By IANS
New Delhi : Shipping companies engaged in transporting cargo to India from abroad are entitled to claim compensation from insurance firms if the cargo is damaged or destroyed before it is supplied to the importer, the Supreme Court has held.
However, for coverage beyond the port area, shipping concerns must have extended insurance, the apex court ruled in a judgement last week.
"When the coverage was extended on same terms and conditions, it would mean that the goods were covered till the same reached in any part of the country in India," said a bench of Justices A.K. Mathur and Tarun Chatterjee while rejecting insurer United India Insurance Company Limited's appeal against a National Consumers Disputes Redressal Commission judgement.
The consumer body had directed the insurance company to pay Rs.49.4 million in compensation to Great Eastern Shipping Company Limited, which had lost 12,000 tonnes of sugar imported from China in 1994 in a fire.
About 83,000 bags of imported cargo had been lying at the Kolkata port awaiting transportation to destinations within the country.
However, due to Durga Puja festivals, the cargo could not be moved out of the port. A big fire broke out at the port and the entire stock of sugar was reduced to ashes.
The surveyors engaged by the shipping company and the insurance company estimated the loss at Rs.49.4 million and the commission upheld it, asking the insurance company to compensate the shipping firm and also to pay 9 percent interest for the period since the surveyors submitted their report in 1995.
The insurance company challenged the award saying the extended insurance cover did not mean that it was liable to compensate an insured for the damage of cargo which had been unloaded at the port.
The commission had held that "the insurance cover of the goods would be till the delivery to the consignees at the destination named therein, i.e. the insurance coverage was valid till the goods were delivered to the consignees' warehouse or other final warehouse or the place of storage at the destination."