1. TWO separate complaints have been filed by two Partnership Firms against the same O.Ps. involving the same O.Ps. including the Shipping Agent, Shipper and the same importer. Since the issue involved is the same hence a common order was agreed to be passed in respect of both the complaints. Original Petition No. 45/1997
2. THE complainants, a partnership firm, are manufacturer and exporter of Indian Home -made woollen carpets tufted carpets and druggets. Since they were in regular business of exports, they had taken Marine Policy (Cargo) covering ''all risks, as per details in (ICC) -A Inland Transit Clause -War and SRCC Clauses, from ''Consignors warehouse to Consignees warehouse for Rs. 50 lakhs for the period from 29.4.1994 to 28.4.1995 (later enhanced to Rs. 1 crore) w.e.f. 22.2.1995 and further increased to Rs. 1.07 crores from 27.4.1995 and renewed for one more year for the period from 19.5.1995 to 18.5.1996 for Rs. 50 lakhs covering, the all risks'' anywhere in the world ''via Bombay -Delhi and Varanasi Dry port''. The complainant sent, in all, 20 shipments of which one was by Air and 19 shipments were sent by sea. The complainant received payment for 1 air shipment and 2 sea shipments. It is these remaining 17 shipments which is the subject matter of dispute in the instant complaint. It is the complainants case that these shipments were sent through their agent, Niranjan Shipping Agency Pvt. Ltd., Bombay who shipped it through Overseas Container Lines Inc. for which 17 Bills of Lading were issued and are on record which are dated between 15th March, 1995 to 29th June, 1995. Consignee in all but one Bills of Lading are ''unto order only; in one Bill of Lading, the consignee is shown to be - To order of Trust Company Bank Atlanta Georgia, U.S.A. Negotiable copy of the Bill of Lading was sent by the shipping agent to the complainants Bank, Punjab National Bank who forwarded the same to their foreign corresponding Bank ''Trust Company Bank'' Atlanta, Georgia, U.S.A. - now ''Sun Trust Bank, with instructions to present them against payment after endorsing the original bill of lading in favour of the importer and in the event of no body turning up, to wait and hold the documents for 90/120 days only as per rule. Not getting the payments and not knowing the fate of consignment, attempt was made to contact the Shipping Line, shipping agent but to no effect. It was only on 25th January, 1996 they came to know that original documents relating to these consignment were still with the Sun Trust Bank, U.S.A. This fact was informed to 1st O.P. on 2nd February, 1996 as also about the claim for loss of the goods. On getting the details of the OPs Surveyor and Claim Settling Agent in USA, a request was sent to the Surveyor in Atlanta for conducting enquiry and investigation relating to their claim. Even after personal contact and several letters when the 1 -3 OPs did not settle the claim, the complaint was filed before the Commission seeking US $ 6,14,796 comprising cost of goods (4,06.096 US $) increase in cost of goods in one year, compensation, business loss and expenses incurred plus interest @ 24% fixed at US $ 1,08,253 upto February, 1997 plus interest upto the date of payment. Original Petition No. 49 of 1997
The complaint has been filed by M/s. Ratan Chand Deep Chand, a registered partnership firm engaged in manufacture and export of Indian home -made woollen carpets, tufted carpets and druggets. For purposes of covering their risk, they had taken Marine Policy (Cargo) for Rs. 20 lakhs valid for the period from 4.5.1994 to 3.5.1995. ''Risk covered'' were ''All risks (ICC) war + SRCC from ''consignors warehouse to consignees warehouse. Policy was renewed for the period 23.5.1995 to 22.5.1996 for Rs. 10 lakhs only - all other terms being the same and covering the same risks. Between 23.8.1994 -4.7.1995 the complainant, in all, sent 55 shipments (52 through Sea and 3 by Air). The complainant received payments only for 3 Air and 13 Sea shipments. He has not received payments for 39 consignments. It is the claim in respect of these consignments which is subject matter of complaint in the instant case.
3. IT is the case of the complainant that they shipped all these consignments using one Niranjan Shipping Agency, Bombay as the Shipping Agents for Overseas Container Line Inc. Bill of Ladings issued with regard to each shipment shows consignee to be ''To order of '' and notifying party as Atlanta Rugs Inc. of Atlanta USA and the complainant. Negotiable copy of Bill of Ladings were sent to their Bankers - 24 to Punjab National Bank, Mirzapur and 15 to Bank of Baroda, Mirzapur. (Annexure 10 of the complaint) who had forwarded them to the foreign correspondence Bank - Sun Trust Bank, Atlanta, USA with instructions to present them against payment after endorsing the original Bill of Lading in favour of importer and in the event of no body turning up, to wait and hold the documents for 90/120 days only as per ICC 322 Rules. Neither the payment was received nor whereabouts of the consignment could be ascertained/confirmed even after repeatedly approaching the parties shipping agent/shipping line. Only on 25th June, 1996 could they know that original documents are still lying with the correspondent Bank in Atlanta, USA. On 2nd February, 1996, the complaint informed about the claim to the 1st OP. The Surveyor/claim settling agent in USA was informed as per terms of the policy who registered the claim on 16th February, 1996 who submitted the report to the 3rd OP without the complainants letting know about it. The claim has not been settled by the 1 -3 OPs in spite of repeated requests and personal meetings, hence the complaint was filed before this Commission, alleging deficiency in service on the part of 1 -3 OPs and claiming in all US $ 11,86,770.00 of which cost of consignment is US $ 8,87,973.00 plus 10% as its cost escalation in one year, 1 lakh US $ each as compensation and business loss and 10 thousand US $ for expenses and US $ 2,33,072.00 as interest upto 6.2.1997 plus interest thereafter. From now onwards the case treads the same path.
4. WRITTEN versions in both the complaints were filed by the OP Insurance Company in November, 1997 rebutting allegations of negligence stating that their investigation through their Surveyor/claim settling agent in Atlanta - USA MC LARENS TOPLIS/TOPLIS HARDING INC, North America, have revealed that all the shipments have been received by the ultimate buyer/Notifying party -Atlanta Rugs Ltd. Atlanta Georgia, USA, hence what it turns out to be, is a commercial dispute of non -payment by the buyer. This risk/peril is not covered by the terms of the policy. There has been no loss in respect of shipment. A letter of repudiation has already been issued on 4.3.1997 outlining the same grounds. It was also denied that there has been any delay in settling the claim. In our view, more than the written version, it is the letter of repudiation which reveals more. It states that as per the report of the Surveyor in USA, shipment has reached the ultimate buyer -Surveyors report also reveals that the Atlanta Rugs, the final buyer and the Shipping Line Overseas Container Line Inc. had the same address - Mr. Kumar Choudhry being the person who was President of both the organisations. The Surveyor had also written to the complainant stating that the buyer have played a fraud with the complainant who malciously was able to get the consignments released without retiring the documents and suggesting that the matter be taken up by the complainant with the buyer Atlanta Rugs and also suggesting to get more details from S.K. Verma of Niranjan Shipping Agency Pvt. Ltd. - the agent of the shipper. Since the peril of non -payment is not covered by the risks/perils as per the terms of the policies and as it only involved a question of non -payment of dues which is a dispute of commercial nature, hence the claim was repudiated as not being covered by the terms of the policy.
As can be seen from the record in both cases, OPs were Insurance Company through their offices the Mirzapur, Kanpur and Mumbai and the shipper, M/s. Overseas Container, Atlanta Georgia, USA. At the initial hearing of the parties the Commission on 10th November, 2000 directed the complainant to add the buyer Atlanta Rugs, USA, the shipping agent, M/s. Niranjan Shipping Agency Pvt. Ltd., Mumbai and both the Banks i.e. Punjab National Bank and Bank of Baroda - both at Mirzapur, as parties. An amended memo of parties was filed, by making all of them as parties (except Bank of Baroda in OP No. 45/1997 as they had no role to play in this OP). By our order dated 4th April, 2001, we recorded the statement of the Counsel for the complainants that the OPs, M/s. Atlanta Rugs, M/s. Overseas Containers Line Inc. and Sun Trust Bank formerly Trust Company Bank - all of Atlanta Georgia, USA are not available and it is not possible to serve them and requesting for deletion of their names from the array of parties. This was done. Written versions were filed by the Niranjan Shipping Agency (Pvt.) Ltd. and Punjab National Bank, Mirzapur in both the cases. In addition, written version was also filed by the Bank of Baroda in OP 49/1997
5. IT is the case of the OP 4, M/s. Niranjan Shipping Agency that no relief has been sought against them. There is no dispute about the Bill of Lading or the consignment leaving the shore of India through Overseas Container. This proves their bona fides and as per law their responsibility ends as soon as shipments have crossed Indian Territory. That it did, is proved by the Master Bill of Lading. Export Promotion copy released by the Indian Coustoms Authorities in respect of each shipment. This is not disputed by the complainants, making it amply clear that they discharged their duties as forwarding Agents.
6. IN its written version filed by the Punjab National Bank, it is stated by them that the complainants enjoyed credit facilities in the form of Packing Credit (Hypothecation) PC(H) limit of Rs. 45 lakhs and Foreign Outward Bill Purchase (FOBP) facility to the tune of Rs. 90 lakhs (in OP 45/1997) and PC (H) of 62.50 lakhs plus FOBP facility to the tune of Rs. 1.45 crores (In OP 49/1997). The complainants have committed defaults and their accounts have gone bad. Cases have been filed before the Debts Recovery Tribunal for recovery of Rs. 2,37,13,263/ - (In OP 45/1997) and for Rs. 3,57,58,422/ - (in OP No. 49/1997) where they are pending and is being contested by the complainants. It is not correct to say that the Banks forwarded the Negotiable copies of Bill of Lading. In fact, the Bank had purchased them under FOBP and this fact has been concealed by the complainants in the complaint. The Bank has insurable interest in the insurance claim in the instant cases as the Bank has already given credit to the complainant of the outstanding Bill amount of US $ 3,69,158.02 and US $ 6,39,914.38 in OP 45/1997 and OP 49/1997 respectively. As and when the complainants case is settled, the Bank shall have the first lien on these amounts with interest.
In its written version filed by the Bank of Baroda (In O.P. No. 49/1997) it is stated that for financing the exports the complainant had obtained a loan facility from the Bank as follows : Foreign Bills purchased : Limit Rs. 3 lakh. Subsequently increased to Rs. 40 lakhs Packing Limit : Rs. 6 lakhs - later on increased to Rs. 25 lakhs.
7. THE complainant availed of these facilities while exporting the shipments in question for which the complainant executed several security documents including DP Notes. Instrument of Pledges. All these have been concealed by the complainants while filing the complaint. Since the complainants account became irregular to the extent of Rs. 91,49,927/ - (Rs. 52,94,105/ - on account of principal and interest amount being Rs. 38,55,822/ -) a case for recovery was instituted before Debts Recovery Tribunal, Allahabad which was decreed against the complainant. This amount has not been paid as yet. By an arrangement between the parties, the insurance policies stand assigned to the Bank through letter of B.P. undertaking foreign bill executed between the parties on 22.1.1993. All these facts have been concealed by the complainant and prayed that any payments arising from the complaint should be directed to be routed through the Bank in order to adjust the same against the outstanding amount.
8. REJOINDER was filed by the complainants highlighting the point that it is only after filing of the complaint that the claim has been repudiated.
Amended complaint was also filed on 5.2.2000 incorporating the dealing with the Bank and the status of the Bank viz -a -viz. these claims and praying that these do not in any way change the scope of the complaint and on relief sought. Reference is also made to the letter received from Federal Maritime Commission, Washington, USA wherein they have stated that they have not been able to locate either Overseas Container Lines Inc. or Atlanta Rugs and suggesting to the complainants obtaining legal advice as Overseas Containers Line maintains a Bond of US $ 50,000/ - available to pay to any judgment that might be obtained against Overseas Container Line Inc.
9. ONE affidavit each was filed by the complainant and 1 -3 OPs. While the affidavit filed by the complainant is a detailed one in support of the complaint, the affidavit filed by the OPs is only to state that written version may be read as evidence in support of the written version.
10. IT is argued by the learned Counsel for the complainant that the basic facts of export of shipments have not been disputed. It is also not disputed that the shipments were covered against ''all risks'', the consignment left the shores of India, consignees were ''To order'' and the Bank did send the negotiable original copies of the Bill of Ladings to the correspondent Banks in Atlanta, which have come back as unretired. As delivery could have been taken only after obtaining the original Bills of Lading which were with the Sun Trust Bank and as these documents have come back, the consignment should be deemed to be lost which peril is covered by the terms of the policy read with Institute Cargo Clauses (ICC) (A) which states that ''this insurance covers all risks of loss or damage to the subject matter insured except as provided of Clauses 4, 5, 6 and 7 below''. The loss in the instant case does not fall under any ''exception'' clauses hence the 1 -3 OPs are liable to indemnify the complaints. In their report dated 4.3.1996, the Surveyors appointed by the Insurance Company states : ''Based on the information known to date it would appear that various shipments involved have been delivered to and/or picked up by your customer Atlanta Rugs Inc. with probable collusion from Overseas Containers Line In.'' But they also go on to say vide their report dated 27.6.1996 that : ''It would appear that all shipments were picked up by Atlanta Rugs Inc. who used fraudulent methods to obtain the shipments without payment through the Bank. We believe that the involvement of the Shipping Lines will be necessary to prevent further acts and to obtain more information on these stolen shipments.''
Any fraudulent means or otherwise on the part of the notifying party Atlanta Rugs Inc. does not legitimise transfer without documents which were with the Bank, which have not been retired and payment not received by the Complainants/Banks thus causing a ''loss'' to the complainant within the terms of the policy hence OP 1 -3 are obliged to indemnifying the complainants. For this, reliance was placed on Section 25(1) of Sale of Goods Act, 1930 which reads as under : Reservation of Right of Disposal ''Where there is a contract for the sale of specific goods or where goods are subsequently appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserves the right of disposal of the goods until certain conditions are fulfilled. In such a case, notwithstanding the delivery of the goods to a buyer, or to a carrier or other bailee for the purpose of transmission, to the buyer, the property in the goods does not pass to the buyer until the conditions imposed by the seller are fulfilled.''
11. THE case of the OP 1 -3 has no legs to stand on. Merely repudiating the claim on the uncertain, uncorroborated/unsubstantiated report of the Surveyor, does not help the OPs. There is no evidence on record to support their contention. They were given an opportunity, yet they failed to file an affidavit by way of evidence in support of their contention. As per Bill of Lading the consignors were the complainants, consignee ''to order'' which clearly infers that the lien over the consignment remained with the complainant. For which he relies upon ''Benjamin Sale of Goods, Second Edition Para 1668 wherein it is stated : ''the inference that the seller intended to reserve a right of disposal is of course even stronger where the Bill of Lading makes the goods deliverable to the order of the Seller or to the order of the Bank which has financed the transaction. The result of all this is although property theoretically passed on shipments, it will only do so in the rare cases in which the sellers intention to pass on at this point is clear.''
12. RELIANCE was also placed upon Halsburys Laws of England, 4th Edition, Volume 41, Paras 950 -954 wherein it is stated : Para 950 ''where goods are shipped and by the Bill of Lading, the goods are deliverable to the order of the Seller or his agent, prima facie, the seller is deemed to reserve the right of disposal. It is further stated in Para 954 where the seller draws a Bill of Exchange for the price upon the buyer and discounts it with a bank at the same time, endorsing the Bill of Lading to the Bank as security, the buyer is not entitled to the Bill of Lading and the property in the goods prima facie, does not pass to him until he has repudiated or tendered to the Bank, the amount due under the Bill of Exchange.'' Our attention was also drawn to the Insurance Manual dealing with Chapter on ''Sellers Interest Insurance'' wherein it is clarified that : ''For example the seller of the goods on FOB or other terms under which the title passes to the buyer at some point in transit, will have financial interest in the goods until the payment has been received. This kind of situation will arise when the terms of payment call for sight draft against documents or for acceptance at 30 -60 days sight.''
The claim has not been repudiated on proper grounds as the Surveyor appointed by the OPs 1 -3 at no stage suggested closure of the case. In fact the Surveyor informed the complainant that they have sent the report dated 27.6.1996 to the 3rd OP which has neither been brought on record nor shown to the complainants. Adverse inference needs to be drawn against the OPs. This is a clear case of deficiency on the part of the OPs 1 -3 who failed to settle the claim of the complainants in spite of clear position of facts and law that the shipment, covered under insurance policy taken from the OPs, were not delivered, proof of which are return of original documents including negotiable Bill of Lading by the correspondent Bank in USA to the Bankers of the complainant, thus proving the loss of consignment, which OPs 1 -3 are obliged to indemnify. Their failure to do so is a clear case of deficiency. In these circumstances the complaint be allowed with interest to date and costs.
13. ON the other hand, it is argued by the learned Counsel for the OPs 1 -3 that as stated in the written version that the dispute relates to the non -payment of the consignments and not on account of any loss or damage, hence outside the purview of the policy cover. Our attention was drawn to para 15 of the complaint - the complainants have not yet received payment for shipments......... thus making it clear that the dispute revolves around non -payment and not loss or damage. Section 3 of the Marine Insurance Act, 1963 reads as follows : ''A contract of marine insurance is an agreement whereby the insurer undertakes to indemnify the assured, in the manner and to the extent thereby agreed against marine losses, that is to say, the losses incidental to marine adventure.'' Insurable interest has also been defined in Section 7 of the said Act which reads as under : ''7. Insurable interest -(1) subject to the provisions of this Act, every person has an insurable interest who is interested in a marine adventure. (2) In particular a person is interested in a marine adventure where he stands in any legal or equitable relation to the adventure or to any insurable property at risk therein, in consequence or which he may be prejudiced by its loss, or by damage thereto, or by the detention thereof, or may incur liability in respect thereof.
14. THE report of the Surveyor that the goods have been delivered to the buyer read along with the above provision of the Marine Insurance Act makes it clear that there has been no loss occasioned by the Marine Peril. Deception on the complainant by the buyer or non -payment is not a marine peril making the OPs liable. The complainants have not produced the export contract which could have thrown light on the terms of the contract. Why is it that no action has been taken against the shipping company or its agent in India, especially when Surveyor asked the complainants to contact S.K. Verma of Niranjan Shipping Agency in Mumbai. It is quite possible that the consignors name might have been there on the Master Bill of Lading which was not in the possession of Sun Trust Bank nor was it shown to the Surveyors, which shows a collusion between the buyer and the complainant. This was an FOB contract and therefore, the risk passes from the seller to buyer when the goods are shipped. The learned Counsel at this stage goes on to pose certain questions : - Why did not the complainant admit that the goods have been delivered to the Atlanta Rug when they aware of this fact ? - Why the name of their custom agent in USA not given to the Surveyor in USA by the complainant ? - No Master Bill of Lading was ever shown to the Surveyors ?
The complainants have not been able to prove the loss or damage to the goods due to marine peril. Non -payment of price of goods is not a marine peril - hence not covered by the marine policy in question. The facts of the case are complicated which cannot be tried in summary jurisdiction hence be relegated to the Civil Court. The complaint needs to be dismissed with costs.
15. ON behalf of the OP -4, it is argued that they are only forwarding Agents. They received consignments for export from the complainants and handed it over for loading to Stemship Line for onward journey to Atlanta. All the documents were prepared, goods custom cleared and documents were sent to the respective parties. The responsibility of the forwarding agent comes to end as soon as the goods leave the territory of India on which there is no dispute. No relief has been sought against them hence they be discharged.
16. WE have gone through the material on record and heard the arguments and find that the undisputed facts are that complainants had a valid marine insurance (cargo) policy covering the risk from ''consignors warehouse to the consignees warehouse'', that the goods of the complainants were shipped out of the country using OP -4 as an agent using Overseas Container Lines as Shipper. There is no dispute that policy covered ''all risks except for those provided in the relevant columns of ICC (A). The case of the complainants is that they had a valid policy covering ''All Risks of Loss'' and since the goods never reached/were delivered at the destination, proof of which is non -retiring of the documents from the correspondence Bank - Sun Trust Bank, Georgia Atlanta, ''loss'' has occurred to the complainants for which they have not been indemnified which is deficiency in service on the part of the OPs 1 -2. Provisions of Sales of Goods Act, Section 25(1) and reading of Para 950 from IVth Edition of Halsburys Laws of England (both reproduced earlier) make it amply clear that property given in the Bill of Lading does not pass until the amount due is paid and documents retired with endorsement from the Bank to be presented to the warehouse for release of goods. Since the documents have been returned to the Bank in India, unretired and goods are nowhere in right, they are deemed to have been lost. As per Marine Cargo Insurance Manual of the OPs Company under ''Marine Cargo Claims'' (P -36) ''actual loss may occur in 3 ways when the matter is destroyed or when it is damaged as to cease to be a thing of kind insured. Actual total loss may also occur when the insurance is irretrievably deprived of the possession of the subject matter''. Para 152 IVth Edition, Vol. 25 of Halsbury Laws of England reads as under : ''152. Onus of Proof -The assured must in every case show that the loss comes within the terms of his policy; but where all risks are covered by the policy and not merely risks of a specified class or classes, he discharges the onus when he has proved that the loss was caused by some event covered by the general expression, and he is not bound to go further and prove the exact nature of the accident or casualty which, in fact, occasioned his loss. (emphasis supplied). Although in ordinary circumstances an insurer who wishes to rely upon an exception clause must prove that the loss is due to an excepted peril, it is permissible for the parties by contract to provide that the assured must prove that the loss is not covered by the exceptions.'' Para 712 of IVth Edition Vol. 41, Halsbury Laws of England reads as follows : ''712. Delivery to Buyer or Carrier : Unless a different intention appears where, in pursuance of the contract, the seller delivers the goods to the buyer, or to a carrier or other bailee, whether named by the buyer or not, for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract. If however, the seller retains control over the goods after delivery to the carrier, as by taking a bill of lading to his own order or by retaining the documents of title, that fact may show that he has reserved a right of disposal and that the appropriation is not unconditional. In such a case the property does not pass upon delivery to the carrier but only upon performance of the condition.'' (Emphasis supplied)
There is no dispute that Bill of Ladings were ''to order''. Thus keeping in view the position of law as enumerated above the property could not pass to the final buyer without performance of the condition that is - non -payment to the correspondent Bank in Georgia Atlanta. Since there is no evidence on record about the fate of the shipments except an unsubstantiated report of the Surveyor, and no payment is received by the seller, the shipments would be covered under the term ''Loss'' in the policy covering ''All risks of loss'' for which the OPs 1 -3 have to indemnify the complainants. ''Loss'' would mean depriving the owner in this case the seller of the benefit of sale of his goods. Non -receipt of payment and non -return of the goods, in general expression would in our view, means ''Loss'' as commonly understood. We also notice deficiency on the part of the OPs for taking nine months after the receipt of report of the Surveyor to repudiate the claim and that too after filing of this complaint and again not sharing the report of the Surveyor dated 27.6.1996 with the complainants.
17. THE case of the OPs is two -fold. One that this is a simple case of non -payment hence not covered by the perils mentioned in the policy. This is also the ground of repudiation issued by OPs on 4.3.1997 and secondly since the complaints were on FOB basis, the interest of the complainant comes to end once these goods are shipped.
18. THE first ground is based on the report of Surveyors, Toplis and Harding Inc. of 27.6.1990. This report has two salient features. One that one Mr. Kumar Choudhry was the President of Shipping line - Overseas Container as also the final buyer M/s. Atlanta Rugs. Second feature is that the Surveyor/Investigator met Mr. Choudhry who told him that he had received all the shipments, but, would not allow to inspect the storage facility. Mr. Choudhry was willing to speak but not to issue a signed statement. Surveyor also states that the Sun Trust Bank told the Surveyors that the shipments have not been paid for which confirmed our (Surveyors) earlier statement that probably Overseas Container Lines were using the steamship line, Master Bill of Lading to obtain and clear the shipments. M/s. Atlanta Rugs Inc. has since been dissolved. In conclusion they state that it would appear that all the shipments were picked up by Atlanta Rugs Inc. who used fraudulent methods for obtaining shipments without payment through the Bank. It is this report and host of correspondence between the Surveyors, complainants and the OPs which has been used as a ground to repudiate the claim. Onus of proof lies with the OPs to prove that the buyer did receive the consignment to make it a commercial dispute. It is well settled law that the onus of proof lies with the person who sets up the case. In the instant case it is OPs who have set up the case that the goods have been received by the buyer - they had to prove it. The report of the Surveyor is not supported by any affidavit nor is there any affidavit of the Surveyor nor for that matter of any one from the OP to this effect. We also see that report of the Surveyor - very key document relied upon by the OP itself is based on uncorroborated/unsubstantiated facts and suspicion etc. As per law of evidence little merit is attached to such documents. The least that could have been done by the OPs 1 -3 was to file an affidavit of the urveyor, in the absence of which, his report has little evidentiary value more so when Surveyors report is the foundation of the case of OPs 1 -3. In the absence of any proof we are unable to satisfy ourselves on this plea of the OPs 1 -3 that the shipments were received by the buyer, Atlanta Rugs. Another point made by OPs 1 -3 is that since the shipment was on FOB basis hence no interest of the seller survives after the goods are supplied. We see no merit in this contention either. In normal circumstances, in a maritime policy their contention could have been true but this is a marine cargo policy with a special condition covering the risk from the consignors warehouse to consignees warehouse. Special condition given on the policy are part of the contract. Similarly the OP 1 -3 wishes to escape from their liability by relying upon Section 3 of the Marine Insurance Act which has been reproduced earlier. It needs to be appreciated that it was not a simple marine policy covering the risk from port to port but covered the risk from warehouse to warehouse, hence the instant case as per terms of the policy - shall be covered by Section 4(1) of the Marine Insurance Act which reads as under : ''4. Mixed Sea and Land risk -(1) A contract of marine insurance may, by its express terms, or by usage of trade, be extended so as to protect the assured against losses on inland waters or on any land risk which may be incidental to any sea voyage.''
Some minor points have also been raised by the OPs 1 -3 at the argument stage. First point is as to why did the complainant not admit that the goods have been delivered when they were aware of this fact ? We must say that there is a limit to naivete. It is not the case of the complainant that goods were delivered to the buyer. First time it occurs is, in the report of the Surveyor which has not been seen to have any legs to stand on. Second point relates to non -revealing of the name of complainants Agent to the Surveyor. It is the shippers Agent who was to discharge the goods at this port of discharge. The Surveyor did get in touch with them but nowhere did they say that they handled the consignment or any such consignment come. The third point made by OPs relates to non -showing of Master Bill of Lading to the Surveyor at the Bank in Georgia. Bills of Ladings were with the Bank and returned unretired. It is this which would have been endorsed by the Bank for release of goods upon payment. How can this be held against the complainant. These documents were sent by the Bankers OPs 5 and 6 to their corresponding Bank in Atlanta Georgia. We see no merit in any of the points raised by the OPs 1 -3.
19. WE would also like to mention here that on the directions of this Commission, M/s. Atlanta Rugs and Overseas Container Lines Inc. and Sun Trust Bank were joined as parties and once it was stated on the Bar that it is not possible to serve them, hence their names were deleted from the array of the parties.
20. THUS in conclusion what we see is that in the light of above discussions, Marine Policy issued covered Inland Transit (Rail or Road) Clause A, ICC, War and Strike clauses. In the instant case, we are concerned with ICC (A). It is well settled law that policy is a contract between the parties and they have to abide by the terms of the policy. Institute Cargo Clauses ''A'' clearly cover ''All risks of loss......'' subject to exceptions given therein. OPs have clearly and completely failed to spell out anywhere as to under what ''exception of the clauses 4 -7 of I.C.C A, the case falls, in terms of the policy, so as to be excluded. On this count the OPs 1 -3 fails to discharge their onus to prove their case. In our view, the complainants have been able to substantiate their claims as per facts of the case, law on the subject and the terms of the policy whereas the case of the OPs fails both on facts and law on the subject. In these circumstances, the complaints are allowed.
It is settled position that the indemnity cannot exceed the liability beyond the terms of the policy. Policy Cover is as follow : OP No. 45/1997 Policy No. Amount Period 1. (a) 2142100008745 Rs. 50,00,000/ - 29.4.1994 to 28.4.1995 (b) Extra endorsement Rs. 50,00,000/ - Rs. 1.07 crores w.e.f. 22.2.1995 (c) Extra endorsement Rs. 7, 00,000/ - w.e.f. 27.4.1995 2. 2142110009032 Rs. 50,00,000/ - 19.5.1995 to 18.5.1996 OP No. 49/1997 Policy No. Amount Period 1. 2142110008749 Rs. 20,00,000/ - 4.5.1994 to 3.5.1995 2. 214211000038 Rs. 10,00,000/ - 23.5.1995 to 22.5.1996
21. IN O.P. 45/1997 12 consignments are reported to be sent under the Policy No. 2142100008745 valued at US $ 2,92,541.00. We see that the Bills of Lading are dated 15.3.1995 to 19.5.1995. We also see that this Policy expired on 27.4.1995 hence at least two shipments with Bill of Lading No. AB/84/26/01 and 0/2 dated 5.5.1995 were not covered by any Policy as on that day no policy cover existed. Bill of Lading issued on 19.5.1995 could be covered under the renewed policy taken by the complainant. Thus for the eight Bills of Lading issued between 15.3.1995 -27.4.1995 value of shipments come to US $ 2,10,935.00 and under the second/renewed policy, Bill of Ladings issued between 19.5.1995 -29.6.1995 are valued as US $ 1,56,376.00 (Annexure 11 of the complaint) - thus making in all US $ 3,67,311.00 and converted into Indian Rupees @ Rs. 36.15 (Conversion rate given in the complaint) the total in terms of rupees comes to Rs. 1,32,78,293/ - which becomes payable by the O.Ps. 1 -3 which we direct them to pay from the date of filing the complaint till the date of payment along with interest @ 12% p.a. to the 5th O.P., Punjab National Bank within period of eight weeks failing which interest shall be payable @ 18%. O.P. Bank shall adjust the amount against the outstanding due from the complainant and pay out to the complainants, if any balance amount is left after the adjustment.
22. IN O.P. No. 49/1997 the amount claimed for loss of 39 shipments is far in excess of the policy cover of Rs. 30 lakhs in all - vide the two policies. The O.Ps. 1 -3 are directed to indemnify the complainants to the policy cover of Rs. 30 lakhs along with interest @ 12% p.a. from the date of filing the complaint till the date of payment which must be paid within eight weeks of the order failing which interest rate shall go upto 18% p.a. the amount thus worked shall be divided equally and paid to the two Banks namely, Punjab National Bank, Mirzapur and Bank of Baroda, Mirzapur.
The complaint is allowed in above terms with cost of Rs. 10,000/ - to be payable to the complainants in each case by the O.Ps. 1 -3. Since no case is made out against O.P. 4, he is discharged. Complaints allowed.
