whatsoever that the deductions made by the Opposite Party from the total claim of the complainant against the Insurance Company are arbitrary and unjustified. In consequence there has also been inordinate delay in the settlement of the claim of the complainant. Considering the amount involved this must have cause serious financial embarrassment to the insured.
6. WE hold that the Respondent Insurance Company has reduced the amount payable under the insurance policy arbitrarily, unfairly and has not settled the claim with reasonable expedition and has thus been guilty of deficiency in service towards the insured. WE therefore, order that the Insurance Company shall pay to the complainant as under: -
1) A sum of Rs. 14,28,619.50 being the amount of the claim with interest thereon at the rate of 18 per cent per annum after the expiry of one month from 14.3.1990, the date on which the claim was filed with the Insurance Company, till the date the amount is paid on the insurance policy. 2) A sum of Rs. 44,800/- as expenses incurred by the complainant for amending the suit against the Shipping Company as per the directions of the Respondent Insurance Company, and 3) A sum of Rs. 3,400/- incurred by the complainant by way of survey fees to the Surveyors.
The Original Petition is allowed to the extent indicated above. The complainant shall be entitled to recover from the opposite party Rs. 5,000/- as costs of this petition. Original petition allowed.
