LexNEW INDIA ASSURANCE CO. LTD versus M/S HIRA LAL RAMESH CHAND & ORS.
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[2008] 9 S.C.R 1198 A NEW INDIA ASSURANCE CO. LTD. v MIS HIRA LAL RAMESH CHAND & ORS. (Civil Appeal No. 4306-4307 of 2003) B JUNE, 13, 2008 (8.N. AGRAWAL, P.P. NAOLEKAR AND R.V. RAVEENDRAN, JJ] MARINE INSURANCE Acr, 1963: c ss.3 and 4 - Marine insurance - Consignments "cov- ered against: All risks (ICC), war.and SRCC from consignor's warehouse to consignee's warehouse" - Consignors telephoni- cally informing insurer about non-realization of bills, and claim- ing value of consignments - Insurer repudiating claims - D Complaints of consignors by National Consumer Disputes Redressal Commission - Partly allowed - HELD: Failure of . ' buyer to make payment and take delivery is not a 'loss' of con- signment covered by Insurance Policy-Absence of averment or proof that consignments did not reach the destination or E the goods were not taken delivery by the consignee - No overment as to whether holders of the documents applied for or attempted to take delivery of consignments to store the same in a bonded warehouse or whether they were refused delivery - Complainants have failed to plead and make out a F case of loss of consignments during transit or within 60 days of the consignment being discharged from the ship - Conse- quently, claims of complainants against insurer are liable to be rejected - Order of National Commission set aside - Con- sumer Protection Act, 1986 - Deficiency in service - Conno- G tation of Marine Insurance - 'Loss' of consignment - Connota- tion of , The complainants-respondent no. 1 in both the ap- , H 1198 . I NEW INDIAASSURANCE CO. LTD. v MIS HIRA 1199 LAL RAMESH CHAND peals, who were engaged in the business of manufac- A ture and export of rugs and durries at Mirzapur, U.P., filed two separate complaints against the appellant-Insurer before the National Consumer Disputes Redressal Com- mission under the Consumer Protection Act, 1986. Their case was that they, in pursuance of the orders placed by s , a buyer at Atlanta in USA, namely, Atlanta Rugs Inc., dis- patched consignments of rugs and durries between 23.8.1994 and 4.7.1995. All the consignments were insured with the appellant insurer and were "covered under: All risks (1 CC), war and SRCC from consignor's warehouse c to consignee's warehouse", and were entrusted to the forwarding agent at Mumbai, namely, Overseas Container Line Inc. (OCL) which was a Non-Vessel Owning Com- mon Carrier (NVOCC) registered in USA; that the Bill of , Lading issued by 'OCL' in regard to each consignment 0 · showed the consignee as "unto order" and the buyer as the party to be notified; that the complainants had a for- eign Out Bill Purchase Account with their Bankers and, therefore, endorsed the Bill of Lading in favour of the said Bankers and the latter in turn endorsed the negotiable copy of the Bill of Lading in favour of its foreign corre- E spondent Bank (the collecting Bank). On 25.1.1996 the collecting Bank informed the Bankers of the complain- ants that the drawee did not make the payment nor did it obtain release of the documents of title; that thereafter the complainants made efforts to contact the buyer and F the forwarding agent 'OCL', but they could not be located. Ultimately, the complainants telephonically informed the Insurer on 2.2.1996 about the non-realization of the Bills and claimed value of the consignments. As the Insurer did not settle the claims, the complainants filed petitions G before the Commission on 25.2.1997, a'lleging that the \ conduct of the Insurer in not settling the claim amounted to deficiency in service. They claimed compensation from the Insurer in regard to the value of the consignments and other losses. H 1200 SUPREME COURT REPORTS [2008] 9 S.C.R. . .._ A The stand of Insurer was that the claims were not J maintainable as none of the consignments were lost or damaged in transit; that it had got the matter investigated through the surveyors and the investigation report dis- closed that the shipping agent OCL and the buyer were B headed by a common President, namely, 'KC' who had admitted to the surveyors that the consignments had all been received by the buyer. There was thus no loss of the consignments and, consequently, no deficiency in service. C The Commission held that the complainants had valid marine insurance cargo policies which gave insur- ance cover against all risks of loss; that even if the buyer had managed to receive the
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