Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 8884-8900 OF 2010
M/s. Galada Power and Appellant(s)
Telecommunication Ltd.
Versus
United India Insurance Co. Ltd. Respondent(s)
and Another Etc.
J U D G M E N T
Dipak Misra, J.
The appellant-complainant filed a batch of 21
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complaints i.e. C.D. Nos.539 to 559 of 2000, claiming
compensation of Rs.43.59 lacs along with interest @ 18%
p.a. from the respondents, namely, United India Insurance
Company Limited and India Transport Organization, on the
ground that there had been shortage/loss of 'All
Aluminium Alloy Conductor' (for short, 'AAAC') wire, which
was supplied by the complainant to the Power Grid
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Corporation of India Limited (PGCIL). The case of the
complainant before the Consumer Disputes Redressal
Forum, Ranga Reddy District (for short, 'the District
Forum') was that between 1.3.1998 to 13.4.1998,
twenty-one trucks of AAAC wire packed in wooden drums
were delivered at stores of PGCIL at Assam. In all the
th
trucks shortage was noticed by PGCIL on 25 March,
1998. As there was shortage, which is called transit-loss
for which the appellant had taken a policy from the
insurer, it put forth a claim before the insurer for Rs.35
lacs. The said claim was lodged before the insurance
rd
company vide letter dated 3 April, 1998.
2. On the basis of the communication made by the
appellant, the insurer appointed a surveyor who gave a
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st
report on 1 September, 1998, assessing the loss
approximately at Rs.2 lacs in each case, thereby the
amount in toto assessed by the surveyor was
approximately Rs.43 lacs. Though the surveyor had
assessed the loss and sent it to the insurance company,
th
the insurer vide letter dated 20 September, 1999,
repudiated the claim by stating thus:-
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“Dear Sirs,
Re: Marine claim
No.050202/21/26/7/18/97/
Policy No.050202/21/26/16/2101/97
On perusal of the records pertaining to the
above claim, and subsequent investigation
into the matter, we find that the above claim
lodged by you does not fall under the purview
of “TRANSIT LOSS”. As such, the claim is not
tenable under the terms of the policy. In view
of this, we are treating your above claim as
“NO CLAIM”.”
[Emphasis added]
3. As the claim was not accepted, the appellant
knocked at the doors of the District Forum for grant of
compensation, but the District Forum declined to accept
the claim on three counts, namely, that there was
non-joinder of necessary parties; that the allegation of theft
was not proved; and that in a summary proceeding the
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factual dispute could not be decided.
4. Dissatisfied by the order passed by the District
Forum, the appellant preferred twenty-one appeals before
the Andhra Pradesh Consumer Disputes Redressal
Commission (for short, 'the State Commission'). The State
Commission after analysing the materials brought on
record opined that the investigator could not be relied
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upon as the investigation had been completed after six
months from the date of occurrence; that the report of the
investigator could not be said to have been based on any
material worthy of verification; that since it was the carrier
who had undertaken to deliver the goods at Assam, it was
they who are responsible to give reasons as to how, when
and where the goods were transshipped and in what
condition the goods were delivered; that the length and net
weight of AAAC wire was mentioned on each drum and also
dispatch documents and the respondent No.2, that is, the
carrier company had issued Exhibit A-3 (lorry receipts)
wherein cross reference to the invoice and delivery challan
numbers were given which clearly established the fact that
the complainant had dispatched as per the said Exhibit;
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that since the persons present at the site at the relevant
point of time i.e. unloading, were the drivers, there was no
reason to disbelieve their endorsements, specifically when
the documents, viz., Exhibits A-25 and 27 confirm the
shortage on 25.04.1998 in 109 drums; that the finding of
the District Forum that the complaint was not
maintainable due to non-joinder of necessary party, that is,
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PGCIL, was not correct and the complaint could not have
been dismissed on that score; that the report of the
surveyor, that is, Exhibit A-12 was based on physical
verification of the consignment of AAAC wire and hence,
the repudiation of claim by the insurer was unjustified;
and that there was no inordinate delay in intimating the
claim to the insurance company. Being of this view, the
State Commission allowed the appeals preferred by the
appellant and determined the compensation approximately
at Rs.43 lacs in all the appeals. Be it noted, the State
Commission while determining the quantum, made the
insurer and the carrier jointly and severely liable.
5. The judgment and order passed by the State
Commission compelled the insurer and the carrier to file
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independent revisions before the National Consumer
Disputes Redressal Commission, New Delhi (for short, 'the
National Commission). The revisions preferred by the
carrier stood dismissed and the same have not been
challenged and, therefore, the view expressed in the case of
the carrier has attained finality.
6. As far as the insurer is concerned, it preferred
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twenty-one revisions, out of which four were dismissed by
the National Commission vide judgment and order dated
th
6 March, 2009, on the foundation that as they dealt with
the transactions pertaining to “open delivery”. We are not
concerned with those four revisions. As far as the
seventeen revision are concerned, the National Commission
allowed them on the ground that the intimation by the
complainant to the insurer was not made within seven
days of arrival of the vehicles at the destination mentioned
in the policy. The reasoning of the National Commission is
to the following effect:-
“In this regard, the dates of delivery are
important to us. As per material brought on
record, the first intimation of the claim or loss
was reported to the petitioner insurer only on
27.3.1998 and confirmed by letter dated
3.4.98. There is no dispute that the arrival
dates of the different consignments in
question start from 1.3.98 onwards till
11.4.98. In the above circumstances and
keeping in view the terms of the Policy,
condition 5 of Inland Transit Clause, we are of
the view that there was no Policy Cover in
existence and the risk stood not covered after
delivery of goods to the consignee. We further
note that, even on practical side, not reporting
the loss in time deprived the Insurer to have a
first a first hand appreciation/assessment of
the extent of loss, more so when, as per
statement on record, against number of
consignments/delivery notes it is clearly
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noted 'seal tempered'.
There can be no dispute that Insurance is a
contract of utmost good faith. Failing to
report the loss, noted at the time of
receipt/delivery is a decisive and a
determinate factor against the complainant.
We also note with some dismay, and wonder
as to why PGCIL was not made a party as it
was at their warehouse in Assam that
shortage/loss is alleged to have been notice.
It is stated by the Ld. Counsel of the Petitioner
that an effort was made before the State
Commission praying for making PGCIL a
party but it was declined. The whole episode
leaves us with a single thought that
complainant did not care for the terms of the
contract and went on to compound the
wrongs.
In retrospect one could only observe that at
least in cases/consignment where material
was found tempered, matter should have been
reported to the underwriters immediately and
delivery should not have been made by the
complainant to the consignee till the loss had
been assessed by the surveyor after perhaps
asking for an open-delivery. This could have
been the case of the consignee also – not
making him a party should be held against
the complainant.
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In the aforementioned circumstances, we are
of the view that there was no coverage of risk
at the time of reporting the loss to the
petitioner/insurer, hence the complainant is
not entitled to any relief in terms of
condition(s) of Policy as also law and other
material on the subject discussed earlier and
also the law laid down by this Commission in
the cited judgment (supra).”
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7. Being of this view, the National Commission
allowed the revision petitions and set aside the orders
passed by the State Commission.
8. We have heard Mr. Rana Mukherjee, learned
senior counsel for the appellant and Mr. Rakesh Kumar,
learned counsel for the respondent No.2. None has
appeared on behalf of the respondent No.1, the insurer.
9. It is submitted by Mr. Rana Mukherjee, learned
senior counsel that the National Commission has grossly
erred by opining that the PGCIL is a necessary party. It is
his further submission that the view expressed by the
National Commission that the claim stands defeated
because of delayed intimation as postulated in
clause no. 5, of the policy is not sustainable, inasmuch as
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a survey was conducted and that apart the letter of
repudiation does not refer or even remotely touch upon any
of the aspects enumerated in clause 5. Additionally, it is
urged by Mr. Mukherjee, learned senior counsel that the
National Commission has erroneously held that the
complainant went on compounding the wrongs, whereas
the material brought on record clearly establish that it was
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quite vigilant and diligent in putting forth his claim and, in
fact, its conduct shows intrinsic faith in the insurer.
10. Mr. Rakesh Kumar, learned counsel appearing for
the respondent No.2 made an endeavour to support the
order passed by the National Commission, but, as has
been stated earlier, when the revisions preferred by the
carrier have already been dismissed and the said orders
have attained finality having not been assailed, we do not
think he can be permitted to argue to sustain the order
passed by the National Commission. Be that as it may, it
really does not make any difference.
11. Clause 5 of the Policy that relates to “Duration”,
reads as follows:-
“5. Duration–. This insurance attaches from
the goods leave the warehouse and/or the
store at the placed name in the policy for the
commencement of transit and continues
during the ordinary course of transit
including customary transhipment if any,
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(i) until delivery to the final warehouse at
the destination named in the
(ii) in respect of transit by Rail only or Rail
and Road, until expiry of 7 days after arrival
of the railway wagon at the final destination
railway station or
(iii) in respect of transit by Road only until
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expirty of 7 days after arrival of the vehicle at
the destination town named in the policy
whichever shall first occur.
N.B.1. The period of 7 days referred to
abvoe shall reckoned from the midnight of the
day of arrival of railway wagon at the
destination railway station or
2. Transit by Rail only shall incidental
transit by Road performed by Railway
Authorities to or from Railway Out-Agency.”
12. The National Commission has relied upon Clause
5 and on that basis has rejected the claim by putting the
blame on the complainant. The letter of repudiation dated
th
20 September, 1999, which we have reproduced
hereinbefore, interestingly, does not whisper a single word
with regard to delay or, in fact, does not refer at all to the
duration clause. What has been stated in the letter of
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repudiation is that the claim lodged by the complainant
does not fall under the purview of transit-loss because of
the subsequent investigation report. It is evincible, the
insurer had taken cognizance of the communication made
by the appellant and nominated a surveyor to verify the
loss. Once the said exercise has been undertaken, we are
disposed to think that the insurer could not have been
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allowed to take a stand that the claim is hit by the clause
pertaining to duration. In the absence of any mention in
the letter of repudiation and also from the conduct of the
insurer in appointing a surveyor, it can safely be concluded
that the insurer had waived the right which was in its
favour under the duration clause. In this regard, Mr.
Mukherjee, learned senior counsel appearing for the
appellant has commended us to a decision of High Court of
Delhi in Krishna Wanti v. Life Insurance Corporation
1
of India , wherein the High Court has taken note of the
fact that if the letter of repudiation did not mention an
aspect, the same could not be taken as a stand when the
matter is decided. We approve the said view.
13. In this context, we may with profit, reproduce a
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passage from Halsbury Law of England, which reads as
follows:-
“In Halsbury’s Laws of England , Vol. 16(2),
4th Edn., Para 907, it is stated:
“The expression ‘waiver’ may, in law, bear
different meanings. The primary meaning has
been said to be the abandonment of a right in
such a way that the other party is entitled to
plead the abandonment by way of confession
and avoidance if the right is thereafter as-
1 2000 (52) DRJ (DB)
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serted, and is either express or implied from
conduct. It may arise from a party making an
election, for example whether or not to exer-
cise a contractual right… Waiver may also be
by virtue of equitable or promissory estoppel;
unlike waiver arising from an election, no
question arises of any particular knowledge
on the part of the person making the repre-
sentation, and the estoppel may be suspen-
sory only… Where the waiver is not express,
it may be implied from conduct which is in-
consistent with the continuance of the right,
without the need for writing or for considera-
tion moving from, or detriment to, the party
who benefits by the waiver, but mere acts of
indulgence will not amount to waiver; nor
may a party benefit from the waiver unless he
has altered his position in reliance on it.””
2
14. In Manak Lal v. Dr. Prem Chand Singhvi , it has
been held:-
“ 8 . … It is true that waiver cannot always
and in every case be inferred merely from the
failure of the party to take the objection.
Waiver can be inferred only if and after it is
shown that the party knew about the relevant
facts and was aware of his right to take the
objection in question. As Sir John Romilly,
3
M.R. has observed in Vyvyan v. Vyvyan :
(Beav p. 75 : ER p. 817)
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‘Waiver or acquiescence, like election, pre-
supposes that the person to be bound is fully
cognizant of his rights, and that being so, he
neglects to enforce them , or chooses one bene-
fit instead of another, either, but not both, of
which he might claim’.”
2 AIR 1957 SC 425
3 (1861) 30 Beav 65 : 54 ER 813
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13
15. Yet again, in Krishna Bahadur v. Purna
4
Theatre , it has been ruled that:-
“A right can be waived by the party for
whose benefit certain requirements or condi-
tions had been provided for by a statute sub-
ject to the condition that no public interest is
involved therein . Whenever waiver is pleaded
it is for the party pleading the same to show
that an agreement waiving the right in con-
sideration of some compromise came into
being. Statutory right, however, may also be
waived by his conduct .”
16. In State of Punjab v. Davinder Pal Singh
5
Bhullar , a two-Judge Bench speaking about the waiver
has opined:-
“41. Waiver is an intentional relinquishment
of a right. It involves conscious abandonment
of an existing legal right, advantage, benefit,
claim or privilege, which except for such a
waiver, a party could have enjoyed. In fact, it
is an agreement not to assert a right. There
can be no waiver unless the person who is
said to have waived, is fully informed as to
his rights and with full knowledge about the
same, he intentionally abandons them. (Vide
Dawsons Bank Ltd. v. Nippon Menkwa
6 7
Kabushiki Kaisha , Basheshar Nath v. CIT ,
8
Mademsetty Satyanarayana v. G. Yelloji Rao ,
Associated Hotels of India Ltd. v. S.B. Sardar
9
Ranjit Singh , Jaswantsingh Mathurasingh v.
10
Ahmedabad Municipal Corpn. , Sikkim Subba
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4 (2004) 8 SCC 229
5 (2011) 14 SCC 770
6 AIR 1935 PC 79
7 AIR 1959 SC 149
8 AIR 1965 SC 1405
9 AIR 1968 SC 933
10 1992 Supp (1) SCC 5
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14
11
Associates v. State of Sikkim and Krishna
Bahadur v. Purna Theatre .)
42. This Court in Municipal Corpn. of Greater
12
Bombay v. Dr Hakimwadi Tenants’ Assn.
considered the issue of waiver/acquiescence
by the non-parties to the proceedings and
held: (SCC p. 65, paras 14-15)
“ 14. In order to constitute waiver, there
must be voluntary and intentional relinquish-
ment of a right. The essence of a waiver is an
estoppel and where there is no estoppel,
there is no waiver. Estoppel and waiver are
questions of conduct and must necessarily be
determined on the facts of each case. …
15. There is no question of estoppel, waiver
or abandonment. There is no specific plea of
waiver, acquiescence or estoppel, much less a
plea of abandonment of right. That apart, the
question of waiver really does not arise in the
case. Admittedly, the tenants were not parties
to the earlier proceedings. There is, therefore,
no question of waiver of rights by Respon-
dents 4-7 nor would this disentitle the ten-
ants from maintaining the writ petition.””
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17. In the instant case, the insurer was in custody of
the policy. It had prescribed the clause relating to
duration. It was very much aware about the stipulation
made in clause 5(3) to 5(5), but despite the stipulations
therein, it appointed a surveyor. Additionally, as has been
stated earlier, in the letter of repudiation, it only stated
that the claim lodged by the insured was not falling under
11 (2001) 5 SCC 629
12 1988 Supp SCC 55
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the purview of transit loss. Thus, by positive action, the
insurer has waived its right to advance the plea that the
claim was not entertainable because conditions
enumerated in duration clause were not satisfied. In our
considered opinion, the National Commission could not
have placed reliance on the said terms to come to the
conclusion that there was no policy cover in existence and
that the risks stood not covered after delivery of goods to
the consignee.
18. Coming to the merits of the claim, we find that
the surveyor had given a report that there was a loss. He
had also quantified it. The State Commission after
elaborate discussion has held as follows:-
“The surveyor also confirmed in their reports,
the shortage/loss of AAAC due to pilferage
during transit and estimated the loss as per
Ex.A12. This shortage was also confirmed by
Katigorah police as per Ex.A13 and as
reiterated earlier by the Tage Over Certificate,
Ex.A19. Taking into consideration that the
surveyros appointed by the insurance
company have completed their investigation
and submitted their reports and thereafter an
investigator was appointed on 16-4-1998
without any valid reasons. It is held by the
National Commission in 1 (2004) CPJ 10 (NC)
in Gammon India Ltd., v. New India
Assurance Co. Ltd. that 'Report of first
surveyor not accepted, second surveyor
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appointed-Appointment of second surveyor
not explained – Deficiency in service proved –
Report of first surveyor upheld' and the
investigator in the instant case submitted his
report on 28-12-1998 i.e. almost 8 months
after his appointment. Taking into
consideration all the above submissions, we
are of the considered opinion that the
appellant/complainant was able to establish
that there was shortage/damage to the
consignment which was given to second
respondent for transportation.”
19. Though the said aspect has not been gone into by
the National Commission, yet we find, the findings
recorded by the State Commission are absolutely justified
and tenable in law being based on materials brought on
record in such a situation we do not think it appropriate
that an exercise of remit should be carried out asking the
National Commission to have a further look at it. In any
case, the exercise of revisional jurisdiction by the National
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Commission is a limited one. We may hasten to add that
to satisfy ourselves, we have perused the surveyor's report
and scrutinized the judgment and order passed by the
State Commission in this regard and we are completely
satisfied that the determination made by it is absolutely
impeccable.
20. In view of the aforesaid analysis, the appeals are
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allowed. The judgment and order passed by the National
Commission in the batch of appeals is set aside. We have
been apprised that 50% of the amount was deposited and
the appellant has withdrawn the said amount. The
balance amount along with interest, as directed by the
State Commission, shall be paid by the insurance company
within four months from today. There shall be no order as
to costs.
.................................J.
(Dipak Misra)
.................................J.
(Rohinton Fali Nariman)
New Delhi;
July 28, 2016.
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