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Burglary Insurance

M.G.RAJESWRI ,
  17 May 2010       Share Bookmark

Court :

Brief :

Citation :
I (2008) CPJ 350 NC

Bench: K G Member, P Shenoy

Nobel Grain India Pvt. Ltd. vs New India Assurance Co. Ltd. on 2/1/2008

ORDER

P.D. Shenoy, Member

1. As the parties are same in all the four appeals, facts and disputes involved in all the four cases are similar and as the State Commission had passed common judgment vide order dated 7.12.1999 in Original Case Nos. 54/97, 55/97, 56/97 and 57/97, four appeals are clubbed together, heard together and we proceed to pass a common order. Case of the appellant: Case of the Appellant:

2. The appellant had taken a marine FOB Policy for the purpose of exporting its goods as an open declaration policy for the period commencing from 1.4.1995 to 31.3.1996 and paid the necessary premium. The policy covered the transit risk from the insured factory at Harda or anywhere in India to Jamnagar by rail/road (to be declared by the appellant on monthly basis). The appellant paid an additional premium of Rs. 15,960 on 22.11.1995 to the respondents for covering the additional risk for exporting the goods to Wadibunder, Bombay and Bombay Port Trust Godown (BPTG). The appellant booked following materials on various dates to BPTG/Wadibunder Mumbai: ------------------------------------------------------------- Date Details of the goods Booked to 14/16 2.96 29 Open boxes BPTG 22,052 Bags

Wt. 1536.728 Tonnes

------------------------------------------------------------- 23/24 2.96 30 open boxes BPTG 22,560 Bags

Wt. 1590.480 Tonnes

4/6 3.96 30 open boxes Wadibunder 22,560 Bags Mumbai

Wt. 1590.480 Tonnes

-------------------------------------------------------------

3. The total value of these goods were Rs. 3,55,89,003 and the insurance coverage was for Rs. 4 crores. The appellant obtained second marine FOB Policy for the period commencing from 8.3.1996 to 7.3.1997 as an open declaration of the policy on the same terms and conditions. Fourth consignment was booked by the appellant to Jamnagar Windmill Station.

Some of the salient features of the policy are as follows:

(a) Deoiled Soya/Rapseed Cakes packed in gunny bags.

(b) To be declared in monthly basis.

(c) Covered against all risks SRCC FOB and storage at port town for 2 weeks and addition to 2 weeks under FOB Clause.

(d) In the event of loss or damage which may result in a claim under the insurance, immediate notice must be given to the nearest office of The New India Assurance Co. Ltd.

(e) Goods to be loaded under the supervision of the authorized agent of the respondents.

4. The appellant had informed the respondents about the period when they were expected to load the goods and Shri Sailendra Patni was appointed by the Insurance Company to supervise. The goods were sent in open boxes packed in gunny bags covered by tarpoline. The surveyor Sailendra Patni prepared a survey report of all the goods loaded on various dates. The following chart shows the details: ---------------------------------------------------------------------- Subject Date of Details of goods Date of matter loading Survey of Origi- report nal Case

---------------------------------------------------------------------- 54/97 14/16.2.96 29 open boxes 20.2.96 22,052 bags

Wt. 1536.728 Tonnes

55/97 23/24.2.96 30 open boxes 28.2.96 22,560 bags

Wt. 1590.480 Tonnes

56/97 4/6.3.96 30 open boxes 11.3.96 22,560 bags

Wt. 1590.480 Tonnes

57/97 7/8.3.96 30 open boxes 11.3.96 26,507 bags

Wt. 1855.773 Tonnes

----------------------------------------------------------------------

5. The Insurance Company did not raise any objection to the survey report of Shri Patni. The Railway Authorities issued Railway receipts noting that loading has not been supervised by the Railway staff and wagon has been covered with the PVC cloth tied with the ropes. The Appellant informed the respondent No. 2 about the time, when the goods are likely to reach to the booked station. The goods were unloaded under the supervision of the Overseas Merchandise Inspection Company (P) Ltd. (hereafter referred to as OMIC-INDIA). The surveyor found a shortage of bags and material. The surveyor submitted a report dated 13.4.1996, giving the complete details to the Insurance Company and the appellant. The appellants lodged a claim in the prescribed form on 24.5.1996 along with the necessary documents.

6. The total value of the claim under policy No. 2145010100291 is Rs. 19,05,653 and under policy No. 2145010100314 to be Rs. 6,59,160 making a total of Rs. 25,62,813.

Case of the opposite parties:

7. The exclusion clause of the insurance policy pertains to loss, damages or expenditure caused by insufficiency or unsuitably of packing or preparation of the subject-matter insured.

8. In this case the cargo was dispatched in open wagons covered by PVC cloth tied with ropes. Further, no efforts were made for minimizing lossesby the complainant company. Neither the consignment was loaded nor its delivery taken in the presence of any representative of the OPs. The complaint was also not lodged immediately, after the alleged loss was noticed, with the Insurance Company. Accordingly, the Insurance Company rightly repudiated the claim of the complainant by its letter dated 6.6.1997, extract of which is given oelow:

1. The relevant consignments were dispatched from Harda to Bombay whereas the said policy covers consignments dispatched from anywhere in India to Jamnagar

2. You have failed to protect recovery rights as required under duty of assured clause. Shortage certificates were not obtained from Railways. Alternatively open-delivery should have been insisted upon by you, which was not done. Neither delivery was taken under protest nor a Panchnama was carried out.

3. No survey report has been submitted, only weighment certificates are arranged by you.

Submissions of the learned Counsel for the appellants:

9. Learned Counsel for the appellant submitted that he had arranged surveyors at the time of loading and at the time of unloading. Further, though the Insurance Company repudiated a claim stating that Railway receipts were issued on "said to contain basis" this option of loading goods on the train 'on said to contain basis' was available to appellants.

10. The learned Counsel drew our attention to the policy documents and risk covered, issued by the New India Assurance Company Limited, office copy of Marine Policy (Cargo), by rail/road-- subject-matter insured--Special declaration Policy--Deoiled Soya/ Rapseed cakes packed in gunny bags to be transported from anywhere in India to any part in India. Under Institute Cargo Clauses (A) Risks Covered--Insurance covers all risks of loss or damage to the subject matter insured except as provided in Clauses 4. The relevant Sub-clause is 4.3.

Exclusions:

4. In no case shall this insurance cover

4.3 Loss, damage or expense caused by insufficiency or unsuitability of packing or expense caused by insufficiency or unsuitability of packing or preparation of the subject-matter insured (for the purpose of this Clause 4.3. "packing" shall be deemed to include stowage in a container or lift van but only when such stowage is carried out prior to attachment of this insurance or by the assured or their servants.

The relevant clause relating to minimizing losses read as follows:

16. It is duty of the Assured and their servants and agents in respect of the loss recoverable hereunder to take such measures as may be reasonable for the purpose of averting or minimizing such loss, and

16.2 To ensure that all rights against carriers.

11. Learned Counsel submitted that these clauses do not speak specifically of the Railway Act or Railways Commercial Manual. According to him, the exclusion clause relating to minimizing the losses especially Clause 16 is unfair, if it means, all the options which were mentioned in the repudiation letter are to be read into it. It is too onerous on the consumer.

12. There were shortages in the four sets of consignments. Appellant had appointed OMIC-India as his own surveyor at the time of unloading.

13. Learned Counsel submitted that he has got shortage certificate from OMICO. To avoid huge demurrage charges, he neither insisted upon shortage certificate from the Railways nor he took the delivery under protest. The dispatched quantity was under the supervision of the Mr. Section Patni, surveyor of the opp. party, who remained in continuous attendance at Harda Railway Station during the course of the loading of the racks. The wagons were loaded manually from the trucks. The trucks were weighed over the weigh bridge and further the average weight of trucks were cross-checked at Harda Railway Station on weighing scale on sample basis. Total 22,052 bags were loaded in goods wagons in sound condition containing 1536/728 M.T. DOC (Yellow). After completion of loading in each wagon, it was completely covered by tarpaulin and tied by ropes.

14. The learned Counsel submitted that it was all done under the supervision and physical presence of the surveyor of the opposite party who thereafter submitted that survey report of the said survey to the opposite party, with a copy to the complainant. The Insurance Company has raised objection to this by stating that at the time of loading of the consignment i.e. deoiled cake, survey was conducted by Shailendra Patni, and as per his report dt. 20.2.1996,22052 bags of deoiled cake weighing 1536.728 MTs were dispatched in 29 open box wagons. But, it is emphatically denied by the complainant stating that the consignment was completely covered by tarpaulins and tied by ropes. The endorsement made on the RR by the railway staff reveals that the wagons after loading, were covered with PVC cloth and not with tarpaulin. He brought to our notice the policy clause, wherein subject matter is insured as 'Mega Turnover' - Deoiled Soya/rapseed cakes packed in gunny bags to be transported from insured factory at Harda arid anywhere in India to Jam Nagar. But Insurance Company later on modified the same as 'anywhere in India'.

15. The survey report of Mr. Patni reads as follows:

The loading of entire 29 wagons was carried out under my supervision and I remained in continuous attendance at Harda Rly-Station during the course of loading of the rack. Wagons were loaded, manually through trucks. Trucks were weighed over the weigh bridge and further the average weight of trucks were cross checked at Harda Rly Station on weighing scale on sample basis. Total 22052 bags were loaded in goods and sound condition containing 1536.728 MT. DOC (Yellow). After completion of loading in each wagon, it was completely covered by tarpaulin and tiled by ropes. Accordingly, all 29 boxes were covered by tarpaulin and tied by ropes.

OMICO India has given its report as follows:

Number of bags received 21620 and additional 297 bags have been used to collect at Railway Yard and Gross for Nett Weight received :1481.313. M/ Tons.

Number of Bags dispatched : 22052

Number of Bags received : 21620

Number of Bags short

received : 432

Gross of Net weight

Dispatched : 1536.728 M/Tons

Weight received

(Gross for Net) : 1481.313 M/Tons

Shortage : 55.415 M/Tons

16. Between 7 and 8% of the bags were found in torn condition due to usage of hooks and torn bags, cargo spilled out from the bags. The estimated spillage was around 15 to 20 kgs from each bag.

17. The above rake was loaded with 22052 bags, weighing 1536.728 MTs of yellow soyabeen de-oiled cake Ex-Harda BPTG in 29 open boxes on 16.2.1996.

18. When the above rake arrived destination and while unloading the same we received only 21520 bags, weighing 1481.313 MTs.

19. Thus, 432 bags weighing 55,415 MTs received short at destination. We hold the Railway responsible for the above shortage. The value of quantity short received comes to Rs. 4,43,320. Similar reports were given for other consignments.

20. Sidharth Soya Products Ltd. filed a complaint claim on 24.5.1996. After that Insurance Company took 13 months to repudiate the claim. The learned Counsel submitted that without investigation into the claim proposal, the State Commission has dismissed this complaint. He submitted that the question arises as to what ought to be the consequence of a failure by the insured to serve a notice immediately as purportedly required under the policy. He further submitted that even if no such notice is served on the opposite party, in the facts and circumstances of this case, where a survey was duly conducted by a competent surveyor and the report submitted along with the claim, the said claim could not have been rejected outright without proper application of mind, which was clearly not done in this case. The opposite party is not entitled to repudiate the entire claim on this ground alone, especially when it is not a ground relied upon in the repudiation letter. The Hon'ble State Commission, therefore, erred in relying upon non-service of immediate notice as a ground on which the claim of the appellant was not maintainable.

21. The learned Counsel invited our attention to the risk clause in the policy insurance cover all risks of loss or damage to the subject matter insured except as provided in Clauses 4, 5, 6 and 7. He brought to our notice an internal communication between the two offices of the Insurance Company dated 25.6.1997 wherein the claim of the appellant was recommended for settling 75% of the claim. This letter reads as follows:

THE NEW INDIA ASSURANCE COMPANY LTD.

BPL/DO-II/PRP/97

25th June, 1997

Mr. A. Venkatachalam, Divisional Manager, Bhopal

Reg : Marine Claim No. 21/450102/96/ 001/2004 A/C/M - Sidharth Soya Products Limited

In reply to your letter No. NIL dated 25.6.1997 the undersigned confirms:

(A) Surveyor has not been deputed by the undersigned.

(B) During the currency of the Policy there was a written request from the insured for coverage of consignment from Harda to any part in India. Policy stands endorsed for the same vide Extra Endorsement No. 21/450102/30030. It appears that through an oversight the above said endorsement has not been placed while recommending the file for 75% settlement by the undersigned.

Keeping in view of legal notice the confirmation is being sent to the date of receipt of your letter, so that your reply is not kept in abeyance.

Kindly acknowledge receipt

Sd/-

(P.K. Pendharkar)

DIVISIONAL MANAGER

22. This letter clarifies two things that during the currency of the policy, coverage of the policy has been increased from Harda to any part in India. Secondly, the Divisional Manager had sent a communication recommending 75% of claim for settlement.

Submissions of the learned Counsel for the respondent.

23. Learned Advocate for Insurance Company opposed the permission to take the additional document on record. He further submitted that competent authority is not bound by the recommendations of the subordinate office.

24. The Railway receipts were issued to the appellant bearing vital adverse remarks such as "P-7 not complied with", "dunnage not used", "open wagons selected by the sender", "loading not supervised by the railway staff"," "loading by sender direct from truck to wagons".

25. According to Indian Railways Conference Association Goods Tariff No. 36, Part I, Volume I, General Rules it has been clearly explained that how should be the packing condition of the goods at the time of entrustment to the Railways Administration. "P-7" has clearly defined that the packing must be done in double jute bags, each of which should conform to the specifications of the corresponding packing condition.

26. At the time of unloading of the consignment at destination station also, the appellant did not inform the respondents but only stated that the unloading of the goods were supervised on request of the appellant by M/s. OMIC-INDIA for the purpose of local weighment. Certificate further issued by OM1C India states that 8% bags were found in torn condition due to use of hooks and that the estimated spillage was around 15-20 kgs. from each bag. He submitted that nowhere in the report, the surveyor has stated that he had seen the unloading and counted the heaps of bags, which were kept in front of each and every wagon. Even at the stage of unloading, the appellants did not inform the respondents about the said alleged loss.

27. The appellant should have requested the Railway Administration to issue open delivery partial delivery certificate or to assess the loss in the light of Sections 81 and 82 of the Railways Act, 1989. The appellant has failed to obtain any certificate in this regard nor has made any effort to obtain the same. Alternatively, the appellant should have moved an application to the Chief Goods Supervisor to grant open delivery as per the Railways Act. In case, the Railway authorities refuse to grant open delivery, the appellant should have executed a Panchnama and assessed the loss. The appellant also could have made an endorsement in the delivery book of the Railways at the time of taking delivery and could have obtained the abstract of the relevant entries from the delivery book. All these efforts and procedures, as per law, have not been adopted by the appellant and, therefore, under the facts and circumstances of this case shortage was not established.

28. When the inspection was made by the OMIC India between 24.2.1996 and 4.3.1996 and the delivery was taken on 16.2.1996 to save demurrage and wharfage, there was enough time to lodge the claim with the respondent. If the Railway Administration was not bound to issue short delivery certificate as the consignment was booked on "said to consign" basis, at least, the remarks in the goods delivery book or the actual number of bags, etc. delivered to him, as required by Rule 1836, ought to have been made. Rule 1836 reads thus:

1836. In respect of a said to contain receipt, the consignee may be permitted to pass remarks in the goods delivery book for the actual number of bags, etc, delivered to him remarks regarding the actual shortage should not be allowed to be passed in such cases. In other words, a remark as 'Delivered...packages short', etc., should not be allowed.

29. Therefore, even though the 'said to contain Railway receipts' do not amount to admission on the part of the Railway administration that the said number of articles had in fact been loaded, when responsibility has to be fixed in the event of any package found missing at destination station then examination of outward tally book and forwarding note or the remark in goods delivery book for the actual number of bags delivered to the complainant is essential, so as to make claim from the Railway, in view of Section 93 and under Section 104 of Act of 1989. Section 104 of the said Act says that where any goods are carried in open wagon, the responsibility of Railway Administration for the destruction damage or deterioration of the goods, being so carried, could have been claimed to be one half of the amount of the value of such loss.

30. Learned Counsel, for the respondent Insurance Company also submitted that it is not disputed that additional premium was received and also was extended to BPTG. The letter of District Manager for the Insurance Company for recommending 75% of the claims was not filed before the State Commission hence it is inadmissible.

Findings:

31. The copy of the marine policy (cargo) issued by the New India Assurance Company on 18.3.1996, relevant extract, reads as follows:

'Vessel and/or Conveyance; Rail/ Road to be declared by the insured on monthly basis.

'Deoiled Soya/Rapseed Cakes packed in gunny bags, to be transported from anywhere in India to any port in India.'

The attached clauses and endorsements form part of this policy.

Survey In the event of loss or damage which may result in a claim under this Insurance, immediate notice must be given to nearest office of the the New India Assurance Co. Ltd.

And Who are the company's agents

at port of discharge. In order that they may examine the goods and issue a survey report. When the Company has no agent, the notice must be given to Lloyd's agent.

Claims Payable at Bhopal Settlement By

32. This insurance covers all risks of loss of or damage to the subject matter insured except as provided in Clauses 4, 5, 6 and 7. Clause 4.3 is relevant:

4. In no case shall this insurance cover

4.3 Loss damage or expense caused by insufficiency or unsuitability of packing or preparation of the subject-matter insured (for the purpose of this Clause 4.3 "packing" shall be deemed to include stowage in a container or lift van but only when such stowage is carried out prior to attachment of this insurance or by the assured or their servants).

Then the clauses relating to minimize losses read as follows:

16. It is the duty of the Assured and their servants and agents in respect of the loss recoverable < hereunder 16.1 to take such measures as may be reasonable for the purpose of averting or minimizing such loss, and

16.2 To ensure that all rights against carriers, bailees or other third parties are properly preserved and exercised, and

the Underwriters will, in addition to any loss recoverable hereunder, reimburse the Assured for any charges properly and reasonably incurred in pursuance of these duties.

17. Measures taken by the Assured or the Underwriters with the object of saving, protecting or recovering the subject matter insured shall not be considered as a waiver or acceptance of abandonment or otherwise prejudice the rights of either party.

Let us analyze the clauses:

33. There is no dispute that goods were sent by rail. Declaration was made by the insured on monthly basis. Deoiled Soya bags packed in gunny bags were transported from anywhere in India to any port in India. When the loss or damage took place immediate notice was not given to the nearest office of the Insurance Company. On the other hand the complainant had engaged a surveyor Shailendra Patni at the time of loa ding of the goods in Railway wagons, who has given clear cut certificate of the quantity loaded and method of loading (supra). At the port of discharge, surveyor OMIC India has conducted survey and given certificate about the quantity received and loss. This has also been quoted in extenso (supra). Hence, these details are not repeated here. Regarding insufficient or unsuitability of packing mentioned in Clause 4.3 of the execution clause the packing material utilized and how the goods were covered in the wagons has been certified by Shailendra Patni in clear-cut terms.

34. Now the issue is--what efforts were made for minimizing losses by the appellant. The wordings used in the insurance policy are that the assured shall take such measures "as may be reasonable for the parties of averting or minimizing such loss and to ensure that all rights against carriers are properly preserved and exercised." That the appellant has appointed an approved surveyor to assess the shortages, who has given a detailed certificate in this regard. The goods were carried on "said to contain basis". Nowhere in the policy there is a restriction/condition, which stipulates goods shall not be carried on "said to contain basis". But whether these reasonable efforts to minimize losses should mean the detailed exercise for following all steps mentioned in Sections 81 and 82 of the Railways Act and Rule 1836 of the Rules and further, Indian Railways Conference Association Goods Tariff No. 36, Part 1 Vol. 1 General Rules is a contentious issue. It is true that the appellant had not intimated Insurance Company immediately after the loss was noticed at the destination. In this connection, it is relevant to go through the repudiation letter. It nowhere mentioned that the claim has been repudiated, because there was delay on the part of the insured in intimating the Insurance Company about the loss of goods in transit, which was noticed by the surveyor OMIC India.

35. The question of liability of the insurer is dealt with by Supreme Court in more than one case. The Apex Court in the case of Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan and Ors. I (1987) ACC 413 (SC) : (1987) SCC 654, Observed as under:

...When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependents on the one hand and the equally plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by him, by way of business activity, there is hardly any choice. The Court cannot but opt for the former view. Even if one were to make a strictly doctrinaire approach, the very same conclusion would emerge in obeisance to the doctrine of 'reading down' the exclusion clause in the light of the 'main purpose' of the provision so that the 'exclusion clause' highlighted earlier. The effort must be to harmonise the two instead of allowing the exclusion clause to snipe successfully at the main purpose. The theory which needs no support is supported by Carter's 'Breach of Contract' vide paragraph 251. To quote: Notwithstanding the general ability of contacting parties to agree to exclusion clauses which operate to define obligations there exists a rule, usually referred to as the 'main purpose rule', which may limit the application of wide 'exclusion clauses, defining a promisor's contractual obligations. For example, in Glynnn v. Margetson and Co. 1893 AC 351, 357, Lord Halsbury, LC. stated: It seems to me that in construing this document, which is a contract of carriage between the parties, one must in the first instance look at the whole instrument and not at one part of it only. Looking at the whole instrument, and seeing what one must regard...as its main purpose, one must reject words, indeed whole provisions, if they are inconsistent with what one assumes to be the main purpose of the contract. Although this rule played a role in the development of the doctrine of fundamental breach, the continued validity of the rule was acknowledged when the doctrine was rejected by the House of Lords in Sttissee Atlantique Societe d Armement Maritime S.A. v. N.V. Rotterdamsche Kolen Central 1967 1 AC 361. Accordingly, wide exclusion clauses will be read down to the extent to which they are inconsistent with the main purpose, or object of the contract.'

In Super Teak Wood Industries v. Oriental Insurance Co. Ltd. and Ors. 1 (1993) CPJ 8 (NC), it was held that "After hearing both sides we are of the opinion that the State Commission was in error in holding that no investigation into the merits of the complaint was called for because of the fact that the Insurance Company had repudiated the claim of the insured as per its letter dated 1.2.1991. We have gone through the said letter and we find that there is nothing therein to indicate to our satisfaction that the Insurance Company had applied its mind with due care to all the relevant aspects and come to a conclusion in good faith as to the true nature or otherwise of the fire accident that is said to have taken place in the saw mill of the appellant. Unless there is a reasoned reply which clearly shows that there has been such an application of mind and arrival at a conclusion in good faith regarding the truth and maintainability or otherwise of the claim put forward by the insured, there is a responsibility cast on the Redressal Forum to investigate into the dispute and come to its own conclusion in regard to the aforesaid matter.

In Kesarban v. United India Insurance Co. II (2000) CPJ 36 (NC) guidelines for settlement of nonstandard claims have been mentioned thus: 'where the breach is material to the loss or where an act of the insured or his agent has contributed to such a breach in such cases if the insured has acted with the best of intentions and has not consciously committed the breach or where the legal question of liability is in doubt, payment may be considered on merits of each case, upto a maximum of 75% of the assessed amount of loss'. Where the breach is material to the loss and the amount determined to be payable upto the maximum of 75% of the assessed amount of loss is found to be higher than what would be payable had the claim been dealt with as one where the breach is of a technical nature, the compromise settlement should be made only for the lower amount.

36. Now let us see the guidelines for settlement of non-standard claims:

1. Where a breach of warranty or policy condition (hereafter referred to as breach) arises and where such breach is of a technical nature or is evidently beyond the control or knowledge of the insured or is not material to the cause of occurrence of the loss--settlement is considered after rectifying the policy and collecting additional premium where due. In settling the claim, a deduction may be made from the assessed claim amount equivalent to the extra premium due for three years or three times the additional premium due for voyage which would have been charged had correct information been available originally.

Where the breach is material to the loss and or where an act of the insured or his agent has contributed to such a breach in such cases if the insured has acted with the best of intentions and has not consciously committed the breach or where the legal question of liability is in doubt, payment may be considered on merits of each case, upto a maximum of 75% of the assessed amount of loss.

Where the breach is material to the loss and the amount determined to be payable upto the maximum of 75% of the assessed amount of loss is found to be higher than what would bepayable had the claim been dealt with as one where the breach is of a technical nature, the compromise settlement should be made only for the lower amount.

37. In this context the letter addressed by the Divisional Manager of the Insurance Company to the Regional Manager assumes importance. The learned Counsel for Insurance Company has not stated that such a letter does not exist. He has only objected to the letter being taken on record and also submitted that recommendation of a subordinate office cannot bind the superior officer competent to take a decision. While, we agree that the letter of a subordinate officer does not bind a superior officer, it is necessary to look into the facts and circumstances of the case, ignoring following factors. The goods were carried by the rail, which is an authorized carrier. The area of transportation is covered by the policy. Shortage of goods have occurred during the currency of the policy. At the time of loading survey was conducted by the approved surveyor, and also at the time of unloading survey was conducted by an approved surveyor, and certificate was issued. To avoid demurrages the complainant took delivery otherwise losses would have been huge. In this connection it is worthwhile to go through the judgment quoted by the learned Counsel for the respondent.

38. He quoted the judgment of National Commission, IV (2006) CPJ 210, National Insurance Company Ltd. and Anr. v. Yodeva Synthetic Private Ltd. "Mainly four pleas have been taken by the appellant--firstly, that the incident of burglary took place on 6.12.1992 whereas, this factum was reported to the appellant Insurance Company only in January, 1993; secondly, the factum of factory having been closed, was never brought to the notice of the appellant, thus violating condition 2 of the terms of the policy; thirdly, for almost 9 months after the episode of burglary, surveyor was not permitted to enter the premises to assess the loss; and fourthly, no evidence has been brought on record about the quality of stocks available in the godown at the time of incident."

39. He submitted that the appeal of the Insurance Company was allowed in this case.

40. The above case quoted by the learned Counsel is distinguishable because it relates to burglary and the Insurance Company was informed belatedly. Whereas, in this case it relates to loss of a small portion of the insured goods, which were carried by Railways, and the loss was assessed by the independent surveyor M/ Section OMIC India Ltd. The repudiation letter does not mention about delayed intimation of the loss to the Insurance Company.

In Shashi Gupta (Smt.) v. Life Insurance Corporation of India and Anr. II (1995) CPJ 15 (SC) : 1995 Supp (1) Supreme Court Cases 754, it is held that as both the aforesaid interpretations are reasonably possible, we would accept the one which favours the policyholder, as the same advances the purpose for which a policy is taken and would be in consonance with the object to be achieved for getting lives assured.

Further in B.V. Nagaraju v. Oriental Insurance Co. Ltd. Divisional Officer, Hassan , in which the Apex Court quoted its decision in Skandia case.

In Life Insurance Corporation of India v. Raj Kumar Rajgarhia and Anr. "It is not always possible to be guided by the

meaning of the words as found in the dictionary while resorting to interpret the actual meaning of a word found in an agreement between the parties. While construing the meaning of a particular word found in an agreement between the parties the intention of the parties to the document in question will have to be given necessary weightage and it is not possible to give a wider and liberal meaning merely because one of the parties to the said agreement is a public authority. While interpreting the terms of the insurance policies if two views are possible, Courts will accept the one which favours the policy-holders."

41. In this case the clauses relating to minimizing the losses are not clear. The clauses do not spell out various provisions of the Railway Act and also Indian Railways Conference Association Goods Tariff No. 36, Part I, Volume I, General Rules. The Insurance Company did not consider it an important material point otherwise it would have mentioned the same in the insurance policy.

42. Accordingly, the order of the State Commission is set aside and the appeals are partly allowed to the extent of the 75% of the claim i.e. Rs. 19.22,110 made by the appellants/complainants.

43. As we are directing payment of non-standard claim, this amount shall not carry any interest, if paid within two months of the receipt of the copy of this order by the respondent Insurance Company. Thereafter that it will carry an interest @ 9% p.a. There shall be no order as to costs.

 
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