MANU/CF/0448/2020

Equivalent Citation: I(2021)C PJ60(NC )

IN THE NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI
Revision Petition No. 2803 of 2018
Decided On: 31.08.2020
Appellants: Dujodwala Products Ltd.
Vs.
Respondent: National Insurance Co. Ltd.
Hon'ble Judges/Coram:
R.K. Agrawal, President and Dr. S.M. Kantikar, Member
Counsels:
For Appellant/Petitioner/Plaintiff: Karan Mehra, Advocate
For Respondents/Defendant: Kishore Rawat, Advocate
ORDER
R.K. Agrawal, President
1 . M/s. Dujodwala Products Ltd., Raigad (hereinafter referred to as the Complainant)
has filed the present Revision Petition under Section 21(b) of the Consumer Protection
Act, 1986 (hereinafter referred to as the Act), against the Impugned Order dated
04.09.2018 passed by the Maharashtra State Consumer Disputes Redressal Commission
(hereinafter referred to as State Commission) in Appeal No. A/15/313, whereby the
State Commission had allowed the Appeal filed by the National Insurance Company Ltd.
(hereinafter referred to as Opposite Party Insurance Company) and had set aside the
Order dated 14.10.2014 passed by the Raigad District Consumer Disputes Redressal
Forum, Alibagh (hereinafter referred to as the District Forum) and dismissed the
Complaint filed by M/s. Dujodwala Products Ltd., the Complainant.
2 . Brief facts as narrated in the Complaint are that the Complainant Company is
engaged in the business of manufacturing of Chemicals, having their factory at
Kumbhivali, Taluka-Khalapur, Dist. Raigad. The Complainant Company sells their
products within and outside India. The Complainant Company was required to supply
their products to M/s. Saudi Rook Wool Factory at Riyadh. As the product was sensitive
in nature and the temperature was required to be maintained at 5 oC or less to save the
product from damage, they hired a Container bearing No. MWCU6037091, having inbuilt
refrigeration system from M/s. MAERSK India Pvt. Ltd. The products were packed in 109
metal drums and were stuffed in the Container and then the Container was loaded on a
motor vehicle for taking the same to JNPT, Nhava Sheva on 14.10.2006 for onward
transportation to Riyadh. The Complainant had insured that Container with Opposite
Party Insurance Company by obtaining Insurance Policy No. 26500/21/06/4600000/647
covering all risks. Before the products were packed in the Container, temperature of the
Container was checked and found that it was at the requisite level. On 18.10.2006 at
about 12.38 p.m. the Complainant Company received message from M/s. MAERSK India
Pvt. Ltd. informing that the Container could not be shipped Overseas as the Container
did not maintain requisite temperature due to technical problem in the refrigeration

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system. Complainant had taken immediate action as the products were sensitive to
temperature and they had brought back the Container to their factory on 19.10.2006.
Due to rising of temperature in Container, quality of products suffered. The Complainant
Company lodged Insurance claim with Opposite Party Insurance Company for getting
the cost of the Products. The Opposite Party Insurance Company deputed M/s. A &
Shaikh Co. (hereinafter referred to as Surveyor) to assess the loss. The Surveyor
verified the Container by visiting factory on 19.10.2006 and assessed the loss to the
tune of 12,22,869/- after deducting 5% of total value of the products towards salvage
value. However, the Opposite Party Insurance Company vide letter dated 26.12.2006
repudiated the Claim on the ground that the damage to the Products was caused due to
change in temperature because of improper packing which resulted into change in
temperature and the same was not covered under the Policy. Alleging deficiency in
service on the part of the Opposite Party Insurance Company, the Complainant Company
filed a Consumer Complaint before the District Forum seeking the following reliefs:-
"a) The Opponent may please be ordered to pay the Complainant a sum of
12,94,731/- alongwith the interest at the rate of 13% and including notice
charges of 1500/- and other expenses, as the Hon. Court may deem fit.
b) The Opponent may please be ordered to pay the Complainant a sum of
1,00,000/- being damages and compensation for hardship, harassment and
mental agony.
c) And cost of proceedings"
3 . The Opposite Party Insurance Company contested the claim by filing their Written
Version. They took a preliminary objection that the cause of action had arisen on
18.10.2006 when the product was destroyed due to rising of temperature. However,
Complaint has not filed within two years from the same. The Container was provided by
M/s. MAERSK India Pvt. Ltd., which is a necessary Party and they have not been made a
Party in this Complaint, therefore, the Complaint is liable to be dismissed for non-
joinder of the Party. They submitted that during the transport of Container neither any
accident had taken place nor any damage was caused to the Container. It was submitted
that due to defective packing of the goods in the Container the refrigeration system
failed and the temperature in the container increased resulting in damage to the goods.
They submitted that the Products kept in the Container were required to be kept at a
temperature below 5 §C. For that purpose, there was inbuilt refrigeration system in the
Container. The Container was supplied by M/s. MAERSK India Pvt. Ltd. and the Products
kept in the Container were damaged due to failure of refrigeration system of the
Container. The Opposite Party has no concern with the same and this part has been
specifically excluded in the Insurance Policy. They also submitted that the Container
was insured covering all the risks which may occur during transport of the Container but
any loss caused due to change in temperature due to failure of the refrigeration system
is not covered in the Policy. They were, therefore, not liable to pay Insurance Claim to
the Complainant. There is no deficiency in service on their part. They prayed that the
Consumer Complaint be dismissed.
4. After hearing the learned Counsel for the Complainant and Opposite Party Insurance
Company, perusing the pleadings and evidence on record, the District Forum had held
as under:-
" No convincing evidence brought on record by the Opposite Party to support its
case that due to defective packing of the goods in the Container the

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 refrigeration system failed and the temperature in the container increased
causing damage to the goods. The evidence tendered by the complainant is not
rebutted and therefore, the case tried to be made out by the Opposite Party
cannot be accepted. If the insurance policy referred to above is minutely
perused, it is seen that it covers all risks. In our opinion the damage caused to
the goods of the Complainant in a manner stated is also covered under the said
policy and the Opposite Party cannot take benefit of exclusion clause 2.3
thereof.
It is established by the evidence tendered by the Complainant that the loss
caused to its goods is covered under the above mentioned Insurance Policy and
the Opposite Party is liable to compensate the loss. In spite of this the Opposite
Party repudiated the claim of the Complainant under the exclusion clause 2.3 of
the Policy which in our opinion is deficiency in service on the part of the
Opposite Party. The Complainant is therefore, entitled to entire damage from
the Opposite Party. After having considered the material on record we arrived at
the conclusion that there is deficiency in service on the part of the opposite
party and hence the complainant is entitled to relief claimed.
FINAL ORDER
1. Complaint No. 143/08 is allowed.
2 . It is hereby declared that there is deficiency in service rendered by the
opposite party to the Complainant.
3 . The Opposite Party shall pay to the Complainant a sum of 12,94,731/-
(Rupees Twelve Lakh Ninety Four Thousand Seven Hundred thirty one only)
towards loss with interest @12% p.a. from the date of filing the Complaint, i.e.,
10.02.2008 till realization.
4. The Opposite Party shall also pay to the Complainant 50,000/- (Rupees Fifty
thousand only) towards compensation and 5,000/- (Rupees Five thousand only)
towards cost of the proceedings."
5. Aggrieved by the Order dated 14.10.2014 passed by the District Forum, the Opposite
Party Insurance Company preferred an Appeal before the State Commission.
6. The Opposite Party Insurance Company submitted before the State Commission that
the damage to the Product kept in the Container was caused only because the
temperature of the Container could not be maintained at 5 oC or below due to defect in
refrigeration system and the Container with inbuilt refrigeration system was provided by
M/s. MAERSK India Pvt. Ltd. The refrigeration system of the Container and work of
keeping the temperature of the Container below 5 §C was strictly with M/s. MAERSK
India Pvt. Ltd. and Opposite Party Insurance Company has no concern with the same. It
was further submitted that damage was not caused due to accident to the vehicle or
damage to the Container. All risks in respect of transportation of Container was covered
in the Insurance Policy but damage to the products due to failure of refrigeration system
was certainly not included in the Insurance Policy. The Opposite Party Insurance
Company relied upon judgment passed by this Commission in " New India Assurance
Co. Ltd. & Ors. Vs. Deepak Anand, reported in MANU/CF/0423/2014 : III (2014) CPJ
373 (NC)] " and " Future Generali India Insurance Co. Ltd. vs. Micron Precision Screws
Ltd. reported in II (2015) CPJ 88 (NC)].

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7 . After hearing the learned Counsel for the parties and perusal of material on record
and the judgments relied upon by the learned Counsel for the Appellant, the State
Commission had allowed the Appeal by observing as under:-
We are of the opinion that opponent cannot have any concern about the same
and cannot be held responsible for the same although in Insurance Policy it has
been mentioned that they are covering all the risks. It means the risk covered is
in respect of transport of container and not about technical problem of
refrigeration system of container. On perusal of terms and conditions, it has
become clear that if loss or damage was caused due to packing then the same
was not covered under the insurance policy and specifically excluded from the
policy. We are of the opinion that as packing of product in the container was
not proper, it affected the refrigeration system of the container to maintain
temperature of container below 5 §C. Hence, it is strictly between complainant
and M/s. MAERSK India Pvt. Ltd. who supplied container to the complainant and
opponent cannot be held responsible for the same. In view of rulings on which
the Learned Advocate for appellant has relied it has become clear that when it
is specifically excluded from the insurance policy, Insurance Company cannot
be held liable to pay insurance claim to the complainant. Hence, we are of the
opinion that the Learned District Forum had not considered this fact properly
and had wrongly come to conclusion that opponent has given deficiency in
service to complainant by not giving insurance claim to complainant and
directed opponent to pay amount of 12,94,731/- to complainant together with
interest on that amount along with costs and compensation. Hence, we are of
the opinion that the order passed by the Learned District Forum in that respect
is to be set aside by allowing this appeal and complaint filed by the
complainant is to be dismissed. We are of the opinion that complainant can
recover the claim from M/s. MAERSK India Pvt. Ltd., who had not supplied
proper container to them.
8 . Aggrieved by the Order dated 04.09.2018 passed by the State Commission, the
Complainant Company, has filed the present Revision Petition before this Commission.
9. We have heard the learned Counsel for the Parties and perused the Memorandum of
Revision and the Orders passed by the State Commission and the District Forum as also
the material on record.
10. The learned Counsel for the Petitioner submitted that even though in the Insurance
Policy issued by the Opposite Party Insurance Company loss damage or expenses
caused by insufficiency or unsuitability of packing or preparation of the subject matter
insured is excluded and in the deeming provision it has been mentioned that the
packing shall deem to stowage in a container or liftvan but only when such stowage is
carried out prior to attachment of this Insurance or by the Assured or their servants, it
cannot be invoked in the present case for repudiating the Claim made by the
Complainant Company for the reason that the Products were packed in 109 metal drums
and there was no defect, insufficiency or unsuitability of packing or preparation of the
Products. After checking the temperature of the refrigeration system of the Container
which was at the desired level, i.e., less than 5 §C, it was loaded in the Container fully
stuffed for taking the same to JNPT, Nhava Sheva and because of some failure in the
refrigeration mechanism of the Container, it cannot be said that there was insufficiency
or unsuitability of packing or preparation of the Products. According to him the learned
State Commission has erred in law in allowing the Appeal filed by the Insurance
Company and dismissing the Complaint. The Complainant Company is entitled for a sum

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of 12,94,731/- alongwith interest @12% p.a. from the date of filing of Complaint till
realization as ordered by the District Forum and the Order passed by the District Forum
should be restored and the Complaint be allowed.
1 1 . The learned Counsel for the Respondent, however, submitted that it is not in
dispute that because of the defect/failure in the refrigeration of the Container, the
Products got damaged which is specifically covered in Clause 2.3 of the Exclusions
mentioned in the Insurance Policy. According to him, the Order passed by the State
Commission does not suffer from any illegality and calls for no interference.
1 2 . We have given our thoughtful consideration to the various plea raised by the
learned Counsel for the Parties. It is not in dispute that the Complainant Company had
taken the Insurance Policy from the Opposite Party Insurance Company insuring the
Container by which 109 metal drums of Products were being sent to M/s. Saudi Rook
Wool Factory at Riyadh. The Container had an inbuilt refrigeration system. Before the
Products were packed in the Container, the temperature of the Container was checked
and it was found that it was at the requisite level, i.e., 5 §C or less. Due to technical
problem in the refrigeration system, the Container could not be shipped Overseas and
was brought back to the factory of the Complainant Company. The quality of Products
suffered because the requisite temperature could not be maintained in the Container.
The only question is as to whether there was any insufficiency or unsuitability of
packing or preparation of the Product as mentioned in Clause 2.3 of the Exclusions in
the Insurance Policy. For ready reference Clause 2.3 of the Exclusions Clause is
reproduced below:-
"EXCLUSIONS
2. In no case shall this insurance cover
.....
2.3 loss damage or expenses caused by insufficiency or unsuitability of packing
or preparation of the subject matter insured (for the purpose of this clause 2.3
"packing" shall be deemed to include stowage in a container or liftvan but only
when such stowage is carried out prior to attachment of this Insurance or by
the Assured or their servants)"
13. From a perusal of the aforesaid Exclusion Clause it is clear that the loss, damage or
expenses caused by insufficiency or unsuitability of packing or preparation of the
subject matter insured is excluded. There is a deeming provision as to what should
'Packing' mean. It deems to include stowage in a container or liftvan but only when
such stowage is carried out prior to attachment of this Insurance or by the Assured or
their servants. Even though, packing includes stowage in a Container or liftvan but the
loss or damage suffered by the Complainant Company cannot be said to be on account
of insufficiency or unsuitability of packing or preparation of the Products insured. It is
not in dispute that the Product which was to be sent to M/s. Saudi Rook Wool Factory at
Riyadh was packed in 109 metal drums and after checking the temperature of the
Container which was about 5 §C or less and after being satisfied, it was stuffed in the
Container having refrigeration mechanism. If some defect had occurred in the
refrigeration mechanism it cannot be attributed to any of the Terms, Clause or
Conditions mentioned in Clause 2.3 of the Exclusionary Clause referred to by the
learned Counsel for the Opposite Party Insurance Company which had already been
reproduced hereinabove.

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14. Thus, we are of the considered opinion that the Opposite Party Insurance Company
had wrongly repudiated the claim made by the Complainant Company and the State
Commission had erred in law in allowing the Appeal and dismissing the Complaint.
15. In view of the foregoing discussions, we are of the considered opinion that the
Petitioner is entitled to succeed. Consequently the Revision Petition is allowed and the
Order dated 04.09.2018 passed by the State Commission in Appeal No. A/15/313 is set
aside and the Order dated 14.10.2014 passed by the District Forum in Complaint No.
143/2008 is restored. The Complaint stands allowed.
16. However, in view of the peculiar facts and circumstances of the case, the Parties
shall bear their own Costs.
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