NATIONAL INSURANCE CO. LTD. versus SKY GEMS

Citation: [2002] 1 S.C.R. 118 · Decided: 09-01-2002 · Supreme Court of India · Bench: D.P. MOHAPATRA · Disposal: Disposed off

Judgment (excerpt)

A 
NATIONAL INSURANCE CO. LTD. 
v. 
SKY GEMS 
JANUARY 9,'2002 
B 
[D.P. MOHAPATRA AND K.G. BALAKRJSHNAN, JJ.) 
Insurance Claim 
Mode of payment-CIF contract-Consignor exported precious stones-
C Insurance cover procured-Insured value of consignments in terms of Pounds 
Sterling-But the premium paid in Indian currency-Consignment however, 
lost in transit-Claim filed against Insurance Company to pay in Pounds 
Sterling-National Commission allowed the claim-On appeal, held the title 
to the goods had not passed to the consignee as he could not produce any 
D document of title-Therefore, consignor is not entitled to receive payment in 
Pounds sterling. 
Respondent-consignor exported parcels of precious stones to the 
consignee in London. He obtained insurance policies from the appellant-
insurance company and the insured value of the consignments were in terms 
E of Pounds Sterling. Consignment did not reach the consignee and the 
investigators appointed confirmed that the consignment had either been lost 
or stolen. Respondent-consignor filed a claim against the appellant and insisted 
the payment in Pounds sterling. Appellants contended that as the title in the 
goods had not passed to the consignees, the respondent-consignor continued 
F to be the owner of the goods and, therefore, the payment could be effected 
only in Indian currency. National Commission held that as the insurance 
policies stated that the claim was payable in London and the insured value of 
the consignments were in terms of Pounds Sterling, the appellant was liable 
to pay to the respondent in Pounds Sterling. Hence the present cross appeals. 
G 
Respondent-consignor contended that as the claim was payable at 
H 
London, the payment should be made by the appellant only in Pounds Sterling. 
It also contended that the goods were sent on CIF contract and the moment 
the goods were consigned, the title would pass to the consignee. 
Disposing of the appeal, the Court 
118 
-"··. 
J. 
) 
NATIONAL INSURANCE CO. LTD. v. SKY GEMS [K.G. BALAKR!SHNAN, J] 
119 
HELD : I. The right of the buyer to claim policy amount would arise A 
when he obtained title to the property and he must produce the documents of 
transfer. In the instant case, the buyer-consignee was not in possession of 
any documents concerning the title of the goods as such could not produce 
them before the investigators. The letter written by the consignee clearly 
shows that they had not paid the value of the missing merchandise to the 
consignor and had suggested to the investigator that the claim may be settled B 
with the respondent-consignor in India. More so there is no evidence to show 
that the necessary documents were endorsed in favour of the consignee and 
that they were transferred to them. These facts show that the title to the goods 
in question had not passed to the consignee at London. The insurable interest 
over the goods continued to be with the respondent-consignor. Thus under C 
such circumstances, the respondent-consignor is not entitled to receive the 
payment in Pounds Sterling. (122-H; 123-A-B] 
2. The respondent-consignor has paid the insurance premium in Indian 
currency and continued to have title over the goods as it never passed to the 
consignee. Had the title passed to the consignee, and if they had preferFed D 
the claim, the insurance amount would have been payable in London in Pounds 
Sterling. ( 123-C) 
Comptoir d' Achat v. luis de Ridder; The Julia, (1949) A.C. 293 at 309, 
referred to. 
Schmitt off's Export Trade-The law and Practice of International Trade 
by Leo D' Arey. Carole Murray Barbara Cleave (10th Edn.), referred to. 
CIVIL APPELLATE JURJSDICTION : Civil Appeal No. 559 of 1994. 
E 
From the Judgment and Order dated 21.12.93 of the National CQnsumer F 
Disputes Redressal Commission, New Delhi in O.P. No. 248of1992. 
M.S. Nargolkar and D.M. Nargolkar for the Appellant. 
V.A. Mohanty and Praveen Swarup for the Respondent. 
G 
The Judgment of the Court was delivered by 
K.G. BALAKRISHNAN, J. Civil Appeal No. 559 of 1994 by National 
Insurance Co. Ltd. and Civil Appeal No. 633of1994 by Mis Sky Gems are 
filed against the judgment dated 21st December, 1993, passed by the National 
Consumer Disputes Redressal Commission (hereinafter referred to as 'National H 
120 
SUPREME COURT REPORTS 
[2002) I S.C.R. 
A Commission'). The respondent-Sky Gems exported two parcels of precious 
stones (Emerald) to London through the Foreign Post Office, New Delhi on 
10.

Excerpt shown. Read the full judgment & AI analysis in Lexace.