Deciding Authority: The Supreme Court of India
Name of the Judges: D.P. Mohapatra & K.G. Balakrishnan
Date of Judgement: 09/01/2002
Facts:
Civil Appeal No. 559 of 1994 by National Insurance Co. Ltd. and Civil Appeal No. 633 of 1994 by M/s Sky Gems are filed against the judgment dated 21st December, 1993, passed by the National Consumer Disputes Redressal Commission (hereinafter referred to as ‘National Commission’). The respondent-Sky Gems exported two parcels of precious stones (Emerald) to London through the Foreign Post Office, New Delhi on 10.9.1990. However, the consignment did not reach the consignee and was believed to have been either stolen or lost in transit. The respondent had taken two insurance policies from the appellant-insurance company. The total sum assured was Pound Sterling 85,740.55 (CIF value + 10%). M/s. W.K. Webster & Company, London, were appointed as investigators and their report dated 25.3.1991 confirmed that the consignment had either been lost or stolen. Non-delivery certificate was issued by the Department of Posts (Foreign Post), New Delhi, in respect of the consignment. The postal authorities admitted their liability and made payment at the rate of Rs. 10,254.50 for each parcel representing the full insured value and service charges. In respect of the two policies obtained from the appellant-insurance company, respondent preferred a claim and the appellant agreed to settle the same for Rs. 28,30,000. The respondent claimed from the appellant an amount of Pounds Sterling 1,07,175.60 and insisted that the payments be made in Pounds. For some reason or the other, there was a delay in settlement of the claim and the respondent filed a petition before the National Commission. The appellant resisted the claim and contended that it was not liable to pay the respondent in Pounds Sterling. It was also contended that as the title in the goods had not passed to the consignee the respondent continued to be the owner of the goods and, therefore, the payment could be effected only in Indian currency.
The National Commission held that as the insurance policies clearly stated that the claim was “payable at London” and the declared invoice value and the insured value of the consignments were in terms of Pounds Sterling, the appellant was liable to pay to the respondent in Pounds Sterling and ultimately ordered the appellant to pay Pounds Sterling 85,740/- + 10% or Pounds Sterling 94,314/-. The respondent was also held entitled to recover interest at the rate prevalent on commercial borrowings in U.K. from time to time, commencing from January, 1991 to the end of December, 1993. The appellant was entitled to adjust the amount of Rs. 20,000 received as compensation from the postal authorities. A sum of Rs. 50,000/- was also ordered as compensation for delayed payment. This Order of the National Commission has been challenged before this Court.
Judgement:
This Court heard Mr. M.S. Nargolkar, learned senior Counsel on behalf of the appellant and Mr. V.A. Mohanty, learned senior Counsel on behalf of the respondent. The dispute in this case is only with regard to the mode of payment to be effected by the appellant in favour of the respondent. The counsel for the respondent contended that as per the terms of the policy, the insured amount was payable at London and, therefore, the payment to be effected has to be in Pounds Sterling. The consignment of the precious stones was dispatched in favour of M/s. Emdico (London) Limited. As per the insurance policy, the claim for settlement was given to M/s. W.K. Webster & Company, 6 Lloyd’s Avenue, London. The contention of the respondent is that as the insurance policy specifically stated that the claim was payable at London, the payment should be made by the appellant only in Pounds Sterling.
It is evident on records that the consignee Emdico (London) Limited, did not pay the value of the missing merchandise to the respondent. There is no evidence to show that the necessary documents were endorsed in favour of the consignee and that they were transferred to them. These facts will show that the title to the goods in question had not passed to the consignee, M/s. Emdico (India)Limited and the respondent continued to be the owner having insurable interest over the goods.
The learned senior Counsel for the respondent contended that the goods were sent on CIF contract and the moment the goods were consigned, the title would pass to the consignee. But, the Court found this contention basless as this Court held in the case of Comptoir d’ Achat vs. Luis de Ridder, The Julia [1949] A.C. 293 that the right of the buyer to claim policy amount would arise when he obtained title to the property and he must produce the documents of transfer. The respondent has paid the insurance premium in Indian currency and continued to have title over the goods as it never passed to the consignee. Had the title passed to the consignee, and if they hadpreferred the claim, the insurance amount would have been payable in London in Pound Sterling.
Decision:
The Court hold that the appellant is not liable to pay the insurance amount in Pounds Sterling, but the respondent is entitled to get Rs. 28,30,000 with interest @ 18% from the date on which it preferred the claim petition before the appellant, till payment. The respondent is also entitled to receive Rs.20,000 towards costs ordered by the National Commission.
Sudipta Bhowmick, 4th year, B.A. LL.B., School of Law, KIIT University
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