(1)
UNITED INDIA INSURANCE CO. LTD. ..... Vs.
LEISURE WEAR EXPORTS LTD. .....Respondent
Sections, Acts, Rules, and Article Mentioned:
Section 12, Section 23: Consumer Protection Act, 1986
Section 17, Section 52: Marine Insurance Act, 1963
Article 21: Constitution of India
Subject:
Insurance – Open Marine Policy (Cargo) – Short delivery of cartons – Compensation under Consumer Protection Act, 1986.
Headnotes:
Facts:
United India Insurance Co. Ltd. (Appellant) vs. Leisure Wear Exports Ltd. (Respondent).
Complaint filed under Consumer Protection Act regarding a loss covered by an Open Marine Policy (Cargo).
Appellant argued that the complaint was not maintainable due to the assignment of the policy in favor of the consignee.
Issues:
Whether the complaint under the Consumer Protection Act against the appellant was maintainable?
Did the respondent have the locus to file the complaint on the strength of the insurance policy after assignment to the consignee?
Held:
Examined Sections 17 and 52 of the Marine Insurance Act. Held that Section 17 allows the insured to retain rights even after assignment unless there is an express agreement. The insured is legally entitled to file a complaint.( Para 19-26)
Authorization letter dated 04.07.1997 from the consignee in respondent's favor further justified the locus to file a complaint for compensation.( Para 28)
The complaint was held maintainable, saved by Section 17 of the Act and the authorization letter dated 04.07.1997.( Para 32)
Section 79 of the Act on sabrogation did not apply; Sections 17 and 52 governed the case.( Para 34)
The court found no merit in the appeals and dismissed them.( Para 35)
Referred Cases in the Judgment:
Decided on : 29-06-2016
Consumer Protection Act, 1986 - Section 12
Marina Insurance Act, 1963 - Section 17, Section 52
Consumer Protection Act, 1986—Section 23—Marine Insurance Act, 1963—Sections 17 and 52—Insurance—Open Marine Policy (Cargo)—Short delivery of cartons—Compensation of ` 19,90,000/- alongwith 12% interest awarded by State Commission—Respondent was legally entitled and had locus to file complaint against appellant on strength of contract of insurance policy for enforcement of all contractual rights available to them under insurance policy for claiming compensation—Complaint so filed by respondent could not be dismissed as not maintainable on ground of locus—It was rightly held as maintainable—Appeals dismissed.
Counsel for Appearing Parties
B.K. Satija, Advocate, for the Appellant; Ms. Iti Sharma, Puneet Sharma, Rajesh Bhatia, Ashwani Kumar, Advocates, for the Respondent
Cases Referred
New India Assurance Co. Ltd. Vs. G.N. Sainani, (1997) 6 SCC 383.
Oberai Forwarding Agency Vs. New India Assurance Co. Ltd., (2000(2) SCC 407).
JUDGMENT
Abhay Manohar Sapre, J. - These appeals are filed by the United India Insurance Company Ltd. against the common final judgment dated 05.07.2004 of the National Consumer Disputes Redressal Commission, New Delhi in First Appeal Nos. 30-33 of 2000 by which the National Consumer Disputes Redressal Commission dismissed their appeals and upheld the order of the State Consumer Commission.
2. These appeals involve a short point. However, to appreciate the point, few facts need mention infra.
3. The appellant - United India Insurance Company Ltd. is the non- applicant whereas the respondent - Leisure Wear Exports Ltd. is the complainant in the complaint filed before the State Consumer Commission, Punjab out of which these appeals arise.
4. The respondent/complainant is engaged in the business of sale of various kinds of hosiery goods and ready-made garments at Ludhiana. They also import and export the goods in which they trade. On 13.06.1996, the respondent obtained from the appellant one Open Marine Policy (Cargo) bearing No. 201002-21-99-042-96. The respondent also paid necessary premium. The policy covered the risk of all kinds of hosiery goods and ready-made garments kept in wooden and cardboard cases sent from any part of India to any friendly country in the world. The policy covered the risk under Institute Cargo Clause `A', Inland Transit Clause `A' and risk of war, SRCC, Riots, Strike valid for "Warehouse to warehouse at final destination". The insurance covered the risk of the insured goods to the extent of Rs. 2 crores. It was subject to terms and conditions as were mutually agreed upon. The policy was for the period from 13.06.1996 to 12.06.1997.
5. The respondent received one order from one party-M/s Magna Overseas, Moscow for supply of hosiery goods and ready-made garments to them at Moscow. The respondent accordingly dispatched 320 cardboard cartons in two separate consignments - one was under cover note No. LDRO/26948 dated 20.06.1996 worth Rs. 49,63,200/- and another was under cover note No. LDRO/28051 dated 28.06.1996 worth Rs. 31,68,000/. The respondent duly notified these transactions to the appellant(insurer). The export was to be made from Ex. Ludhiana to Moscow.
6. The consignments reached Mumbai Port and from there, it was loaded in the ship for its final destination-Moscow. The consignments landed at port Odessa in Ukraine and from there, the consignment was moved by road to Moscow. When the delivery was taken at Moscow, it was found short of 142 and 139 cartons respectively.
7. The matter was then reported to the Insurance Company who, in turn, appointed M/s Ingostarkh Insurance Company Ltd., Moscow as the surveyors to investigate into the matter and assess the loss. The surveyors confirmed the short delivery of the cartons. In terms of policy, the claim for the loss sustained by the consignee was lodged with M/s Ingostrakh Insurance Company in the first instance. They did not settle it and hence the consignee authorized the respondent to file the claim against the appellant for recovery of the loss sustained by them due to loss of their goods.
8. The respondent then filed two separate complaint petitions under the Consumer Protection Act before the State Consumer Commission, Punjab against the appellant (Insurance Company) on the strength of the policy issued by the appellant in their favour claiming compensation for the loss of their goods while in transit and which were duly insured by the respondent under the policy dated 13.06.1996. In substance, the case of the respondent in their complaint was that since the goods, which were lost, were admittedly got insured by the respondent with the appellant and, therefore, the respondent are entitled to claim compensation for the loss sustained by them from the appellant on the strength of the policy which covered such loss. It was alleged that the policy was admittedly in force when the loss occurred and hence the appellant cannot deny their liability to compensate the respondent for the loss caused to the goods of the respondent.
9. The appellant filed their written statement and admitted the factum of issuance of policy in respondent's favour so also the factum of the loss of goods sustained by the respondent while the goods were in transit. Their main objection was that the respondent had no right to file the complaint and claim compensation from the appellant on the strength of policy in question. It was alleged that since the respondent had already assigned the policy in question in favour of their consignee, i.e., M/s Magna Overseas to whom the goods were sent by them and, therefore, it was for the consignee/assignee to file the complaint for realization of the loss amount from the appellant (insurer) on the strength of the assignment of the policy. It was, therefore, alleged that once the respondent made the assignment of the policy in favour of the consignee then in such event, they lost all their rights and interest in the policy qua the insurer and hence had no locus to file the complaint against the appellant. The complaint was, therefore, liable to be dismissed on this ground alone. Parties filed their evidence.
10. The State Consumer forum vide order dated 31.12.1999 allowed both the complaints and awarded Rs. 19,90,000/- in all to the complainant/respondent by way of compensation in each complaint. The compensation awarded to the respondent comprises of the reported value of the loss of the goods, 10% towards moral loss, 15% towards loss of earning and interest at the rate of 12% payable from 07.11.1996 till realization.
11. Felt aggrieved, the appellant filed the appeals before the National Consumer Disputes Redressal Commission, New Delhi out of which this appeal arises.
12. By impugned order, the National Consumer Disputes Redressal Commission dismissed the appeals and upheld the order of the State Consumer Commission.
13. Felt aggrieved, the Insurance Company has filed these appeals by way of special leave before this Court.
14. Heard Mr. Vishnu Mehra, learned counsel for the appellant and Mr. Ashwani Kumar, learned counsel for the respondent.
15. Learned counsel for the appellant reiterated the submissions here, which they had urged before the two forums unsuccessfully. The submission was that both the forums erred in entertaining the complaint filed by the respondent, which deserved dismissal at the threshold.
16. According to learned counsel, since the respondent assigned the policy in question in favour of consignee (M/S Magna Overseas), they (respondent) ceased to have any subsisting interest in the policy, which they could enforce against the appellant. Learned counsel urged that in these circumstances, a right to file the complaint on the strength of policy and to seek its enforcement against the appellant was with the consignee and not with the respondent. It was, therefore, urged that the respondent had no locus to file the complaint against the appellant and seek enforcement of the terms of the policy for realization of any claim arising out of the policy.
17. In reply, learned counsel for the respondent supported the reasoning and the conclusion arrived at by the National Consumer Redressal Commission and contended that it does not call for any interference and deserves to be upheld.
18. Having heard the learned counsel for the parties and on perusal of the record of the case, we find no merit in the appeal.
19. The short question which arises for consideration in this appeal is whether the complaint petition filed by the respondent under the Consumer Protection Act against the appellant (Insurer) was maintainable or not or in other words whether the respondent had the locus to file the complaint on the strength of contract of Insurance Policy in question for claiming compensation for the loss sustained in the transaction?
20. Sections 17 and 52 of the Marine Insurance Act, 1963 (hereinafter referred to as "the Act") are relevant for deciding the above said question. They read as under :
"Section 17. Assignment of interest.-Where the assured assigns or otherwise parts with his interest in the subject-matter insured, he does not thereby transfer to the assignee his rights under the contract of insurance, unless there be an express or implied agreement with the assignee to that effect.
But the provisions of this section do not affect transmission of interest by operation of law.
"Section 52. When and how policy is assignable.-
(1) A marine policy may be transferred by assignment unless it contains terms expressly prohibiting assignment. It may be assigned either before or after loss.
(2) Where a marine policy has been assigned so as to pass the beneficial interest in such policy, the assignee of the policy is entitled to sue thereon in his own name; and the defendant is entitled to make any defence arising out of the contract which he would have been entitled to make if the suit had been brought in the name of the person by or on behalf of whom the policy was effected.
(3) A marine policy may be assigned by endorsement thereon or in other customary manner."
21. Section 52 provides as to when and how the marine policy may be transferred. It says that a marine policy may be transferred by assignment unless it contains express terms, which prohibits any assignment of the policy. It also provides that such assignment can be made before or after the loss has occasioned.
22. Sub-Section(2)of Section 52 provides that once the assignment is made then the assignee is entitled to sue in his name whereas the insurer/defendant is also entitled to raise all such defences against the assignee, which are available to him against the original insured i.e. assigner.
23. Section 17 deals with "assignment of interest". It provides that where the assured assigns or otherwise parts with his interest in the subject-matter insured, he (insured) does not thereby transfer to the assignee his rights under the contract of insurance unless there is an express or implied agreement with the assignee to that effect. This D.D
29/06/2016
Facts:United India Insurance Co. Ltd. (Appellant) vs. Leisure Wear Exports Ltd. (Respondent).Complaint filed under Consumer Protection Act regarding a loss covered by an Open Marine Policy (Cargo).Appellant argued that the complaint was not maintainable due to the assignment of the policy in favor of the consignee.Issues:Whether the complaint under the Consumer Protection Act against the appellant...
(2)
VISAKHAPATNAM URBAN DEVELOPMENT AUTHORITY ..... Vs.
S.S. NAIDU AND OTHERS .....Respondent D.D
29/06/2016
Facts:Notification issued under Section 4(1) of the Land Acquisition Act, 1894, on March 20, 1978.Land acquired for widening a road.Possession of the land taken on February 20, 1982.Respondent land-owners requested withdrawal of acquisition after possession.Government ordered withdrawal under G.O.M. No.156 dated 25th February, 1982.Subsequently, withdrawal was canceled under G.O.M. No.714 dated 11...
(3)
V. VENKATA PRASAD AND OTHERS ..... Vs.
HIGH COURT OF A.P. AND OTHERS .....Respondent D.D
29/06/2016
Facts:Appellants were initially appointed as District Munsifs in the State Judicial Service and later promoted to Sub-judges.Their names were recommended for promotion to the post of District and Sessions Judge, Grade II.Government sanctioned additional posts for Fast Track Courts, and appellants were temporarily posted as District and Sessions Judges Grade II in Fast Track Courts.Respondents were...
(4)
BHAGWAN SAHAI AND ANOTHER ..... Vs.
STATE OF RAJASTHAN .....Respondent D.D
03/06/2016
Facts:The appellants and their family were accused of forming an unlawful assembly and causing injuries in their village.The prosecution alleged assault due to old enmity, leading to charges under various sections of the IPC.The defense argued denial of the occurrence, presenting an alternative version where the injuries on the accused resulted from an attack on their family members.The trial cour...
(5)
BIJENDER @ PAPU AND ANOTHER ..... Vs.
STATE OF HARYANA .....Respondent D.D
03/06/2016
FACTS: The appellants, Bijender @ Papu and another, along with three co-accused, were convicted under various sections of the Indian Penal Code (IPC), including Section 325 read with Section 149, Sections 148A, 308/149, and 323/149. The Trial Court imposed a sentence, and the High Court, on appeal, enhanced the punishment for the major offence.ISSUES:The appellants claimed parity with three other ...
(6)
DR. RINI JOHAR AND ANOTHER. ..... Vs.
STATE OF M.P. AND OTHERS .....Respondent D.D
03/06/2016
Facts: The case involves a writ petition (criminal) filed by Dr. Rini Johar and another against the State of Madhya Pradesh and others. The petitioners, a doctor and a practicing advocate, faced charges under Section 420 IPC and Section 66-D of the IT Act. They were arrested without following proper arrest procedures and later enlarged on bail. The petitioners alleged a demand for bribe by police ...
(7)
INDIRA DEVI AND OTHERS ..... Vs.
STATE OF HIMACHAL PRADESH .....Respondent D.D
03/06/2016
Facts: The three lady appellants, along with two men, were accused in a case involving various offenses. The trial court convicted all accused, and the High Court affirmed the decision. The appeal contended that contradictions in the victim's statements were not properly considered, and the defense of the appellants was overlooked.Issues:Contradictions in the victim's statements regardin...
(8)
SARLA PERFORMANCE FIBERS LIMITED ETC. ..... Vs.
COMMISSIONER OF CENTRAL EXCISE, SURAT-II .....Respondent D.D
03/06/2016
Facts: The appellants made a payment totaling Rs. 14,89,349.00, taking into account the duty payable under Section 3(1) of the Central Excise Act, 1944, considering the cum-duty benefit. An additional amount of Rs. 11,19,775.00 was payable if the benefit of a specific notification was applied.Issues: The extension of the benefit of cum-duty price, the invocation of a wrong section or rule in the s...
(9)
BHAGWAN SAHAI AND ANOTHER ..... Vs.
STATE OF RAJASTHAN .....Respondent D.D
03/06/2016
Facts:The appellants and their family were accused of forming an unlawful assembly and causing injuries in their village.The prosecution alleged assault due to old enmity, leading to charges under various sections of the IPC.The defense argued denial of the occurrence, presenting an alternative version where the injuries on the accused resulted from an attack on their family members.The trial cour...