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Andagro United Services Ltd. Vs. United India Insurance Co. Ltd. and Another - Court Judgment

LegalCrystal Citation
CourtNational Consumer Disputes Redressal Commission NCDRC
Decided On
Case NumberOriginal Petition No. 165 of 2000
Judge
AppellantAndagro United Services Ltd.
RespondentUnited India Insurance Co. Ltd. and Another
Excerpt:
consumer protection act, 1986 - sections 2(1)(d), 21(a)(i), 2(1)(g), 2(1)(o), 14(1)(d); marine insurance act, 1963 - section 34; consumer protection act 1986 - sections 2(b)(i) and 12, customs act 1962 - section 23; appeal against the order of the state consumer commission - main controversy swirls around the question “whether the ‘doctrine of contribution’ is applicable in this case?. complainant is an importer and dealer in commodities – port of kandla was hit by a storm/cyclone, became inundated – claimed compensation from insurance company – rejected on the ground of false excerpted terms of the policy. court held - each policy must cover the same interest in the same property, that is to say, each.....j.m. malik, presiding member 1. in this case, filed in this commission on 07.06.2000, the main controversy swirls around the question œwhether the doctrine of contribution is applicable in this case?. the marine policy is pitted against a fire policy, obtained from united india insurance co. ltd., op2, in this case. clause 4 of the fire insurance policy states : order: œthis insurance does not cover any loss or damage to property, which at the time of the happening of such loss or damage, is insured by or would, but for the existence of this policy, be insured by any marine policy or policies except in respect of any excess beyond the amount which would have been payable under the marine policy or policies had this insurance not been effected?. the other question is.....
Judgment:

J.M. Malik, Presiding Member

1. In this case, filed in this Commission on 07.06.2000, the main controversy swirls around the question œWhether the Doctrine of Contribution is applicable in this case?. The marine policy is pitted against a Fire Policy, obtained from United India Insurance Co. Ltd., OP2, in this case. Clause 4 of the Fire Insurance Policy states :

Order:

œThis insurance does not cover any loss or damage to property, which at the time of the happening of such loss or damage, is insured by or would, but for the existence of this policy, be insured by any marine policy or policies except in respect of any excess beyond the amount which would have been payable under the Marine Policy or policies had this insurance not been effected?.

The other question is œWhether other clauses of Insurance Policy will pale into insignificance?. The said Clause is to be read as vacua or as a part of whole composite policy?. The another knotty question is œWhether the complainant has insurable interest?.

2. Let us now proceed to mention the facts of the case. The complainant is an Importer and Dealer in commodities. In April, 1998, the complainant imported 5000MTs sugar to Kandla. The sugar was purchased CIF (Cost, Insurance, Freight) and the complainants Seller insured the cargo with Gerling-Konzern, who are the marine insurers and assigned the insurance to the complainant. The insurance with marine insurers was on a declaration basis and it was declared for a proportion CIF value of USD 662112. The cargo arrived at Kandla on 04.05.1998 by ship. It was cleared by the customs. A total relevant quantity of 181 MTs remained with the port premises and were stored in Central Warehousing Corporation (CWC), OP2. OP 2 charged the complainant for warehousing services and as a separate charge, charged for obtaining insurance. Insurance covered risk of œstorm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation?. The consideration was paid by the complainant in the first instance to OP2 and OP2 subsequently passed on the same to the United India Insurance Co. Ltd.,OP1. OP2 is required to make periodical declarations to OP1. OP2 is bound to obtain a proper and adequate insurance cover and to ensure that any insurance claim is paid to the complainant.

3. On or about 09.06.1998, a total quantity of 181MTs remained in the godown of OP2. The port of Kandla was hit by a storm/cyclone, became inundated and flooded and was otherwise struck by an occurrence covered by the insurance policy. The warehouse and the port was flooded and all the goods were rendered unfit for human consumption. The goods were tested by the Port Health Organisation and were found not to conform to the standards and provisions of the Prevention of Food Adulteration Rules. Certificate in this context, dated 26.06.1998 has been placed before the Commission. OP2 was the Bailee of the goods and in actual custody of the goods. It was required to take due care of the goods as well as to take all necessary steps to protect the goods. On 17.11.1998, the complainant filed its claim with OP2. OP2 refused to disclose the terms of the insurance. Sh.H.Srinivasan, Sr.Divisional Manager of OP1 refused to disclose the full terms and conditions of the policy. He read over selective reading which was designed to mislead the complainant which is itself a deficiency in service.

4. Prior to that, on 03.03.1999, the OPs forced and induced the complainant to give an undertaking that they would not claim under the marine policy, but refused to disclose the policy. The complainant by its letter dated 08.03.1999, gave the undertaking. In response to the complainants Advocates letter, the OP2, purported to have forwarded a copy of the policy by its letter dated 25.08.1999. The said policy contained only one printed page which purported to exclude the liability of OPs. The non-supply of the full copy was another deficiency in service. The above said copy was incomplete and incorrect. However, vide their letter, dated 09.11.1999, OP1 dishonestly stated that the policy was complete. The complainant vide its letter dated 23.12.1999 asked the OP to send copy of each page of the policy, but in response to the said letter, the complaint policy was not sent, instead, a blank form containing printed terms and conditions was sent.

5. In the meantime, the complainants marine insurer, on 21.10.1999, in absence of any accurate information on the policy of OP1, considered the claim as a Double Insurance and settled the claim by paying 50% of the policy and balance was to be claimed from the OPs policy. The claim of the complainant results from a total loss of 1881MTs of white refined sugar valued at USD 352.00 per MT @ Rs.44.05 equivalent to Rs.15,505.60 per MT and having a total value of USD 662,112.00 @ Rs.44.05 equivalent to Rs.2,91,66,033.60. The complainant claims the sum of USD 4,65,910.00 @ Rs.44.40 equivalent to Rs.2,06,86,406.24 being the total of the actual relevant cost of the goods i.e. USD 331,056.00 @ Rs.44.40 equivalent to Rs.1,45,79,706.24 plus interest @ 21% p.a. from the date of loss, i.e. 09.06.1998 till 06.06.2000. The complainant has also claimed other proportionate relevant expenses in the sum of Rs.6,78,787/- along with interest @ 21%.p.a., compensation and damages in the sum of Rs.1,20,00,000/- against the OPs, jointly and severally.

6. It is contended that the above said deficiency, on the part of OPs is apparent. The policy and full terms, and complete policy was never disclosed. The complainant was misled by giving false excerpted terms of the policy. The failure of the OP to consider and honour the complainants claim or to perform the acts and deeds and things necessary for the expeditious consideration and the honouring of the complainants claim by the marine insurers. In the alternative, if the policy does not cover the complainants claim, the said OP has provided deficient service in charging premium and failing to obtain a proper and complete insurance policy with the complainant, the acts and omissions of OP has resulted in the complainants claim being settled at 50% on their claim by the marine insurers and, therefore, OPs are liable to pay for the same. Again contract of insurance is a contract of uberrimae fides. OP1 owed a duty of utmost good faith to the complainant and was in breach of their duty. It avoided to perform all the obligations. 2nd OP was an agent and/or bailee and/or warehouseman and owed diverse duties of care and faith to the complainant. OP2 while working with OP1 in cahoots, sought to avoid making payment under the insurance and to assist the OP1 in breaching its obligations.

7. In its written statement, OP1 has listed the following defences. The complainant is not a œconsumer?. The complainant has not hired or availed of any services from OP1 for a consideration. It is also not the beneficiary of such services. The complainant is not a consumer in terms of Section 2(b)(i) of CP Act, 1986 as he has not hired or availed of the services of OP1. Before a dispute can be termed as a consumer dispute, it is necessary that the petition should be in terms of the Act. This complaint does not constitute a complaint in terms of Section 2(c)(iii) as there is no consumer dispute and the complaint is not maintainable. The complainant does not disclose any provisions of law under which the services by the OP1 was required to be maintained. OP1 did not undertake any services to be performed to complainant in pursuance of a contract or otherwise as there is no question of any deficiency in discharge of its service.

8. As a matter of fact, OP1 had issued a Fire Insurance Policy to OP2. The said contract is purely between the OPs. No third-party or a stranger to a contract has any right to lay his claim against OP1 on the basis of the said insurance policy. The above mentioned insurance policy issued in favour of OP2 is itself dependant for its revival upon the compliance by OP2 with the terms and conditions and obligations specified in the policy. OP2, in whose favour the insurance policy has been issued, can also not transfer its rights under the policy to a third-party without the consent of OP1 as the insurance policy is a personal contract between the contracting parties. The complainant cannot acquire a right to sue under the policy and cannot maintain the petition against the OP1. The complainant had no right to ask declaration of the contents of the insurance policy existing between OP1 and OP2 and to which insurance policy the complainant itself is not a party. The complaint was not filed in accordance with Section 12 of Consumer Protection Act, 1986.

9. OP1 admits that the sugar was imported. The Seller had insured the sugar and the insurance policy was assigned to buyer/complainant. The contribution in marine insurance applies only when the insurable interest is covered in more than one insurance policies, which ought to have become clear to the complainant and its marine insurer that if at all there was a fire insurance existing in the name of OP2, it would necessarily cover the insurable interest only of OP2 in the goods, which insurable interest would be very different than the one possessed by the complainant in respect of the subject matter. Merely because the goods are the same, the contribution does not apply at all. It was wrong for the marine insurer to have assumed that contribution applied. In case the complainant and its marine insurers proceeded under a misunderstood provisions of insurance law, it is a matter between themselves and the OPs are not liable for the result flowing from such misunderstanding.Again, the subject matter of two contracts are not identical. The law of contribution does not apply. All the other allegations have been denied.

10. Now, we advert to the written statement of OP2. OP 2 admitted that the stock of the complainant was stored in the Kandla Warehouse. The insurance of the stock was arranged with OP1 on behalf of the complainant. The storage charges as well as the insurance charges were collected from the complainant at the time of delivery of the stock. It is admitted that stocks of the complainant were damaged in a cyclone on 09.06.1998, due to natural calamity. Consequently, it cannot be said that there was deficiency in service on part of OP2. The marine insurance policy was assigned to buyer/complainant. The credit note towards insurance charges was, for the first time, raised only on 31.08.1998 onwards. Whereas, the credit note towards the storage charges was raised on 03.06.1998 onwards. The insurance charges were recovered from the complainant only subsequent to the cyclone on 09.06.1998. Even though the same had been paid by OP2 to the insurance company in advance. OP2 has taken fire declaration from OP1 on behalf of all depositors whose goods arrive in the warehouse and covers all warehouses, OP2, situated all over India. A sum of Rs.3.90 crores were paid by OP2 to OP1 as a premium towards the said policy for the year 1998-99. It is averred that the policy obtained by OP2 is a normal fire declaration with standard terms and conditions and, therefore, there was nothing confidential about the same. But on the other hand, the complainant failed to make available to OP2, the copy of marine insurance policy obtained by it, in spite of several reminders. The complainant has already got compensation to the extent of 50% of the claim. As per the conditions of the Fire Policy, the complainant had to first pursue the claim with the marine insurer. The marine insurer should have discharged its liability in full under the marine policy. The complainant should have pursued its right to recover the full amount of claim under the marine policy because it extended to cover the entire amount of loss. OP2 is not liable to the loss as it had happened force majure and secondly the fire insurance of a bailee covers interest from that of an owner of property and thirdly the fire insurance policies the world over contain the Marine clause whereby the fire insurance can be called in to consider the claim, if any, only in excess of the liability under marine policy.

11. The claim made by Complainant is an exaggerated one. It cannot set up a claim for an amount in excess of that calculated strictly on the basis of principle of indemnity. However, in any case, OP2 is prepared to pay the compensation to the depositors if OP1 agrees to pay the same and the same is received from OP1.

12.  We have heard the counsel for the parties and perused their written synopses. Both the OPs have placed much reliance on Clause 4 of the Insurance Policy. Before proceeding further, it would be worthwhile to reproduce the relevant salient features of the Fire Policy :

Clause 4 of the said policy, already stated above.

Clause 6 of the said policy states : It is hereby declared and agreed that the property insured under this policy is either the insureds own or held by him/them in trust, in deposit or in commission or on joint account with others for which he/they is/are liable in the event of loss or damage by fire.

Clause 11 of the policy states : If at the time of any loss or damage happening to any property hereby insured, there be any other subsisting insurance or insurances, whether effected by the insured or by any other person or persons covering the same property, this Company shall not be liable to pay or contribute more than its rateable proportion of such loss or damage.

Clause 3 of the Special Conditions appended with the policy, runs as follows:- œIf at the time of any loss or damage happening to any property hereby insured there be any other subsisting insurance or insurances, on other than a declaration basis, whether effected by the insured or by any other person or persons covering the stocks hereby insured, this policy shall apply only to the excess of the value of such stocks at the time of the loss over the sum insured by such other insurance or insurances, this Company shall not be liable to pay or contribute more than that proportion of such loss which such excess [or if there be other declaration insurances covering the same stocks, a rateable proportion of such excess], but not exceeding the Sum Insured hereby, bears to the total value of the stocks?.

Another special condition is also reproduced hereunder :-

œIt is understood and agreed that the entire property in one complex/location is extended to cover risk of Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation and the sum insured for this extension is identical to the sum insured against the risk covered under Fire Policy C?.

13. It was argued that contribution in marine insurance applies only when the same insurable interest is covered under more than 1 insurance policies. It was submitted that it ought to have become clear to both the complainant and his marine insurer that if at all, there was any fire insurance existing in the name of OP2, it would necessarily cover the insurable interest only of OP2 in the insured property which insurable interest would be very different than the one possessed by the complainant in respect of the subject matter. It was emphasised that merely because the goods are the same, the contribution does not apply at all. The marine insurer wrongly assumed that the Doctrine of Contribution is applicable. Moreover, there were two contracts of insurance, i.e. (1) the marine policy existing between the complainant and his marine insurer and (2) fire policy existing between OP1 and OP2. Since it does not contain the same insurable interest, the law of contribution does not apply and the OP1 had no duty to disclose to overseas marine insurer, the nature or extent of contract of fire insurance existing between the OPs.

14. It was also argued that the complainant had not hired or availed of any service of OP2 for consideration. The complainant is also not a beneficiary of such service. The complaint does not constitute a complainant as there is no consumer dispute vis-à-vis, this OP. Since OP1 has not undertaken any service to be performed by complainant in pursuance of a contract or otherwise, therefore, there can be no allegation of deficiency in this case. OP1 had issued a fire insurance policy in favour of OP2. There is no privity of contract between the complainant and OP1. OP2 also cannot transfer its rights under the policy to a third-party without the consent of OP1. Again, insurance policy is a transfer contract between the contracting parties. The complainant cannot acquire a right to sue under the policy and cannot maintain the complaint. The complainant has no right to ask disclosure of the contents of the insurance policy existing between the OP1 and OP2 to which insurance policy, the complainant is a stranger.

15. In their written submissions, OP2 admits that the above said cyclone did not give any time to OP2, to save the stocks as there was no prior warning. The cyclone caused damage worth Rs.600.00 crores at Kandla port. The official death toll went up to 100 persons. The complainant did not plead that there was negligence on the part of OP2 in keeping all the goods in warehouse and ipso facto, the deficiency of service does not arise on the part of OP2. This is loss of goods and act of God, which is not covered under the fire policy. This is universal practice across the globe. As per clause 4, 11 and clause 3 of the Special Conditions, the complainant had to exhaust the remedy first of all against the marine policy to the full extent. In the instant case, the complainant submitted its undertaking/bond dated 08.03.1999 that the complainant would not take the subject claim from the Marine Insurance of M/s. Gerline but per contra, despite submitting undertaking, the complainant obtained claim from marine insurance and settled the claim at 50%. Since the complainant had already settled the claim with marine policy, he is not entitled to get any claim from OP2. Moreover, Central Warehouse Corporation is not liable by virtue of clause 4. The Doctrine of Double Insurance is not applicable. Both the parties did not incorporate contribution clause. Moreover, OP2 kept good under statutory provision not because of any contract with complainant. OP2 is appointed by the Customs under Section 57 of the Customs Act, 1962, as Public Warehouse for keeping the goods which are subject to customs clearance. The complainant imported total 5000 MTs of Pakistan sugar and the said record was getting cleared by customs step by step in lots and the last lots of said goods 1881 MT sugar were not cleared by them.

16. OP2 admits that it had realised the charges not at the time of deposit of goods but at the time of delivery and in the instant case too, by virtue of receipt dated 03.06.1999, the OP2 only raised bills in pursuance of condition printed at the right hand top of the said receipt and the said charges were realised on 31.08.1998, subsequent to 09.06.1998, and therefore, at the time of advent of cyclone, there was no consideration passed by the complainant to OP2 to make a concluded contract. OP2 has to pay the damages on pro rata basis and OP2 does not obtain insurance cover on behalf of any of its clients, including the complainant as the OP2 got insured its interest of warehouse, not its clients and whenever a loss is caused to the goods at any point of time, the said loss is paid on pro-rata basis to all whose goods were kept and damaged. It was also argued that in case of insurance claim, the CWC simply transfers the claim of the insurance company and it is the insurance company which is to appoint a Surveyor and assess the loss of the complainant and whatever amount the insurance company decides to approve, the OP2 receives the same from the insurance company and again re-transfers to individual claimant/complainant or the charges on pro rata basis. Thus, the OP2 is merely a conduit between the insurer and the complainant and it cannot be made liable for the claim of the insurance. There is no privity of contract between the complainant and OP2. OP2 is merely the Bailee of the Customs and does not represent the Bailor. It was submitted that mere receipt of a premium does not give rise to a concluded contract of insurance as per ratio propounded in (1) M/s. Marthi Crystal Vs. Oriental Insurance Co. Ltd. , AIR 2001 Mad, 288 and (2) SalehMd. Vs. Ramrattan Tiwari, AIR 1924 Nag 156. Moreover, there is negligence on the part of the complainant itself. There was no water proof packaging and it did not invoke Section 23 of the Customs Act, 1962 for remission of Custom Duty. Again, Customs is not a party.

17. We find it extremely difficult to countenance these contentions. First of all, we will decide the question whether the complainant is a stranger to the contract of insurance. The OP2 obtained insurance services from OP1 for the benefit of complainant and other parties, whose goods were being kept there. Secondly, premium was paid by the complainant in advance to OP2. OP2 in its written statement clearly mentions about it. Consequently, the complainant is a œconsumer?. The privity of contract stands established between the complainant and OP1 due to agreement entered into between OP1 and OP2. OP1 is jointly and severally liable with OP2, qua the complainant. This was never denied that the complainant had paid portion of total insurance policy, the suppression of relevant provisions of insurance policy, the missing representation and the admitted non-payment itself, constitute a deficiency in service on the part of OP1. In ShriLaxmi Cotton Traders Vs. CWC and Ors., III 1996 CPJ 22 (NC) same view was taken.

18. We are of the considered view that Doctrine of Contribution is applicable in this case. The entire policy must be read holistically. We cannot rely upon one part and ignore the others, in favour of the insurance company and to the detriment of the complainant. Clause 11 of the insurance policy provides for Contribution as well as rateable proportion of such loss or damage. Clause 3 of the Special Conditions further provides that it will cover the risk of cyclone as well. In view of these clauses, Clause 4 of the insurance policy pales into insignificance. Other Clauses will prevail over Clause 4. Moreover, relevant clauses of the Fire Policy were never disclosed.

19. OP1 wants to have the benefit of both the worlds. It has accepted premium in the sum of Rs.3.90 crores paid by the OP2 for all the persons whose goods were kept there, and on the other hand, it does not want to compensate the complainant on frivolous grounds. Moreover, the privity of contract stands established with the following facts which cannot be skimmed over. (1) The cash receipt dated 03.06.1998, issued by OP2 to M/s. V.Arjoon, Forwarding and Clearing Agents, for the complainant indicating, inter alia, the insured charges paid by the complainant to OP2 and also the Warehouse charges paid by the complainant to OP2 and the acknowledgement of stocks of sugar issued by OP2 to M/s.V.Arjoon, Forwarding and Clearing Agents for the complainant and delivery of these stocks (2) letter dated 09.06.1998 addressed by OP to M/s.V.Arjoon, Forwarding and Clearing Agents, wherein it is confirmed œCargo stored in our warehouse at Kandla is insured with the United India Insurance Co. Ltd., under All India Floater Policy, taken by our office, CWC, New Delhi. The insurance is for flood, fire, theft, cyclone, burglary, etc. (3) The claim submitted by the complainant through its Consultants, addressed to OP2, dated 07.09.1998. (4) The revised bill dated 10.09.1998, given by OP2 to M/s.V.Arjoon, to the account of the complainant, in the sum of Rs.3,87,178/- being the dumping and destruction expenses. (5) Corresponding evidence which forms part of Annexure C-1, are (a) Letter dated 25.11.1998, wherein OP2 admits that œconsignment is also insured under marine policy?, (b) letter dated 21.12.1999, addressed by OP2, admits that œyour claim is being processed at our Regional Office/Corporate Office. There are other letters, dated 27.01.199, 28.01.1999, 03.03.1999, 09.04.1999, 01.05.1999, 12.05.1999, 02.06.1999, 11.06.1999, 25.08.1999, 09.09.1999, 06.10.1999, 15.12.1999, 27.01.2000, which show that OP2 took up the matter with OP1. There is a letter dated 08.03.1999 written by the complainant to OP2. The relevant para of which runs as follows:-

œWe refer to your letter under captioned and hereby undertake that we will not take the subject claim from our Marine Insurance Company and that at the time of payment of claim to us we shall furnish an indemnity bond to this effect to the Central Warehousing Corporation.

We trust you will find the above in order and expedite settlement of our claim at the earliest, especially when the same has been pending with you since September, 1998 and similar claims of other parties, to our knowledge have already been settled, needless to reiterate/highlight the financial hardship being experienced by us due to delay in settlement of our claim?.

20. The learned counsel for the OP submitted that it has breached the undertaking given by the complainant. It has recovered compensation to the extent of 50%. It was contended that the complainant is not entitled to any further compensation in view of the above said undertaking.

21. We do not locate substance in these arguments. This case is pending before this Commission for the last thirteen years. Despite giving this undertaking, there lies no rub in pursuing the matter with the marine company. The complainant has not got reimbursement of a single paisa from the OPs. The undertaking was given on 08.03.1999. We find considerable force in the submission made by the counsel for the complainant that the complainant acted in the best interest of the OPs by claiming both from the marine insurer and from the OPs, in order to reduce the burden of OP1. Moreover, according to insurance law, the assured has the right to persuade both the insurers on the basis of equity because it has paid the premium to two insurers and the two insurers must share the burden equally. The complainants are bound to claim in law, the rateable interest from both the policies.

22. So far as Marine Insurance is concerned, Section 34 of the Marine Insurance Act, 1963, provides as follows:-

œ(1) Where two or more policies are effected by or on behalf of the assured on the same adventure and interest or any part thereof, and the sums insured exceed the indemnity allowed by this Act, the assured is said to be over-insured by double insurance.

(2) Where the assured is over-insured by double-insurance:-

(a) the assured, unless the policy otherwise provides, may claim payment from the insurers in such order as he may think fit, provided that he is not entitled to receive any sum in excess of the indemnity allowed by this Act;

(b) where the policy under which the assured claims is a valued policy, the assured must give credit as against the valuation, for any sum received by him under any other policy, without regard to the actual value of the subject-matter insured;

(c) where the policy under which the assured claims is an unvalued policy he must give credit, as against the full insurable value, for any sum received by him under any other policy;

(d) where the assured receives any sum in excess of the indemnity allowed by this Act, he is deemed to hold such sum in trust for the insurers, according to their right of contribution among themselves?.

23. In an English case, reported in National Employees Mutual General Insurance Association Ltd. Vs. Haydon 1980 2 Lloyds Law Reports 149. The facts of this case were :

The Policy stated :

œThis policy does not indemnify the insured in respect of any claim made against him (i) for which the Insured is or would but for the existence of this Policy be entitled to indemnify under any other Policy except in respect of any excess beyond the amount payable by such Policy ¦¦.?.

It was held, :

œ4. Each policy was to be looked at independently and if each would be liable but for the existence of the other, then the exclusion clauses were to be treated as cancelling each other out and the plaintiffs and defendants were liable on the policies and the plaintiff was entitled to a contribution?.

It was also held :

œIn my judgment, this case turns on the construction of the two policies as a whole and in particular of general exception (i) in the NEM policy and general exclusion 5 (b) (iii) in the master policy. If those two clauses are indistinguishable in their effect, as the Judge thought, I would agree with him that, like Mr.Justice Rowlatt in Weddells case, the Court should invoke the equitable principle of contribution between co-insurers to avoid the absurdity and injustice of holding that a person who has paid premiums for cover by two insurers should be left without insurance cover because each insurer has excluded liability for the risk against which the other has indemnified him. But I accept Mr.Irvines submission that the two clauses we have to consider are clearly distinguishable from each other, and that on their true construction the solicitors are covered by the NEM policy and not by the master policy against the Glover claim. Whether these clauses are rightly labelled exceptions or exclusions does not, in my opinion, matter. The question is, what in each case is covered by these policies read as a whole, including these clauses?.

It was further held :

œ¦. In the case of double insurance an exemption clause will not be allowed to deprive the insured of the benefit of both policies. The insured was only entitled to recover 50% under one policy because there was a rateable proportion clause which reduced the liability under that policy in the event of another insurance policy existing at the date of the accident, as it did?.

24. Again, in another English case, in reference, the Court of Appeal in case, Commercial Union Assurance Co.Ltd. Vs. Hayden, [1977] Vol.I] 13, held :

œWhere a man has made a double insurance, he may recover his loss against which of the underwriters he please, but he can recover for no more than the amount of his loss¦¦ It being thus settled, that the insured shall recover but one satisfaction, and that in the case of double insurance, he may fix upon which of the underwriters he will for the payment of his loss, it is a principle of natural justice that the several insurers should all of them contribute in their several proportions, to satisfy that loss against which they have all insured?.

25. Similar view was taken in (1)Legal and General Assurance Society Ltd. Vs. Drake Insurance Co.Ltd., [1984 L. No.1495], I.Q.B. 887, (2)British Telecommunications PLC and Ors. Vs. Caledonia North Sea Limited and Ors., UKHL/0029/2002 and (3)Drake Insurance PLC Vs. Provident Insurance PLC, UKCM/0001/2003.

26. Generally, the rule applicable is that a Tribunal is endowed with such ancillary and incidental powers to discharge its functions. The Honble Supreme Court in GrindlaysBank and Central Government Industrial Tribunal, AIR 1981 SC 606, went on to hold that by rule of statutory contribution, a Tribunal is endowed with such ancillary and incidental powers as necessary to discharge its functions effectively for the purpose of doing complete justice between the parties.

27. InGeneral Assurance Society Ltd. Vs. Sitarama Rice Mill Co. and Ors., 1971 Comp Case 162 (Mad), it was held :

œThe contribution clause in exhibit A-1 has been introduced only in order to secure to the first defendant the right of contribution wherever it arises. The general principle is that the assured who insures his property cannot recover more than a full indemnity. But for such contribution clause, it would be open to the assured to select the policy upon which to claim his indemnity “if that alone is sufficient for the purpose “ and the insurers upon that policy cannot resist liability upon the ground that there are other policies in existence which the assured might have enforced. (See page 415 of Ivamys General Principles of Insurance Law). At page 416 of the same book, it is stated in order to give rise to a right to contribution the following conditions must be fulfilled: 1. All the policies concerned must comprise the same subject matter. 2. All the policies must be effected against the same peril. 3. All the policies must be effected by or on behalf of the same assured. 4. All the policies must in force at the time of the loss. 5. All the policies must be legal contracts of insurance. 6. No policy must contain any stipulation by which it is excluded from contribution. In dealing with the conditions giving rise to right of contribution, it is stated in paragraph 528 at page 267 of Halsburys Laws of England, third edition, volume 22, that each policy must cover the same interest in the property and the principle is explained in the following passage:

œEach policy must cover the same interest in the same property, that is to say, each policy must be intended to protect the same assured against the same loss. The policies must, therefore, cover a common interest; it is not sufficient that they cover the same property. Where separate insurances are effected upon the same property by different persons interested in it for the purpose of protecting their separate interests only, there is no contribution. Thus, there is no contribution when separate policies are effected by bailor and bailee, by mortgagor and mortgagee or by landlord and tenant for their individual protection. Where, however, one of the policies is intended to ensure for the benefit of both persons interested, as, for instance, where the bailee, mortgagor or tenant intends to cover the interest of his bailor, mortgagee or landlord as well as his own, a case of contribution arises between such policy and any policy effected by the bailor, mortgagee, or landlord for his separate protection, since both policies, in fact, cover a common interest, namely, the interest of the bailor, mortgagee or landlord?.

28. The learned counsel for the Complainant has invited our attention to (1) ContshipContainer Lines Limited Vs. DK Lall and Ors., (2010) 4 SCC 256, (2)New India Assurance Co. Ltd. Vs. Priya Blue Industries Pvt. Ltd., (2011) 4 SCC 231, (3)Oriental Insurance Co. Ltd. Vs. Ozma Shipping Co. and Anr., (2009) 9 SCC 159.

29. In view of the facts and circumstances of this case, no liability can be fastened upon OP2. However, instead of helping the complainant, it supported the OP1. Why did OP2 work in cahoots with OP1? On the other hand, the OPs compelled the complainant to give the undertaking that they would not claim any amount from the Marine Policy as they would compensate it completely, on the other hand, OPs want to shirk from paying 50% of the loss.

30. The whole gamut of above said facts and circumstances leans on the side of the complainant. We, therefore, direct the OP1 to pay 50% of the total loss of Rs.2,06,86,406.24ps with interest @ 9% p.a. from the date of filing of this complaint, i.e. 07.06.2000, till realisation of the decreetal amount, to the complainant. Compensation for mental agony and harassment, in the sum of Rs.50,000/- is also granted, payable by OP1, to the complainant, within 45 days, failing which it will carry interest at the rate of 9%, p.a., till realisation.


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