National Consumer Disputes Redressal
Viraj Impex Ltd. vs Oriental Insurance Co. Ltd. & Anr. on 15 July, 2025
IN THE NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
AT NEW DELHI
NC/CC/132/2012
WITH
NC/IA/8282/2021 (PLACING ADDL. DOCUMENTS)
NC/IA/6792/2025 (PRODUCTION OF ADDL. DOCUMENTS)
NC/IA/17849/2017 (DIRECTIONS)
NC/IA/6795/2025 (PRODUCTION OF ADDL. DOCUMENTS)
NC/IA/12922/2018 (DIRECTIONS)
NC/IA/6794/2025 (PRODUCTION OF ADDL. DOCUMENTS)
NC/IA/6793/2025 (PRODUCTION OF ADDL. DOCUMENTS)
M/s. Viraj Impex Pvt. Ltd. ... Complainant
Versus
The Oriental Insurance Co. Ltd. & Anr. ... Opposite Parties
NC/CC/133/2012
WITH
NC/IA/6796/2025 (PRODUCTION OF ADDL. DOCUMENTS)
NC/IA/6800/2025 (PRODUCTION OF ADDL. DOCUMENTS)
NC/IA/8283/2021 (PLACING ADDL. DOCUMENTS)
NC/IA/12923/2018 (DIRECTIONS)
NC/IA/17850/2017 (DIRECTIONS)
NC/IA/6798/2025 (PLACING ADDL. DOCUMENTS)
NC/IA/6797/2025 (PRODUCTION OF ADDL. DOCUMENTS
K. Amishkumar Trading Pvt. Ltd. ... Complainant
Versus
The Oriental Insurance Co. Ltd. & Anr. ... Opposite Parties
NC/CC/134/2012
WITH
NC/IA/17851/2017 (DIRECTIONS)
NC/IA/6801/2025 (PRODUCTION OF ADDL. DOCUMENTS)
NC/IA/12924/2018 (DIRECTIONS)
NC/IA/6799/2025 (PRODUCTION OF ADDL. DOCUMENTS
Baijnath Melaram ... Complainant
Versus
The Oriental Insurance Co. Ltd. & Anr. ... Opposite Parties
CC_132_133_134_2012 Page | 1
BEFORE:
HON'BLE MR. JUSTICE A. P. SAHI, PRESIDENT
HON'BLE MR. BHARATKUMAR PANDYA, MEMBER
Appeared at the time of arguments:
For Complainant : Mr. Syed Naqvi, Advocate
For Opposite Party : Mr. Abhishek Gola, Advocate
Mr. Anshul Mehral, Advocate
Pronounced on: 15th July 2025
ORDER
JUSTICE A.P. SAHI, PRESIDENT
1. These are three Complaints regarding an insurance claim in respect of the loss of three consignments of the Complainants which they allege were insured with the Opposite Party Oriental Insurance Company, and upon the loss having occurred during the duration of the policy, the same was liable to be indemnified under the terms of the policy for the sums as insured respectively in all the three cases. The claims were declined by the Insurance Co. giving rise to the complaints that were filed alleging deficiency.
2. The consignments sailed on a ship named Khalijia-III from China to its destination in Mumbai. The consignment consisted of Rolled Steel Coils. There were other importers who had booked their separate consignment on the same vessel that commenced its journey from Caofeidian Port, China to be discharged at Mumbai Port, India. All the Appellants had secured a Marine Insurance Policy covering all risks as per the Institute Cargo Clauses (A) and the ship arrived safely at Mumbai Port on 06.07.2010. It was given a berth at Mumbai Port on 14.07.2010 for discharge of the cargo but on account of the CC_132_133_134_2012 Page | 2 failure of the crane of the vessel during the discharge operations, the same got disrupted.
3. The vessel was moved out for repairs and in the intervening night of 18/19/07/2010, it unfortunately collided with another naval ship and ran aground.
4. It may be pointed out that the policy in CC No.132 and 133 of 2012 are Marine Cargo Single Voyage Policies but in CC No.134 of 2012, the policy is an Open Cover Insurance Policy. The nature of the policy, its issuance and the communication in between are the contentions of the parties and shall be discussed in detail hereinafter. The events that followed the vessel having run aground would also be discussed but at the outset what needs to be spelt out is that the claim of the Complainants as well as the other importers was declined by the Insurance Company on the ground that the Vessel on which the consignments were being shipped was not classed in accordance with the classification clause attached to and forming part of the policy Insurance issued to the Complainants confirming its seaworthiness.
5. It was therefore notified by the insurance company that since there was a breach of the terms and conditions of the policy, they had no liability and on 20.08.2010, the Complainants were intimated that the General Average and Salvage Guarantee issued and arranged by the Insurance Company were being withdrawn. In essence, the claim was repudiated as a consequence of the conclusion that the vessel was not classed in accordance with the CC_132_133_134_2012 Page | 3 classification as envisaged under the policy, as such it was not seaworthy which fact was undisclosed.
6. This gave rise to the filing of separate complaints by all the importers whose consignment was loaded on the ship before this Commission including the present three complaints. One of importers M/s. Rajankumar & Bros. had filed CC No. 200 of 2012 that was dismissed by this Commission on 12.11.2013 reported in 2013 SCC OnLine NCDRC 998.
7. The said Order was assailed before the Apex Court in Civil Appeal No.971/2014 and the same was dismissed on 07.02.2020 upholding the Order of this Commission that stands reported in Rajankumar and Brothers (Impex) vs. Oriental Insurance Co. Ltd. (2020) 4 SCC Page 364.
8. The Apex Court after discussing the evidence and the facts as well as the ICC Clauses on the basis of the material before it in that case, came to the conclusion that the Complainant had failed to establish that the vessel was possessed of the recognised classification and further came to the conclusion that the Complainant/Appellant therein had not succeeded in proving of having tendered prompt notification to the Insurance Company regarding classification particular of the Ship. While proceeding to record findings, it was held that there was a breach of the terms of the policy and the arguments, regarding waiver by the Insurance Co. of the requirement of prompt information about classification raised on behalf of the Complainant, were rejected.
CC_132_133_134_2012 Page | 4
9. Paras 24 to 46 of the Judgment of the Apex Court are extracted hereinunder :
"24. In the instant case, it is apparent that neither was the subject vessel in compliance with the ICC clause, nor had the appellant given prompt notification to the respondent about such non-compliance. The appellant, in its letter dated 26-5- 2010 (supra) had informed the respondent that the vessel is of ―IRS‖ class. However, the full form of ―IRS‖ was not specified. As mentioned supra, the appellant has contended that NCDRC wrongly interpreted the term ―IRS‖ to mean ―Indian Register of Shipping‖ and that the subject vessel was actually registered and classified with the ―International Register of Shipping‖. However, our perusal of the official website of the International Register of Shipping shows that its official acronym is ―INTLREG‖. Whereas ―IRS‖ is the official acronym of the ―Indian Register of Shipping‖. Hence the appellant's contention that "IRS" refers to the International Register of Shipping is prima facie sustainable.
25. The appellant had also averred in its complaint before NCDRC that the Overseas Seller had produced a certificate dated 11-6-2010, certifying that the subject vessel was registered with an approved Classification Society as per the Institute Classification Clause. Further, that as per the said certificate, the class of the subject vessel was equivalent to Lloyd's 100A1, and the subject vessel was seaworthy and not more than 30 years old. However, no such evidence of the vessel's classification was ever provided to the respondent. It is true that the appellant has, during the course of hearing this appeal, placed the certificate dated 11-6-2010 before this Court. However, a perusal of the certificate shows that is only a self-certification wherein the vessel owners have claimed that the subject vessel is classed with an approved classification society as per the ICC clause. It cannot be taken as conclusive evidence that the vessel was actually classed with an IACS member society.
26. Even if we were to accept the appellant's contention that the vessel is classed with the International Register of Shipping (hereinafter ―INTLREG‖, for convenience), this does not help its case inasmuch as the INTLREG is not one of the 12 accredited Member Societies of the IACS. Rather, it is the "IRS" which is an IACS member. It has never been the case of the appellant that the subject vessel was classed by the Indian Register of Shipping. It is also not the appellant's case that the subject vessel was classed with a National Flag Society. Hence we find that the appellant had committed breach of the classification requirement contained in Clause 1 of the ICC.
27. The letter dated 26-5-2010 sent by the appellant to the respondent, in respect of the ship's particulars, cannot be said to constitute "prompt notification" as the CC_132_133_134_2012 Page | 5 particulars of the subject vessel's classification were not clearly specified therein. The respondent may have, in good faith, assumed that "IRS" meant that the subject vessel was classed with the "Indian Register of Shipping", and may have consequently inferred that the subject vessel fell within the scope of the ICC clause.
28. It was only pursuant to the appellant's request for release of separate salvage security that the respondent's claim settling agents, M/s W.K. Webster & Co., London by email dated 9-8-2010 informed the respondent that as per their investigation, the subject vessel was classed with Lloyd's Register of Shipping only until 10-10-2007, after which the classification was withdrawn. Hence it was only from this email that the respondents came to know that the shipment may fall outside the scope of the insurance cover, as per the terms of the ICC. Consequently, we find that the ―prompt notification‖ requirement has not been satisfied, and there is no ground for the application of the ―held covered‖ clause.
29. Further, as per the observations of the Singapore Court of Appeal in Everbright Commercial Enterprises, we consider it highly unlikely on the facts of this case that any prudent underwriter would have agreed to cover the risk involved in a such a high value shipment under the Marine Cargo Clause (which covers almost all risks of loss or damage), even though the appellant had no documentary evidence on record to prove the classification of the subject vessel. However, neither of the parties has led evidence on whether the respondent would have agreed to insure the policy for a reasonable premium had the correct particulars of the subject vessel been disclosed. Hence we do not consider it appropriate to record any findings on the same. In any case, such question does not arise inasmuch as the appellant did not provide "prompt notification" in the first place. Hence, as provided under Clause 5 of the ICC, the insurer's liability is automatically discharged.
30. Consequently, we conclude that the appellant had committed breach of the warranty contained in the marine insurance policy requiring the subject vessel to be classed in accordance with the ICC, and such breach of warranty discharged the liability of the insurer.
31.The second issue which then arises for our consideration is whether the respondent had, through its conduct or in any of its communications, waived the requirement of compliance of the subject vessel with the classification requirement of the ICC. In this regard, it may be of use to refer to Sections 35 and 36 of the Marine Insurance Act, 1963 (the 1963 Act):
―35. Nature of warranty.--(1) A warranty, in the following sections relating to warranties, means a promissory warranty, that is to say a warranty by which the assured undertakes that some particular thing shall or shall not be done, or that some condition shall be fulfilled, or whereby he affirms or negatives the existence of a particular state of facts.
CC_132_133_134_2012 Page | 6 (2) A warranty may be express or implied.
(3) A warranty, as above defined, is a condition which must be exactly complied with, whether it be material to the risk or not. If it be not so complied with, then, subject to any express provision in the policy, the insurer is discharged from liability as from the date of the breach of warranty, but without prejudice to any liability incurred by him before that date.
36. When breach of warranty excused.--(1) Non-compliance with a warranty is excused when, by reason of a change of circumstances, the warranty ceases to be applicable to the circumstances of the contract, or when compliance with the warranty is rendered unlawful by any subsequent law.
(2) Where a warranty is broken, the assured cannot avail himself of the defence that the breach has been remedied, and the warranty complied with, before loss. (3) A breach of warranty may be waived by the insurer.‖
32. A warranty imposes certain obligations on the insured, and Section 35(3) makes it amply clear that a warranty needs to be complied with, regardless of whether or not its non-compliance materially affects the risk involved in carrying the shipment. As a corollary, when a warranty is not complied with i.e. there is a breach of warranty, the insurer is discharged from liability from the date of such breach, by virtue of Section 35(3). At the outset, therefore, it is important to note that the scheme of the 1963 Act is clear inasmuch as the automatic consequence of a breach of warranty is discharge of the insurer's liability. Such discharge of liability does not require any express conduct or representation from the insurer.
33. However, Section 36(3) of the 1963 Act provides that the insurer may waive a breach of warranty. Such a waiver may be done either by or by way of incorporating certain terms in the insurance contract, such as the "held covered" clause in the ICC or the exclusion clause found in the Institute Cargo Clauses, or by a representation or conduct of the insurer. We shall first examine whether the respondent had waived the breach of warranty by way of incorporating certain terms in the contract.
34. In the instant case, though the respondent initially issued the cover note dated 14-5-2010 without knowing the particulars of the vessel in which the appellant's cargo was to be carried, it subsequently issued the marine insurance policy after the particulars of the subject vessel, including the purported classification of ―IRS‖, were received. However, while the importance of the ICC is undoubtedly more significant in cases of ―open-cover‖ insurances where the specific details of the vessel carrying the cargo are not known to the insurer, as held in Nam Kwong Medicines [Nam Kwong Medicines & Health Products Co. Ltd. v. China Insurance Co. Ltd., (2002) 2 CC_132_133_134_2012 Page | 7 Lloyd's Rep 591] , a ―facultative‖ insurance policy in which the details of the subject vessel are specified, need not be mutually exclusive with the ICC.
35. It is not the appellant's case that the respondent had chosen to issue the marine insurance policy despite being informed by the appellant that the vessel was non- classed. Rather the appellant had represented that the subject vessel was ―IRS‖ classed. That being the case, as noted in Everbright Commercial Enterprises [Everbright Commercial Enterprises Pte Ltd. v. Axa Insurance Singapore Pte Ltd., 2001 SGCA 24] and Kam Hing Trading [Kam Hing Trading (Hong Kong) Ltd. v. The People's Insurance Co. of China (Hong Kong) Ltd., (2010) 4 HKLRD 630], it was not the respondent's burden to have investigated the appellant's claim and informed the appellant that the subject vessel was non-classed. Hence, at the outset it is important to note that the mere formal issuance of the marine insurance policy by the respondent does not indicate ―acceptance‖/waiver of the vessel's classification or lack thereof.
36. At this juncture, it may be pertinent to refer to Clause 5 of the marine insurance policy which provides for exclusion of loss arising from unseaworthiness of the subject vessel:
―5.1. In no case shall this insurance cover loss, damage or expense arising from unseaworthiness of vessel or craft...
5.2. The underwriters waive any breach of the implied warranties of seaworthiness of the ship and fitness of the ship to carry the subject-matter insured to destination, unless the assured or their servants are privy to such unseaworthiness or unfitness.‖
37. It was contended by the appellant that non-compliance with the ICC stood waived by Clause 5.2, as stated above. However, it cannot be said that the ICC was an ―implied‖ warranty within the meaning of Clause 5.2. It was stated on the face of the Marine Cargo Cover dated 14-5-2010 and the marine insurance policy that the ICC is one of the warranties/terms of insurance.
38. In any case, the appellant's stand is that the subject vessel was classed with the ―INTLREG‖ (which it has mistakenly referred to as ―IRS‖). As the Singapore Court of Appeal has observed in Everbright Commercial Enterprises [Everbright Commercial Enterprises Pte Ltd. v. Axa Insurance Singapore Pte Ltd., 2001 SGCA 24] and as discussed supra, the very purpose of adopting the ICC is to ensure that the vessel chosen by the insured meets certain minimum standards of seaworthiness, by virtue of being classed with one of the well-established member societies of the IACS. The appellant, having known that the subject vessel was classed with the ―INTLREG‖, which neither was nor is a member of the IACS, was privy to the fact that the subject vessel was not compliant with the minimum standard of seaworthiness as laid out in the marine insurance policy. Clause 5.2 only waives breaches of implied warranties of seaworthiness where the assured was not privy to the unseaworthiness of the CC_132_133_134_2012 Page | 8 vessel. Hence, the appellant would not be saved by Clause 5.2 of the Policy, and it cannot be said that the respondent had waived the breach of warranty before the appellant's claim, by incorporating Clause 5.2 of the Policy.
39. We may now turn to whether the respondent waived the breach of warranty by its conduct or any representation. During the course of arguments, it was put to the learned counsel for the parties whether the act of provision of general average guarantee amounted to a waiver of breach of warranty. It is commonly understood that a waiver in the context of marine insurance, apart from one already provided for by way of ―held covered‖ or other such terms in the insurance contract, must include two elements, namely, (i) knowledge of the insurer, and (ii) unequivocal representation of the insurer. The presence of both these elements is indispensable.
40. For instance, after the occurrence of loss, even if the insurer makes an express representation that it would affirm the contract and indemnify the loss, if the insurer can prove that such a representation was made without the knowledge that there was a breach of warranty on the part of the insured, the liability of the insurer would stand discharged from the date on which the warranty was breached. Similarly, mere knowledge on the part of the insurer that there was a breach of warranty would not amount to a waiver, in the absence of an express representation to that effect. [ Baris Soyer, Warranties in Marine Insurance (Cavendish, 2001) pp. 206-213.]
41. Insofar as the element of knowledge is concerned, if the vessel carrying the insured cargo incurs loss, and the insurer seeks to investigate into whether or not there was a breach of warranty, no knowledge can be attributed to the insurer until such investigation is completed. [ Id. at p. 209.] Once there is knowledge, the second element i.e. unequivocal representation comes into play. The representation must be of such a nature that it is sufficient for the insured to conclude that the insurer is aware of the breach of warranty and has chosen to waive such breach and indemnify the loss. The determination of whether or not these elements are present assumes more complexity in cases where such a representation comes from an agent of the insurer, or where such an agent has knowledge of the breach. However, these arguments with respect to representations made by the insurer's agent have not been raised before us, and hence, such issues need not be addressed for the purposes of the present case.
42. Under the facts and circumstances of this case, the breach of warranty occurred when the appellant informed the respondent by letter dated 26-5-2010 that the subject vessel was classed by ―IRS‖, thereby indicating that the subject vessel was compliant with the ICC. After the subject vessel ran aground on the midnight of 18-7- 2010, the appellant requested the issuance of general average guarantee, and the same was issued on 3-8-2010.
43. At the outset, the general average guarantee in ―Form B‖ dated 3-8-2010 issued by the respondent to the GAA was only an undertaking to pay the shipowners and CC_132_133_134_2012 Page | 9 the GAA on behalf of the appellant for their contribution to the general average, as and when such contribution was ascertained. This guarantee was issued as per Clause 2 of the marine insurance policy, under which the respondent had agreed to cover all general average and salvage charges. Clause 2 reads as follows:
―2. This insurance covers general average and salvage charges, adjusted or determined according to the contract of affreightment and/or the governing law and practice, incurred to avoid or in connection with the avoidance of loss from any cause, except those excluded in Clauses 4, 5, 6 and 7 or elsewhere in this insurance.‖
44. At the time the aforesaid general average guarantee dated 3-8-2010 was issued, the respondent was still under the impression that the subject vessel is in compliance with the ICC. Obviously, such impression was based on the representation made by the appellant that the subject vessel was classed with ―IRS‖. It was only by the email dated 9-8-2010 from its claim settling agent that the respondent came to know that the subject vessel does not meet the prescribed classification. Subsequently, the respondent withdrew the guarantee and refused to pay the separate salvage security. Hence, the issuance of the general average guarantee cannot not (sic) be understood as a waiver inasmuch as the respondent, on the date of such issuance, did not have the knowledge of the breach of warranty committed by the appellant and was only fulfilling its duty to contribute to the general average (as explained supra) in good faith, as required by Clause 2 of the marine insurance policy.
45. Further, in any case, at the time of issuing the general average guarantee, the respondent did not expressly state that it was aware of the non-compliance with the ICC and it was waiving the same. In fact, the moment the breach of warranty was discovered, the respondent initiated steps to withdraw the general average guarantee that had been issued by them and refused to pay the additional salvage security, which clearly demonstrates that there was no intent to waive the breach of warranty. Therefore, it cannot be said that the respondent had waived the breach of warranty through its conduct or representations after the claim was made by the appellant.
46. Since we have concluded that the liability of the insurer was discharged on account of the breach of warranty caused by non-compliance with the classification requirement within the ICC, we do not consider it relevant to deal with the age limitation requirement therein for the purpose of the present case.‖
10. What is significant in the aforesaid decision of the Apex Court is the fact that while the said Appeal was being heard, the present three complainants CC_132_133_134_2012 Page | 10 had moved their respective intervention applications before the Apex Court mentioning that they had filed their individual Consumer Complaints that were pending adjudication before this Commission. The intervention applications were allowed on 27.10.2017 by the Apex Court by the following Order :-
―All the Interlocutory Applications are allowed.‖
11. The Apex Court while proceeding to dismiss the Appeal of Rajankumar & Bros (Impex) (supra) in Paragraph 47 & 48 observed as follows :-
"47. It is pertinent to note that during the course of hearing the present appeal, three other parties, namely, K. Amishkumar Trading Pvt. Ltd., Baijnath Melaram and Viraj Impex Pvt. Ltd. (―Interveners‖) filed Intervention Applications Nos. 3-5 of 2016 respectively in the present appeal. The aforesaid interveners filed individual consumer complaints against the respondent before NCDRC, which are presently pending adjudication.
48. The interveners' applications were allowed by this Court vide order dated 27-10- 2017 [Rajankumar & Bros. (Impex) v. Oriental Insurance Co. Ltd., 2017 SCC OnLine SC 1944] . We do not consider it appropriate to decide the interveners' claims on merits at this stage, especially since these may require separate findings of fact as to the terms and conditions of the policies issued by the respondent to them, the warranties made by the interveners to the respondent and so on. Hence, we direct that the interveners be relegated to record their evidence before NCDRC, and NCDRC is requested to hear the matters on merits and decide the same expeditiously, in accordance with the law as stated by us above.‖
12. Accordingly, the Apex Court issued directions as indicated above in the present cases while holding that Rajankumar & Bros (Impex) (supra) had committed a breach of warranty that cannot be said to have been waived by the Respondent, and therefore upheld the repudiation. Accordingly, the Order of this Commission dated 12.11.2013 quoted above was confirmed.
13. It is after the aforesaid decision of the Apex Court that the matter proceeded in these Complaints as well and it is appropriate to mention at this CC_132_133_134_2012 Page | 11 stage that the right to file Written Version/Statement of the Insurance Company stood forfeited in all the cases including the present three complaints as a result where of the present complaints have been heard on the basis of the pleadings and the documents filed only by the Complainants.
14. We may point out that Interim Application Nos. 8282/2021 and 8283/2021 filed by the Complainants praying for taking certain additional documents on record has not been pressed by Mr. Naqvi in the background of the Orders passed by this Commission on 10.11.2023, 14.12.2023 and 06.02.2025. This has also been specifically stated in the Additional Written submissions filed upon conclusion of hearing.
15. We may point out that the Order passed by this Commission on 10.11.2023 notices the delivery of the Judgment of the Apex Court in CC No.200/2012 as already quoted above.
16. The matter had proceeded with the contentions raised by Mr. Naqvi and responded to by Mr. Mehra on behalf of the Insurance Company. This was in the context of the amendments sought in the present complaints in the light of the judgment of the Apex Court permitting the complainants to raise their contest in the present proceedings. The amendment Applications were moved in the light of the observations made by the Apex Court. The Order passed on 14.12.2023 on the amendment sought by the Complainants is extracted hereinunder:
"IA/468, 469 & 470/2021 (For amendment of complaints) The arguments commenced today when Mr. Naqvi, learned Counsel for the Complainants, handed over a compilation of brief submissions to urge that CC_132_133_134_2012 Page | 12 these three matters may have to be deferred in view of pending Civil Appeals No.5026 and 5027 of 2021 before the Apex Court where the present complainants have also filed intervention applications. He has also along with the said compilation annexed the orders of the Supreme Court as also the copies of the intervention applications and has substantiated his submissions with the help of the judgment in the case of D.K Trivedi Vs. State of Gujarat AIR 1986 Page 1323 to contend that propriety demands that the hearing of these complaints should be deferred.
In order to convince that the same issues are engaging the attention of the Apex Court, he submits that similar intervention applications had been moved before the Apex Court in the case of Rajankumar & Brothers (Impex) Vs. Oriental Insurance Company Limited which arises out of the same repudiation in respect of the claims of similar losses which formed the same nature of the claim and involving the same vessel. He submits that while deciding above mentioned case the case in respect of one of the complainants, which was against the decision of NCDRC in CC/200/2012, the intervention applications filed by the present complainants were also taken into consideration and ultimately the Apex Court left it upon to the present complainants to proceed to establish their own cases in the present complaints before this Commission in accordance with the law as was enunciated in that judgment. Mr. Naqvi states that there was no final adjudication and there could not be a final adjudication inasmuch as according to him, there are clearly distinguishable facts which are available on record to demonstrate that in the present complaints, in spite of the declaration of the law therein, the complainants can establish independently that their claims have been incorrectly repudiated by the Insurance Company. He submits that in view of the said clear leverage granted by the Apex Court the present complaints therefore had to proceed accordingly but in the meantime the other two complaints namely CC/205 and 206/2012 came to be dismissed by this Commission on 28.01.2021 against which the Civil Appeals referred to above have been filed before the Apex Court and are pending where again the complainants have moved their intervention applications. It is pointed out that the said matters are listed before the Apex court on the 08.01.2024, hence the hearing on these complaints be deferred.
Mr. Mehra, learned Counsel for the Opposite Party, on the other hand, has vehemently opposed this request for deferring the matter on the grounds raised, contending that to the contrary the Apex Court has requested the NCDRC which in another way is a command to dispose off the pending CC_132_133_134_2012 Page | 13 matters relating to the interveners who are no one else than the present complainants. He has invited the attention of the Bench to the contents of paragraph 48 of the said judgment to urge that the Commission is obliged to decide the matter expeditiously.
Having considered the submissions raised, the mandate of the judgment in the case of Rajankumar (Supra) paragraph 48 thereof reads as under:
―48. The interveners' applications were allowed by this Court vide order dated 27-10-2017 [Rajankumar & Bros. (Impex) v. Oriental Insurance Co. Ltd., 2017 SCC OnLine SC 1944] . We do not consider it appropriate to decide the interveners' claims on merits at this stage, especially since these may require separate findings of fact as to the terms and conditions of the policies issued by the respondent to them, the warranties made by the interveners to the respondent and so on. Hence, we direct that the interveners be relegated to record their evidence before NCDRC, and NCDRC is requested to hear the matters on merits and decide the same expeditiously, in accordance with the law as stated by us above.‖ A perusal of the said observations leave no room for doubt that there is no bar in proceeding with the matter and therefore the request for deference on account of the pendency of the other Civil Appeals arising out of the other two cases therefore may not be available as the very same complainants who were interveners have been allowed to proceed with their cases and rather there is a direction contained in paragraph 48 to proceed with this matter. Consequently the request for deferment is declined.
Coming to the merits of the matter, before the arguments could proceed, it was pointed out by Mr. Naqvi that in order to meet whatever advantages are available to the complainants in order to distinguish the present cases from the case of Rajankumar (Supra) on facts, the present amendment applications have been filed inasmuch as the said amendments as proposed are in relation to the subject matter which was additionally decided by the Apex Court both on questions on fact and law. Consequently, he submits that the amendments therefore have to be considered on merits before proceeding with the case in the light of the law laid down in the case of Rajankumar (Supra).
In essence, the argument of the Mr. Naqvi is that the present complaints together with the facts on record including the classification letters of the CC_132_133_134_2012 Page | 14 vessel which are on record are sufficient to distinguish the present cases from the case of Rajankumar (Supra) and hence he presses that the amendment application be allowed to enable him to proceed on the merits of the case. Mr. Mehra, on the other hand, has vehemently opposed the amendment applications and all the contentions advanced by Mr. Naqvi to urge that as a matter of fact the judgment in the case of Rajankumar (Supra) exhaustively deals with all issues of fact and law and consequently the issue of classification of the vessel in question which is the same vessel is no longer res integra and parties are bound by it. He submits that the amendment applications are only an attempt to re-agitate the very same issues and consequently he has invited the attention of the Bench to the fact that the applications had been orally opposed when it had been moved on 19.01.2021. He, however, submits that a physical copy of the said amendment applications is not available with him. Mr. Naqvi will supply a copy of all the three applications by tomorrow. Mr. Mehra submits that he may be granted time to file his objections to the said amendment applications. Four weeks' time is granted for the same to which a rejoinder can be filed by Mr. Naqvi within two weeks thereafter.
In the meantime, as informed by Mr. Naqvi that the Civil Appeals are listed before the Apex Court on 08.01.2024, it will be open to him to inform the outcome thereof on the next date fixed of listing.
As agreed, list on 12.03.2024 at 02:00 PM.‖
17. The matter was once again adjourned by this Commission as recorded in the order dated 12.03.2024 which is extracted hereinunder :
―A request has been made today by Mr. Vishnu Mehra, learned Counsel for the Insurance Company that he seeks further time for filing a response to the compilation and the amendment applications moved on behalf of the Complainant.
It is stated that the matter was proposed to be listed and taken up today before the Apex Court as is mentioned in the Order dated 14.12.2023. The case could not be taken up on 08.01.2024. Mr. Syed Naqvi, learned Counsel for the Complainant informs that even today the matter is not likely to be taken up on account of non-constitution of the Bench and some future date is likely to be generated and fixed before the Apex Court.
CC_132_133_134_2012 Page | 15 In the background above, as prayed by Mr. Vishnu Mehra, learned Counsel for the Insurance Company let the matter be listed after he serves a copy of his response as prayed earlier within four weeks from today. Learned Counsel for the Complainant will have two weeks' time to file a Rejoinder.
List on 15.07.2024 at 02.00 p.m. to enable the learned Counsel to inform about any orders passed by the Apex Court or proceed with case.‖
18. We may point out that earlier when the matter had been taken up in 2023 and 2024, Mr. Naqvi had referred to the pendency of two Civil Appeals before the Apex Court namely Civil Appeal No. 5026 and 5027 of 2021, the proceedings whereof Mr. Naqvi wanted to refer to in support of his submissions and therefore these cases were adjourned on those occasions, but it transpires that the said Civil Appeals are still pending before the Apex Court and no Orders have been passed as yet. The Civil Appeals are titled as M/s. Mauria Udyog Ltd. vs. United India Insurance Co. Ltd. & Ors. and the latest Ordersheet dated 24.01.2025 as downloaded from the website indicates that the matter was directed to be relisted in the first week of April 2025, but no further Order seems to have been passed therein.
19. One of the importers who was also impacted by the decision of the Insurance Company namely Rajankumar & Bros (Impex) had contested the stand of the Insurance Company and had undertaken litigation at other levels. The complaint filed by it CC No.200/2012 was heard and dismissed by this Commission vide Order dated 12.11.2013 reported in 2013 SCC Online NCDRC Page 998. The Order passed by this Commission is extracted hereinunder:-
JUSTICE J.M. MALIK CC_132_133_134_2012 Page | 16
1. The emphatic view taken by the Honle Apex Court is that in a contract of insurance, the rights and obligations are governed by the said terms of the contract. Therefore, the terms of a contract of insurance have to be strictly construed and no exception can be made on the ground of equity. In interpreting the documents relating to a contract of insurance, the duty of the Court is to interpret the ords in which the contract is expressed by the parties because, it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves. It needs little emphasis that in construing the terms of the contract of insurance, the ords used therein, must be given paramount importance and it is not open for the Court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer. Therefore, the endeavor of the court should always be to interpret the words in which the contract is expressed by the parties. This view was taken in a catena of judgments by the Honle Supreme Court in Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd. & Anr., (2010) 10 SCC 567, General Assurance Society Ltd. Vs. Chandmull Jain, 1966 ACJ 267 (SC) 23, Harchand Rai Chandan Lal case, 2005 ACJ 570 (SC), etc.
2. The main question in this case swirls around the question whether the consumer complainant has stated the truth in this case. It must be borne in mind that insurance policy is a contract of insurance falling under the category of contract of uberrimae fidei, meaning thereby, a contract of utmost good faith, by the assured. [Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd., IV (2009) CPJ 8 (SC)].
3. The facts of this case are these. M/s. Rajankumar & Bros., (IMPEX) is a partnership firm which transacts the business as Importers and Exporters of various commodities, including steel coils. The Oriental Insurance Co. Ltd., issued a Marine Cargo Cover dated 14.05.2010 for an insured sum of Rs.6,25,62,500/- only covering the voyage from any port in China to Taloja, Navi Mumbai, via Mumbai Port, India, in respect of the said cargo covered under B/L No.K4, both dated 11.06.2010. The perils covered were as per the Institute Cargo Clauses War and SRCC terms against the payment of premium amount of Rs.34,504/- vide premium receipt Ex.A. The complainant vide its letter dated 26.05.2010 forwarded to the OP the particulars of the ship, Vessel, CC_132_133_134_2012 Page | 17 namely, Khalijia -III, was built in March, 1985, Class of Vessel as IRS and other particulars vide Ex.and The complainant also informed Kirtanlal & Sons, intending agents of the Overseas Sellers vide Ex.1.
4. Hangzhou Cogeneration (Hong Kong) Co. Ltd. through M/s. Kirtanlal & Sons, shipped 80-prime hot rolled steel coils weighing 2000 MT on Board the Vessel Khalijia-III from the Caofeidian Port, China to the complainant for discharge at Mumbai Port cargo totally valued at USD 1263712.50 for the said consignment under Bill of Lading No.K-4, dated 11.06.2010 and issued their commercial Invoice dated 07.06.2010 to the complainant. The above said Sellers negotiated the shipping documents, including the certificate that the said Vessel was registered with approved classification Society as per the Institute Classification Clause and Class Maintained equivalent to Lloyds 100 AI and that the said Vessel was sea-worthy which was not more than 30 yearsold. The shipping details were furnished to M/s. Sun Insurance Brokers Ltd., of the OP, with a request to issue the policy, who, in turn, vide its letter dated 02.07.2010, forwarded the same to the OP against the cover note Ex. The OP accepted the above said particulars and specified that the above said particulars and specified that the cover issued was as per the Insurance Cargo Clause No other terms and conditions, clauses and/or warranties were attached thereto. The premium was accepted.
5. The said Vessel carried on Board some other consignments of Prime Hot Rolled Steel Coils of seven other importers who purchased and imported the same from the same Sellers. The total of such coils on Board of the said Vessel was 1484 coils weighing about 30924.02 MTs. The said Vessel completed the Voyage and reached Mumbai Port , on or about, 06.07.2010 and was allotted berth on 14.07.2010, for discharge of the cargo on Board. On account of the failure of Vessel crane during discharge, further discharge did not take place and the Vessel was removed by an order of the port authorities from her Berth.
6. On 19.07.2010, the complainant came to know from a Newspaper report that the Vessel had run aground on the midnight of 18.07.2010. Apprehending damage to their consignment on Board, to aid the grounded Vessel, the complainant immediately sent a letter dated 20.07.2010 to the OP informing about the said policy vide copy Ex.F. It also came to light that Owners of the Vessel had engaged services of Salvors, M/s. Smit Singapore Private Ltd., for salving the said Vessel and the cargo on Board. On/or about 22.07.2010, the CC_132_133_134_2012 Page | 18 complainant also learnt that M/s.Richards Hogg Lindley (Piraeus, Greece) were appointed as General Average Adjustor, in short, AA By an email, dated 22.07.2010 sent to the complainant and the OP by the said GAA, it was stated, inter alia, that the situation had given rise to General Average and the ship owners had declared General Average Security and had appointed their Piraeus Office to collect the General Average Security prior to the delivery of the cargo at the destination.
7. The complainant requested the OP to issue General Average Guarantee, Form as required by the said General Average Adjusters because the cargo could not be released to the Cargo Receivers, until they furnished the security documents and the Salvors had received satisfactory salvage security. Cargo was to be released immediately in order to avoid heavy port demurrage charges and further damage to the consignment. The OP agreed and undertook to pay to the ship owners or to the said General Average Adjustors on behalf of the complainant in contribution towards general average and which salvage/ expenses charges and/or special charges which may be ascertained to be properly due in respect of complainant consignment. The complainant took all those documents to the concerned authority. OP also gave the requisite separate salvage security. In addition to the general average security to be furnished in the amount of 25% of C.I.F., value of the cargo on Board the Vessel or equivalent to USD 256880.
8. On the other hand, the OP appointed M/s. W.K. Webster & Co., London as their claim settling agents/representatives in London for the cargo insured by them on the said Vessel. By e-mail dated 09.08.2010, Mr. J.P.Vajpai of the OP2, Regional Office, Mumbai, informed Stephen Fernandez of M/s. Richard Hogg Lindley India Ltd., Mumbai, Mr. Mark Meredith of M/s.W.K.Webster & Co., OP claim settling agent/representatives in London, the Salvors, M/s. Smith Pvt. Ltd., Singapore, Ms.Diana Bowles of Lloyds, London, Mr. Alex Pinto of M/s. Richard Hogg of Singapore and Mr.R.K. Joshi of OP 1 & 2 that the OP had received all the compliances as required under Section 64VBA of Insurance Act and confirmed that the same were in order.
9. On 08.08.2010, it was reported that on 07.08.2010, there was collusion between the said Vessel MV Khalijia II with a Navy Vessel MV Chitra, in waters on JNPT, Mumbai Port, resulting, inter alia, in oil spill from the Vessel, MSC Chitra. It is alleged that the OP did not comply with their obligation to issue a CC_132_133_134_2012 Page | 19 separate salvage security as required by the said GAA thereby resulting in withholding all the instructions from release of the complainant consignment at Mumbai Port, though the complainant said consignment had been discharged into Mumbai Port Trust premises. On 13.08.2010, M/s. Smith Pvt. Ltd., the Salvors, claimed a maritime lien on the said cargo. As the OP did not issue a separate salvage security as required, the complainant said consignment remained uncleared in the Mumbai Port Trust premises incurring heavy demurrage and being exposed to likelihood of further damages.
10. In the meantime, Salvors had commenced Arbitration proceedings against the Owners of the said Vessel and the cargo interests in London and obtained an ex-parte order dated 16.08.2010 restraining the cargo owners from removing the cargo from the Mumbai Port Trust until a salvage security to the tune of USD 70.00 lakhs was furnished to the said Salvors, M/s.Smith Pvt. Ltd., Singapore. The Salvors, M/s. Smith Pvt. Ltd., Singapore, filed arbitration petition against the owners of the Vessel, Mumbai Port Trust and the cargo owners, including the complainant herein, under Section 9 of the Arbitration and Conciliation Act, 1996 in the Honle High Court, Mumbai and obtained an ex- parte interim order dated 13.08.2010, restraining the complainant and other cargo owners from, in any manner, directly or indirectly, removing, taking away and/or releasing their respective consignments and also restraining the Mumbai Port Trust from giving delivery or releasing the cargo to the complainant and other cargo owners. However, the Honle High Court declined to continue with the order dated 13.08.2010 vide its order dated 18.08.2010. But the Honle High Court, Mumbai, by order dated 18.8.2010 continued the earlier interim reliefs, till 24.08.2010.
11. On 18-19.08.2010, the Complainant received a letter from M/s.Richard Hogg Lindley (Hellas) Ltd., the General Average Adjustors revised their demand for Salvage from USD 256880 to USD 423864 based on the said order dated 16.08.2010, in the arbitration proceedings in London. On 23.08.2010, the complainant received a letter from OP informing them that OP 1 were purportedly withdrawing the General Average Guarantee Form issued by their Divisional Office in respect of the said complainant consignment insured by them on the said Vessel MV Khalijia-III. The Honle High Court of Mumbai vide its order dated 24.08.2010, directed that complainant and other cargo owners would be permitted to remove their respective consignments from Mumbai Port Trust premises on furnishing security in the Form of Bank Guarantee in the CC_132_133_134_2012 Page | 20 aggregate sum of Rs.14.00 crores and each of the cargo owners were to furnish separate guarantees, proportionate to the quantity mentioned in respect of the respective Bill of Lading. The Complainant furnished Bank Guarantee and took delivery of the said consignment from Mumbai Port Trust on 03.09.2010. On 02.12.2011 the learned Arbitrator passed the Award.
12. The complainant vide its letter dated 02.02.2012, called upon the OP to clear the loss of Rs.1,60,23,982/-. The documentary evidence was also annexed. The complainant also forwarded the copy of the arbitration award dated 02.02.2011 and called upon the OP to clear the losses. Legal notice was sent on 21.06.2012, reminder was also sent on 04.07.2012, but which went unresponded. Consequently, this complaint was filed with the following prayers :- . A sum of Rs.1,61,32,953/- (Rupees one crore sixty one lakhs thirty two thousand nine hundred fifty three only) as compensation for the loss suffered by the complainant together with interest @ 18% p.a. thereon from 20.08.2010 on the said claim. ii. A sum of Rs.1,00,00,000/- (Rupees one crore only) towards compensation for the loss caused and deficiency in services of the OP together with interest @ 18% p.a. thereon. iii. A sum of Rs.5,00,000/- (Rupees five lakhs only) being the legal and other incidental expenses incurred and to be incurred by the complainant. iv. to hold and declare the OP to be guilty of deficiency in service and unfair trade practice as per provisions of the C P Act, 1986. v. to direct the OP to rectify the defects in its service and pay the complainants a sum of Rs.1,61,32,953/- as compensation for the loss claimed by the complainant together with interest @ 18% p.a. thereon from 20.08.2010 on the said claim. vi. to direct the OP to additionally pay to the complainants a sum of Rs.1,00,00,000/- towards compensation for the inconvenience suffered by the complainant due to the deficiency in services of the OP. vii. to direct the OP to rectify the defects in its service and to further pay to the complainant a sum of Rs.5,00,000/- being the legal and other incidental expenses incurred by the complainant for the present complaint. viii. For such other and further relief that this Hon'ble Commission may deem fit and proper in the nature and circumstances of the case.
13. The OP could not file the written statement within 45 days from its service. Consequently, the right to file the written version was forfeited, vide order dated 14.05.2013. Thereafter, the counsel for OP argued that the written arguments filed by him should be considered. The request of the OP was again dismissed vide order dated 01.07.2013, while placing reliance on the three JudgesBench CC_132_133_134_2012 Page | 21 of the Honle Apex Court, reported in Dr.J.J.Merchant & Ors. Vs. Shrinath Chaturvedi, III (2002) CPJ 8 (SC).
14. Aggrieved by the order dated 01.07.2013, Special Leave to Appeal (Civil) No.24705/2013 was filed by the Oriental Insurance Co., the OP, before the Honle Supreme Court . The Apex Court vide its order dated 13.08.2013, dismissed the said SLP.
15. However, we have heard both the counsel because the OP was permitted to raise the arguments on the legal questions only. The OP tried to make submissions on various legal points. However, in our opinion, the key question is whether the ship in question was having a lass The main grounds mentioned in the repudiation letter dated 20.08.2010 which appear to be valid, run as follows:- e: Withdrawing the General Average Guarantees issued in respect of your cargo on Board M.V. Khalijia-3. Dear Sirs, This is to inform you that we are withdrawing the General Average (GA) Guarantees issued by our Divisional Offices in respect of your Cargo insured by them on M.V. Khalijia-3. After we had issued the GA Guarantees to the Average Adjusters appointed by the Ship owners, we have been advised by the Surveyors appointed by us, that the Vessel was NOT classed in accordance with the Classification Clause, attached to and forming part of the Policy of Insurance issued to you. Since there is a breach of the terms and conditions of the Policy, we have no liability and hence our decision to withdraw the GA and Salvage Guarantees issued/arranged for by us. This letter is issued without prejudice to our rights, privileges, liberties and immunities under law and contract, as applicable. Sd/- For The Oriental Insurance Co. Ltd.
16. It must be borne in mind that it is the complainant and nobody else who is to carry the ball, in proving its case. We have gone through a number of documents filed by it. Counsel for the complainant has invited our attention towards letter written by the complainant dated 26.05.2010, wherein it was mentioned as under :- with reference to the above, we would like to request you that our goods shipped from China to Mumbai by Vessel Khalijia-3, Qty: 2000 M/Tons. We are sending herewith shipped particulars with full details. Please kindly inform us whether this steamer is accepted by insurance company
17. There is no inkling that the said letter was actually sent or was responded by the OP. We will assume that, that the said letter was not responded by the OP. There is no evidence worth the name, which may go to show that the CC_132_133_134_2012 Page | 22 second letter, in this regard or reminder was also sent. The complainant has produced on record, the ship particulars which mention class - IRS which stands for Indian Registrar of Shipping Our only finding is that this representation was falsely made. There was no such class Consequently, the value of the claim made by the complainant stands evanesces. Mere ipse dixit on the part of the complainant, will not do. There must be some solid and unflappable evidence. This is one of the conditions of the policy dated 14.05.2010, wherein it was specifically mentioned : term of Insurance : The risks under this policy are covered as per the following Clauses, current on date of sailing or dispatch and/or other conditions/warranties otherwise stated herein and attached hereto: Important Notice Procedure in The Event of Loss/Damage Institute War Atomic and Nuclear Exclusion Institute Radioactive Contamination Exclusion Clause Freight Brokers Warranty Cargoism Clause Termination Clause Computer Millennium Cargo Clause Institute Classification Clause Institute Cargo Clauses (A) Institute Tpnd Clause Institute War Clauses (Cargo) Institute Strike Clauses (Cargo).
18. We have also gone through the Oriental Insurance Company letter which is part of Ex. P-1, at page 59-A. The Insurance Co. came to the following conclusion :- classification and Age Our investigation reveals that the Khalijia-3 was classed with Lloyd until 10 Oct 2007, after which class was withdrawn by Lloyd. We do not have a copy of your insurance certificate/policy. However, we believe that it may incorporate the Institute Classification Clause. If it does, the relevant shipment would seem to fall outside the scope under the Main Identity.
19. The moment this conclusion has been drawn by the Oriental Insurance Co. Ltd., it was the duty of utmost importance on the part of the complainant to produce the certificate from IRS. Why did the Lloyd not extend the class.
20. Both the counsel could not throw more light on this issue. Consequently, we took the help of the internet and found out the text of the Institute Classification Clause, dated 01.07.1978, the relevant portion of which, runs as follows:- argoes and/or interests carried by mechanically self-propelled vessels not falling within the classification of the above are held covered subject to a premium and on conditions to be agreed. Vessels over 15 yearsold, under 1000 G.R.T. and not classed by any one of the above classification societies attract additional rates provided in the tariff. It is possible to waive additional CC_132_133_134_2012 Page | 23 premium for vessels over 15 years old but not over 25 years of age and engaged in overseas (import/export) voyages, if they are declared as iners For this, it is necessary for the ship owner on the steamer agent in India to submit an application to the Advisory Committee, requesting them to declare the vessel as a iner The present rule should have completed at least one voyage to Indian Ports during the last 12 months. Age Limitation: 2. Cargoes and/or interests carried by Qualified Vessels (as defined above) which exceed the following age limits will be insured on the policy or open cover conditions subject to an additional premium to be agreed. Bulk or combination carriers over 10 years of age or other vessels over 15 years of age, unless they :- 2.1 have been used for the carriage of general cargo on establish and regular pattern of trading between a range of specified ports, and do not exceed 25 years of age, or 2.2 were constructed as container ship, vehicle carriers or double-skin open-hatch gantry crane vessels (OHGCS) and have been continuously used as such on an established and regular pattern of trading between a range of specified ports, and do not exceed 30 years of age The case of complainant does not show that his case is covered under Clause 2.2.
21. It must be borne in mind that date of loss is 18.07.2010, the date of built of ship in question is March, 1985. The loss occurred after a period of more than 25 years. The complainant submitted that its Class is IRS. This is a stoke and shaky explanation. It was the bounden duty of the complainant to produce the Certificate from IRS, even though its case is covered under Clause 2.2. Its absence rocks the boats to a dangerous extent. Attempts were made in vain to sweep the truth under the mat. The court is not to be deceived by this lie. The court has to be empherical and practical in confronting the reality. The complainant has tried to kick against the pricks. The complaint is sans merit and deserves dismissal which we hereby direct. No order as to costs.‖
20. Pleadings were being exchanged on the Amendment Application and further time was granted on 15.07.2024 and the amendment applications were ultimately allowed on 06.02.2025 by the following Order :-
IA/468/2021, IA/469/2021 & IA/470/2021 Heard Mr. Naqvi, learned counsel for the complainants/ applicants and Mr. Gola, learned counsel for the Insurance Company.These amendment CC_132_133_134_2012 Page | 24 applications have been filed seeking amendment in the pleadings primarily contending that this had become necessary in the light of the judgment of the Apex Court in one of the matters arising out of a similar claim in the case of Rajankumar and Brothers (Impex) Vs. Oriental Insurance Company Limited, (2020)4 SCC 364. Mr. Naqvi urges that the legal issues that came to be deliberated by the Apex Court and ultimately answered in the aforesaid judgment were witnessed by the present complainants through intervention applications that were moved before the Apex Court in the said case. But the Apex Court instead of entertaining the contentions, after laying down the law on the issues decided by the Apex Court, called upon and permitted the complainants to pursue the present complaints on their own merits, and issued directions to this Commission to decide the present complaints as the Apex Court was not inclined to decide the merits of these claims on intervention in the said case.
Mr. Naqvi submits that the amendment application is nothing else but in compliance of the observations made by the Apex Court and the liberty given to the complainants to proceed with their complaints independently in these matters. The NCDRC was directed to hear the matter on merits and it is therefore submitted that in the light of the decision of the Apex Court the complainants/ applicants are entitled to seek an amendment as sought for without introducing any additional facts or documents. It is urged that in effect the amendment application seeks the consideration of the legal issues that arise out of the ratio of the decision of the Apex Court referred to above and the amendments are confined only to those aspects.
Objections have been filed in the shape of a reply on behalf of the Insurance Company contending that nothing survives for consideration and the amendment is a futile exercise, more so, having been filed at such a belated stage. The amendment is therefore not in accordance with the principles of Order 6 Rule 17 CPC and does not satisfy the conditions thereof, hence the same deserves to be dismissed. In the parawise reply to the averments made to the applications it has been urged that neither of the three issues narrated in the amendment applications need to be addressed nor are required to be addressed at all in the present cases as well. The applicants have no claim whatsoever and the repudiation of their claims is justified. The entertaining of the amendment application would be unnecessary and would prolong the dispute. He however submits that even if this Commission arrives at the conclusion that the amendment deserves to be accepted, then the opposite party Insurance Company will also have a right to file written version to the amended complaint which opportunity cannot be denied. He therefore submits that on a reading of the entire Apex Court judgment it is the law discussed therein which has to be considered and if applied on the facts of the present cases, thesecomplaints also deserve dismissal. He therefore submits that CC_132_133_134_2012 Page | 25 the exercise of amendment will not yield any aid to this Commission in the adjudication of the matter and therefore should not be permitted.
At the outset we may point out that five complaints were filed in all in relation to the loss suffered by all the five complainants whose goods were lost when the vessel Khalijia-3 carrying their goods sank. Out of these five complaints, CC/200/2012 was decided by this Commission reported in Rajankumar and Brothers (Impex) Vs. Oriental Insurance Company Limited, SCC OnLine NCDRC 998. The said complaint was dismissed against which the complainant had filed the appeal before the Apex Court, whereas the other complaints remained pending before this Commission. It needs to be pointed out that the Insurance Company had not filed their written version within time specified under the Consumer Protection Act, 1986, as a result whereof their right to file the written version stood forfeited in all these complaints vide order dated 28.11.2023, which is extracted herein under:
―Leaned counsel for the parties present. It is now transpired that vide order dated 17.10.2012 direction was given to file the written statement, within four weeks. However, they have filed the written version on 24.01.2013 i.e. beyond the period of 45 days. Under these circumstances, the defense of the opposite parties is forfeited in view of the authority by Bench of three Judges in Dr. J. J. Merchant & Ors. Vs. Shrinath Chaturvedi III (2002) CPJ 8 (SC), wherein it was held:
―...From the aforesaid Section it is apparent that on receipt of the complaint, the opposite party is required to be given notice directing him to give his version of the case within a period of 30-days or such extended period not exceeding 15 days as may be granted by the District Forum or the Commission. For having speedy trial, this legislative mandate of not giving more than 45 days in submitting the written statement or the version of the case is required to be adhered. If this is not adhered, the legislative mandate of disposing of the cases within three or five months would be defeated.‖ The case is fixed for arguments on 12.12.2013.‖ It is not disputed that against the said order, the Insurance Company went up in appeal before the Apex court that was dismissed. Accordingly there is no written version in either of these complaints on behalf of the Insurance Company, consequently this opportunity having been foreclosed there is no occasion to grant any additional opportunity for filing a written version.
We may however, clarify that the objections filed to the amendment applications have been taken on record to which a rejoinder has also been filed and these pleadings shall be taken into account at the time of CC_132_133_134_2012 Page | 26 final hearing without prejudice to the rights of the Insurance Company to submit its written arguments in addition thereto.
Apart from this, when the matter was taken up on 21.07.2022, the following order was passed by this Commission:
―The complainants have circulated a letter for adjournment as he wants to engage some other counsel. Since the matter is very old and is covered by the judgment of the Hon'ble Supreme Court, therefore, last opportunity is given to the Complainants to argue the matter. List the matters for final hearing on 18.10.2022. The case shall not be adjourned on that date on the request of thecomplainants.‖ The observations made in the above quoted order that the matter is old and is covered by the judgment of the Apex Court and therefore a last opportunity was given to the complainants to advance their submissions was perceived to be adverse therefore aggrieved by the aforesaid observation of this Commission, the complainants approached the Apex Court against the above quoted order dated
21.07.2022 in an appeal that was disposed off at the diary stage on 17.10.2022 by observing that the rights of the Insurance Company to file written statement has already been closed and the expression in the impugned order about the decision of the Apex Court, was a tentative expression of opinion, and not a final conclusion. The order of the Apex Court is extracted herein under:
―Delay condoned.
Having heard the learned counsel for the appellant and having perused the material placed on record, though we find no reason to consider interference in the impugned order dated 21.07.2022, which is essentially an interlocutory order whereby the National Commission has posted the matter for final hearing on 18.10.2022 but, we have taken note of the submissions made on behalf of the appellant that the observations occurring in the order impugned as if the matter already stands covered by a judgment of this Court, leaves rather no scope for the appellant to put forth its submissions before the Commission as regards inapplicability of the referred decision of this Court or distinguishing the same.
In regard to the aforesaid submissions, suffice it to observe that even if the Commission has made such observations in the impugned order dated 21.07.2022, it has nevertheless posted the matter for hearing. Obviously, the said expression in the impugned order could only be regarded as a tentative expression of opinion by the Commission and not a final conclusion. This is for the simple reason that if the Commission had already concluded on the applicability of the decision of this Court, there was no reason to adjourn the matter for hearing. It goes without saying that in the matter in question, where the right of the respondents to file their written statement has already been closed, the matter would be examined by the Commission on its own merits and in accordance with law.
Subject to the observations foregoing, this appeal stands disposed of.‖ CC_132_133_134_2012 Page | 27 In this background there is no occasion to invite any further response from the Insurance Company granting them a fresh opportunity to file any written version which already stands foreclosed way back in 2013. The objections to the amendment applications shall however be taken into account at the time of final hearing.
Mr. Naqvi while advancing his submissions urged that three issues which according to him require to be considered through the amendment applications are as follows:
―A. This certificate was issued by INTERNATIONAL REGISTER OF SHIPPING.
B. This Certificate clearly mentioned the name of the Vessel as KHALIJIA- C. This Document Certified that the Vessel KHALIJIA-3 complied with the requirements of Annex VI of the Convention as regards structure, systems, fittings of the ship.
D. This Certificate was issued on 09th March 2009.‖ It is urged that it is these issues that were required to be addressed through this amendment in the light of the Apex Court judgement for which he has invited the attention of the Bench to certain documents relating to the classification of the ship, the communication to the Insurance Company vide mails dated 09.08.2010, 10.08.2010 and the repudiation dated 20.08.2010 that are already on record. His contention is that the reason given in the repudiation letter that the vessel was not classed in accordance with the classification clause is an erroneous conclusion, in as much as, the complainants had intimated the classification of the vessel with the appropriate documents and they had also received the acknowledgment thereof in the mail sent by the Insurance Company on 10.08.2010. These documents are already along with the main complaints and it is in support thereof that the contentions through amendment on the legal issues decided by the Apex Court are being introduced through these applications. He also submits that this would demonstrate that no breach had been committed by the complainants and rather they have fulfilled all the terms and conditions as well as requirement of prompt information about the class and status of the vessel and therefore the vessel stood classified appropriately.
He also submits that having received this information timely it was thereafter that the policy was issued on 02.07.2010 which is evident from the internal communications of the Insurance Company through mails referred to hereinabove. Thus, there was all information available, hence the Insurance Company could not have repudiated the claim as it had waived its right to point out any defect in classification before the issuance of the policy that had been issued after the receipt of information and documents that were found to be in order. He therefore submits that the amendment seeks only to reiterate the facts without introducing anything new except the legal propositions and asserting those facts which emanate out of the order of the Apex Court in the case of Rajankumar and Brothers (Impex) (Supra). He finally urged that no objection to CC_132_133_134_2012 Page | 28 the amendment can be taken that was filed timely immediately after the decision by the Apex Court, the judgment whereof was delivered on 07.02.2020. Accordingly, these applications for amendment were taken up on 19.01.2021 and the following order was passed by this Commission:
―IA nos. 468, 469 and 470 of 2021 are applications filed by the complainant for amendment of the complaint. A connected matter, CC no.200 of 2012 was dismissed by the Hon'ble Supreme Court with the following directions:
―Hence, we direct that the Intervenors be relegated to record their evidence before the NCDRC, and the NCDRC is requested to hear the matter on merits and decide the same expeditiously, in accordance with the law as stated by us above.‖ Learned counsel for the opposite party strongly opposes the amendment of the complaint at this belated stage. Since, it is a complex matter involving interpretation of law, the matter may be placed before the Hon'ble President for orders to list it before a Bench consisting of a Judicial Member.
List the matter on 8th March 2021.‖ The argument by Mr. Naqvi concluded with the observations and directions contained in paragraph 47 and 48 of the judgment in the case of Rajankumar and Brothers (Impex) (Supra), which are extracted herein under:
―47. It is pertinent to note that during the course of hearing the present appeal, three other parties, namely, K. Amishkumar Trading Pvt. Ltd., Baijnath Melaram and Viraj Impex Pvt. Ltd. (―Interveners‖) filed Intervention Applications Nos. 3-5 of 2016 respectively in the present appeal. The aforesaid interveners filed individual consumer complaints against the respondent before NCDRC, which are presently pending adjudication.
48. The interveners' applications were allowed by this Court vide order dated 27-
10- 2017 [Rajankumar & Bros. (Impex) v. Oriental Insurance Co. Ltd., 2017 SCC OnLine SC 1944] . We do not consider it appropriate to decide the interveners' claims on merits at this stage, especially since these may require separate findings of fact as to the terms and conditions of the policies issued by the respondent to them, the warranties made by the interveners to the respondent and so on. Hence, we direct that the interveners be relegated to record their evidence before NCDRC, and NCDRC is requested to hear the matters on merits and decide the same expeditiously, in accordance with the law as stated by us above.‖ Mr. Gola submits that the order of the Apex Court does not allow any such leverage which is sought by the complainants through these amendment applications and consequently for all the objections taken in the reply filed, the amendment applications deserve to be rejected.
CC_132_133_134_2012 Page | 29 We have considered the submissions raised and the purpose of an amendment application is to ensure that all the facts should be available that are necessary to determine the real controversy involved. Mr. Gola is correct in his submission that amendments are generally to be allowed at the pre-trial stage, but even subsequently parties seeking amendment should satisfy the forum as to why the pleadings could not be brought earlier or as to why the amendment was necessary for the purpose of determining the questions in the controversy involved between the parties.
We may again point out in the present case that this may not be open to the Insurance Company to contend, in as much as, they have already forfeited their right to file the written version long back in 2013. Even otherwise the amendment does not give rise to anything which may be termed as an entire new cause and is not at the belated stage, in as much as, the observations made by the Apex Court in paragraph 47 and 48 of the judgment in the case of Rajankumar and Brothers (Impex) (Supra), decided on 07.02.2020 lays down the foundation for permitting the complainant to seek an amendment which is only related to the issues raised and decided therein. It does not in any way breach or disturb the rights of either of the parties as the Insurance Company itself was a party before the Apex Court and the said judgment is binding on the Insurance Company. The amendment therefore is in consonance with the observations of the Apex Court which contains directions as spelt out therein. There is therefore no occasion for this Commission to refuse the amendment as sought for, which are almost legal grounds, and declining to accept the amendment would be a hyper technical approach. On the other hand the amendments would aid this Commission in arriving at a correct conclusion either way on the basis of the pronouncement of the Apex Court in the judgment relied on by the complainants the ratio whereof is in relation to the sinking of the same vessel and similar subject matter. We are therefore of the opinion that the amendment deserves to be allowed. All the three applications are accordingly allowed with liberty to the complainants to file the amended complaints. The objections filed by the Insurance Company to the entertaining of the applications therefore is not sustainable subject to the condition that the objections taken on merits of the contents of the amendment applications shall be open for consideration and scrutiny at the time of final hearing.
All the three applications accordingly stand disposed off. NC/IA/17670, 17671 and 17672/2024 These Applications have been moved for condoning the delay in filing the Rejoinder by the Complainant.
The cause shown is sufficient. The Applications are allowed. The Rejoinder be taken on record.
Complaint
CC_132_133_134_2012 Page | 30
Learned Counsel for the Parties are permitted to file their arguments in the light of the Orders passed today.
List on 06.05.2025 at 02.00 p.m.‖
21. It is in the said background that the present three complaints have been heard and Mr. Naqvi commenced his arguments on 06.05.2025. He urges that full and complete information was tendered to the Insurance Company about the classification of the Vessel Khalija - 3. He has first invited the attention of the Bench to the fact that the policy involved in CC No. 132 of 2012 is a Marine Cargo Single Voyage Policy. A similar policy is involved in CC No. 133 of 2012, but the policy in CC No. 134 of 2012 is an Open Cover insurance policy. He has pointed out the nature of the policies to explain the distinction between the two by contending that a Single Voyage policy, the description of the vessel and the cargo is disclosed together with destination of the shipment. On the other hand, an open cover insurance policy is usually taken by the importers who regularly keep on sending consignments where the description of the vessel is not known and mentioned on the policy but is declared as and when a consignment is imported.
22. While pointing out to the fact of CC No. 132 of 2012 in the case of Viraj Impex Ltd., he has invited the attention of the Bench to the letter dated 04.05.2010 (Exbt. A Page 35 of the Complaint). This letter was to request for the insurance presently under consideration namely Marine Cargo Single Voyage Policy for shipment from any port in China to Taloja, New Mumbai, India. This letter dated 14.05.2010 was accepted by the Insurance Company and the cover note in respect thereof was prepared by the Insurance CC_132_133_134_2012 Page | 31 Company which is on record at page 36 of the paperbook. The cover note includes the terms of insurance governing the contract with an endorsement of "Institute Classification Clause". The premium was charged on the said policy and the receipt thereof dated 14.05.2010 is at page 38.
23. It is the case of the Complainant that the details of the vessel were provided by the sellers to the Complainant by their mail dated 28.05.2010. The same has been filed as Exbt. B at page 39 naming the vessel as Khalija - 3 with its specific classification of IRS (International Register of Shipping) as understood by the Complainant. It is alleged by the Complainant in paragraph 7(c) that this entire information regarding the classification of the ship was intimated to the Insurance Company through mail alongwith the entire ship particulars and its certification indicating categorically its classification with all certificates confirming the class of the vessel. The letter / mail dated 28.05.2010 sought confirmation of the acceptability of the vessel from the Insurance Company. It is urged that the Insurance Co. in spite of having received the same, it did not seek any clarification nor took any objection regarding the classification.
24. Mr. Naqvi further pointed out that the classification of the vessel was duly certified not only from the said documents, but also the certificate which has been filed at page 41 and the other accompanying certificates as well as the certification dated 11.06.2010 by the Master of the Vessel certifying that the vessel as per the ICC norms is classified to LLOYDS and the vessel is sea worthy and not more than 30 years old. He further submits that the entire CC_132_133_134_2012 Page | 32 classification documents were available with the insurers, hence there was a compliance of the terms of the risks covered under the Policy. He has further invited the attention of the Bench to substantiate that the classification of the vessel through LLOYDS register is as per ICC clause effective from 01.08.1997, which document has been filed at page 164. This was prompt notice to the insurers.
25. He then contends that he received the communication on 01.07.2010 that the consignment aboard the ship had commenced its journey and sailed from Hong Kong on 02.07.2010. This intimation was also dispatched to the Insurance Company through Exbt. D at page 66 of the paperbook. The policy endorsed the name of the vessel on 11.06.2010 which is evident from the document at page 67. He submits that these documents are undeniable and hence the issuance of the policy was based on all valid documents in conformity with the terms of the policy. He then pointed out that the vessel docked in Bombay on 06/07.07.2010 and for the purpose of discharge of the cargo was given a berth on 14.07.2010. Unfortunately during the process of discharge of the cargo from the vessel, the operating crane failed and therefore the vessel had to move out for repairs. It is while moving out for repairs that in the night of 18/19.07.2010 it had collided with another Naval ship M V Chitra and was run aground.
26. After the said collision and the grounding of the ship, the Insurance Company was immediately informed and the process of assessment through the General Average Adjustor was undertaken. This adjustment has to be CC_132_133_134_2012 Page | 33 made to proportion the salvage of the cargo and its liability between the cargo owner and the ship owner. The Insurance Company provided the General Average Guarantee vide coverage dated 30.07.2010 but did not provide the additional 25% Salvage Security. The documents however for the coverage were all acknowledged internally by the insurance Company which stands corroborated from the mail of J.P. Vajpayee to Mr. Stephen Fernandes dated 09.08.2010. According to Mr. Naqvi the said mail acknowledges having received all documents in compliance of Section 64VB of the Insurance Act 1938 that was found to be in Order. The next communication dated 10.08.2010 sought certain information and acknowledged the documents including information about the vessel classification clause sent on 28.05.2010. A prompt information was given to the same on the same date, which demonstrates that the documents pertaining to classification and other information was available and had been forwarded by the Complainant accordingly.
27. Mr. Naqvi therefore submits that with all these documents on record, there was no occasion for the claim of the Complainant to have been repudiated on the ground as mentioned in the repudiation letter dated 20.08.2010 at page 117 of the paperbook.
28. He therefore submits that the case of the Complainant is genuine in all respects including classification of the vessel and its prompt notification to the Insurance Co., and therefore the present case is distinguishable on facts as in CC_132_133_134_2012 Page | 34 the case of Rajan Kumar and Brothers (Impex) (supra), where the Hon‟ble Supreme Court had found the absence of any such evidence.
29. Mr. Naqvi continued his arguments on the 2nd June, 2025 and pointed out towards the documents which in particular have been brought on record in CC No. 132of 2012 to establish that the documents of classification were in order and in accordance with the ICC Clause, and further that there was a prompt notification of the full particulars of the Vessel to the Insurance company. Mr. Naqvi emphasized that the issue of seaworthiness of the vessel was never questioned by the Insurance company and for that he pointed out to the cover note issued in response to the request made by the complainant M/s Viraj Impex Ltd. The letter requisitioning the cover note is on record as Exhibit A and the cover note of Marine Cargo Single Voyage „C‟ policy of the same date is on page 37 of the paper book. He pointed out that the said cover note specifically mentions Institute Cargo Clause to be applicable. It further, under the Terms of insurance, specifies the applicability of the conditional warranties attached thereto along with the clauses and the first item mentioned under the Terms of insurance is "Institute Classification Clause". He, therefore, submits that apart from this, there is no other phrase or clause mentioned in the cover note. Since the aforesaid terms are of significance, the same are extracted herein under:
Term of Insurance: The risks under this policy are covered as per the following Clauses, current on date of selling or despatch and/or other conditions/warranties otherwise stated herein and attached hereto:
Institute Classification Clause Important Notice CC_132_133_134_2012 Page | 35 Procedure In The Event Of Loss/Damage Institute War Atomic And Nuclear Exclusion Institute Radioactive Contamination Exclusion Clause Freight Brokers Warranty Cargo Claim Clause TERMINATION CLAUSE COMPUTER MILLENNIUM CARGO CLAUSE Institute Cargo Clauses (C) Institute War Clauses (Cargo) Institute Strike Clauses (Cargo) In the event of loss or damage which may result in a claim under this Insurance, immediate notice must be given to JAMES FINLAY LTD, W.K.WEBSTER & LLOYDS PO BOX NO 118, AGRABAD C/A CHITTAGONG BAN +880 31 716321/5/715542 +880 31 710008 & 710207 Claim Payable at/by. WEBSTERS_UK Financier's Names are as stated herein: None Insurance under this policy le subject to conditions, clauses, warranties, endorsements as per forms attached
30. He then points out that the complainant had intimated to the insurance company through their official Madam Chitra, informing the insurance company that the complainant M/s Viraj Impex Ltd. intends to nominate the Vessel Khalijia-III. This letter has been contested by the insurance company to be not on record but Mr. Naqvi contends that this letter stands admitted in the recital of the mail dated 10.08.2010, which is an internal mail between one of the officials of insurance company Mr. Vajpei that was sent to the insurance company itself, and hence the said mail and the contents of the letter dated 28.05.2010 cannot be disputed by the Insurance company. Even though the said document is being disputed by Mr. Gola we are extracting the same as it CC_132_133_134_2012 Page | 36 is connected with the mail dated 10.08.2010 with which we will deal later on. The letter dated 28.05.2010 is extracted herein under:
Date: 28.05.2010 Ref: VI-523/2010-11 To, The Oriental Insurance Company Limited., Divisional Office No.7, Maganet House, 3rd Floor, N.M. Marg, Ballard Estate, Mumbai-400 038.
Attn.: Madam Chitra Dear Madam.
Sub : Insurance Cover Note No. 121600/21/2011/15 Dtd.14.05.2010 for Rs. 10,86,42,188/-.
The shipper intends to nominate vessel Khalijia-III for shipment of this cargo covered under the above mentioned cover note.
We are forwarding herewith ship particulars (Pdf file attached).
Please confirm that this vessel is acceptable to you and after which we shall request the shipper to nominate the vessel.
Awaiting your response.
Thanking You, Yours Faithfully, Viraj Impex Pvt. Ltd.
31. Mr. Naqvi, to substantiate his submission and the understanding about the classification of the vessel, points out that through the above mentioned letter the particulars of the ship had also been supplied. This document is already on record as Exhibit B at page 39 of the paper book. The class of the Vessel is described as IRS. The full form of the said abbreviation has not been CC_132_133_134_2012 Page | 37 indicated therein and therefore there is a debate as to whether the same is an abbreviation for International Register of Shipping or Indian Register of Shipping. The contention of Mr. Naqvi is that the said abbreviation is of International Register of Shipping and for that he relies on the Certificate of Classification that has been filed at page 41 which certifies the assignment of a class of vessel for being entered in the register book as a bulk carrier strengthened for heavy cargos. The said certificate is indicated to be valid till 08.06.2010. The name of the vessel is clearly mentioned as Khalijia - III followed by the entries made in the Form-I of the International Shipping Registry mentioning the name of the same vessel and referring to the classification society with which the ship is classified namely International Register of Shipping filed at page 42 of the paper book. He has then read out the Cargo Ship Safety Ratio Certificate of the vessel with its validity upto 08.08.2010 at page 43. The same is supplemented by the Cargo Ship Safety Radio Certificate also valid till 08.08.2010 and filed at page 44 of the paper book. The other certificates pertaining to the aforesaid certification have also been filed on record with their respective validity periods that are filed from page 45 to 63. Mr. Naqvi then pointed out that no objection was either raised or taken to the engagement of the said vessel with the aforesaid certificates to its credit that had been intimated to the insurance company under the letter dated 28.05.2010.
CC_132_133_134_2012 Page | 38
32. With these communications, the shipment was dispatched from China and the insurance company was duly intimated on 01.07.2010. The letter dated 01.07.2010 is extracted herein under:
Date 01.07.2010 Ref: VI-523/2010-11 Divisional Manager The Oriental Insurance Co. Ltd.
Divisional Office No.7, Maganet House, 3rd Floor, N.M. Marg, Bellard Estate, Mumbai-400 038.
Tel.: 2261 8881/2/3/4 Email: [email protected] Dear Sir/Madam, ATTN.: MR. SAOOL/MADAM CHITRA SUB: Insurance Policy No. 121600/21/2011/15 Dtd. 14.05.2010 for Rs. 10,86,42,188 - USD 21,87,500 X 110% USD 24,06,250 X Rs.45.15 for 3500 MT Hot Rolled Steel Coils @ USD 625 PMT.
Under the above mentioned Insurance Policy the shipper has shipped consignment on "KHALIJIA 3", details as follows -
B/L No. & Date No. of Coils Gross/Net Weight
(MT)
K5A 132 3352.970
11.06.2010
K5B 8 206.700
11.06.2010
TOTAL 140 3559.670
Total Invoice Value USD 22,24,793.75
We are enclosing herewith One Invoice and 2 B/L copies for your ready reference.
Please make Insurance Policy of the above and give it to our man.
Thanking you, Yours faithfully, For VIRAJ IMPEX PVT. LTD.
CC_132_133_134_2012 Page | 39
33. The cover note dated 14.05.2010 duly stamped by the Insurance company was issued with an endorsement of the date 11.06.2010 with the name of the vessel as Khalijia-III. He pointed out to this document at page 67 that this policy document was handed over on 02.07.2010 which also mentions the Bill of Lading endorsed thereon after the information that the consignment had commenced its journey and the Vessel had sailed for its destination. He, therefore, contends that the insurance company was fully aware of the name of vessel, its specifications and classification where after it had made an endorsement in the cover note which confirms that the same class was being understood between the parties, as per Institute Classification Clause, the details whereof had been provided by the insurance company to the complainant along with the policy and the terms and conditions of the risk coverage and the detail of the Classification Societies whose classification was understood to be acceptable. This Institute Classification Clause dated 01.08.1997 is part of the cover note policy dated 11.06.2010 and is relevant for the controversy, as such it is extracted herein under:
INSTITUTE CLASSIFICATION CLAUSE 01.08.97 THE MARINE TRANSIT RATI INSURANCE APPLY ONLY TO CAR GOES AND/OR INTERESTS CARRIED BY MECHANICALLY SELF-PROPELLED VES SELS OF STEEL CONSTRUCTION CLASSED AS BELOW BY ONE OF THE FOLLOW ING CLASSIFICATION SOCIETIES.
Llyod's Register 100 Al or B.S.
American Bureau of Shipping +AJ
Bereau Varitas 13/3 E+
China Classification Society CSA
Germanischer Llyod +100 A5
CC_132_133_134_2012 Page | 40
Korean Register of Shipping +KRSI
Maritime Register of Shipping KM
Nippon Kaiji Kyokai NS
Norske Veritas +1Al
Registro italiano *100 A 1.1 Nov.
Provided such vessels are
a) i) not bulk and or combination carriers over 10 years of age.
ii) not mineral oil tankers exceeding 50,000 GRT which are over 10 years of age.
b) I) not over 15 years of age OR b) i)
ii) Over 15 years of age but not over 25 years of age and have established and maintained a regular pattern of trading on an advertised schedule to Load and unload at specified ports CHARTERED VESSELS AND ALSO VESSELS UNDER 1000 G.R.T WHICH ARE ME- CHANICALLY SELF-PROPELLED AND OF STEEL CONSTRUCTON MUST BE CLASSED AS ABOVE AND NOT OVER THE AGE LIMITATIONS SPECIFIED ABOVE.
THE REQUIREMENTS OF THE INSTITUTE CLASSIFICATION CLAUSE DO NOT APPLY TO ANY CRAFT RAFT OR LIGHTER USED TO LOAD OR UNLOAD THE VESSEL, WHILST THEY ARE WITHIN THE PORT AREA.
CARGOES AND/OR INTERESTS CARRIED BY MECHANICALLY SELF- PROPELLED VESSELS NOT FALLING WITHIN THE SCOPE OF THE ABOVE ARE HELD COVERED SUBJECT TO A PREMIMUM AND ON CONDITIONS TO BE AGREED.
34. Mr. Naqvi, therefore, submits that apart from this, there was no communication or objection on the part of the insurance company who had promptly informed about the particulars and the details of the vessel as well as its classification prior to its having left China. To substantiate his submissions, Mr. Naqvi relies on the Internal Office mails filed on record, and which mails according to him, remain undisputed and unchallenged by any affidavit or any material whatsoever. These mails relate to the communications made after the vessel had been grounded and communications were being made regarding CC_132_133_134_2012 Page | 41 General Average Adjusting process and Salvage Guarantee issuance. It is in this context that the mail dated 09.08.2010 from Mr. Vajpei of the Oriental Insurance Company addressed to Mr. Stephen Fernandes, General Average Adjuster and to the other concerned and to the surveyors is extracted herein under:
From: ―JP VALYEI' [email protected] To: [email protected] CC: <[email protected]>: "Andrew Bolden", <[email protected]>; "Mark Meredith th"
<[email protected]>; <[email protected]>; <[email protected]>; <[email protected]>;
<[email protected]>; <anjalig <[email protected]>: "Oic Do7" <[email protected]>; "NILEKANI M D [email protected]>; [email protected]>; <[email protected]> Sent: Monday, August 09,2010 4.39 PM Attach: OIC consgignments.xls; OIC - GA Bonds.pdf; OIC - GA
Guarantees.pdf; OIC - Cargo invoices.pdf; OIC-bill of ladings.pdf Subject: Fw: "KHALIJIA 3" - OIC's consignment on board the vessel for salvage security Dear sir, We have received all the section 64Vb compliance for the captioned policies and confirm that they are in order Regards J.P. Vajpei CC_132_133_134_2012 Page | 42
35. The surveyors had demanded certain documents which were once again sought by Mr. Vajpei on 10.08.2010 and the said mail is extracted herein under:
From: ―JP VALYEI' [email protected] To :<[email protected]>;[email protected] n>;
Cc:<[email protected]>;
<[email protected]>; "Rajiv Thakar"
<[email protected]> Sent: 10 August, 2010 11:13 AM Subject: PW: KHALIJIA 3-18th July 2010-Grounding off Mumbai and ingress of water into cargo holds.
This has reference to the trailing mail of Captain Rajiv Thakar of Wkwebster seeking few documents / clarifications.
1. Calculate and specify Amount of insurance premium charged for the captioned shipment
2. Obtain charter Party (c/p) from the Insured
3. Attach a copy of the policy high lighting the vessel classification clause which is mandatory in the system
4. Confirmation whether or not prompt notice was given by the insured regarding the age and class of the KHALIJIA 3 Please treat the requirement urgent and send / reply for the above ASAP to enable Wkwebster to submit salvage security accordingly.
Regards J.P.Vajpei
36. The mail that was received from the surveyor is also extracted herein under:
From: Rajiv Thakar CC_132_133_134_2012 Page | 43 To: [email protected] Cc: [email protected]; Andrew Joannou Sent: Monday, August 09, 2010 8:46 PM Subject: KHALIJIA 3-18th July 2010-Grounding off Mumbai and ingress of water into cargo holds. Our Ref: RT/APJ/10GA 86215; Your Ref: Pls provide Dear Mr. Vajpei, Many thanks for your email.
Section 64Vb & Premium We note that section 64Vb.has been complied with. Could you please advise the insurance premium applicable to this shipment?
Charter Party Please obtain a copy of the charter party (c/p) from your insured and forward to us.
Classification and Age Our investigation reveals that the KHALIJIA 3 was classed with Lloyd's until 10 Oct 2007 after which class was withdrawn by Lloyd's. We do not have a copy of your insurance certificate / policy. However, we believe that it may incorporate the Institute Classification Clause. If it does, the relevant shipment would seem to fall outside the scope of the cover under the
37. Then comes the crucial mail dated 10.08.2010 on the basis whereof Mr. Naqvi submits that the letter dated 28.05.2010 stood acknowledged. The said mail is extracted herein under:
From: "MCDO7" <121600mcdo7 [email protected]> To: <[email protected]> Cc: "ps Amrute" <[email protected]>:
―NILEKANI [email protected] <[email protected] in>:
Sent: Tuesday, August 10, 2010 12:24 PM Attach: khalijia3.pdf, POL-16-por Subject: Re: KHALIJIA 3-18th July 2010- Grounding off Mumbai and ingress of water into cargo holds; Our Ref. R/APJ/10GA 86215; Your Ref:
Pls provide
Dear Sir,
CC_132_133_134_2012 Page | 44
We are giving below the premium computation of the captioned policy. (also attaching the pdf policy copy)
1)Sum Insured: Rs. 10,86,42,188/-
Marine premium (ICC-C) RS 10864:22 War & SRCC RS. 21728.00 RS.32592.00 Service Tax RS. 3357.00 Stamp duty RS. 1.00 Total Premium Rs.35950.00
2)Regarding C.P., we have called from the Insured.
3)Classification clause appears in the 2nd page of the policy copy (attached herewith)
4)Insured vide their mail 28th May, 2010 informed us about age and classification of the vessel as per attached documents forwarded by the Insured Regards,
38. Mr. Naqvi urges that this mail acknowledges unequivocally the letter dated 28.05.2010 by which full and complete information had been notified to the insurance company by the complainant and therefore the insurance company inspite of having knowledge of these documents did not raise any objection whatsoever and issued the cover note dated 11.06.2010. The vessel sailed thereafter on 01.07.2010 that was duly intimated and even then no objection was taken and the policy cover note was handed over on 02.07.2010 with an endorsement of Bill Lading particulars. The ICC classification referred to above was mentioned in the attachment to the policy referring to Lloyds as one of the recognized societies entitled to classify this vessel. Inspite of all this entire information, the Insurance company never called upon the complainant to give any explanation about the status of CC_132_133_134_2012 Page | 45 classification of the vessel nor did it intimate that the said classification was not acceptable under any norms. The contention of Mr. Naqvi is that the complainant could not have either imagined or assumed about any defect in the classification of the vessel when the insurance company with all this information neither objected to nor sought any clarification from the insurance company about the classification of the vessel that sailed on 01.07.2010 from China with the consignment laden on it. The classification list was given to the Complainant for the first time with the policy cover note on 02.07.2010.
39. He contends that, on the other hand, the process of General Average Adjustments continued for the issuance of the General Average Guarantee for proportioning the liability of the salvage between the Cargo owner and the Ship owner. The said documents also went through and were formalized and it is at that stage that the Insurance company all of a sudden came up with the withdrawal of the General Average Guarantee issued to the Average Adjustors appointed by the ship owners. This was narrated in the letter dated 20.08.2010 which also virtually repudiated the claim on the ground that there was a breach of terms and conditions of the policy on account of the vessel not classified in accordance with classification clause. It is the said repudiation letter that gave rise to the filing of the complaint and is extracted herein under:
M/s. Viraj Impex Pvt Ltd.
KL-6/11/15, Sector 3 E, Kalamboli, New Mumbai 410 218 DATE 20/8/2010 Re.: WITHDRAWING THE GENERAL AVERAGE GUARANTEESI SSUED IN RESPECT OF YOUR CARGOON BOARDM.V. "KHALIJIA-3"
CC_132_133_134_2012 Page | 46
Dear Sirs,
This is to inform you that we are withdrawing the General Average (GA) Guarantees issued by our Divisional Offices in respect of your Cargo Insured by them on M.V. "KHALIJIA-3 After we had issued the GA Guarantees to the Average Adjusters appointed by the Shipowners, we have been advised by the Surveyors appointed by us, that the Vessel was NOT Classed in accordance with the Classification Clause, attached to and forming part of the Policy of Insurance issued to you.
Since there is a breach of the terms and conditions of the Policy, we have no liability and hence our decision to withdraw the GA and Salvage Guarantees issued / arranged for by us.
This letter is issued without prejudice to our rights, privileges, liberties and immunities under law and contract, as applicable.
THE ORIENTAL INSURANCE COMPANY LIMITED, AUTHORISED SIGNATORY
40. Mr. Naqvi has referred to the terminology of General Average and has also handed over a convenience compilation which refers to the policy and the documents relied on by him to substantiate his submissions. Apart from the written submissions, additional written submissions have been filed.
41. Responding to the aforesaid contentions Mr. Gola, learned counsel for the insurance company submits that even though the right of the Insurance company to file written statement stood forfeited, yet keeping in view the arguments which are on record, there is nothing new or novel to advance submissions to support the claim in as much as these sets of documents have already been analyzed, considered and found to be insufficient to establish the classification of the vessel as per the terms of the policy as recited in the judgment in the case of Rajankumar & Bros (Impex) (supra). The vessel was not classified and the goods had sailed on the vessel that was not CC_132_133_134_2012 Page | 47 competent to carry the cargo in terms of the policy warranties and conditions.
It was therefore not sea worthy as such the policy conditions stood breached. The said issue including the very same classification as alleged by Mr. Naqvi stood rejected in the decision rendered by this Commission in CC No. 200 of 2012 dated 12.11.2013, which stands confirmed by the Apex court. He, therefore, submits that in absence of any novelty of either the arguments or the nature of the documents, these complaints also deserve to be rejected. He has relied on the judgment of the Apex court in the case of Hind Offshore Pvt. Ltd. Vs. IFFCO Tokio General Insurance Co. Ltd 2023 Livelaw (SC) 640 to contend that warranty will not apply as already held by the Apex court in the case of Rajankumar & Bros (Impex) (supra) and again explained in the judgment referred to above where also the issue of classification of the vessel was involved. The seaworthiness of the vessel, therefore, being clearly questionable, he relies on the judgments referred to above to substantiate his submissions.
42. Mr. Gola has tendered written arguments on 10.06.2025 in CC No. 132 of 2012 which are extracted herein under:
1. That, at the very outset, it is submitted on behalf of the Opposite Party that the vessel/ship MV Khalijio-III was not in compliance with the Institute Classification Clause, and due to the breach thereof, the claim stood repudiated by the answering Insurance Company.
2. The Complainant has sought to contend, inter alia, that, firstly, it had issued prompt notice as contemplated under the Institute Cargo Clauses (ICC) 1.1.2001; and that, at the time of obtaining the policy, having provided such notice, no blame or fault could be attributed to the insured for any non-compliance with the said clause.
3. Secondly, the Complainant has asserted that the answering Insurance Company, subsequent to the issuance of its proposal letter dated 14.05.2010 (refer Page 35 of the Complaint), issued a purported "cover CC_132_133_134_2012 Page | 48 note" as reflected at Page 36, which, according to the Complainant, was later merged into the insurance policy found at Page 67. It is further contended that, via email dated 28.05.2010 (Page 38A of the Complaint), the insured provided certain ship particulars, comprising 25 pages, to the insurer, a single-page copy of which is filed at Page 39.
4. It is submitted that upon scrutiny of the matter and perusal of the documents, the Opposite Party has found that the aforesaid documents were never received by it and, prima facie, appear unauthenticated, including the allegedly disputed email dated 28.05.2010. Since the Opposite Party had not filed its written version earlier, these documents could not be specifically denied at that stage. However, during the course of final arguments, the Opposite Party has filed an application for admission and denial of documents, supported by an affidavit, along with a detailed reply to the additional documents placed on record by the Complainant.
5. It is respectfully submitted that a consolidated compilation of all three complaints has been tendered by the Opposite Party to demonstrate the inconsistencies and discrepancies in the narrative advanced by the insured. It is submitted that the Insurance Company issued only a "Single Voyage" policy effective from 14.05.2010, and no alleged cover note was ever issued. The alleged document at Page 36 of the Complaint, claimed to be a "cover note." is merely a copy of the policy where the term "cover note" appears to have been subsequently inserted in handwriting. possibly with a pencil/pen, to convey the impression that the document dated 14.05.2010 was only a preliminary document and not the final policy. This is contradicted by the receipt at Page 38, issued contemporaneously by the insurer on 14.05.2010, which unmistakably mentions "new policy" as the status. The evident purpose behind the Complainant's attempt to portray the document dated 14.05.2010 as a mere "cover note," and the policy at Page 67 as the formal one issued post 11.06.2010, is to construct a timeline that allows for the introduction of the email dated 28.05.2010 purportedly enclosing the ship particulars at Page 39 as a document issued after the alleged cover note, thereby projecting compliance with the prompt notice requirement as pleaded in the complaint.
6. It is pertinent to note that there is no documentary or technical evidence to demonstrate that the email dated 28.05.2010 carried the alleged 25- page attachment containing the vessel's classification documentation. Even assuming, arguendo, that such an email was indeed dispatched, the only identifiable attachment therein appears to be a single-page document (Page 39), with no corroboration of further annexures.
7. Furthermore, it is submitted that on 01.07.2010, the insured issued the communication at Page 66, which merely outlines the invoice value pertaining to the consignment and is conspicuously silent on any reference to the email dated 28.05.2010. Subsequently, an email was allegedly addressed on 20.07.2010 (Page 69) to Daman Shipping Agencies and copied to the insurer's general email ID. Reliance is also sought to be placed by the Complainant on an internal email dated 09.08.2010 (Page 98), purportedly sent by an official of the insurer to a claims settling agent, acknowledging that compliance with Clause 64 VB of the policy was in order. To this, a query was raised by the claims settling agent on 09.08.2010 and was allegedly replied to by an email CC_132_133_134_2012 Page | 49 dated 10.08.2010 (Page 99), wherein confirmation was sought as to whether prompt notice had been provided by the insured concerning the vessel's age and classification. The Opposite Party specifically denies the authenticity of the email dated 10.08.2010 (Page 100), purportedly emanating from the generic email ID [email protected]" at 12:24 PM. titled "Khalijia3.Pdf. POL15.Pdf." allegedly authored by one "Chitra, AO,"
asserting that such information had already been provided by the insured via their mail dated 28.05.2010. It is submitted that the Opposite Party has neither authored nor received such communication.
8. It is further submitted that the facts of the present case are squarely covered by the authoritative pronouncement of the Hon'ble Supreme Court in Rajan Kumar and Brothers Impex v. Oriental Insurance Co. Ltd. [(2020) 4 SCC 364), where identical issues were comprehensively examined. Therein, the insured had similarly claimed to have sent particulars of the vessel by letter dated 26.05.2010, stating that the vessel was classed under the "International Register of Shipping," which, it was held, did not fulfill the mandatory requirement of the Institute Classification Clause, which stipulates classification by a member or associate member of the International Association of Classification Societies (IACS). The insured's contention in the instant casei.e., that the email dated 28.05.2010 and its annexures contained ship classification particulars remains unsubstantiated. There is no cogent evidence to demonstrate that such classification records were ever placed before the insurer. Even the certificate dated 11.06.2010 at Page 63. issued by the vessel owner. merely states that the vessel was classed with an approved society under the ICC Clause. However, such a self-serving document cannot, in law, be treated as conclusive proof of compliance with the ICC requirement. Hence, the alleged communication dated 28.05.2010 cannot be treated as a valid notice or proof of compliance regarding classification of the vessel under the ICC terms.
9. It is further submitted that the vessel in question was not lost. This factual position has also been noted by the claim-settling agent, M/s W.K. Webster & Co., London, in its email dated 09.08.2010, wherein it was conveyed to the insurer that the subject vessel was classed with Lloyd's Register of Shipping only up to 10.10.2007, and that the classification had been withdrawn thereafter. The insurer, therefore, came to learn of the breach of warranty only upon receipt of such communication and, accordingly, treated the claim as falling outside the purview of the ICC Clause. The Supreme Court, in Rajan Kumar (supra), held that the vessel's non-compliance with the ICC rendered the claim untenable. It is further submitted that the insurer has never waived the condition of classification compliance under the ICC. The issuance of the General Average Guarantee cannot be construed as a waiver, as it was purely an undertaking subject to verification of compliance. Upon discovery of the breach, the insurer promptly withdrew the guarantee. Furthermore, the Supreme Court's direction in the aforementioned judgment merely permits adjudication of the consumer complaint on merits by the NCDRC, without adjudicating the merits themselves.
10. The Opposite Party specifically denies having ever received the email dated 28.05.2010 as alleged by the Complainant.
CC_132_133_134_2012 Page | 50
11. It is further specifically denied that Annexure A-1 (Page 12 of the application of Addl. Docs) was ever despatched by the Complainant or received by the Opposite Party. It is denied that said Annexure was accompanied by any ship particulars or PDF attachments. The authenticity and genuineness of Annexure A-1 as a valid electronic record are also specifically denied.
12. The Opposite Party denies the veracity of the copy of the email dated 28.05.2010 filed on record. It is submitted that the Complainant had earlier attempted to tamper with and fabricate documents annexed with the original complaint, in respect whereof a separate application/objection has already been preferred by the Opposite Party.
13. It is further submitted that the alleged electronic documents annexed to the application are inadmissible in evidence in the absence of a certificate under Section 65B of the Indian Evidence Act, 1872.
14. The documents in question are inherently vulnerable to alteration, excision, or manipulation. Admitting such material without the requisite safeguards would amount to a travesty of justice.
15. In light of such denials. it becomes incumbent upon the Complainant to establish the authenticity, integrity, and origin of the said electronic record strictly in accordance with the mandatory requirements of Section 65B of the Indian Evidence Act, 1872.
16. No certificate under Section 65B(4) of the Indian Evidence Act has been filed by the Complainant in support of the alleged electronic records, to establish the genuineness and proper functioning of the system from which such emails were purportedly generated or sent.
17. The Hon'ble Supreme Court in Arnvar P.V. v. P.K. Basheer [(2014) 10 SCC 473]. and subsequently in Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal [(2020) 7 SCC 1]. has categorically held that the compliance with Section 65B is mandatory for the admissibility of any electronic evidence.
18. In the absence of such compliance, the said emails and documents cannot be treated as admissible or credible evidence. Any reliance on such documents, without the foundational statutory proof, would seriously prejudice the interests of justice.
19. Being a Public Sector Undertaking, the Opposite Party is under a statutory duty to protect public revenue and ensure that only admissible, duly authenticated, and lawful material is relied upon in adjudication.
43. One of the submissions raised by Mr. Gola is that the mails, particularly the mails dated 09.08.2010 and 10.08.2010, have not been proved by authentication / certification in terms of Section 65B of the Indian Evidence CC_132_133_134_2012 Page | 51 Act. Mr. Gola attempted to create a doubt about the status of these mails as not being admissible genuine documents.
44. Mr. Naqvi has come up in rejoinder to contest this stand on behalf of the Insurance Company to urge that these mails have not been controverted or rebutted by any cogent material and as a matter of fact, the right to file the written version of the OP Insurance Co. was forfeited by Order dated 28.11.2013, which is extracted hereinunder:
"Learned counsel for the parties present. It is now transpired that vide order dated 17.10.2012 direction was given to file the written statement, within 4 weeks. However, they have filed the written version on 24.01.2013 i.e. beyond the period of 45 days. Under these circumstances, the defense of the Opposite Parties is forfeited in view of the authority by Bench of three Judges in Dr. J. J. Merchant & Ors. Vs. Shrinath Chaturvedi III(2002 CPJ 8 (SC), wherein it was held:
"..... From the aforesaid section, it is apparent that on receipt of the complaint, the opposite party is required to be given notice directing him to give his version of the case within a period of 30 days or such extended period not exceeding 15 days as may be granted by the District Forum or the Commission. For having speedy trial, this legislative mandate of not giving more than 45 days in submitting the written statement or the version of the case is required to be adhered to. If this is not adhered, the legislative mandate of disposing of the cases within three or five months would be defeated."
The case is fixed for arguments on 12.12.2013.
45. Mr. Naqvi points out that this argument has been raised out of the box abruptly in desperation and in fact while contesting the amendment application no. 468, 469 and 470, the Insurance Company has filed a reply dated 21.06.2024 before this Commission on 27.06.2024. Mr. Naqvi has invited the attention of the Bench to paragraph no. 15 of the said reply to urge that the Insurance Company has nowhere taken this stand that the said mails were CC_132_133_134_2012 Page | 52 artificially created. To the contrary, the recitals contained therein clearly indicate the issuance of the said mails with no allegations that the mails were not genuine. Mr. Naqvi submits that this oral argument of Mr. Gola deserves rejection.
46. He further states that on all three counts, namely the issue of prompt notice, the alleged breach of warranty and the waiver of warranty by the Insurance Company, the facts of the present cases particularly CC No. 132 of 2012 reveal an altogether different story establishing the claim of the Complainant. He submits that none of these documents were filed in CC No. 200 of 2012 in the case of Rajankumar & Bros (Impex) (supra). He therefore submits that this clear distinction on facts on the other hand allows the applicability of the ratio of the judgment in the case of Rajankumar & Bros (Impex) (supra) to support the contention of the Complainant. He submits that in the present case on facts there was a clear representation at every stage and prompt information as well as notice about the status and classification of the vessel which was never disputed by the Insurance Company and the policy was issued having full knowledge about the status of the vessel. This is established by the said mails and the communications and to further buttress his submissions, Mr. Naqvi points out yet another important factual averment regarding the proceedings undertaken before the General Average Adjusters. He submits that in order to satisfy a proportionate balance of adjustment of the salvage, a salver was appointed and the parties were called upon to fill-up the appropriate forms accepting their respective obligations and liabilities. To this CC_132_133_134_2012 Page | 53 end, the Complainant immediately responded by filling-up form „A‟ and correspondingly the Insurance Company also filled up form „B‟ as per the terms of the policy that required the appointment of General Average Adjustor (GAA) without raising any objections regarding classification.
47. He submits that once the letter dated 28.05.2010 and the information furnished thereafter was on record followed by the process of the appointment of the General Average Adjustor, this was yet another circumstance to establish that the Insurance Company was well aware of the status of classification of the vessel and no objections were raised.
48. It may be pointed out that the owners of the vessel had engaged the services of a Salvor namely M/s. Smits Singapore Pvt. Ltd. for the purpose of salving the vessel and the cargo on board. In order to work out the same, M/s. Richards Hogg Lindley (Piraeus, Greece) were appointed as General Average Adjuster and a mail dated 26.07.2010 was received by the Complainant as well as by the Insurance Company intimating about the need to collect the General Average Security prior to the delivery of the Cargo at the destination. It is through the said letter that the forms „A‟ and „B‟ were tendered to be signed and were duly executed by both the parties. Mr. Naqvi submits that this further confirms that the Insurance Company while filling up the form „B‟ was having full and complete knowledge about the status of the classification of the vessel, yet no objection about classification was raised.
49. Mr. Gola for the Insurance Co. has however disputed this urging that it is during this process of the securing of the General Average Bonds for the CC_132_133_134_2012 Page | 54 purpose of covering the marine lien on the Cargo for the Salvage Adjusters that an investigation revealed the status of the vessel not having been classified under any of the 12 recognised Societies (IACS) as mentioned in the policy. The information about the classification by Lloyd Society not having been extended was informed by the Settling Agents appointed by the Insurance Company, namely M/s. WK Webster & Co., London and was received during this process on 09.08.2010 as per the mail on record and also noted by the Apex Court in its judgment in para 28 of Rajankumar & Bros. (Impex) (supra).
50. This position has also been contested by the Complainant urging that the information about the vessel being classified had been supplied to all concerned and on top of this information, form „B‟ had been filled up by the Insurance Company on 28.07.2010 after the accident and as such, the act of accepting the status of prompt information was completed without any demur by the Insurance Company. It is later on that they had raked up this issue and therefore Mr. Naqvi submits that after having issued the cover note much before the accident and after having filled-up form „B‟, as noted above, the Insurance Company will be presumed to have waived off its right of raising any objection regarding the classification of the vessel. Mr. Naqvi submits that these facts and the documents in support thereof that have been discussed by him and pointed out were not staged or portrayed or fell for consideration in the case of Rajankumar & Bros (Impex) (supra).
CC_132_133_134_2012 Page | 55
51. We have already extracted hereinabove the letter dated 20.08.2010 by virtue whereof the General Average Guarantee and General Security had been withdrawn by the Insurance Company with a further recital that the Insurance Company had no liability for the loss claimed and therefore the said letter amounts to a repudiation. Be that as it may, it would be appropriate to understand this process of General Average Adjustment and General Average Security, the withdrawal whereof has resulted in repudiation.
52. In connection with the insurance of ships and their freights, average has to do with claims made upon the persons, who insure a ship or cargo in the event of either being damaged or lost at sea.
53. Average is a measure of loss or damage accidentally happening to a vessel or its cargo during a voyage. It is a term used in commerce to signify a contribution made by the owners of the ship. freight and goods, on board, in proportion to their respective interests, towards any particular loss or expense sustained for the general safety of the ship and cargo; to the end that the particular loser may not be a greater sufferer than the owner of the ship and the other owners of goods on board.
(Bouvier's & Law Dictionary, Vol. 1, 6th Edition, 1856.)
54. There are two main classes of average, General and Particular, provided for in insurance coverages. Particular average relates to damage due to accident, such as the straining of a ship‟s hull by storms, the carrying away of a mast, damage to cargo by water or fire, and so on. Each person insured as owning the ship and cargo or a part of the cargo, then puts in a CC_132_133_134_2012 Page | 56 claim for his particular loss, which may be great or small. Average is called general or gross average, because it falls generally upon the whole or gross amount of the ship. freight and cargo; and also to distinguish it from what is often though improperly termed particular average, but which in truth means a particular or partial, and not a general loss; or has no affinity to average properly so called. Besides these there are other small charges, called petty or accustomed averages; such as pilotage, towage, light-money, beaconage, anchorage, bridge toll, quarantine, river charges, signals, instructions, castle money, pier money, digging the ship out of the ice, and the like.
(Bouvier's & Law Dictionary, Vol. 1, 6th Edition, 1856.)
55. General Average is intentional damage done to a ship and all the cargo, or as much of it as necessary. For instance, a ship‟s mast may have to be cut away or part of the cargo may have to be thrown overboard to save a leaking ship or the holds may have to be flooded to put out a fire. In such a case, it is only fair that the loss due to such damage should be shared by all the owners of the ship and cargo, since the act done was for the good of all. The fixing of the sums which have to be paid by the persons concerned is done by the skilled people called Average Adjusters. A contribution upon general average can only be claimed in cases where, upon as much deliberate on and consultation between the captain and his officers as the occasion will admit of, it appears that the sacrifice at the time it was made, was absolutely and indispensably necessary for the preservation of the ship and cargo. To entitle the owner of the goods to an average contribution, the loss must evidently CC_132_133_134_2012 Page | 57 conduce to the preservation of the ship and the rest of the cargo; and it must appear that the ship and the rest of the cargo were in fact saved.
(Bouvier's & Law Dictionary, Vol. 1, 6th Edition, 1856.)
56. There is no dispute that after the ship went aground having hit another ship, the owners of the vessel engaged the services of the salvor M/s. Smits Singapore Pvt. Ltd. for salving the ship and the cargo and M/s. Richards Hogg Lindley were appointed as General Average Adjuster for collecting the General Average Security from the Complainant cargo owners as well as from the Insurance Company. They issued the letter dated 26.07.2010 for filling form A (Average Bond) to be filled up by the Cargo Receiver and Form B (Average Guarantee) to be filled up by the Insurance Co. The respective forms were signed for the carrying out of the salvage and a Lloyd‟s standard form of agreement was signed.
57. The salvage operations constituted the stemming of the ingress of water in the vessel, pumping water out from the ship cargo holds and then taking the ship and the cargo to the place of safety. This exercise and the cost incurred thereon gave rise to the General Average exercise that was required to be adjusted and for which the General Average Adjuster was appointed. It is for this reason that the General Average Bonds Form „A‟ was signed by the Complainant and for the guarantee and the General Average Guarantee Form „B‟ was signed by the Insurance Company and tendered to the General Average Adjuster. The form was signed by the Insurance Company through Mr. Samrendra Arora, the Senior Divisional Manager on 06.08.2010 and CC_132_133_134_2012 Page | 58 accordingly, the Insurance Company agreed and undertook to pay to the ship owners or to the General Average Adjusters on behalf of the Complainant to satisfy the contribution, if any, towards the General Average for meeting the expenses of the salvage operations on behalf of the Complainant.
58. It has also been brought on record that the said Form B was handed over by the Insurance Company to the Complainant and was accordingly forwarded to the General Average Adjuster. Form B signed by the Insurance Company was also forwarded to M/s. Mitsutor Shipping Agency, who are the agents of the vessel at Mumbai for giving clearance.
59. The Salvers required a separate salvage security in addition to the General Average Security to the tune of 25% of the CIF value of the cargo and was to be lodged with the salvage arbitration branch of Lloyds, which letter was also forwarded making a request to the Insurance Company to issue a Special Salvage Security, which they did not issue.
60. The mail dated 09.08.2010 by Mr. Vajpayee was communicated to all the parties and the settling agency had informed that all compliances had been received as per Section 64 VB of the Insurance Act and were in Order.
61. It seems that simultaneously on 09.08.2010 the Settling Agents of the Insurance Co. M/s. W.K. Websters London informed about the alleged non- extension of Lloyd‟s having not extended the classification certificate after 10.10.2007.
62. It is in this background that the Salvers M/s. Smits Singapore Pvt. Ltd. filed an Arbitration Petition No. 956 of 2010 against the owners of the vessel, CC_132_133_134_2012 Page | 59 the Mumbai Port Trust and the Cargo owners including the Complainants under Section 9 of the Arbitration and Conciliation Act before the High Court of Bombay and obtained and ex-parte interim Order on 13.08.2010 restraining the Complainant and the other cargo owners from removing or taking away their consignments.
63. The Complainants appeared in those proceedings and the learned Single Judge declined to extend the interim Order against which a Letters Patent Appeal was filed by the Salver being Appeal No. 557 of 2010 and the Division Bench of the High Court continued the ad-interim Order on 18.08.2010. Later on, as stated by the Complainant, the Cargo was released subject to furnish Bank Guarantees. It was also informed that the Complainants had to ultimately discharge their liabilities towards the Average Adjuster as per the Arbitration Award.
64. The Complainants had to bear the liability as on 20.08.2010, the General Average Guarantee was withdrawn by the Insurance Company on the alleged ground that there was no valid classification of the vessel. Prior to this, no objection to classification was raised and the Policy remained intact.
65. Mr. Gola has advanced another submission, that had this information been tendered about the classification of the vessel being not under any of these recognised societies mentioned in the policy, the insurance coverage might possibly have fetched a higher premium, but since the correct information about classification had not been given and was rather suppressed and misrepresented, there was no occasion for the Insurance CC_132_133_134_2012 Page | 60 Company to have raised a higher premium demand. The submission is that any default on the part of the Complainant and a breach of utmost good faith principle, cannot be read as a deficiency against the Insurance Company.
66. The arguments, the submissions and the aforesaid facts have therefore now to be viewed from the point of view of these issues having been dealt with by this Commission in the case of Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd., 2013 SCC OnLine NCDRC 998 and its affirmance by the Apex Court in the judgment cited above.
67. The genesis of this case and the widespread canvas of facts needs to be taken into account in the background that the incident and accident has already been analyzed before in the case of Rajankumar & Bros. (Impex) (supra). It was the same vessel that was carrying the consignment of 7 importers including the present Complainant as well as Rajankumar & Bros (Impex). The incident / accident that occurred on 18.07.2010 when the vessel was moving for repairs after having docked at Mumbai is the same and common in respect of all the consignees referred to above. The vessel had safely docked at Mumbai and was allotted a birth on 14.07.2010. The discharge of the cargo was obstructed on account of the failure of vessel crane and therefore, the vessel was removed from its berth for undertaking repairs and it is during this movement that in the midnight of 18.07.2010 that the vessel hit a naval vessel and went aground. These facts are undisputed. All the consignees had obtained separate Marine Cargo Policies on furnishing the documents available to them.
CC_132_133_134_2012 Page | 61
68. It is the contention of Mr. Naqvi, learned counsel for the Complainants that the case of Rajankumar & Bros. (Impex) (supra) was decided holding that the Complainants therein had not been able to throw any further light on the issue of the Classification of the Vessel and that its classification with Lloyd‟s had not been extended after 10.10.2007. It was also held by this Commission in that case that the claim of certification by the Complainant from International Register of Shipping was not a valid classification as the abbreviation I.R.S. according to this Commission in its Order was described to be "Indian Register of Shipping". In that case the conclusion drawn was that since the vessel was not classed in accordance with the classification clause provided in the policy, the Insurance Co. was justified in declining to further process the claim of the complainant therein and accordingly the complaint was dismissed on 12.11.2013 as extracted herein above.
69. Mr. Naqvi has urged that the documentation, the information and the entire conduct of the Insurance Co. having not raised any objection in this regard, which amounted to waiver, has been substantiated in the present complaint particularly C.C. No.132 of 2012 bringing on record the full details regarding the Classification of the Vessel, its prompt information to the Insurance Co. and further no objection having been raised by it which facts had not been spread out, explained or supported to that extent in the case of Rajankumar & Bros. (Impex) (supra). He therefore, submits that the facts of the present case bring out the complete story and the documents that had not fallen for consideration in the case of Rajankumar & Bros. (Impex) (supra) CC_132_133_134_2012 Page | 62 and therefore this distinguishable feature based on established facts needs to be reconsidered without being influenced by the facts which were incomplete in the case of Rajankumar & Bros. (Impex) (supra). The conclusion drawn in that case therefore rests on incomplete facts, and rather the facts of this case as unfolded clearly establish the classification of the vessel, the prompt intimation and information to the Insurance Co. about the same and there being no objection or any further clarification sought from the Complainant in this regard till the time the vessel had sailed and the Insurance policy had been handed over, and the vessel had safely arrived at Mumbai.
70. It is urged by Mr. Naqvi that the Insurance Co. not only failed to controvert this evidence but also failed to file its written submission thereby forfeiting its right to file the written version or any evidence as is evident from the order passed in these proceedings on 28.11.2013 already extracted hereinabove. He therefore, submits that there was no material to controvert the evidence filed on record in the present case which was extensive and was sufficient to prove the classification of the vessel, its intimation to the Insurance Co. and no objection having been taken to these documents. In such circumstances the order passed by this Commission in the case of Rajankumar & Bros. (Impex) (supra) and its confirmance by the Apex Court cannot preclude this Commission to assess the facts as unfolded herein independently, without being influenced by the facts of judgement in the case of Rajankumar & Bros. (Impex) (supra). He submits that the ratio on the legal aspect in the said judgement would therefore have to be applied on the CC_132_133_134_2012 Page | 63 facts of the present case and it is only to this extent that the judgement will have a binding effect, and not beyond that inasmuch as the facts of the present case reveal the complete story and full disclosure as a result whereof the Complainants are entitled to the desired relief.
71. He submits that the applications for intervention had been moved before the Apex Court by the present Complainants which were allowed but as noted above, the judgment of the Apex Court in paragraphs of 47 and 48 cleared the decks for the hearing of these Complaints independently, clearly mentioning that they may require separate findings of fact, keeping in view the terms and conditions of the Policies and the evidence to be recorded in this case separately. Mr. Naqvi points out that the Apex Court has categorically indicated that this Commission will hear these matters on merits and decide the same accordingly. It is therefore, urged that the facts of the present case may be assessed independently on all the issues, as on the facts of the present case it would be clear that the vessel was Classified in accordance with the norms that was promptly notified and with no objection by the Insurance Co., the claim was clearly indemnifiable and admissible.
72. It is in this background that we propose to record the facts as pleaded in the present case in the background that no written version has been filed by the Insurance Co. controverting the material on record.
73. The first document which needs to be addressed is the letter dated 04.05.2010 which is a request for issuance of the Marine Cargo Single Voyage Policy applied for by the Complainant in C.C No.132 of 2012. The CC_132_133_134_2012 Page | 64 letter dated 14.05.2010 is a request from the Complainant Viraj Impex indicating the details of the shipment and the journey. A preliminary cover note also spelling out the ICC Cargo Clause in response to this request was issued on 14.05.2010 which is on record. The Cover Note Serial No. is 1305277 and the Policy No. is 1216/21/2011/15. The date is 14.05.2010, the sum insured is Rs.10,86,42,100/- in respect of 3,500 metric tons of hot rolled steel coils for which a premium of Rs. 36,250/- was mentioned. This Cover Note, that was initially issued on 14.05.2010 is also accompanied by the terms of Insurance in one page which recites "Institute Classification Clause" as a warranty condition. It relates to the classification of the vessel and is a specific condition under the Policy. We may point out that the risk covered is "Institute Cargo Clauses(C)" that should not be confused with the term of classification. The Institute Classification Clause is in relation to the classification of the vessel. The Cover Note also mentions that the Policy is subject to the conditions, clauses, warranties, endorsements as per forms attached. As against this Cover Note dated 14.05.2010 a receipt of the payment of the amount collected has also been filed on record which is dated 14.05.2010 for a sum of Rs.35,950/- for a Marine Cargo Single Voyage (C) Policy.
74. Now the facts which are being orally disputed by the Insurance Co. are that the complainant alleges to have complied with "the Institute Classification Clause" by intimating the same along with full particulars of the Ship, which according to the Complainant was dispatched after being intimated by the sellers / consigners from China, that the entire consignment is being loaded CC_132_133_134_2012 Page | 65 for being shipped to Mumbai on the Vessel Khalijia-III. The ship particulars are contained in one sheet accompanied by the documents of the Crew list and the certificate of classification as per the "International Register of Shipping". There are a number of certificates attached mentioning the name of the vessel and in all the certificates of the vessel pertaining to its classification and technical status, run into almost 24 pages from page 41 of the Complaint to page 65. The Conditional certificate of classification at page 41 has been issued on 09.03.2010 with its validity upto 08.06.2010 followed by a subsequent certificate of the same denomination from the same agency of "International Register of Shipping" that has been filed at page 64 where the date of issuance is 02.06.2010 certifying its validity till 01.11.2010. These certificates recite that they are interim certificates for Classification as per the "International Register of Shipping". This is supported by a certificate of the Master of the Vessel dated 11.06.2010 at page 63 of the paper-book referring to Llyod‟s reregister. We have referred to this document because the Judgement of the Apex Court in the case of Rajankumar & Bros. (Impex) (supra) has described it as a self-certification and has been held to be not a conclusive piece of evidence certifying that the vessel was actually classed with an I.A.C.S. Member Society. We will deal this issue later on.
75. A perusal of the ship particulars at page 39 mentions the class of the vessel as "I.R.S.". According to the Complainant, the same was understood to be the International Register of Shipping. From a perusal of the Order of this Commission quoted in para 19 above in the case of Rajankumar & Bros.
CC_132_133_134_2012 Page | 66 (Impex) (supra), it appears that the said abbreviation has been construed to mean "Indian Registrar of Shipping". This has been treated to be a misrepresentation by the Commission and it has been held that this was a "joke and a shaky explanation". It was also held therein that the Complainant in that case should have produced the certificate from IRS and its absence "rocks the boats to a dangerous extent". It was taken to be "an attempt to sweep the truth under the mat" and it was held that the court is "not to be deceived by this lie".
76. The aforesaid findings of this Commission were challenged before the Apex Court and the Certificate of the Master of the Vessel dated 11.06.2010 was placed, and in paragraph 25 the Apex Court observed that the said certificate depicted as if equivalent to Lloyd‟s 100 AI or equal and that the vessel was sea-worthy. As noted above, the Apex Court held the said certificate to be a self-certification as no evidence of the vessel classification was provided to the Insurance Co. Accordingly it was held not as a conclusive evidence for treating the vessel to be actually classed with an I.A.C.S. Members Society.
77. Learned counsel for the Complainant has pointed out that in the present case apart from the said certificate from the Master of the vessel, dated 11.06.2010, all the certificates issued by the International Register of Shipping certifying the vessel to be sea-worthy as brought on record herein were not there in Rajankumar‟s case but the same has been filed in the present Complaint and therefore, there is enough unrebutted evidence regarding the CC_132_133_134_2012 Page | 67 classification of the vessel which according to the Complainant had been sent and informed to the Insurance Co. before the issuance of the Policy and after the Cover Note had been issued on 14.05.2010. It is urged that the issuance of the Cover Note was subject to the compliance of ICC classification that had been fulfilled by the Complainant.
78. Then comes the second bone of contention on these facts of the intimation about the aforesaid certificates to the Insurance Co. before the final issuance of the Cover Note and the handing over of the Policy. Learned counsel for the Insurance Co. Mr. Gola through his written submissions and oral arguments has taken a consistent stand that no such information about classification was tendered by the Complainant to the Insurance Co. and there was a total breach of the terms of the warranty as the vessel was even otherwise not classed as per the Policy conditions. The Complainant has come up with the clear case that all the particulars had been transmitted regarding the vessel and its classification together with the certificates referred to herein above vide mail dated 28.05.2010. It may be mentioned that the provisional Cover Note had been issued on 14.05.2010 subject to the fulfillment of these conditions and warranties including the ICC Classification that came to be tendered and a final Cover Note with endorsements was made on 11.06.2010.
79. In this regard there are two documents which need reference. The first is the letter / mail dated 28.05.2010 as referred to by the Complainant at Page 38-A of the Complaint. Mr. Gola disputes the filing of this letter on record and CC_132_133_134_2012 Page | 68 its content. The said letter has already been extracted hereinabove in paragraph 29 of this Order. The letter recites that the Complainants intend to nominate the vessel named Khallija-III for shipment of the cargo and the particulars were being forwarded along with the same in PDF file attached. There is a further recital requesting the Insurance Co.(Madam Chitra) to confirm as to whether the vessel is acceptable or not.
80. Mr. Gola, learned counsel for the Insurance Co. has contested this letter but as already pointed out hereinabove no written version controverting any such allegation has been filed and to the contrary the right to file the written version stood forfeited as noted above. The arguments of Mr. Gola could have been entertained but what we find is that this document / mail was admitted to have been received by the Insurance Co. in the mail dispatched by Mr. Vajpayee, an official of the Insurance Co. in his internal communication dated 10.08.2010 which has also been brought on record and has been quoted hereinabove in paragraph 36 of this Order. Item No.4 of this letter / mail recites the acceptance of the mail dated 28.05.2010 informing the Insurance Co. about the age and classification of the vessel as per attached documents. Mr. Gola attempted to dispute this mail and has also raised a submission in the written arguments that this mail is not supported by any certification under Section 65-B of the Indian Evidence Act. We have to reject this argument of Mr. Gola for the simple reason that firstly there is no material, including any written version controverting this allegation or document. The second reason is that such an argument cannot be advanced orally, and the CC_132_133_134_2012 Page | 69 jurisdiction of this Commission is a summary jurisdiction where facts are stated on affidavits that can be controverted accordingly, but not orally. We have already commented upon this to be an argument having been advanced in desperation to create a doubt about the sending of the mails. Mr. Gola submits that there is no proof of the contents of the PDF documents. These arguments deserve also rejection inasmuch as these documents form part of the Complaint including the acknowledgement by the own employee of the Insurance Co. Mr. Vajpayee in his mail dated 28.05.2010 as confirmed on 10.08.2010, referred to above that has gone unrebutted. The stand of the Insurance Co. that no document or information regarding the classification of the vessel had been dispatched by the Complainant in compliance of the terms of the Cover Note, seems to be patently incorrect. The mail dated 10.08.2010 confirms the same.
81. We may point out that a similar letter was under consideration in the case of Rajankumar & Bros. (Impex) (supra) which was dated 26.05.2010. We presume that it is a similar letter which has been mentioned in the present case and is dated 28.05.2010. The Commission in its Order dated 12.11.2013 in C.C. No. 200 of 2012 has referred to this fact in paragraphs 16 and 17. A perusal of the findings recorded therein indicates that there was no "inkling" that such a letter was actually sent or was responded to by the Insurance Co. An assumption was also recorded that a response may not have been sent by the Insurance Co. Thus, that case proceeded in the absence of any response by the Insurance Co.
CC_132_133_134_2012 Page | 70
82. This vital fact is reflected on record differently in the present case because here there is a confirmed response. The letter / mail dated 28.05.2010 is a response by the Insurance Co. that has neither been refuted nor rebutted and is an evidence on record confirmed in the mail dated 10.08.2010 as well as the conduct of the Insurance Co. in having completed and concluded the contract with the issuance of Cover Note, the acceptance of premium and the issuance of the policy.
83. This Commission in the case of Rajankumar & Bros. (Impex) (supra) proceeded on the assumption that there was no communication and therefore this vital different fact in the present case changes the basis of appreciation of evidence, in as much as, we find that the letter dated 28.05.2010 of the Insurance Co. acknowledges the fact of having received the information about particulars of the ship sent by the Complainant. Thus, so far as sending of the information and its dispatch as well as its receipt by the Insurance Co., is established, having been received by the Insurance Co. after the issuance of the Cover Note and prior to the issuance of the Policy.
84. The afore-said issue in the case of Rajankumar & Bros (Impex) (supra) was dealt with by the Apex Court on the basis of the facts therein and the conclusion drawn is available in paragraph 27 of the reported judgement of the Apex Court already extracted hereinabove. The Apex Court treated the information given in the letter dated 26.05.2010 as not constituting prompt information on the ground that the particulars of the vessel classification were not clearly specified therein. The Apex Court observed that it is possible that CC_132_133_134_2012 Page | 71 in the absence of complete information, the Insurance Company might have treated the abbreviation „IRS‟ to mean Indian Register of Shipping to infer that the vessel fell within the classification of ICC clause. This inference has been drawn by the Apex Court on the basis of its conclusion in paragraph 24 of the Judgement where the Apex Court has referred to the official website of International Register of Shipping that reflected that the official acronym of International Register of Shipping was "INTLREG", meaning thereby that the acronym for it was not "IRS". It further went on to observe that "IRS" is the official acronym of "Indian Register of Shipping."
85. We find that the afore-said conclusions seems to have been discovered after visiting the official website, but there was neither any pleading in that case about the same by the Insurance Company as no written version had been filed therein, nor is there any pleading by the Insurance Company in the present case as no written version was permitted to be taken on record as they had forfeited their right to file the written version because of the lapse of 45 days. It is, therefore, evident that there was no such evidence in Rajankumar and Brothers (Impex) (supra) case to support the particulars of the ship, as against that which has been provided in the present case running into almost 24 pages of certificates that have been brought on record and have been referred to hereinabove. These certificates are on the letter head of the "International Register of Shipping."
86. To appreciate the distinction on the basis of the submissions raised and the facts on record, the Order and Judgement in the case of Rajankumar & CC_132_133_134_2012 Page | 72 Bros. (Impex) (supra), the said material as observed above in the present case stood transmitted to the Insurance Company through the letter/mail dated 28.05.2010. Once this is established, then this did cast an obligation on the Insurance Company to have tendered any communication either accepting the same or refusing to do so, in the background, that the letter dated 28.05.2010 specifically names the vessel, the particulars and the certificates sent therewith which appears to have been done, and then with a formal request and offer for an approval of the same. The Insurance Company was, therefore, clearly represented with the particulars naming the vessel as Khalijia-III and with a clear request to approve the same. As would be evident, the provisional cover note was finally endorsed on 11.06.2010 and the policy was handed over on 02.07.2010. The contract went through and was completed without any query.
87. There was no response by raising any objection to the same. To the contrary, the letter along with the information dated 28.05.2010 has been acknowledged through the mail dated 10.08.2010 as referred to above which communication had commenced following the processing of the salvage adjustment through the General Average Adjustor the process whereof has been explained in detail hereinabove. The Insurance Company even at that stage while filling up the Average Guarantee form (Form-B) had not raised any objection regarding the classification of the vessel or of not having received any prompt information from the complainant.
CC_132_133_134_2012 Page | 73
88. We may further point out that the provisional policy cover note dated 14.05.2010 was finally endorsed on 11.06.2010. This is evident from the said document which is on record and remains undisputed at page 157 of the paper book. This endorsed cover note is the same cover note with the same serial number and same policy number that was issued on 14.05.2010 and the premium had been realized on the same date, the receipt whereof is on record and has also been referred to hereinabove. The endorsement in the cover note by hand has been made on 11.06.2010 and also bears the stamp of the Insurance Company. What is relevant in this document is that it is the same cover note, but on 11.06.2010 the date of „14.05.2010‟ has been scored out and endorsed as „11.06.2010‟ and it mentions two very important facts, namely, the name of the vessel as Khalijia-3 as also the details of the Bill of lading. This information has been filled up by the Insurance Company itself and signed by its officials which document has not been rebutted and no written version has been filed rebutting the same. It is, therefore, evident that the provisional cover note which was prepared on 14.05.2010 and the amount of premium received on the same day remains the same. What appears is that this information regarding the vessel and the details of the Bills of lading were tendered by the complainant that was endorsed by hand on the same cover note on 11.06.2010. There is no reason for us to disbelieve the same. The document, therefore, is a self-evident truth of the fact that the information with regard to the particulars of the ship and its classification had reached the Insurance Company which seems to have been dispatched by the letter dated CC_132_133_134_2012 Page | 74 28.05.2010 and which has been rightly acknowledged in the mail dated 10.08.2010.
89. This, therefore, further fortifies the contention of the complainant that no objection was taken to the prompt information despatched by the complainant regarding classification of the vessel.
90. There is one more aspect which needs to be clarified regarding the cover note referred to above endorsed on 11.06.2010. This cover note includes the Institute Classification class details as adopted by the Insurance Company on 01.08.1997. This detail, according to the complainant, was never given before yet the same document records that if a vessel is classed by any of the societies mentioned therein, the same would be acceptable. The first name in the said classification list is Lloyd's register 100 AIO BS. We find that this classification is mentioned in the certificate dated 11.06.2010 issued by the Master of the Vessel where the phrase Lloyd's register has been categorically mentioned and has been relied on by the Complainant.
91. It is in addition thereto that the complainant has also brought on record the certificates from the "International Register of Shipping" which the complainant states to be the correct meaning of the acronym „IRS‟ mentioned in the ship particulars. These certificates as stated above remained unchallenged and had been intimated to the Insurance Company. The Insurance Company did not choose to dispute the same or call for another explanation or classification from the complainant. The stand taken by the Insurance Company that it had not received any such documents has been CC_132_133_134_2012 Page | 75 found to be incorrect as already recorded hereinabove. There is, therefore, no rebuttal of these Classification documents.
92. However, we do not find any mention of the "International Register of Shipping" in the ICC list dated 01.08.1997. There is one particular recital in the said clause that the requirements do not apply to any bulk or combination carriers over 10 years of age and over 15 years but not over 25 years of age. The age of the vessel has been commented upon in paragraph 21 of the Order of this Commission in the case of Rajankumar & Bros. (Impex) (supra) stating that the loss had occurred after the vessel had attained 25 years of age. The fact remains that the Insurance Company did not take any objection to the classification nor did it choose to claim any higher premium on account of the absence of any such classification. There is no response by the Insurance Company rejecting the choice of the vessel on which the goods had been laden which fact was in the knowledge of the Insurance Company as is evident from the endorsed cover note dated 11.06.2010 and the mails dated 28.05.2010 and 10.08.2010 referred to above.
93. There is yet another vital and important fact which needs to be mentioned and that is the intimation dated 01.07.2010 to the Insurance Company about the ship/vessel having sailed with the consignments on 11.06.2010. This letter also indicates that the Insurance Company had been informed at every stage of the dispatch of the goods on the vessel in question.
94. Mr. Naqvi points out that the policy along with the documents and the endorsed cover note was handed over to the complainant on 02.07.2010 and CC_132_133_134_2012 Page | 76 it is for the first time then that the classification clause attached to that policy document dated 01.08.1997 was made known to the complainant. Nonetheless, he maintains that since there was no objection raised to the deployment of the vessel for carrying the consignment on the ground of it not being classified or not being sea-worthy. Such objection was never communicated and the Insurance Company with all this information had full knowledge of the vessel having sailed, and not only this of having reached Mumbai safely on 06.07.2010 without any damage.
95. Thus the Insurance Company had nowhere expressed dissatisfaction or any deficiency about the documents pertaining to the classification of the vessel at any point of time and the goods had reached safely to Mumbai. It was unfortunate that the vessel while discharging the cargo developed a fault in its crane and had to be moved for repairs when during such movement the accident happened. Even then, neither the insurer nor any of its agents in any way commented upon any deficit in the documents pertaining to the classification of the vessel.
96. Accordingly even later on after the vessel had run aground, the salvage adjustment process as indicated above was carried out and all the documents pertaining to the same have been brought on record. After the Bond for Salvage adjustment Form „A‟ had been filled up by the complainant and the Average Guarantee form „B‟ had been filled up by the Insurance Company on behalf of the complainant and handed over to the adjustor, that an information is stated to have been received from the claim settlers of the Insurance CC_132_133_134_2012 Page | 77 Company in England M/s W.K. Webster on 09.08.2010 that the classification of the vessel in Lloyd's register had not been extended after 10.10.2007.
97. On this issue Mr. Naqvi advanced his submissions that the Insurance Company will be presumed to have waived its right to raise any such objection long after the accident in the background above and, therefore, this subsequent information cannot be treated as any misrepresentation or suppression by the complainant. For this he relies on the ratio of the judgement in the case of Manmohan Nanda Vs. United India Assurance Co. Ltd. (2022) 4 SCC 582. He submits that the Lloyd's register information was tendered by the Master of the vessel and had been sent to the Insurance Company and was on record after having been received on 11.06.2010. It, therefore, cannot be said that the complainant had misrepresented this fact regarding the registration of classification and it was only on the information received from the Master of the vessel that it was given to the Insurance Company. Mr. Naqvi submits that the Insurance Company had enough time to verify the correctness of all the declarations/certificates which they failed to do and, therefore, they will be presumed to have waived their right to take a plea of the breach of warranty. He, therefore, submits that such an argument for breach of warranty cannot be entertained on the facts that have emerged in the present case with all the certificates on record where apart from the Lloyd's register, the classification of the vessel through the "International Register of Shipping" has been established otherwise without any objection by CC_132_133_134_2012 Page | 78 the Insurance Company that had issued the cover note on 11.06.2010 and the policy on 02.07.2010 after having received such documents.
98. He, therefore, submits that the contract of insurance came into existence and was complete after full and prompt information had been given and which stands established from the documents on record, hence the Insurance Company was estopped and could not have absolved itself from the liability nor it could have withdrawn the Average Guarantee in the circumstances indicated above. He, therefore, submits that the Insurance Company cannot decline to indemnify the complainant as against the Average Guarantee issued by it as also the other losses suffered in the accident and will be presumed to have waived its right to do so.
99. Mr. Naqvi apart from submitting written submissions in all the three complaints has submitted additional written submissions as well that have been perused by us. We have also perused the written submissions tendered by Mr. Gola for the Insurance Co., who has primarily relied on the Order of this Commission in the case of Rajankumar & Bros. (Impex) (supra) as confirmed by the Apex Court to urge that no different view is possible and the ratio as well as the findings recorded in the case of Rajankumar & Bros. (Impex) (supra) squarely covers the present case and the other two complaints as well both on facts as well as in law. He, therefore, submits that the facts as displayed in the present case do not contain any distinguishable features so as to arrive at a different conclusion and hence the complaints deserve to be dismissed.
CC_132_133_134_2012 Page | 79
100. In order to finally hold or otherwise absolve the Insurance Company of any liability, would be dependent on whether the vessel Khalijia-3 was in fact appropriately classed as a sea worthy vessel in terms of the ICC norms specified in the policy. An argument has been raised in the written submissions that there was no need for such a requirement in as much as the provisional cover note issued on 14.05.2005 that merged with the cover note dated 11.06.2006 only mentions the terms "Institute Classification Clause". The cover note or any other communication did not specify either the name or type of classification and therefore the Insurance Company cannot question either the absence of classification or the classification documents which have been presently filed by the Complainant M/s. Viraj Impex Pvt. Ltd. in CC No. 132 of 2012.
101. We find that the requirement of classification is explicit in the policy cover and the term "Institute Classification Clause" is part of the contract. This is a warranty and therefore the terms of the insurance bind both the parties. The risk covered is subject to such a warranty. This ensures that the vessel which is being utilised for carrying the cargo is declared to be sea worthy. The Insurance Company is justified in placing reliance on this clause which is not under challenge. This clause of classification is recited in all the policy documents including the cover notes and the policies on record. The issue raised on behalf of the Complainant is that the specific type of classification has not been mentioned either in the cover note or even thereafter and it is for the first time that when the policy was handed over on 02.07.2010 that the CC_132_133_134_2012 Page | 80 ICC document accompanied the policy which is dated 01.08.1997. The Insurance Company nowhere represented about any other classification or being applicable in respect of the contract of insurance.
102. The aforesaid fact has not been rebutted in the absence of any written version on behalf of the Insurance Company. The 01.08.1997 ICC document that has been filed on record has already been extracted hereinabove in paragraph 33. No other classification clause accompanied the policy and it is the case of the Complainant that the vessel in question was classed with Lloyd‟s Register which is a recognised classification Society according to the Insurance Company itself under the ICC dated 01.08.1997 referred to above. The contention of the learned Counsel for the Complainant may be correct that this classification was made known for the first time on 02.07.2010 when the policy document was handed over to the Complainant but the fact remains that the applicability of the ICC was endorsed in the terms of the cover note itself. It may be true that in the absence of any clarification, the Complainant proceeded on the presumption that the vessel was already classified with a recognised classification Society, namely Lloyd‟s Register, and it is for this reason that the Complainant had also relied on the certification of the Master of the vessel dated 11.06.2010, which also mentions that the vessel was classed by the Lloyd‟s Register. This understanding of the Complainant may be a reason for the Complainant to believe that the vessel was classed by a recognised classification Society as per the Institute Classification Clause dated 01.08.1997 that was represented to the Complainant, but the fact CC_132_133_134_2012 Page | 81 remains that the said classification of the vessel had come to an end on 10.10.2007 as intimated by the Claim Settlers of the Insurance Company M/s. W.K. Websters, London through their communication dated 09.08.2010. There is no evidence brought forth by the Complainant to demonstrate that the classification of the vessel by Lloyd‟s Register was continued beyond the said date. In the absence of any such material, the self-certification by the master of vessel dated 11.06.2010 does not appear to be representing the correct status of classification of the vessel when it undertook its journey and sailed from China. The said certification had also been doubted in the decision of Rajankumar & Bros (Impex) (supra) by this Commission and also upheld by the Apex Court as referred to hereinabove. In the present set of Complaints, no document of Lloyd‟s Register has been brought forth demonstrating the continuance of the classification of the vessel by the said Society beyond 10.10.2007.
103. Waiver will not come to the aid of the insured because of its own reliance on misinformation about the Lloyd‟s register classification that was discontinued and did not exist on the date of the voyage or the incident. The misinformation about the vessel classed by Lloyd‟s Register Society has seemingly arrived on the asking of by the insured and sent by the seller. The source and procurement of the document dated 11.06.2010 is at the instance of the insured. The information was an outcome that stemmed from, and had its source from this exercise. The representation of classification was therefore deceptive for whatever reason, and therefore a factually incorrect CC_132_133_134_2012 Page | 82 information transformed itself into a misrepresentation that was procured, handled and relied on by the insured, hence waiver by the Insurance company is nowhere attracted.
104. The second is, that the 01.08.1997 classification clause nowhere includes the International Register of Shipping to be a recognised classification Society or a member of the International Association of Classification. We are mentioning it in as much as the Complainant has in addition to Lloyd‟s certification, heavily relied on the certificates of classification issued under the letterhead of "International Register of Shipping" which the Complainant states to be possessing the abbreviation IRS. This reason for the Complainant to rely on this rests on the ship particulars mentioned at page no. 39 of the paper book which refers to the class of the vessel as IRS. The shipping particulars were also received from the sellers in China and it nowhere specifies the meaning or the full form of IRS. Assuming that the class of the vessel was certified by the International Register of shipping, we do not find the International Register of Shipping mentioned as a recognised classification Society under the ICC document that accompanies the policy dated 01.08.1997.
105. Mr. Naqvi contends that this was known for the first time on 02.07.2010 after the ship had already sailed with the cargo and the Insurance Company had never objected to or raised any query in this regard. This contention of Mr. Naqvi may be correct that the Insurance Company did not prior to 02.07.2010 specify the terms of classification but the fact remains that the Complainant CC_132_133_134_2012 Page | 83 has relied on the certificate of classification issued by the International Register of Shipping and the Master of vessel certificate dated 11.06.2010 containing the reference to Lloyd‟s Register.
106. In order to resolve this issue, we have to refer to the Apex Court judgment in the case of Rajankumar & Bros (Impex) (supra). Interestingly when the matter was being contested in that case, the ICC document as was existing in 1978 was referred to. The Apex Court seems to have further probed into the matter regarding compliance of ICC and then recorded its findings in paragraphs 6 to 13 thereof which is extracted hereinunder:
6. At this juncture, we find it useful to dwell upon the scope and relevance of the ICC in marine insurance contracts. The ICC is drafted and issued by the Joint Cargo Committee of the Lloyd's Marketing Association (a premier marine insurance market in London) in consultation with insurance and shipping interests. It is commonly understood that this "classification" relates to the seaworthiness of the vessel in which the cargo is carried. [See John Dunt, Marine Cargo Insurance (Informa Law, Routledge, 2009) p. 166.] The relevant portion of the latest version of the ICC, as revised in 2001 ("ICC 1-
1-2001"), which was in force at the time of the marine insurance policy, and continues to be in force till date, reads as follows:
"Qualifying Vessels
1. This insurance and the marine transit rates as agreed in the policy or open cover apply only to cargoes and/or interests carried by mechanically self-propelled vessels of steel construction classed with a Classification Society which is:
1.1. a Member or Associate Member of the International Association of Classification Societies (IACS), or 1.2. a National Flag Society as defined in Clause 4 below, but only where the vessel is engaged exclusively in the coastal trading of that nation (including trading on an inter-island route within an archipelago of which that nation forms part).
CC_132_133_134_2012 Page | 84 Cargoes and/or interests carried by vessels not classed as above must be notified promptly to underwriters for rates and conditions to be agreed. Should a loss occur prior to such agreement being obtained cover may be provided but only if cover would have been available at a reasonable commercial market rate on reasonable commercial market terms.
Age Limitation
2. Cargoes and/or interests carried by Qualifying Vessels (as defined above) which exceed the following age-limits will be insured on the policy or open cover conditions subject to an additional premium to be agreed.
Bulk or combination carriers over 10 years of age or other vessels over 15 years of age unless they:
2.1. have been used for the carriage of general cargo on an established and regular pattern of trading between a range of specified ports, and do not exceed 25 years of age, or 2.2. were constructed as containerships, vehicle carriers or double-skin open-hatch gantry crane vessels (OHGCs) and have been continuously used as such on an established and regular pattern of trading between a range of specified ports, and do not exceed 30 years of age.
* * *
Prompt Notice
5. Where this insurance requires the assured to give prompt notice to the underwriters, the right to cover is dependent upon compliance with that obligation.‖ (emphasis supplied)
7. As is evident from the above, the ICC 1-1-2001 imposes two requirements to ensure that the vessel complies with a certain minimum standard of seaworthiness. The first is a classification requirement which requires that the vessel should be classed with a Classification Society which is a Member/Associate Member of the International Association of Classification Societies (IACS) or, in the case of vessels engaged exclusively in coastal trading, a National Flag Society. The second is an age limitation in respect of the insured vessel. The IACS consists of 12-
member societies, as listed below:
(i) American Bureau of Shipping (ABS)
(ii) Bureau Veritas CC_132_133_134_2012 Page | 85
(iii) China Classification Society (CCS)
(iv) Croatian Register of Shipping (CRS)
(v) Det Norske Veritas-Germanischer Lloyd (DNV-GL)
(vi) Indian Register of Shipping (IRS)
(vii) Korean Register of Shipping (KR)
(viii) Lloyd's Register (LR)
(ix) Nippon Kaiji Kyokai (Class NK)
(x) Polish Register of Shipping (PRS)
(xi) Registro Italiano Navale (RINA)
(xii) Russian Maritime Register of Shipping (RS).
8. The official statement provided by the IACS about its quality standards is significant for understanding why classification of a cargo vessel with a member-society of the IACS, as opposed to any other society, is considered as a yardstick to judge whether the voyage policy can be reasonably insured. Members of the IACS have to comply with the IACS ―Quality System Certification Scheme‖ (QSCS), which, after 25 years of continuous evolution, is considered as the ―gold standard" for ship classification societies. Moreover, every IACS member is required to have its own ―Internal Quality Management System‖ for ensuring that classed vessels meet certain minimum criteria of quality. The audits of all IACS members, and of those societies who wish to be considered for such membership, are carried out by independent accreditation bodies, [ International Association of Classification Societies, Quality System Certification Scheme (QSCS), <http ://www.iacs.org.uk/quality/quality-system-certification-scheme-qscs/> last accessed 2-2-2020.] which lends further legitimacy to the classification accorded to vessels by IACS members.
9. Thus, it can be inferred from the above that an underwriter/insurer would usually trust the quality of, and be prepared to issue a reasonable premium for, a vessel classed with an IACS member society. On the other hand, the insurer may demand a higher premium, or deny insurance cover altogether, for a voyage in respect of a vessel classed by a non-IACS member society. Hence, the ICC prescribes classification with a member of the IACS as the baseline for ensuring that the policy involves less risk for the underwriter.
10. Therefore, sub-clause (1) of the ICC 1-1-2001 provides that cargo interests are obligated to promptly notify insurance underwriters if the cargo is being carried by a vessel which is not classed as prescribed in the ICC, and Clause 5 CC_132_133_134_2012 Page | 86 makes it clear that failure to provide such information will lead to exclusion of the insurance cover.
11. It has been contended by the appellant that Ncdrc has erred in relying on the older version of the ICC i.e. the 1978 version. We are in agreement with the said contention of the appellant, inasmuch as the 1978 version of the ICC was replaced by the ICC 13-4-1992, the ICC 1-8-1997, and the ICC 1-1-2001. As mentioned supra, the ICC 1-1-2001 is the most recent version of the ICC, and the one which is relevant for the purpose of the present case.
12. However, the most recent version of the ICC i.e. ICC 1-1-2001, parts of which we have quoted earlier, does not help the appellant's case inasmuch as it is stricter in its import. We find it useful to undertake a comparative analysis of the older versions of the ICC and the ICC 1-1-2001 in this regard. Clause 1 of previous versions of the ICC stated that, ―The marine transit rates agreed in this insurance apply only to cargoes and/or interests... classed as below by one of the following classification societies‖. This phrasing had led to confusion as to whether a failure of the vessel to comply with the classification requirement would mean that the risk was completely excluded from cover or merely that the premium rate, as agreed upon, would no longer apply and the assured would have to pay a different premium rate. [See John Dunt, Marine Cargo Insurance (Informa Law, Routledge, 2009) p. 167.] Hence, in the ICC 1-1-2001, sub- clause (1) was modified to read as follows:
―This insurance and the marine transit rates as agreed in the policy or open cover apply only to cargoes and/or interests...classed with a Classification Society...‖ (emphasis supplied)
13. The word ―insurance‖ was specifically added in the ICC 1-1-2001 to clarify that the insurance itself, and not merely the rate of premium, is subject to compliance with the classification requirement. [See John Dunt, Marine Cargo Insurance (Informa Law, Routledge, 2009) p. 167.] Furthermore, the 1978 version provided that:
―Cargoes and/or interests carried by mechanically self-propelled vessels not falling within the classification of the above are held covered subject to a premium and on conditions to be agreed.‖ (emphasis supplied) The aforementioned ―held covered‖ provision acted as a saving clause to cater for situations where an assured discovered that the vessel in which their cargo CC_132_133_134_2012 Page | 87 was being carried fell outside the classification and/or age requirement in the ICC. In such a situation the assured cargo owner could still avail of the insurance cover subject to negotiating payment of an additional premium with the insurer.
107. A perusal of the said findings demonstrates that the Apex Court went on to hold that the classification clause that was currently revised in 2001 i.e. ICC 01.01.2001 was in force at the time when Marine Insurance Policy was issued.
It then went on to record the then recognised classification societies who were 12 in number registered with the International Association of classification. The Societies have been named in paragraph 7 of the report and Lloyd‟s Register was once again mentioned in 2001 classification as well. However, the same judgment in paragraph 28 has recorded that the subject vessel was classed with Lloyd‟s Register of shipping only till 10.10.2007 after which the classification had been withdrawn. As noted above, no evidence has been brought forth to demonstrate the continuance of the vessel as a classed vessel registered under Lloyd‟s Register or for that matter under any of the classification Societies mentioned in the ICC requirement.
108. The Apex Court in the case of Rajankumar & Bros. (Impex) (supra) in paragraph 19 observed as under:
19. Subsequent common-law decisions, however, have held that the obligation of the assured to inform the correct details in respect of the vessel's classification extends even where a policy is issued after the particulars of the vessel have been provided.
109. The Court then in paragraph 21 recorded as follows:
21. In Kam Hing Trading (Hong Kong) Ltd. v. The People's Insurance Co. of China (Hong Kong) Ltd. [Kam Hing Trading (Hong Kong) Ltd. v. The People's CC_132_133_134_2012 Page | 88 Insurance Co. of China (Hong Kong) Ltd., (2010) 4 HKLRD 630] , the respondent insurance company repudiated the claim of the appellant cargo seller on the ground that the vessel carrying was not classed in compliance with the ICC. It may be worth noting that in Kam Hing Trading [Kam Hing Trading (Hong Kong) Ltd. v. The People's Insurance Co. of China (Hong Kong) Ltd., (2010) 4 HKLRD 630] , the appellant cargo company had produced a certificate to show that the vessel was classed by the International Register of Shipping. However, it was observed by the High Court of Hong Kong that the International Register of Shipping was not a Member or Associate Member of the IACS, as required by the ICC 1-1-2001.
110. A perusal of the said findings of the Apex Court rules that the assured had to inform the correct details in respect of the vessel even when the policy is issued after the particulars of the vessel have been provided. In the instant case, the Complainant has come up with a case that after the cover note was given on 14.05.2010 all the documents of classification were provided.
111. The question is as to whether the Complainant, the assured, did provide the correct information which it was obliged to do. As noted above, the information regarding Lloyd‟s Register contained in the self-certification of the Master of the vessel dated 11.06.2010 has been found to be incorrect as the Lloyd‟s Register certification had been withdrawn w.e.f. 10.10.2007 and had not been continued thereafter. The said self-certification therefore gave an incorrect information that was forwarded by the Complainant and therefore it was an incorrect representation by the Complainant of an incorrect information. The Complainant therefore cannot take any advantage of the said information nor can it be treated to be a valid classification certificate. This was also found in the Order of this Commission in the case of Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd. (supra) clearly reciting that CC_132_133_134_2012 Page | 89 no supporting material demonstrating the continuance of the Lloyd‟s Register certification was produced. The position remains the same in the present cases as well as no such document has been brought forth to establish the continuance of certification of the vessel.
112. The next conclusion from the finding recorded in paragraphs 19 and 21 of the judgment in the case of Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd. (supra) as quoted above is that the certificate of International Register of Shipping was not valid as the said Society was not a member or associate member of the International Association of Classification Societies (IACS). Thus, the certificate from the International Register of Shipping was also found to be not valid.
113. The third inference that can be drawn as a ratio from the said judgment is the meaning and full form of the acronym / abbreviation „IRS‟. This issue was thrashed out by the Apex Court by referring to the issue of the acronym of IRS. The Apex Court after analysing the facts observed in paragraph 23 and 24 as follows:
23. Thus, it can be seen from the above decisions that where a vessel is not classed with a recognised classification society in terms of the ICC, any loss incurred by the cargo owner will be excluded from the scope of the insurance cover. Further, the cargo owner is required to immediately notify the underwriters and negotiate an additional premium if the vessel is not classed in accordance with the ICC.
24. In the instant case, it is apparent that neither was the subject vessel in compliance with the ICC clause, nor had the appellant given prompt notification to the respondent about such non-compliance. The appellant, in its letter dated 26-5-2010 (supra) had informed the respondent that the vessel is of ―IRS‖ class. However, the full form of "IRS" was not specified.
CC_132_133_134_2012 Page | 90 As mentioned supra, the appellant has contended that NCDRC wrongly interpreted the term ―IRS‖ to mean ―Indian Register of Shipping‖ and that the subject vessel was actually registered and classified with the ―International Register of Shipping‖. However, our perusal of the official website of the International Register of Shipping shows that its official acronym is "INTLREG". [See International Register of Shipping, ―About‖, <https ://intlreg.org/about/>.] Whereas "IRS" is the official acronym of the "Indian Register of Shipping". [See Indian Register of Shipping, ―About IRClass‖, <https ://www.irclass.org/abouirclass/>.] Hence the appellant's contention that ―IRS‖ refers to the International Register of Shipping is prima facie sustainable.
114. A perusal of the said finding demonstrates that the Apex Court arrived at the conclusion that the acronym of IRS is the official acronym of the "Indian Register of Shipping", whereas the acronym of the International Register of Shipping was INTLREG. If that is so, then the classification of the vessel is not with the Indian Register of Shipping and the contention of Mr. Naqvi about the understanding of the acronym IRS by the Complainant therefore is unacceptable because the acronym of International Register of Shipping is not equal to IRS as mentioned in the ship particulars at page 39 of the paperbook that was supplied by the seller. It is more than obvious that the information in the ship particulars with the acronym IRS supplied by the Complainant was clearly misleading as it was obviously not referring to the Indian Register of Shipping. On the other hand, the acronym INTLREG was not mentioned in the ship particulars and therefore no presumption could be raised that it referred to the International Register of Shipping. Even otherwise the International Register of Shipping is not a member of IACS as held by the Apex Court, and is therefore not a recognised Society for proper classification of the vessel and CC_132_133_134_2012 Page | 91 stood excluded from the scope of the Insurance cover in view of the conclusions drawn by the Apex Court in paragraph 19 and 21 in the case of Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd. (supra) read with paragraph 22 and 23 thereof which are extracted hereinunder:
22. Therefore, where the insurer issues the insurance policy based on incomplete or incorrect details provided by the assured, it does not amount to acquiescence to improper classification of the vessel. It is the duty of the assured to provide the full and correct particulars of the vessel at the time of issuance of the policy, irrespective of whether or not the insurer carries out any due diligence from their end. Since no such prompt notice was given by the appellant in Kam Hing Trading [Kam Hing Trading (Hong Kong) Ltd. v. The People's Insurance Co. of China (Hong Kong) Ltd., (2010) 4 HKLRD 630] , the High Court held that the appellant was excluded from the scope of the insurance cover. The High Court further observed that even if such evidence had been given, there was no evidence to show that premium could have been obtained at reasonable market terms, and hence the ―held covered‖ clause would not apply.
23. Thus, it can be seen from the above decisions that where a vessel is not classed with a recognised classification society in terms of the ICC, any loss incurred by the cargo owner will be excluded from the scope of the insurance cover. Further, the cargo owner is required to immediately notify the underwriters and negotiate an additional premium if the vessel is not classed in accordance with the ICC.
115. The assumption of fulfilment of classification norms based on a misinformation or that which arises from a misunderstanding or an incorrect understanding of the meaning of classification clearly intended, cannot give rise to any ambiguity, latent or patent, about the terms and conditions of insurance for any advantage to a party. What was clearly intended was the classification of the vessel according to ICC norms. As held by the Apex Court in Rajankumar & Bros (Impex) (supra), the classification has to be from a CC_132_133_134_2012 Page | 92 society mentioned categorically that are recognised under the norms. The insured cannot take any advantage of its own understanding about classification under the garb that the Insurance company failed to respond to its communications. A vessel without a proper classification cannot be deemed as a classified vessel unless it is in conformity with the norms.
116. We therefore find that the dual factual foundation laid by the Complainants to distinguish the present case from that of Rajankumar & Bros (Impex) (supra) has been extensively examined by us and it has been found on the facts pleaded in this case that the vessel was not classed with a recognised classification society as on the date of the voyage or even thereafter when it met with an accident. The Complainants in all the three cases have failed to discharge the burden of proof in establishing the classification of the vessel either on the strength of Lloyd‟s Register or on the strength of International Register of Shipping. The conclusions drawn hereinabove are based on the facts pleaded in these cases but the conclusion remains the same as was held by the Apex Court in the case of Rajankumar & Bros (Impex) (supra).
117. We may point out that the general principles of discharging the burden of proof require that the burden of proving the fact always lies upon the person who asserts the same. This has been dealt with extensively by the Apex Court in the case of Mahakali Sujatha vs. The Branch Manager, Future Generali India Life Insurance Co. Ltd. & Anr., (2024) SCC OnLine SC 525, paragraphs 41 to 46 that are extracted hereinunder:
CC_132_133_134_2012 Page | 93
41. Being aggrieved by the repudiation, the respondent in Rekhaben case [Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175 : (2019) 3 SCC (Civ) 174] filed a consumer complaint which was dismissed on the ground that there was non-disclosure of the fact that the insured had held a previous policy in the proposal form filled up by the proposer. The appeal filed by the respondent was, however, allowed based on a decision of NCDRC in Sahara India Life Insurance Co. Ltd. v. Rayani Ramanjaneyulu [Sahara India Life Insurance Co.
Ltd. v. Rayani Ramanjaneyulu, 2014 SCC OnLine NCDRC 525 : (2014) 3 CPJ 582] (―Sahara India‖). The decision of the State Consumer Disputes Redressal Commission was affirmed by NCDRC for the reason that the omission of the insured to disclose a previous policy of insurance would not influence the mind of a prudent insurer, as held in Sahara India [Sahara India Life Insurance Co. Ltd. v. Rayani Ramanjaneyulu, 2014 SCC OnLine NCDRC 525 : (2014) 3 CPJ 582] .
42. The question before this Court in Rekhaben case [Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175 : (2019) 3 SCC (Civ) 174] was, whether, the repudiation could be sustained on the grounds of suppression of information about other insurance policies. It is pertinent to note that the insured therein had admitted the non-disclosure of the earlier cover for life insurance held by him, but argued that the non-disclosure of such information was not a material fact whose suppression would allow for repudiation of the claim under Section 45. Therefore, the Court ruled in favour of the insurance company and held that such suppression was indeed a material suppression of information, as it had a bearing on the decision of the insurer to enter into the contract of insurance or not.
43. The Court thereunder held as follows : (Rekhaben case [Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175 : (2019) 3 SCC (Civ) 174] , SCC pp. 193-94, paras 32-34) ―32. In the present case, the insurer had sought information with respect to previous insurance policies obtained by the assured. The duty of full disclosure required that no information of substance or of interest to the insurer be omitted or concealed. Whether or not the insurer would have issued a life insurance cover despite the earlier cover of insurance is a decision which was required to be taken by the insurer after duly considering all CC_132_133_134_2012 Page | 94 relevant facts and circumstances. The disclosure of the earlier cover was material to an assessment of the risk which was being undertaken by the insurer. Prior to undertaking the risk, this information could potentially allow the insurer to question as to why the insured had in such a short span of time obtained two different life insurance policies. Such a fact is sufficient to put the insurer to enquiry.
33. The learned counsel appearing on behalf of the insurer submitted that where a warranty has been furnished by the proposer in terms of a declaration in the proposal form, the requirement of the information being material should not be insisted upon and the insurer would be at liberty to avoid its liability irrespective of whether the information which is sought is material or otherwise. For the purposes of the present case, it is sufficient for this Court to hold in the present facts that the information which was sought by the insurer was indeed material to its decision as to whether or not to undertake a risk. The proposer was aware of the fact, while making a declaration, that if any statements were untrue or inaccurate or if any matter material to the proposal was not disclosed, the insurer may cancel the contract and forfeit the premium. MacGillivray on Insurance Law [ 12th Edn. (Sweet and Maxwell, 2012). See p. 257 for cases relied upon.] formulates the principle thus:
‗... In more recent cases it has been held that all-important element in such a declaration is the phrase which makes the declaration the ―basis of contract‖. These words alone show that the proposer is warranting the truth of his statements, so that in the event of a breach of this warranty, the insurer can repudiate the liability on the policy irrespective of issues of materiality.'
34. We are not impressed with the submission that the proposer was unaware of the contents of the form that he was required to fill up or that in assigning such a response to a third party, he was absolved of the consequence of appending his signatures to the proposal. The proposer duly appended his signature to the proposal form and the grant of the insurance cover was on the basis of the statements contained in the proposal form. Barely two months before the contract of insurance was entered into CC_132_133_134_2012 Page | 95 with the appellant, the insured had obtained another insurance cover for his life in the sum of Rs 11 lakhs. We are of the view that the failure of the insured to disclose the policy of insurance obtained earlier in the proposal form entitled the insurer to repudiate the claim under the policy.‖
44. However, the aforesaid judgment in Rekhaben case [Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175 : (2019) 3 SCC (Civ) 174] is distinguishable from the present case, insofar as there is no admission by the appellant herein of any previous policies taken by the insured. In that case, after the admission by the policy holder, the Court was tasked only with the question of whether the fact about previous polices qualified to be a ―material fact‖ that was suppressed. However, in the present case, in light of Section 45 of the Insurance Act, 1938, the burden rests on the insurer to prove before the Court that the insured had suppressed the information about the previous policies. This burden of proof has to be duly discharged by the insurer in accordance with the law of evidence.
45. In the instant case, NCDRC has extracted from the letter dated 31-12-
2011, by which the claim of the appellant was repudiated, and has relied upon the reply filed by the respondent Company before the District Forum wherein details of as many as fifteen insurance policies taken from various insurers, other than the policy taken from the respondent Company, have been given as under:
Sl. Insurers Policy No. Issue RCD Sum Date of
No. Date assured birth
(in Rs) declared
1. Kotak 1839610 11-1- 11-1-2010 5,00,000 14-7-1960
2010
2. Bharti Axa Life 5003353827 Not 28-3-2009 7,50,000 12-9-1960
known
3. Aviva ASP2610613 Not 9-6-2009 10,00,000 12-7-1960
known
4. Reliance Life 13231705 Not 17-12-2008 2,00,000 6-7-1959
Insurance known
5. Reliance Life 13741094 Not 11-2-2009 5,00,000 14-7-1960
Insurance known
6. HDFC Standard 13061074 Not 29-8-2009 4,80,000 NA
Life known
7. HDFC Standard 12695703 Not 21-3-2009 4,80,000 NA
Life known
8. Max New York 809471329 Not 27-1-2009 5,75,289 14-7-1960
Life known
9. Max New York 388825572 Not 30-9-2009 4,24,711 14-7-1960
CC_132_133_134_2012 Page | 96
Life known
10. Birla 2489174 Not 28-1-2009 1,33,461 14-7-1960
known
11. Birla 2490595 Not 28-1-2009 2,60,241 14-7-1960
known
12. Birla 3121574 Not 3-8-2009 5,00,000 14-7-1960
known
13. Birla 3956699 Not 17-3-2010 3,24,000 14-7-1960
known
14. IDBI Not given Not 20-4-2010 5,00,000 14-7-1960
known
15. IDBI Not given Not 28-04-..... 5,00,000 14-7-1960
known
Total 71,27,702
Total : Rupees seventy-one lakhs twenty-seven thousand seven hundred and two only
46. A mere perusal of the aforesaid Table would indicate that the date of birth declared are different and the date of issuance has not been stated except in respect of one policy. It is also not known from the table to whom the said policies were issued. However, NCDRC has observed that the appellant-complainant had not alleged in her complaint that no other insurance policy had been taken by the deceased. In the affidavit of the complainant, the fact that insurance policies were taken from other insurers was not denied. The respondent Insurance Company had given details of the aforesaid policies by way of an affidavit. Therefore, NCDRC concluded that the deceased insured had withheld information in respect of several insurance policies which he had taken from other insurers.
118. In that case the Insurance Company had been contending about nondisclosure of multiple Insurance policies that had been allegedly suppressed but the Insurance Company was found on the facts of that case to have not been able to prove the same. The aforesaid principles were reiterated in the case of Mahaveer Sharma vs. Exide Life Insurance Co. Ltd. & Anr., 2025 SCC OnLine SC 435, where the obligation of disclosure was discussed in the light of decision in the case of Manmohan Nanda (supra) which has also been relied on by Mr. Naqvi for the Complainant.
CC_132_133_134_2012 Page | 97 Applying the principles as spelt out therein, the present is a peculiar case where the Insurance Company has failed to file its written version, but at the same time, the findings recorded by the Apex Court in the case of Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd. (supra) are not only applicable and binding, but relate to the same vessel presently in question. The Complainants have been unable to dislodge the recital contained in the letter of repudiation dated 20.08.2010 in the present case which categorically recites the absence of classification of the vessel in accordance with the ICC document. As noticed above, there is no evidence to prove the continuance of certification under Lloyd‟s Register of the vessel Khalijia-3 beyond 10.10.2007. Similarly the International Shipping Register documents even if communicated with prompt notice, and were unrebutted, does not in any way establish the fulfilment of ICC requirement as the said certification is not by any authorised and recognised society as held hereinabove and as also confirmed in the findings recorded by the Apex Court in the case of Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd. (supra).
119. There is yet another legal principle which needs to be referred to in the background that the facts stated by the Complainants went unrebutted because the written version had not been filed by the Insurance Company. This Commission in the absence of any written version can still exercise its jurisdiction to trace out the correct facts on the basis of material on record and cannot be compelled to blindly accept the contentions of the Complainant who CC_132_133_134_2012 Page | 98 has not been able to prove the existence of any valid certification of the classification of the vessel as required under law. We may therefore gainfully refer to the principles laid down by the Apex Court in the case of Balraj Taneja & Anr. vs. Sunil Madan & Anr. as reported in (1999) 8 SCC 396, paragraph 29 in particular which is extracted hereinunder:
29. As pointed out earlier, the court has not to act blindly upon the admission of a fact made by the defendant in his written statement nor should the court proceed to pass judgment blindly merely because a written statement has not been filed by the defendant traversing the facts set out by the plaintiff in the plaint filed in the court. In a case, specially where a written statement has not been filed by the defendant, the court should be a little cautious in proceeding under Order 8 Rule 10 CPC. Before passing the judgment against the defendant it must see to it that even if the facts set out in the plaint are treated to have been admitted, a judgment could possibly be passed in favour of the plaintiff without requiring him to prove any fact mentioned in the plaint. It is a matter of the court's satisfaction and, therefore, only on being satisfied that there is no fact which need be proved on account of deemed admission, the court can conveniently pass a judgment against the defendant who has not filed the written statement. But if the plaint itself indicates that there are disputed questions of fact involved in the case regarding which two different versions are set out in the plaint itself, it would not be safe for the court to pass a judgment without requiring the plaintiff to prove the facts so as to settle the factual controversy. Such a case would be covered by the expression ―the court may, in its discretion, require any such fact to be proved‖ used in sub-rule (2) of Rule 5 of Order 8, or the expression ―may make such order in relation to the suit as it thinks fit‖ used in Rule 10 of Order 8.
120. Consequently for all the reasons hereinabove, the Complainants independent of the facts in Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd. (supra) have been unable to establish the fact of CC_132_133_134_2012 Page | 99 classification of the vessel and therefore the repudiation on that ground as well as the withdrawal of the General Average Guarantee by the Insurance Company cannot be faulted with.
121. The Complainant has come up with a case that in spite of all this information, the insurance Company never objected to the same, accepted the premium and executed the policy document thereby concluding the contract and hence the insurance Company was estopped from raising any such plea. It is as a corollary to this argument that Mr. Naqvi submitted that with the acceptance of the document by the Insurance Company that was received by it, there is an express and an implied waiver by the Insurance Company regarding any alleged shortfall in the classification or lack thereof as urged on behalf of the Insurance Company. Mr. Naqvi therefore has heavily relied on the principles of waiver, acquiescence and estoppel to contend that the said documents of International Shipping Register and the classification of the vessel was not pleaded in Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd. (supra) case and therefore these facts being different in the present set of cases, the ratio of Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd. (supra) case would not be binding as the Insurance Company in spite of having knowledge of all the documents did not choose to object to these representations and consequently the principles of waiver would apply. It is for this reason also that he has supplemented his arguments by relying on the decision in the case of Manmohan Nanda (supra).
CC_132_133_134_2012 Page | 100
122. The aforesaid decision in our opinion cannot come to the aid of the Complainant on the facts of this case and the ratio thereof would not apply because on this very issue of waiver, the Apex Court has already expressed its final opinion in respect of the same vessel in the case of Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd. (supra). Paragraphs 31 to 42 are relevant and have already been extracted in paragraph 9 hereinabove. The conclusions drawn therein are squarely binding and need not be reproduced once again. We are therefore of the opinion that the Insurer had been misinformed by the Complainant which has also been referred to in paragraph 42 of the judgment of the Apex Court. Coming to the principle of waiver and estoppel in matters of Marine Insurance, the warranty clause operates under the umbrella of Section 35(3) of the Marine Insurance Act 1963. Once a warranty is not complied with and there is a breach, the Insurer is discharged from liability automatically which does not require any express conduct or representation from the Insurer. Mr. Gola has therefore rightly relied on the judgment of the Apex Court in the case of Hind Offshore Pvt. Ltd. vs. Iffco-Tokio General Insurance Co. Ltd. reported in (2023) 9 SCC
407.
123. Coming to the issue of the alleged acquiescence by the Insurance Company by voluntarily issuing the General Average Guarantee in form B, the same has also been categorically dealt with and rejected in paragraph 43 to 46 of the report which has also been extracted hereinabove.
CC_132_133_134_2012 Page | 101
124. Mr. Naqvi has advanced a submission regarding the obligation of the Insurance Company to have invoked the "held covered" clause as in the present case there was a prompt notification about the status of classification of the vessel. We have already indicated hereinabove that there was information with the Insurance Company about the classification documents relied upon by the Complainant but we have also found that the classification documents do not conform to the ICC stipulations. The question is, can the Complainant in these circumstances avail any advantage of "held covered"
stipulations. The phrase "held covered" is defined in the Dictionary of Insurance Law by E.R. Hardy Ivamy as follows:-
"Held covered. A term meaning that the insurers agree to the subject-matter continuing to be insured on payment of an additional premium in circumstances where the insured is guilty of a breach of warranty (see BREACH OF WARRANTY CLAUSE) or has changed the voyage of a vessel (see CHANGE OF VOYAGE CLAUSE) or the period of insurance under a time policy has expired while she is still at sea (see CONTINUATION CLAUSE)"
125. On this issue once again, the judgment in the case of "Rajan Kumar"
(supra) covers the issue on a plain reading of Para 9 to 23 of the reported judgment which is with regard to the same vessel as presently involved. This part of the judgment of the Apex Court squarely answers this issue to the effect that it was the duty of the Complainant assured to have correctly and promptly notified the exact status of the classification of the vessel, and otherwise also it was the insured who was obliged to disclose that the vessel was not classed in accordance with ICC. Applying the said ratio on the facts of the present case, the Complainant had throughout been maintaining that CC_132_133_134_2012 Page | 102 the vessel was classed in accordance with ICC which has been found to be incorrect for the reasons given hereinabove. The Complainant has nowhere represented before the Insurance Company or even before us that the vessel was not classed in accordance with the ICC provisions. Rather the argument has been raised as an alternative as if it was the obligation of the insurer to have offered insurance on "held covered" terms. We may clarify with the aid of ratio of Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd.
(supra) as indicated hereinabove that it was not the insurer‟s duty to do so.
The insurer could have been obligated only if the Complainant had made any such an offer or declaration that the vessel was not classed in accordance with ICC. It is only then that the Insurance Company could have possibly applied its mind to either accept such an offer or not. The lack of a recognized classification is a significant factor for the operation of "held covered"
provision. The Insurance Company has the right to inquire into the facts of classification if the vessel is unclassed before proceeding to invoke the "held covered" clause. The risk of a shipment has to be assessed by the insurer and then higher premium can be charged in case such an offer made by the proposer is accepted by the insurer. We need not deliberate any further except to reiterate that there is no such implied automatic obligation on the insurer to invoke the "held covered" provision unless there is a prompt notified disclosure to this effect by the assured. There is no evidence in the present case that the Complainants had expressly represented requesting the insurance company to treat the vessel as unclassed as per 2001 ICC CC_132_133_134_2012 Page | 103 provisions and invoke the "held covered" provision. There was no such express or implied intendment and, therefore, there was no corresponding obligation on the insurance company to have on its own invoked the "held covered" provision. The clear understanding on which both the parties moved was that the vessel was classed and, therefore, there is no reason to infer that the Complainants intended or even expressly informed the insurers of their intention to have an insurance cover with a higher premium for invoking the "held covered" clause treating the vessel as unclassed as per ICC provisions of 2001. The Insurance Company cannot therefore be saddled with any such obligation or any implied liability by inferring an obligation on their part to apply the "held covered" clause. As noted above, its application could have been possibly only if this representation has been made by the Complainants.
126. In such circumstances, the Insurance Company has correctly arrived at the conclusion that there was a breach of the warranty conditions. We may point out that warranty is defined as per the Concise Law Dictionary by P Ramanatha Aiyar as follows:-
"WARRANTY - EXPRESS AND IMPLIED. A warranty is a statement or representation made by the seller of goods, contemporaneously with and as a part of the contract of sale, although collateral to the express object of it, having reference to the character, quality, or title of the goods, and by which he promises or undertakes to insure that certain facts are or shall be as he then represents them. A warranty is express when the seller makes an affirmation with respect to the article to be sold pending the treaty of sale, upon which it is intended that the buyer shall rely in making the purchase. A warranty is implied when the law derives it by implication or inference from the nature of the transaction, or the relative situation or circumstances of the parties. A warranty is not one of the essential elements of a sale, but is a collateral undertaking."
CC_132_133_134_2012 Page | 104
127. We may further point out that this probability of a claim arising out of „held cover‟ was not even envisaged when the policy was taken and in fact the vessel with the consignment landed safely at Mumbai port. Unfortunately, the accident took place in the circumstances thereafter as indicated above. Both the parties were, therefore, comfortable with the insurance risk coverage with the premium received without any inkling or apprehending that the vessel during repairs after docking at Mumbai port and having reached safely would run a ground subsequently. The premium paid was only to cover the risk to that extent which was clearly understood between the Parties. Had there been any contemplation of the shipment being carried by an unclassed vessel, the same would have been a matter of negotiations with a higher premium in accordance with the legal position as discussed hereinabove. There was no such intention or negotiation and, therefore, this argument on behalf of the Complainants also deserves to be rejected for all the reasons hereinabove.
128. Given the alleged new set of facts in the present case as has been pointed out by Mr. Naqvi, in spite of having been burdened with a 136 paragraphs written submissions by the learned Counsel for the Complainant along with analysis of the Apex Court judgment in the case of Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd. (supra) coupled with analysis of Manmohan Nanda (supra) case and the concluding submission as well as the additional written submissions, we have been unable to find any distinction in law even if the facts have been differently placed in the present set of cases, to take a different view other than taken by this Commission in the CC_132_133_134_2012 Page | 105 case of Rajankumar & Bros. (Impex) vs. Oriental Insurance Co. Ltd.
(supra) as confirmed by the Apex Court. All the three Complaints therefore for the same reason cannot receive a different treatment and are hereby dismissed.
129. Having recorded our reasons on the basis of the facts pleaded in CC No. 132 of 2012, we find that it is these very facts which have been relied on by the Complainants in CC No. 133 of 2012 and CC No. 134 of 2012 respectively. Even though a different submission was sought to be raised in CC No. 134 of 2012 on account of the difference in the nature of the policy, the fact remains that the warranty condition regarding vessel classification is common in all the cases. Not only this, the policies obtained by all the Complainants are allegedly based on the same set of documents and therefore there being no difference in the foundational facts of all the three complaints, it is not necessary for us to narrate the facts of the other two complaints as the different recital of the facts in no way will make any difference on the outcome of these complaints.
130. However, before parting, we would like to comment upon the stand of the Insurance Company in these batch of complaints that have been conducted on its behalf inappropriately, without exercising due diligence and negligently. This is more than evident that in all the cases, including that of Rajankumar and Brothers (Impex) vs. Oriental Insurance Co. Ltd.
(supra), the Insurance Company failed to file its written version promptly and contest the same by appropriate pleadings. Additionally in the present case CC_132_133_134_2012 Page | 106 the stand taken is about non-receipt of information for which the written submissions raised and the oral arguments on the instructions of the Insurance Company have gone to the extent of doubting their own mails and communications. We cannot appreciate the said response of the Insurance Company which deserves to be deprecated in as much as the Insurance Company cannot go to the extent of refuting facts solely with the objective of somehow or the other to dispute a claim. The mails and the communications are sufficient proof of the fact that the officials of the Insurance Company, even though communicating internally had been referring to the same subject matter with clarity. We have noticed in the narration of facts hereinabove that the Insurance Company had filed a reply to I.A. Nos. 468, 469 and 470 of 2021 and we have noticed the argument of Mr. Naqvi on this count while recording the Order in reference to the amendment application that was allowed by this Commission. The reply filed by the Insurance Company to the said IAs for the amendment has nowhere stated that the mails and communications relied on by the Complainants were either fake or generated.
We have accordingly accepted the arguments of Mr. Naqvi on this count and we find that the Insurance Company by attempting to do so has inappropriately advanced submissions that seem to be misleading. To defend itself, the Insurance Company has taken the plea of there being no certification of the mails under Section 65B of the Indian Evidence Act. We have found this stand of the Insurance Company to be unreasoned and unsustainable and have rejected the same. The Insurance Company is not CC_132_133_134_2012 Page | 107 expected to raise such submissions that too, in the background, that no written version had been filed. We therefore deprecate this stand of the Insurance Company while conducting this case in the present three complaints. There was no reason for the Insurance Company to have taken such a stand simply to outwit the Complainant through written submissions that has been found to be without substance.
131. Another facet of such conduct which comes to our mind is that the Insurance Company officials had on the one hand been communicating amongst themselves that establishes the dispatch and receipt of the documents regarding classification by the Complainants and on the other hand the Insurance Company finally comes around to repudiate the claim. We cannot be oblivious to the fact that either the Insurance Company was complacent by not giving a response to the approval sought by the Complainant to the vessel classification, and at the same time all the policy documents and the insurance contracts were gone through without a demur. If the Insurance Company had the knowledge of the documents and yet it did not choose to raise any objection, then such a conduct can either be negligent or an indirect method to somehow facilitate the generation of a litigation that might ultimately benefit a litigant. Such contributions therefore raise a serious doubt about the credit-worthiness of the functioning of the officials of the Insurance Company and which in itself reflects a serious deficiency, if not for the Complainants but for the public at large. For this shortfall and deficient conduct of the Insurance Company, we impose a punitive cost of Rs. 5 lakhs CC_132_133_134_2012 Page | 108 on OP No. 1 that shall be deposited by them in the Consumer Legal Aid Account - NCDRC.
132. With these observations and directions, all the three complaints are consigned.
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(A. P. SAHI, J.) PRESIDENT ........................................
(BHARATKUMAR PANDYA)
MEMBER
Pramod/Jyotsna/aj/SSB/Arun/Court-1/CAV
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