State Consumer Disputes Redressal Commission
M/S Arcadia Shipping & Trading Co. vs United India Ins. Co. Ltd on 8 September, 2021
1
Details DD MM YY
Date of Judgment 08 09 2021
Date of filing 13 06 2014
Duration 26 02 07
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, GUJARAT
STATE AT AHMEDABAD.
Complaint No. 2014/193
[Virtual hearing]
Court No.1
M/s. Arcadia Shipping & Trading Co.
Through its proprietor Arvindbhai Kantilal Shah
5th Floor, City Point, Opp. Town Hall,
Jamnagar. ...Complainant
Vs.
United India Insurance Company
2nd Floor, Kuber Complex, Park Society,
Opp. Joggers Park,
Jamnagar. ...Opponent
Complainant- Learned advocate Mr. Nishit P. Gandhi,
Opponent-Learned advocate Mr. M. J. Shelat
Coram : Hon‟ble Mr. Justice V. P. Patel, President
Smt. Usha P. Jani, Member,
Order by Hon'ble Mr. Justice V. P. Patel, President
1.The complainant has filed the consumer complaint u/s. 17 of the Consumer Protection Act, 1986 (For short "The Act) against the opponent insurance company claiming main relief in terms of para 28 which reads as under:
(A) Your Honour may be pleased to direct the opponent to pay Rs.
41,00,000/- to the complainant along with 18% interest from the date of filing of present date.
Facts of the complaint:
2. Short facts giving rise to the present complaint are as under: The complainant is a proprietor firm a shipping and trading Co. Complainant has purchased a dumb barge namely "SEA GLOARY" from the M/s. Asia Marine Services on 7.4.2005 and agreement was executed between the M. B. Desai CC-14-193 Page 1 of 17 2 parties for the same on 4.4.2006. The original agreement was lost in transit and therefore, new agreement was executed on 28.4.2008 having the same facts, terms and conditions. After the purchase of the said dumb barge complainant made an attempt for the registration of the said dumb barge on its name but because the original sale agreement was lost in transit the same could not be completed.
2.1 The complainant also applied for the insurance of the said "SEA GLOARY" dumb barge and opponent company has approved the insurance for the same with sum insured of Rs. 38,00,000/-. The survey was done by Admire Marine Services Pvt. Ltd. on 26.2.2008 and valuation was done at Rs. 38,00,000/- showing M/s. Asia Marine Services as the owner of the said dumb barge "SEA GLOARY".
2.2 It is further submitted that in the year 2008 the complainant was not registered as the owner of vessel and the said vessel is insurable property and complainant is having insurable interest in the said vessel therefore, the policy was issued in the name of complainant for the period between 10.4.2008 to 9.4.2009 and after the policy was renewed for the period between 10.4.2009 to 9.4.2010. It is submitted that at that time no objection was raised by the opponent insurance company about non- transfer of the name of the complainant as the owner by the Registering Authority while accepting the premium.
2.3 It is further submitted that during the existence of the policy on 2.8.2009 at about 4.00 p.m. the dumb barge - SEA GLOARY sunk at Rozi Anchorage and the same was immediately informed to the opponent. The final loss report was prepared on 17.6.210 by the surveyor of the opponent. In the said survey report, surveyor has confirmed that complainant has already applied for transfer of his ownership with the Mercantile Marine Department. The surveyor has also confirmed that the harbor craft license was also granted to the complainant and cargo boat license was also issued in favour of the complainant. After verifying all the documents surveyor has considered the loss as constructive total loss and held that the same is covered under the policy. The surveyor has also vide letter dated 12.12.2011 informed the opponent about their M. B. Desai CC-14-193 Page 2 of 17 3 query of non-transfer of ownership and clearly informed that complainant has an insurable interest. However, opponent vide letter dated 21.11.2012 repudiated the claim of the complainant on the ground that complainant may not be considered as owner and he does not have insurable interest.
Defense of the opponent:
3. The complaint was admitted and the notice was duly served to the opponent insurance company. It appeared through learned advocate and filed written statement. It is stated that the contents in the complaint are not true and correct and not admitted. That the complainant may be put to strict proof to prove the contention raised in the complaint. That the story of lost agreement of sale in the transit and subsequent agreement dated 28.4.2008 is not considerable and not happened in normal mode of sale of such type of barge. Therefore, the complainant has to put strict proof to prove the purchase of the said barge. It is also contended that it is obligatory on the part of complainant to get its name registered being owner with the competent authority under the Costing Vessels Act 1838 read with Merchant Shipping Act 1958. That the complainant has no insurable interest on the barge because the said barge was on the name of Ms. Asia Marine Services and not on the name of the complainant. That the so called agreement dated 8.4.2006 and 28.4.2008 are really not executed on the date mentioned in the agreement as the same could have been produced before the competent authority for transfer of ownership of the said barge in the name of complainant. As on the date of loss, complainant was not an registered owner of the barge in question as per the government record hence, naturally it has no insurable interest in the barge, therefore, complainant is not entitled for the compensation.
3.1 That the complainant has suppressed material facts about the non transferring his name as the owner of the barge with competent authority under the Law then, contract of insurance become void at the instance of opponent insurance company. That the contract of insurance is based on good faith and it was bounded duty of the every insurer to disclose true and correct facts while proposing for insurance. It is further submitted M. B. Desai CC-14-193 Page 3 of 17 4 that if the barge is not registered with the competent authority established under the Provision of Costing Vessels Act 1838 and neglected or any breach of the owner for non compliance of the provision he is subject to penalty and fine. Therefore, section 4 and 5 of the Act are mandatory in nature for the owner of the vessel in India. It is further argued that the complainant had not complied with provision of law i.e. Section 38, 43 and 59 of Merchant Shipping Act 1958. It was obligatory on part of complainant to follow the procedure to get its name entered in the registered book as owner. Thus, the complainant has no insurable interest in the vessel. Therefore, the insurance company has rightly repudiated the claim in question. It is also submitted that the complainant had obtain services of opponent for commercial purpose as it had obtain insurance policy covers risk of vessel in question which was need for business purpose then as per the Provision of Consumer Protection Act, complaint is not maintainable. He requested to dismiss the complaint with cost.
Argument of the complainant:
4. ld. advocate for the complainant has argued that the complainant is proprietorship firm and interested in marine adventure. That the dumb barge sea glory was purchased by the complainant on 4.4.2006. The said original agreement was lost in transit therefore, another agreement dated 28.4.2008 was prepared. That due to losing of original agreement in transit the name of complainant could not be entered as the owner of vessel by the competent authority. That the dumb barge being an insurable property as define under Section 2 (c) of the Marine Insurance Act, 1963 was insured with the opponent. The opponent has issued insurance policy on the name of complainant. Before issuance of policy the opponent has carried out survey about the condition and valuation of the subject barge. That after surveyor‟s report the insurance company confirmed the policy on the name of the complainant. That the vessel was an insurable property and since the complainant is interested in the marine adventure, he is having insurable interest in the said vessel.
4.1 That the opponent has issued the policy for second year also in the name of the complainant commencing from the 10.4.2009 to 9.4.2010.
M. B. Desai CC-14-193 Page 4 of 17 5At the time of accepting the premium no objection was raised by the insurance company about non transfer of the name of the complainant as owner by the registered authority. It is also argued that as per Section 7 of Marine Insurance Act person who is interested in marine adventure has an insurable interest. That the complainant has immediately informed the opponent about the incident. The insurance company has appointed the surveyor and he has also submitted report and considered the compensation be awarded. That the claim was prayed within the purview of the terms and conditions of the policy in spite of that the opponent has illegally, arbitrarily and unjustifiably repudiated the claim. That the opponent has not denied the fact that there was an agreement between seller and purchaser about SEA Glory dumb barge. He has also relied upon the judgment reported in 2019 (12) Scale 156 (SC) which will be discussed hereinafter. He has requested to allow the complaint and award the amount as prayed for.
Argument of the opponent:
5. Ld. advocate for the opponent has argued that the complainant was not owner of the insured barge and had no an insurable interest. That there was no deficiency of service on the part of opponent in repudiating the claim in question. That the complainant is not consumer as per the Provision of Consumer Protection Act. That till the date of loss i.e. 2.8.2009 complainant had not got entered his name in registered of the competent authority hence, the complainant has no insurable interest. 5.1 It is further submitted that first agreement dated 8.4.2006 and the second agreement dated 28.4.2008 were really not executed on the date mentioned in the agreement. If they were executed the same could have been produced before the competent authority for transfer of ownership of the said barge in the name of the complainant. Thus, complainant has no insurable interest in the barge therefore, complainant is not entitled for any compensation. That the complainant has not disclosed the true and correct facts while proposing for insurance. The complainant has breached the mandatory provision Section 4 and 5 of the Costing Vessles Act 1838 and Section 29, 34, 38, 43 and 59 of Marchant Shipping Act M. B. Desai CC-14-193 Page 5 of 17 6 1958. Therefore, complainant is not entitled any compensation. He has requested to dismiss the complaint with cost.
Merits of the case:
6. The complainant has produced the copy of repudiation letter dated 21.11.2012 at page no. 53 wherein, it is stated as under:
"1. The vessel is registered under the Costal Vessels Act in favour of Asia marine Services, but the policy was taken by Arcadia Shipping and Trading Co.
2. The registration was never transferred in your name and hence Asia Marine services remained the owner till the date of loss.
2. Under section 4 of the Costal Vessels Act, 1838 ownership is to be declared to the Registering authority based on which a vessel (to which the Act continues to apply) is registered in the name of the owner. In view of the statutory provision, it can be considered that the vessel was owned by M/s. Asia Marine on the date of loss.
3. In the absence of registration of the vessel in your name i.e. Arcadia Shipping and Trading Co. You may not be considered the owner under the law or having insurable interest.
4. Even though proposal indicates that you have declared yourself to be the owner having purchased the vessel in 2005, there is no evidence to indicate."
Evidence produced by the parties:
7. We have gone through the following documents submitted by the complainant, which are on record.
Sr. Description Page
1 Copies of both the sale agreement. 1-10
2 Copy of the said survey report dated 26.2.2008 11-13
3 Copy of the amendment report 14
4 Copies of the approval letter and the insurance policy 15-18
Copies of the proposal form and the policy for the 5 19-26 year 2009-10 Copies of the letter giving the information of the 6 27-29 incident 7 Copy of the surveyor report 30-45 8 Copy of the letter dated 12.08.2010 46-48 9 Copy of the letter dated 17.1.2011 49-50 10 Copy of the letter dated 12.12.2011 51-52 11 Copy of the repudiation letter 53 12 Copy of the letter dated 28.11.2012 54-56 M. B. Desai CC-14-193 Page 6 of 17 7 Copy of Affidavit in rejoinder on behalf of 13 63-68 the complainant dated 8.9.2015 Copy of additional affidavit on behalf of the 14 69-71 complainant dated 16.1.2021 15 Copy of Harbor craft license plying at Bedi Port 72-75 7.1 Opponent has filed additional affidavit in reply at page 85-88. No documentary evidence is produced by the opponent.
7.2 Closing pursis filed by the complainant on 22.3.2021 and closing pursis filed by the opponent on 22.3.2021.
Insurable interest:
8. The complainant has produced certain documents wherein, the following facts are emerged:
8.1 The complainant has produced the copy of sale agreement dated 4.4.2006 (Page 1 to 5) and 28.4.2008 (Page 6 to 10). The sale agreement dated 28.4.2006 is notarized document. The complainant has produced the copy of letter dated 5.4.2008 (Page 14) as amendment in survey report dated 26.2.08 wherein, it is stated as under:
Further to issuance of our aforesaid survey report, insured approached us and shown their records, pertaining to purchase of the vessel by them. Based on our verification of the same we note name of the owner of the vessel as under:
Owners: Shri Arvin Kantilal Shah proprietor of Messrs "Arcadia Shipping & Trading Co. 5 th Floor, City Point, Opp. Town Hall, Jamnagar.
Considering the survey report and documents of sale agreement we conclude that sale agreements are genuine.
8.2 The complainant has produced the copy of survey report dated 26.2.2008 (Page 11 to 13) submitted by the surveyor before the insurance was taken wherein, it is stated as under.
1. Registered owner: M/s. Arcadia Shipping & Trading Co.
2. Registered owner: Shri Sameer, Raup Khatkhate, M/s. Arcadia Marine Services, 2, YMCA Road, M. B. Desai CC-14-193 Page 7 of 17 8 Byculla, Mumbai-400 008.
3. Name of vessel: D. B. "SEA GLORY".
Conclusion: At the time of our inspection, we found the dumb barge to be free of any abnormal leakages & in seaworthy condition. In our opinion the risk is insurable.
Thereafter, surveyor has send letter dated 5.4.2008 for amendment to survey report dated 26.2.2008.
Considering the report dated 26.2.08 and 5.4.08 it was opinion of the surveyor that the risk is insurable. The surveyor has made clear that the name of the insured is complainant i.e. M/s. Arcadia Shipping & Trading Co.
8.3 The complainant has produced the copy of letter dated 5.5.08 at page 15 written by the Hema Bhatt Deputy Manager from Marine Hull Regional Office to the Division office of opponent insurance company about the approval of vessels, wherein renewal period is mentioned. In this letter also name of complainant is mentioned as insured person.
8.4 The complainant has produced a copy of policy at page 16-18 wherein, the policy NO. 066300/22/08/01/00000003 and period 10/4/2008 to 9/4/2009 for the sum insured of Rs. 38,00,000/- are mentioned. The policy shows complainant name as insured person.
8.5 The complainant has produced the copy of proposal form at page 19-
20. The proposal form was made on 30.3.2009 for the insurance period between 10.4.2009 to 9.4.2010. Name of the complainant is shown as insured person.
8.6 The complainant has produced the copy of policy at page 21-26 wherein, the policy No. 066300/22/09/01/00000004 and period 10/4/2009 to 9/4/2010 for the sum insured of Rs. 38,00,000/- is mentioned. The policy is also issued on the name of the complainant.
8.7 The complainant has produced the copy of letter dated 3.8.2009 at page 27 address to the manager United India Ins. Co. Jamnagar about M. B. Desai CC-14-193 Page 8 of 17 9 incident taken place on 2.8.2009 at about 4.00 P.M. By this letter it was informed the dumb barge was sunk at Rozi Anchorage.
The complainant has produced the copy of letter dated 3.8.2009 at page 28 address to the Supt. of Customs, Jamnagar about the incident taken place.
The complainant has produced the copy of letter dated 3.8.2009 at page 29 address to the port office about the incident taken place on 2.8.2009.
From these three letters of complainant, it is established that incident taken place on 2.8.2009 and he reported to concerned authority within short span of time. This shows that complainant is interested in a marine adventure. He has legal and equitable relation to the adventure or to insurable property at risk.
9. It is the defense of the opponent insurance company that the complainant has not insurable interest in the vessel. He has relied upon the Section 4 and 5 of the Costing Vessels Act, 1838 which are as under:
(i) Costing Vessels Act, 1838.
Section 4. Registry of name, number and burthen: The name and number of every such vessel employed as aforesaid, fishing- vessel and harbour-craft and burthen and also the name or names of the owner or owners thereof, shall be register in a book to be kept for that purpose by the person hereinafter directed to make such registry.
Registry by whom to be made, fresh registration. At Bombay such registry shall be made by the (Principal Officer, Mercantile Marine Department) and at other places by the Collector of Sea-Customs at such places respectively or by such other person as shall be appointed by the (central government) to act at such place respectively, in the execution of this Act; and whenever any change shall take place in the burthen of such vessel employed as aforesaid, fishing vessel or harbor-craft, or in the name or names of the owner or owners thereof, such registry shall be made again:
Provided, however, that it shall not be lawful to give any name to such vessel employed as aforesaid, fishing-vessel or harbour-craft, other than that by which she was first registered.M. B. Desai CC-14-193 Page 9 of 17 10
Section 5: Owners to apply for registry: The owner or owners of every such vessel employed as aforesaid, fishing- vessel and harbour-craft shall apply to the person authorized to make such registry in respect of the same, in order to have such registry as aforesaid made, or in order to have such registry made again as aforesaid.
Information of registry at Subordinate port. And whenever such vessel employed as aforesaid, fishing-vessel or harbor-craft is registered at a subordinate port, information thereof, and of the number there assigned to her, shall immediately be given by the registering officer to the (Principal Officer, Mercantile Marine Department) at Bombay.
As per the Section 4 and 5 of the Costing Vessels Act, 1838 the owner of the fishing vessel has to registered in a book to be kept for the purpose. This register is meant for purpose of execution of the Costing Vessels Act. This Act does not meant for any insurance purpose.
10. Ld. advocate for the complainant has submitted that complainant has insurable interest in the vessel as per the Provision of Marine Insurance Act. Insurable interest is defined under Section 7 of the Marine Insurance Act, 1963 which reads as under:
10.1 Marine Insurance Act, 1963.
Section 7. Insurable interest defined: --(1) Subject to the provisions of this Act, every person has an insurable interest who is interested in a marine adventure.
(2) In particular a person is interested in a marine adventure where he stands in any legal or equitable relation to the adventure or to any insurable property at risk therein, in consequence of which he may benefit by the safety or due arrival of insurable property, or may be prejudiced by its loss, or by damage thereto, or by the detention thereof, or may incur liability in respect thereof.
Insurable interest is attached with the marine adventure therefore, we have to see the definition of marine adventure. The marine adventure is defined under Section 2 (d) of the Marine Insurance Act which reads as under:
10.2 Section 2 (d): "marine adventure" includes any adventure where--
(i) any insurable property is exposed to maritime perils;
(ii) the earnings or acquisition of any freight, passage money, commission, profit or other pecuniary benefit, or the security for any advances, loans, or M. B. Desai CC-14-193 Page 10 of 17 11 disbursements is endangered by the exposure of insurable property to maritime perils;
(iii) any liability to a third party may be incurred by the owner of, or other person interested in or responsible for, insurable property by reason of maritime perils;
10.3 To understand the marine adventure we have to again refer the definition of insurable property and maritime perils which defined under Section 2 (c), 2(e) and 2 (h) of the Marine Insurance Act, which reads as under:
Section 2 (c): "insurable property" means any ship, goods or other movables which are exposed to maritime perils;
Section 2 (e) : "maritime perils" means the perils consequent on, or incidental to, the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints and detainments of princes and peoples, jettisons, barratry and any other perils which are either of the like kind or may be designated by the policy;
Section 2 (h): "ship" includes every description of vessel used in navigation;
10.4 We have considered the definition of perils from the policy which reads as under:
4. Perils:
4.1. This Insurance covers loss of or damage to the subject matter insured caused by 4.1.1 Perils of the seas rivers lakes, or other navigable waters, 4.2 This Insurance covers loss of or damage to the subject-matter insured caused by 4.2.1 Accident in loading discharge or shifting cargo or fuel, 4.2.2 bursting of bollers breakage of sharfts or any latent defect in the machinery or hull, 4.2.3 negligence of master officers crew or pilots, 4.2.4 negligence of repairers or charterers provided such repairers or charterers are not an assured hereinunder 4.2.5 barratry of master officers or crew.
10.5 Considering the definition of the maritime perils, insurable property the vessel sea glory can be said to be a maritime adventure. The complainant has interest in the said maritime adventure. As per the M. B. Desai CC-14-193 Page 11 of 17 12 Marin Insurance Act a particular person is interested in the maritime adventure where he stands in any legal or equitable relation to the adventure. Here in this case the complainant has legal and equitable relation with the sea gory vessel as he has purchased the said vessel.
Further this, vessel was insured by the opponent for the interest of complainant if any loss or damage is caused to the vessel.
11. Ld. advocate for the complainant has relied upon the judgment reported in 2019 (12) Scale 156 in case of Balwant Singh and Sons. vs. National Insurance Co. Ltd. wherein, Hon‟ble Supreme Court has held in para 22, 24 and 25 as under:
"22. The principle that emerges from the precedents of this Court is that even though in law there would be a transfer of ownership of the vehicle, that by itself would not absolve the person in whose name the vehicle stands in the registration certificate, from liability to a third party. So long as the name of the registered owner continues in the certificate of registration in the records of the RTO, that person as an owner would continue to be liable to a third party under Chapter XI of the Motor Vehicles Act, 1986. The above decisions, therefore, deal with the obligation of the registered owner to meet third party claims. The principles which have been elucidated by this Court in the context of the liability of the registered owner of the vehicle in satisfying third party claims consequently has no application to the present case. For this reason, the three judge Bench of this Court in Complete Insulations (P) Ltd (supra) carefully noted that third party claims with reference to insurance policies issued under Chapter XI stand on a different footing. Hence, it was held that if the policy of insurance covers other risks, that would be a matter of the contract of insurance between the insurer and the transferee in whose favour the risk is assumed.
24. In the present case, not only was there an acceptance of premium but the issuance of a policy document. The insurer had knowledge of the transfer when the Bank informed it of the lifting of the lien.
25. In the present case, the Court is dealing with a situation where following the transfer of the vehicle, the insurer was specifically informed by the Bank which held a lien on the insurance policy, of the lifting of its lien following the termination of the agreement of hypothecation. Following this, a policy of insurance was issued by the insurer. Admittedly the payment of premium was made by the appellant. The third respondent did not set up any claim in respect of the loss of the vehicle since the vehicle had already been repossessed and sold by the bank on account of its default in the payment of dues. The insurer cannot repudiate the claim of the appellant holding that its liability is to the third respondent who has no subsisting interest in the ownership in the vehicle. The appellant has undertaken to furnish an indemnity to the insurer against any claim at the behest of the third respondent."M. B. Desai CC-14-193 Page 12 of 17 13
11.1 This judgment squarely applied to the present case. The facts under the judgment reveals that the proposal was made to the insurance company and the vehicle was purchased at an auction conducted by the bank .That the vehicle was hypothecated in pursuance of a hire purchase agreement. That the vehicle was not transferred on the name of insured. The insurance company was intimated about the handing over of possession furnish by the bank. That the premium was paid by the insured and policy was issued on the name of the insured. It was held that the purchaser has insurable interest. The insurance company cannot repudiate the claim.
11.2 In the present case the proposal form was made by the complainant to the insurance company, the premium was paid by the complainant. That the policy was issued by the opponent insurance company. That the purchase information of Sea Glory was intimated to the insurance company. the surveyor has also reported about the facts of the purchase of Sea Glory by the complainant to the insurance company. That the real owner (seller) has not claim but he has supported the claim of complainant. Therefore, we believe that the complainant has insurable interest in the sea glory.
12. Again we refer section 3 of the Marine Insurance Act which are as under:
Section 3. Marine insurance defined: --A contract of marine insurance is an agreement whereby the insurer undertakes to indemnify the assured, in the manner and to the extent thereby agreed, against marine losses, that is to say, the losses incidental to marine adventure.
12.1 Complainant has produce the copy of proposal form at page 19-20.
By this proposal form the complainant has made proposal to the opponent insurance company which was accepted. Thereafter, it becomes an agreement. The policy was issued by which the insurer has undertaken to indemnify the complainant against the Marine losses incidental to marine adventure i.e. Sea Glory.
13. Considering the definition of insurable property, marine adventure, maritime perils and insurable interest defined under The Marine Insurance Act there is no specific provision that person who is registered owner has only insurable interest in the such property. In other terms for insurable interest there is no requirement of registration in the name of persons as owner. Insurable interest in the property does not necessarily M. B. Desai CC-14-193 Page 13 of 17 14 connected with the ownership of the property. For marine insurance, there is no requirement that a marine adventure is owned by the insured. In present case, policy is contract between the parties. By the said policy with the terms and conditions the assured has interest in the subject matter (SEA Glory) which was insured by the insurance company at the time of occurrence. Therefore, in our view the complainant has insurable interest at the time of occurrence. Hence, argument advance by the ld. advocate for the insurance company is required to be disregarded.
14. Another argument of the opponent insurance company is that the complainant had not complied with the Provisions of Section 38, 43 and 59 of the Merchant Shipping Act, 1958. Ld. advocate for the opponent has not shown any provision in terms and conditions of policy which effect the non-compliance of Provision of Merchant Shipping Act. It is pertinent to mention here that according to Marine Insurance Act, insurable interest has nothing to do with registration of vessels with the record of the port authority.
Further, no such contention are raised in repudiation letter dated 21.11.2012. Therefore, company cannot take such defense about the breach of Merchant Shipping Act. We relied upon the ratio laid down by Hon‟ble Supreme Court reported in (2020) CPJ 93 (SC) in case of Saurashtra Chemicals Ltd. vs. National Ins. Co. ltd. wherein it is held as under:
"Hence we are of the considered opinion that the law as laid down in „Galada‟ on issue (2) still holds the field. It is a settled position that an insurance company cannot travel beyond the grounds mentioned in the letter of repudiation. If the insurer has not taken delay in intimation as a specific ground in letter of repudiation, they cannot do so at the stage of hearing of the consumer complaint before NCDRC."
Perils insurance included in consumer definition:
15. Ld. advocate for the opponent has argued that the complainant had obtained the service of the opponent for commercial purpose as it had obtained the insurance policy to cover the risk of vessel in question which was meant for business purpose. That complainant is not consumer and present complaint is not maintainable.M. B. Desai CC-14-193 Page 14 of 17 15
15.1 Ld. advocate for the complainant has submitted that the complainant has purchased the insurance policy to cover the marine hull and machinery policy for its benefit and the same is not to generate profit, therefore, complainant can be said to be a consumer.
15.2 This Commission has come across the judgments delivered by Hon‟ble National Commission in case of Shree Dhain Auto Transport Corporations vs. United India Insurance Co. ltd. in Revision Petition No. 2405/2013 dated 13.1.2021, wherein, it is held as under:
"8. Regarding maintainability, whether the Complainant can be said to be a consumer as defined in Section 2(1)(d) of the Consumer Protection Act or not, it has been held by this Commission in Harsolia Motors v. National Insurance Co. Ltd. I, (2005) CPJ 27 (NC) decided on 03.12.2004 that since an Insurance Policy is taken for reimbursement or for indemnity of the loss which may be suffered on account of insured perils, the services of the insurer cannot be said to have been hired or availed for a commercial purpose. This Commission does possess the requisite jurisdiction to entertain a Consumer Complaint wherever a defect or deficiency in the services rendered by an insurer is made out. In view of the above, the Complaint is held maintainable."
Considering the ratio laid down by the Hon‟ble Supreme Court in above referred judgment we are of the view that the policy is for the purpose to cover the loss due to sea perils does not take the policy for commercial purpose. Policy is only for indemnification and actual loss. It is not intended to generate profit. Therefore, defense as regards to the complainant is not consumer is not tenable in eye of law.
Quantum:
16. Complainant has prayed in para 28 (A) Rs. 41,00,000/- and the description is given in para 19 i.e. Rs. 38,00,000/- towards the loss of damage barge and Rs. 2,00,000/- as mental harassment and Rs.
1,00,000/- for the expenses incurred by the complainant.
16.1 Complainant has produced the copy of claim form at page 47-48 wherein, it has asked for damage of Rs. 38,00,000/-.
M. B. Desai CC-14-193 Page 15 of 17 1616.2 Complainant has produced the coy of policy at page 21-26, on perusing the same it is stated that sum insured amount is of Rs. 38,00,000/-.
16.3 Complainant has produced the copy of survey report at page 30-45 wherein, the surveyor has stated at page 36 which reads as under:
"The insureds had engaged first local expert diving agency for just search and location of the sunk barge, but they were unsuccessful in tracing the same. Thereafter, invited further offer from Mumbai based firm. The were successful in location the barge but were skeptical in salving the barge after removal of residual cargo in a single piece basing on their quotation offer for salving the barge, we had worked out the estimates of recovery and repairs of the barge for putting it into working condition as hereunder:
Cost of recovery (salvage) from its sunk position & towing afloat to repair yard. (excid S.T.) ....Rs. 42,00,000.00 Cost of Jacking and unjacking at repair yard ....Rs. 50,000.00 Cost of steel required for damaged structurals 70 tons @ Rs. 33,000/- pmt. ....Rs. 23,10,000.00 Cost of fabrication labour, welding structures together, engaging services of crane etc. 70 tons @ Rs. 15,000/- pmt. ....Rs. 10,50,000.00 Total Estimated Costs ....Rs. 76,10,000.00 As the costs of recovery and repairs for exceeds the insured value, hence, this loss can be considered as CONSTUCTIVE TOTAL LOSS (CTLO).
Further, in our opinion salvaging this barge was not on economically viable proposition."
It is also stated at page 45 as under:
"In view of above and considering sizable repair costs involved after its recovery, the total costs of recovery and repairs far exceeds the Insured Value, hence this loss can be considered as CONSTRUCTIVE TOTAL LOSS (CTLO). In our opinion, salving of the barge then repairing it to bring the barge in cargo working condition, was not an economically viable proposition.
THE LOSS HAD OCCURRED WITHIN THE PURVIEW OF THE PERILS AS COVERED BY THE POLICY."
16.4 Survey is made by the surveyor appointed under statutory provision and he has submitted his report to the insurance company. There is no reason for not to believe the survey report and estimation of loss made by the surveyor. Considering the sum insured Rs. 38,00,000/- we are of the view that the complainant is entitled for Rs. 38,00,000/- as compensation.
M. B. Desai CC-14-193 Page 16 of 17 17As far as the compensation of Rs. 2,00,000/- for mental harassment, the complainant is artificial body/person therefore, no compensation is required to be awarded for mental harassment.
17. Considering the contents of the complaint, documentary evidence on record, arguments advanced by the ld. Advocate for the parties, ratio laid down in the above referred judgments, we are of the view that the complainant has made out his case for compensation and opponent have shows deficiency in service in repudiating the claim. Therefore, complaint is require to be partly allowed. Hence in the interest of justice following final order is passed.
ORDER
(i) The complaint No. 193 of 2014 is partly allowed.
(ii) Opponent is ordered to pay Rs.38,00,000/- (Rupees Thirty Eight Lakhs only) with interest at the rate of 9% from the date of filing of the complaint till its realization to the complainant as compensation.
(iii) Opponent is ordered to pay Rs. 25,000/- (Rupees Twenty Five Thousand Only) to the complainant as costs of litigation and shall bear its own costs, if any.
(iv) Copy of the judgment and order be provided to the parties free of costs.
Pronounced in the open Court today on 8th September, 2021.
[Smt. U. P. Jani] [Mr. V. P. Patel]
Member President
M. B. Desai CC-14-193 Page 17 of 17