NATIONAL COMMISSION HAS REVISIONAL JURISDICTION, WHICH IS A LIMITED ONE

On the basis of the communication made by the appellant, the insurer appointed a surveyor who gave a report on 1st September, 1998, assessing the loss approximately at Rs.2 lacs in each case, thereby the amount in toto assessed by the surveyor was approximately Rs.43 lacs. Though the surveyor had assessed the loss and sent it to the insurance company, the insurer vide letter dated 20th September, 1999, repudiated the claim by stating thus:-

“Dear Sirs,

Re: Marine claim No.050202/21/26/7/18/97/ Policy No.050202/21/26/16/2101/97 On perusal of the records pertaining to the above claim, and subsequent investigation into the matter, we find that the above claim lodged by you does not fall under the purview of “TRANSIT LOSS”. As such, the claim is not tenable under the terms of the policy. In view of this, we are treating your above claim as “NO CLAIM”.”

As the claim was not accepted, the appellant knocked at the doors of the District Forum for grant of compensation, but the District Forum declined to accept the claim on three counts, namely, that there was non-joinder of necessary parties; that the allegation of theft was not proved; and that in a summary proceeding the factual dispute could not be decided.

Dissatisfied by the order passed by the District Forum, the appellant preferred twenty-one appeals before the Andhra Pradesh Consumer Disputes Redressal Commission (for short, ’the State Commission’). The State Commission after analysing the materials brought on record opined that the investigator could not be relied upon as the investigation had been completed after six months from the date of occurrence; that the report of the investigator could not be said to have been based on any material worthy of verification; that since it was the carrier who had undertaken to deliver the goods at Assam, it was they who are responsible to give reasons as to how, when and where the goods were transshipped and in what condition the goods were delivered; that the length and net weight of AAAC wire was mentioned on each drum and also dispatch documents and the respondent No.2, that is, the carrier company had issued Exhibit A-3 (lorry receipts) wherein cross reference to the invoice and delivery challan numbers were given which clearly established the fact that the complainant had dispatched as per the said Exhibit; that since the persons present at the site at the relevant point of time i.e. unloading, were the drivers, there was no reason to disbelieve their endorsements, specifically when the documents, viz., Exhibits A-25 and 27 confirm the shortage on 25.04.1998 in 109 drums; that the finding of the District Forum that the complaint was not maintainable due to non-joinder of necessary party, that is, PGCIL, was not correct and the complaint could not have been dismissed on that score; that the report of the surveyor, that is, Exhibit A-12 was based on physical verification of the consignment of AAAC wire and hence, the repudiation of claim by the insurer was unjustified; and that there was no inordinate delay in intimating the claim to the insurance company. Being of this view, the State Commission allowed the appeals preferred by the appellant and determined the compensation approximately at Rs.43 lacs in all the appeals. Be it noted, the State Commission while determining the quantum, made the insurer and the carrier jointly and severely liable.

The judgment and order passed by the State Commission compelled the insurer and the carrier to file independent revisions before the National Consumer Disputes Redressal Commission, New Delhi (for short, ’the National Commission). The revisions preferred by the carrier stood dismissed and the same have not been challenged and, therefore, the view expressed in the case of the carrier has attained finality.

As far as the insurer is concerned, it preferred twenty- one revisions, out of which four were dismissed by the National Commission vide judgment and order dated 6th March, 2009, on the foundation that as they dealt with the transactions pertaining to “open delivery”. We are not concerned with those four revisions. As far as the seventeen revision are concerned, the National Commission allowed them on the ground that the intimation by the complainant to the insurer was not made within seven days of arrival of the vehicles at the destination mentioned in the policy. The reasoning of the National Commission is to the following effect:-

“In this regard, the dates of delivery are important to us. As per material brought on record, the first intimation of the claim or loss was reported to the petitioner insurer only on 27.3.1998 and confirmed by letter dated 3.4.98. There is no dispute that the arrival dates of the different consignments in question start from 1.3.98 onwards till 11.4.98. In the above circumstances and keeping in view the terms of the Policy, condition 5 of Inland Transit Clause, we are of the view that there was no Policy Cover in existence and the risk stood not covered after delivery of goods to the consignee. We further note that, even on practical side, not reporting the loss in time deprived the Insurer to have a first a first hand appreciation/assessment of the extent of loss, more so when, as per statement on record, against number of consignments/ delivery notes it is clearly noted ’seal tempered’.

There can be no dispute that Insurance is a contract of utmost good faith. Failing to report the loss, noted at the time of receipt/ delivery is a decisive and a determinate factor against the complainant. We also note with some dismay, and wonder as to why PGCIL was not made a party as it was at their warehouse in Assam that shortage/loss is alleged to have been notice. It is stated by the Ld. Counsel of the Petitioner that an effort was made before the State Commission praying for making PGCIL a party but it was declined. The whole episode leaves us with a single thought that complainant did not care for the terms of the contract and went on to compound the wrongs.

In retrospect one could only observe that at least in cases/consignment where material was found tempered, matter should have been reported to the underwriters immediately and delivery should not have been made by the complainant to the consignee till the loss had been assessed by the surveyor after perhaps asking for an open-delivery. This could have been the case of the consignee also – not making him a party should be held against the complainant.

In the aforementioned circumstances, we are of the view that there was no coverage of risk at the time of reporting the loss to the petitioner/insurer, hence the complainant is not entitled to any relief in terms of condition(s) of Policy as also law and other material on the subject discussed earlier and also the law laid down by this Commission in the cited judgment (supra).”

The National Commission thus allowed the revision petitions and set aside the orders passed by the State Commission. Against the order of the National Commission special leave petition was filed. The Supreme Court allowed the appeals, the judgement and order passed by the National Commission in the batch of appeals was set aside.

The operative part of the judgment reads as under:-

The letter of repudiation dated 20th September, 1999, which we have reproduced hereinbefore, interestingly, does not whisper a single word with regard to delay or, in fact, does not refer at all to the duration clause. What has been stated in the letter of repudiation is that the claim lodged by the complainant does not fall under the purview of transit-loss because of the subsequent investigation report. It is evincible, the insurer had taken cognizance of the communication made by the appellant and nominated a surveyor to verify the loss. Once the said exercise has been undertaken, we are disposed to think that the insurer could not have been allowed to take a stand that the claim is hit by the clause pertaining to duration. In the absence of any mention in the letter of repudiation and also from the conduct of the insurer in appointing a surveyor, it can safely be concluded that the insurer had waived the right which was in its favour under the duration clause.

In the instant case, the insurer was in custody of the policy. It had prescribed the clause relating to duration. It was very much aware about the stipulation made in clause 5(3) to 5(5), but despite the stipulations therein, it appointed a surveyor. Additionally, as has been stated earlier, in the letter of repudiation, it only stated that the claim lodged by the insured was not falling under the purview of transit loss. Thus, by positive action, the insurer has waived its right to advance the plea that the claim was not entertainable because conditions enumerated in duration clause were not satisfied.

The findings recorded by the State Commission are absolutely justified and tenable in law being based on materials brought on record in such a situation we do not think it appropriate that an exercise of remit should be carried out asking the National Commission to have a further look at it. In any case, the exercise of revisional jurisdiction by the National Commission is a limited one. We may hasten to add that to satisfy ourselves, we have perused the surveyor’s report and scrutinized the judgment and order passed by the State Commission in this regard and we are completely satisfied that the determination made by it is absolutely impeccable.

Authorities relied upon : 2000 (52) DRJ (DB), AIR 1957 SC 425.

Reference : Supreme Court. M/s. Galada Power and Telecommunication Ltd. v. United India Insurance Co. Ltd. and Another Etc., Civil Appeal Nos. 8884-8900 of 2010 [From the Judgment and Order dated 06.01.2009 of the National Consumer Disputes Redressal Commission, New Delhi in Revision Petition Nos. 2774-2790 of 2006].