Bombay High Court
Reliance General Insurance Co. Ltd vs Seven Islands Shipping Ltd. And Anr on 8 April, 2025
2025:BHC-AS:16338
Neeta Sawant WP-12656-2023-JR-FC
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 12656 OF 2023
Reliance General Insurance Company Ltd.
Having its office;
Reliance Centre, 19, Walchand Hirachand Marg,
Ballard Estate, Mumbai - 400 001. .... Petitioner
-Versus-
1. Seven Islands Shipping Ltd.
Having its office at;
Suit No.4, Level 8, B, Wing
Times Square, Andheri Kurla Road,
Andheri-East, Mumbai 400 059.
2. Athena Insurance and Re-Insurance
Brokers Pvt. Ltd.
Having its Address at;
112, "C", Mittal Tower, Vidhan Bhavan Marg,
Nariman Point, Mumbai 400 021. .... Respondents
Mr. Rushabh S. Vidyarthi with Ms. Ishita Bhole, Mr. Mohit Turakhia i/b
Mr. Asim S. Vidyarthi, for the Petitioner.
Ms. Naira Jeejeebhoy with Ms. Sneha Goud i/b Bose & Mitra & Co., for the
Respondent No.1.
CORAM : SANDEEP V. MARNE, J.
Judgment Reserved On : 27 March 2025.
Judgment Pronounced On : 8 April 2025.
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Page No.1 of 31
Tuesday, 8 April 2025
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Neeta Sawant WP-12656-2023-JR-FC
JUDGMENT:
A. THE CHALLENGE 1) The Petitioner-Insurance Company has invoked jurisdiction
of this Court under Article 227 of the Constitution of India for assailing judgment and order dated 31 July 2023 passed by the National Consumer Disputes Redressal Commission dismissing First Appeal No.849/2021 filed by it and confirming the judgment and order dated 22 September 2021 passed by the Presiding Judicial Officer of State Consumer Disputes Redressal Commission, Maharashtra, Mumbai in Complaint No. CC/16/235.
B. FACTS 2) The first Respondent-Seven Islands Shipping Ltd. (Seven
Islands) is an Indian shipping company operating its cargo and tanker ships for carriage of goods including oil to offshores of the country. Petitioner is a private insurance company engaged in the business of providing general insurance coverages of various types. It is duly licensed by the Insurance Regulatory and Development Authority of India since 23 October 2000. Respondent No.2 operates as an insurance intermediary and had facilitated the issuance of the insurance policy between the Petitioner and Respondent No.1.
3) Seven Islands, through its agent-Respondent No.2, expressed interest in seeking insurance coverage so as to secure the possible perils associated with one of its tanker vessels 'M.T. Crystal' in November 2006. The insurance policy covering all the risk was agreed ___________________________________________________________________________ Page No.2 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC to be provided by Petitioner at the annual premium of Rs. 6,72,528/- payable in quarterly installments of Rs.1,68,132/- in addition to payment of stamp duty. Respondent No.1 paid first installment on 6 November 2006. The insurance cover commenced w.e.f. 9 November 2006. Accordingly, an undated letter was issued by the Petitioner to Seven Islands confirming holding of the risk for the vessel-M.T. Crystal, subject to submission of signed proposal form.
4) A proposal form was subsequently sent to Seven Islands, which was duly filled up and submitted to Respondent No.2 on 23 November 2006. Under the heading 'General' in the proposal form, information regarding accidents to any of the vessels owned by Seven Islands in the last 3 years was required to be disclosed. Under a belief that no accident had happened to any of its vessels during the last three years, Seven Islands filled up the said column with the remark 'N.A.' (Not Applicable).
5) Thereafter Respondent No.2 forwarded to the Petitioner the signed proposal form alongwith class certificate copy vide letter dated 23 November 2006. Petitioner issued 'Marine Hull Insurance Policy' bearing No. 1101062511000011 (the Policy) for all risks associated with Seven Islands Vessel-M.T. Crystal. The policy contained list of terms, conditions and warranties and according to the Petitioner, Warranty No. 8 was about non-making of any claim in respect of any of the vessels in Seven Islands fleet during the last five years. The policy was sent by Respondent No.2 to Seven Islands vide letter dated 14 December 2006.
6) The vessel-M.T. Crystal departed from Fujairah Port on 4 September 2007 towards Kandla Port. On 5 September 2007 at about ___________________________________________________________________________ Page No.3 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC 16.00 hours when the vessel had reached around 190 nautical miles away from the coast of Okha, the 2 nd Engineer pulled the engine lever astern which action damaged the bearing of the Tanker and the Lube Oil pressure of the main engine dropped to lower levels. Upon inspection of the main engine, it was found that some white metal had crept inside the crankcase. Seven Islands thereafter towed the vessel to the nearest port where workshop facility was available. Seven Islands issued email dated 6 September 2007 to Respondent No.2 intimating it of the aforesaid incident. On 7 September 2007, Respondent No.2 as agent, informed the Petitioner of such incident and it is the case of Seven Islands that Petitioner had confirmed that it was counter guaranteeing the payment of towage charges restricted to its share of general average. The Seven Islands engaged an Average Adjuster in respect of the claim and duly informed the Petitioner of such appointment. The agency, which was appointed to tow the vessel raised their invoices for towage charges of U.S.D. 252,343.75 which was certified 'reasonable' by the Petitioner's surveyor. On 21 September 2007, Petitioner sent email to the Seven Islands referring to Warranty No.8 relating to non-making of any claim in the last five years and calling it upon to send details of all the claims made on vessels insured in its fleet during the last five years.
7) By email dated 26 September 2007, Petitioner avoided to sanction the claim on the ground that during past 2 years, two claims were reported on M.T. Twinkle, a sister vessel in the fleet of Seven Islands. Petitioner referred to Warranty No.8 stating that under that warranty, the fleet needed to be claim free during the last five years. By letter dated 23 October 2007, Petitioner repudiated the claim made by the First Respondent in respect of the vessel and sent an endorsement on the policy cancelling the same as void-ab-initio and offered to refund ___________________________________________________________________________ Page No.4 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC the premium. Certain correspondence took place between the parties. In the meantime, the Surveyor appointed by the Petitioner submitted final certificate report and bill submission report dated 3 July 2008 assessing the losses in the sum of Rs.68,60,789/-. On 11 July 2008, the Average Adjuster of Seven Islands assessed the damages and losses at Rs.87,59,178.23/-.
8) In the above background, Seven Islands filed Consumer Case No.153/2009 before the National Consumer Disputes Redressal Commission (NCDRC) seeking to enforce its claim. By order dated 6 November 2015, NCDRC opined that pecuniary jurisdiction to try and entertain the Complaint would vest in the State Commission and accordingly returned the complaint to be presented before the State Commission. Seven Islands thereafter filed Consumer Case No. 235/2016 before the Maharashtra State Consumer Disputes Redressal Commission, Mumbai, (SCDRC) for claim in the sum of Rs.90,56,894.12/- with interest at the rate of 15% p.a. The complaint was resisted by the Petitioner by filing its counter version. Seven Islands filed Affidavit in Evidence of Witness No.1-Captain Thomas W. Pinto. Petitioner examined Mr. Priyank P. Shah, Legal Claims Manager. On 22 September 2021, SCDRC passed final judgment and order partly allowing the complaint of the First Respondent by directing Seven Islands to deposit total premium of Rs.6,87,316/- with the Petitioner with further direction to the Petitioner to restore the insurance policy. The Petitioner was directed to pay insurance claim of Rs.68,60,789/- to Seven Islands alongwith interest at the rate of 12% p.a. from the date of the Report dated 3 July 2008 till realization of the amount. The Petitioner was directed to pay compensation of Rs.1,00,000/- to Seven Islands for mental pain and agony. Costs of Rs.25,000/- were also ___________________________________________________________________________ Page No.5 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC awarded. The Complaint was however dismissed against Respondent No.2.
9) Petitioner felt aggrieved by the order passed by SCDRC and filed First Appeal No. 849/2021 before the NCDRC. By judgment and order dated 31 July 2023, the NCDRC has dismissed the Appeal filed by the Petitioner. Accordingly, Petitioner has filed the present petition challenging the judgment and order dated 31 July 2023 passed by NCDRC.
C. SUBMISSIONS 10) Mr. Rushabh Vidyarthi, the learned counsel appearing for
the Petitioner would submit that the order dated 22 September 2021 passed by SCDRC suffers from jurisdictional error as consumer complaint has been decided by its single Member in violation of the provisions of Sections 14(2), 16(1B) and 18 of the Consumer Protection Act, 1986 (the Act) which requires decision of the Complaint by a Bench consisting of President and atleast one member sitting together. He would rely upon judgment of Rajasthan High Court in Divisional Manager N.I.C. Ltd., Jodhpur Versus. Rajasthan State Consumer Disputes Redressal Commssion and others1 and would submit that decision of a Complaint by Single Member would result in passing of an order without jurisdiction. He would also rely on judgment of Rajasthan High Court in State of Rajasthan Through District Collector, Jodhpur and another Versus. Rajendra Tanwar s/o Shri Arjun Singh Tanwar and others2 which follows the earlier judgment of 1 S.B. Civil Writ Petition No. 1972/2012 decided on 25 October 2018 2 S.B. Civil Writ Petition No. 4105/2018 decided on 22 May 2019 ___________________________________________________________________________ Page No.6 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC Divisional Manager N.I.C. Ltd., Jodhpur (supra). He would also place reliance on order passed by the Single Judge of Rajasthan High Court in Kamal Travels Kokks International Versus. The State of Rajasthan and others3 and would submit that the said order has been upheld by the Division Bench by order dated 4 July 2019 passed in Division Bench Special Appeal Writ No. 1779/2018. He would submit that the order of the Single Judge has ultimately been confirmed upto the Hon'ble Supreme Court by dismissal of Special Leave to Appeal (C)No.4969/2020 on 30 September 2021. He would also place reliance on orders passed by the Apex Court in The New India Assurance Co. Ltd Versus. M/s. Aczet Private Limited4 and S S Versus. Rajat Gupta & Ors.5.
11) Mr. Vidyarthi would then submit that even though the objection of jurisdiction of single Member to decide Consumer Complaint was not raised in First Appeal before NCDRC, since the issue relates to jurisdiction and goes to the root of the matter, the Petitioner can raise it directly before this Court. In support, he would place reliance on the judgment of the Apex Court in Jagmittar Sain Bhagat and others Versus. Director, Health Services, Haryana and others 6. He would rely upon judgment of the Apex Court in Gulzari Lal Agarwal Versus. Accounts Officer7.
12) Without prejudice to the objection of order passed by SCDRC being a nullity, Mr. Vidyarthi would submit that the claim of the First Respondent was rightly repudiated by the Petitioner on account of violation of terms of warranty. That the Insurance Policy was 3 S.B. Civil Writ Petition No.18/2012 decided on 14 March 2018 4 Civil Appeal No. 3743/2023 decided on 20 February 2024 5 Civil Appeal No. 13447/2024 decided on 2 December 2024.
6(2013) 10 SCC 136 7 (1996) 10 SCC 590 ___________________________________________________________________________ Page No.7 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC issued on the basis of specific disclosure and warranties issued by the First Respondent. That the First Respondent made specific declaration of non-occurrence of any accident to any of its vessels during the past three years. Additionally, it gave a warranty that no claim was made in respect of any of the vessels in its fleet during the past 5 years. He would submit that at the time of making declaration and issuance of warranty, the First Respondent was aware that claim in respect of incident dated 9 May 2006 was settled by IFFO-TOKIO General Insurance Company (IFFCO-Tokio) in respect of its vessel-M.T. Twinkle. That since a claim was already settled in respect of a vessel in its fleet during the past five years, the warranty issued by the First Respondent turned out to be false and the Petitioner correctly cancelled the policy by returning the amount of insurance premium.
13) Mr. Vidyarthi would further submit that the word 'accident' occurring in the insurance proposal is required to be given wider meaning and would cover even the incident of engine failure. That the State Commission and NCDRC have erroneously given narrow meaning to the word 'accident'. That everything which is unpostulated would be covered by the term 'accident'. He would submit that in any case, even if the incident of engine failure is not to be treated as an accident, the terminology adopted in the warranty, using the word 'claim' would clearly constitute an valid ground for the Petitioner to deny the claim.
14) Mr. Vidyarthi would further submit that NCDRC has recorded a perverse finding that both the claims were lodged subsequently to the issuance of insurance policy when infact the first claim was in respect of incident dated 9 May 2006 and mere subsequent lodging of the claim on 6 December 2006 would be irrelevant. He would ___________________________________________________________________________ Page No.8 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC further submit that the NCDRC has erred in holding that there was ambiguity in the proposal form or that therefore the same will have to be interpreted contra-proferentem. That the two interpretations are not possible in the present case and that therefore, there is no scope for invoking the doctrine of contra-proferentem. That the terms and conditions of the insurance policy are clear and unambiguous and incapable of being given two meanings.
15) Mr. Vidyarthi would then highlight the importance of warranty given by the First Respondent while securing insurance policy. He would rely upon judgment in Newcastle Fire Insurance Co. Versus. MacMorran and Co.8 in support of his contention that when a thing is warranted to be of a particular nature or description, it should be exactly as such as is represented to be, otherwise the policy is void and there is no contract. He would rely upon judgment of the Apex Court in Hind Offshore Pvt. Ltd. Versus. IFFCO-Tokio General Insurance Co. Ltd.9 in support of his contention that the provisions contained in Marine Insurance Act, 1963 relating to warranties mandate that if the requirement is not complied with then the insurer is discharged from the liability as from the date of breach of warranty. He would also rely upon the judgment of the Apex Court in Life Insurance Corporation of India and another Versus. Hira Lal10 in support of his contention that 'accident' means something that happens fortuitous and unexpected. Mr. Vidyarthi would accordingly pray for setting aside the orders passed by NCDRC and SCDRC.
16) The petition is opposed by Ms. Naira Jeejeebhoy, the learned counsel appearing for the First Respondent. She would submit 8 (1918) 1 K.B. 136 9 2023 SCC OnLine SC 966 10 (2011) 14 SCC 445 ___________________________________________________________________________ Page No.9 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC that it is no longer permissible for the Petitioner to challenge the order of SCDRC on the ground of the same is being passed by a Single Member. She would submit that the said contention was never raised before NCDRC. She would rely on judgment in Kunhayammed and Ors. Versus. State of Kerala and another11 in support of her contention that the order of SCDRC has merged into the order of NCDRC and it is no longer open for the Petitioner to raise the issue of defect in jurisdiction in the order passed by SCDRC. Without prejudice, she would submit that the order passed by SCDRC is otherwise valid on account of provisions of Section 29A of the Act, under which no act or proceeding of the State Commission is rendered invalid by reason of existence of any vacancy amongst its Members or any defect in the constitution thereof. She would rely upon judgment of NCDRC in Satya Shakti Cold Storage Versus. Onkar Singh 12. She would submit that the provisions of the Act must be considered harmoniously to promote the cause of consumers under the Act and would also place reliance in Gulzari Lal Agarwal (supra). She would submit that the consumers who have bonafide proceeded before a Single Member cannot be prejudiced by an error, if any, on the part of the President of SCDRC in assigning the complaint to a Single Member. She would submit that the judgments and orders passed by the learned Single Judge of Rajasthan High Court have not taken into consideration the provisions of Section 29A of the Act. She would also submit that the provisions of Section 18 of the Act cannot be construed to mean as if the composition of Benches of State Commission would be governed by the provisions of Sections 12 and 14 of the Act which otherwise would apply to District Forum. She would submit that the phrase 'with such modification as may be necessary' if read with authority vested with the State Commission 11 (2006) 3 SCC 359 12 (2018) SCC OnLine NCDRC 959 ___________________________________________________________________________ Page No.10 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC under Section 16(1-B)(i) and (ii) would mean that sub-section (2) of Section 14 making a provision for conduct of proceedings by the President and atleast one member of the District Forum, can be modified by the President of the State Commission in its application to proceedings before the State Commission. That the President of the State Commission, in his discretion, can take aid of the phrase 'with such modifications as may be necessary' occurring under Section 18 of the Act of 1986 to deviate from the provisions of Section 14(2). She would submit that this issue has been considered in the judgment of the Division Bench of Allahabad High Court in Ansal Properties and Infrastructure Ltd. Versus. State Consumer Dispute Redressal Commission 13 which holds that the President of SCDRC has the discretion to constitute a Bench of Single Member and that the jurisdiction of SCDRC can be exercised by a Single Member.
17) Ms. Jeejeebhoy would further submit that the two orders relied upon by the Petitioners of the Supreme Court in The New India Assurance Co. Ltd. (supra) and S S Versus. Rajat Gupta (supra) are on the issue of technical members of the NCDRC deciding the case sitting singly suffering from the vice of coram non judice. She would submit that in the present case, the Presiding Member of MSCDRC has passed the order. She would submit that mere dismissal of SLP in State of Rajasthan and Ors. Versus. Kamal Travels Kokks International and Ors.14, does not lay down any law which would be binding upon this Court. That in any case, in S S Versus. Rajat Gupta (supra), the Apex Court has clarified that the issue in Kamal Travels Kokks International case was one where Technical Member was sitting singly. She would therefore submit that no interference is warranted in the order passed 13 2017 SCC OnLine All 2932 14 Order dated 30 September 2021 in Special Leave to Appeal (C) No. 4969/2020.
___________________________________________________________________________ Page No.11 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC by NCDRC confirming the order of MSCDRC on the ground of any defect in passing of the order by the Presiding Single Member of the State Commission.
18) On merits of the order passed by NCDRC, Ms. Jeejeebhoy, would submit that two concurrent findings of facts have been recorded by SCDRC and NCDRC without appreciating the evidence on record. That in absence of any element of perversity or error, this Court would not be justified in interfering with the same. She would submit that the Petitioner erroneously repudiated the claim by referring to settlement of claim by IFFCO-Tokio in respect of the incident of 9 May 2006 which involved damage to the main engine turbo charger, which, can by no stretch of imagination, be treated as an 'accident'. That the proposal form mandated disclosure only in respect of accidents. That the First Respondent made correct disclosure about non-occurrence of any accident to any of its vessels during the past three years. Ms. Jeejeebhoy would submit that in fact the risk cover had commenced by the Petitioner w.e.f. 9 November 2006 which did not include any condition for submission of any warranty. That the condition of warranty has been subsequently inserted by the Petitioner after issuance of the policy. That therefore the insurance policy was not dependent on warranty of non-making of claim in respect of any of the vessels in the fleet during past 5 years. That the confirmation letter was issued on 9 November 2006, whereas the proposal form was submitted on 23 November 2006. That policy has been commenced from 9 November 2006 and therefore it cannot be contended that the same was subject to any declaration made subsequently. That in any case, there is no breach of warranty or declaration made by the First Respondent. She would submit that the NCDRC has rightly invoked the doctrine of contra-proferentem as it is well settled proposition of law that in the event of any ambiguity, the ___________________________________________________________________________ Page No.12 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC interpretation which is beneficial to the consumer is to be followed. Lastly, Ms. Jeejeebhoy would submit that the jurisdiction of this Court under Article 227 being corrective in nature, the same need not be exercised in the facts and circumstances of the present case. She would rely upon judgment of the Apex Court in Garment Craft Versus. Prakash Chand Goel15 and Estralla Rubber Versus. Dass Estate (P) Ltd.16 She would pray for dismissal of the petition.
D. REASONS AND ANALYSIS 19) Petitioner has questioned the correctness of the concurrent
findings recorded by SCDRC and NCDRC by filing the present petition. Both the Commissions have concurrently held the Petitioner liable in respect of the insurance claim by rejecting its defence of wrongful representation in the proposal form and in the warranty. The Petitioner has repudiated the claim and it cancelled the insurance policy by refunding the premium. SCDRC has directed the First Respondent to deposit the amount of refunded premium of Rs.6,87,316/- with direction to the Petitioner to restore the insurance policy. The SCDRC has directed the Petitioner to pay insurance claim of Rs.68,60,789/- alongwith interest in addition to payment of compensation of Rs.1,00,000/- and costs of Rs.25,000/-. The NCDRC has dismissed Petitioner's First Appeal, which has given rise to filing of the present petition.
20) The claim of the first Respondent is towards towage cost for towing of the vessel after encountering engine failure on 5 September 15 (2022) 4 SCC 181 16 (2001) 8 SCC 97 ___________________________________________________________________________ Page No.13 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC 2007. The Surveyor of the Petitioner has assessed the loss at Rs.68,60,789/- in its final survey report dated 3 July 2008. The dispute between the parties is not really with regard to the quantum of losses suffered by the First Respondent, as the First Respondent did not challenge the order of SCDRC awarding the claim in the sum of Rs.68,60,789/- as per the final survey report of the Petitioner's surveyor. The dispute between the parties is about the validity and enforceability of the insurance policy.
21) This case involves a peculiar circumstance where the Petitioner-Insurance Company proceeded to confirm the risk w.e.f. 9 November 2006 even before submission of signed proposal form and two other documents of (i) condition and valuation report and (ii) class certificate copy. The proposal form was signed and submitted by the First Respondent to Respondent No. 2 much later on 23 November 2006. However, the first installment of the premium of Rs.1,89,920/- was paid on 6 November 2006. Thus, the risk was confirmed by the Petitioner- Insurance Company immediately upon receipt of first installment of the premium without awaiting submission of signed proposal form. In the proposal form, the First Respondent was required to make a disclosure under the heading 'General' as under:
GENERAL
1.
(a) What accidents have happened during the [a] N.A. past three years to any vessel owned by you?
(b) If any, which of them have occurred in connection with the vessel herein proposed? [b]
(c) Please furnish the premium and claim (Paid and outstanding) year wise for the last 5 years. [c] (emphasis added) ___________________________________________________________________________ Page No.14 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC
22) Thus, against the column 'what accidents have happened during the past three years to any vessel owned by you', the First Respondent mentioned 'N.A.'.
23) The Petitioner issued Marine Hull Insurance Policy in favour of the First Respondent which bears the date of 8 November 2006. Along with the said insurance policy, there was a list of terms and conditions and warranties under the heading 'Attached to and Forming part of Policy No. 1101062511000011' which reads thus:
Attached to and Forming part of Policy No. 1101062511000011
1) ITC (HULLS) 1/10/83
2) CIC WAR RISK SCHEME
3) TRADING WARRANTY - INSTITUTE WARRANTIES DATED 1-7-
1976 BUT TRADING LIMITED TO NOT EAST OF 110 EAST LONGITUDE AND NOT WEST OF 30 EASTLONGITUDE
4) SUBJECT TO CANCELLATION RETURNS ONLY. NO REFUND OF PREMIUM IS PAYABLE IN THE EVENT THE VESSEL IS LAID- UP IN PORT OR IN YARD DURING THE CURRENCY OF POLICY.
5) INSITTUTE EXTENDED RADIOACTIVE CONTAMINATION EXCLUSION CLAUSE 1-11-2002
6) INSTITUTE CHEMICAL, BIOLOGICAL, ELECTROMAGNETIC WEAPONS AND CYBER ATTACK EXCLUSION CLAUSE 1.11.2002.
7) INSTITUTE CLASS, CLAUSE + CLASS MAINTENANCE CLAUSE, CLASS WARRANTY, ISM CODE WARRANTY.
8) WARRANTED NO CLAIM HAS BEEN MADE ON SEVEN ISLANDS FLEET DURING THE LAST 5 YEARS
9) PREMIUM INSTALLMEN'T CLAUSE.
(emphasis added)
24) Petitioner relies on the condition at Serial No.8 of the above document, under which the First Respondent warranted that no claim was made in respect of any of its vessels in the fleet during the last five years. Petitioner justifies repudiation of the claim on twin grounds of (i) ___________________________________________________________________________ Page No.15 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC the incident being covered by the term 'accident' occurring in the proposal form and (ii) settlement of the claim with IFFCO-Tokio in respect of the incident of 9 May 2006, being in breach of warranty in Condition No.8. The two grounds are raised by Petitioner without prejudice to one another.
25) So far as the ground of incident dated 5 September 2007 being covered by the term 'accident' is concerned, the NCDRC has held that the claim settled by IFFCO-Tokio in respect of the incident of 9 May 2006 was not towards any 'accident'. The relevant findings recorded by NCDRC in this regard reads thus:
8. So far as arguments of the counsel for the appellant, in respect of concealment of material fact, is concerned, specific query in the Proposal Form was "What accidents have happened during past three years to any vessel owned by you" which was answered as "Not Applicable". The word 'accident' means unpleasant event that happens unexpectedly and causes damages or injury. A perusal of the letter of IFFCO Tokio General Insurance Company Limited dated 06.02.2017 shows two claims were raised by the complainant for damage to 'main engine turbo charger' one for the incident dated 09.05.2006, which was prior to filling up the Proposal Form in question and other for the incident occurred on 24.06.2007, i.e. subsequent to filling up the Proposal Form. There is nothing on record to show that damage to 'main engine turbo charger' was due to any accident, which necessarily connotes the happening due to external force and not a normal wear and tear, which is otherwise payable under insurance policy. As such concealment of material fact in proposal form has not been established.
26) I do not find any element of perversity in the above findings recoded by NCDRC. The claim settled by IFFCO-Tokio in respect of the vessel of the first Respondent-M. T. Twinkle was towards 'damage to main engine turbo charger' and the same cannot be treated, by any stretch of imagination, as an accident within the meaning of disclosure sought under the heading 'General' in the proposal form. Damage to the main engine turbo charger was on account of routine operations of the vessel occurring due to normal wear and tear and ___________________________________________________________________________ Page No.16 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC cannot be covered under the ambit of the term 'accident' which essentially connotes unpleasant event occurring unexpectedly and causing damages or injury due to external force.
27) The expression 'wear and tear' refers to the gradual deterioration of an item due to normal use and aging, while the term 'accident' implies a sudden, unexpected, and often damaging event. When a turbo charger is added to an internal combustion engine, it becomes integral part of the engine as its function is to increase the efficiency and power output of the engine. A turbocharger is a turbine- driven forced induction device that increases an internal combustion engine's efficiency and power output. Such turbocharger is prone to usual wear and tear and damage to the same cannot be treated as something which is not inevitable. This is further clear from the fact that the Vessel M.T.-Twinkle suffered damage to turbo charger twice at short intervals of 9 May 2006 and 24 June 2007. As opposed to normal wear and tear occurring in various parts of the engine, the term 'accident' refers to an event or condition occurring by chance or arising from unknown or remote causes. Therefore damage to turbo engine charger cannot be treated as an accident.
28) Mr. Vidyarthi has relied on the judgment in Life Insurance Corporation of India Versus. Hira Lal (supra) in support of his contention that the term 'accident' must be given wider meaning. The Apex Court was dealing with a case where the Respondent therein had suffered permanent blindness due to an accident. The Apex Court has reproduced findings recorded by the State Commission in paras-21 to 27 and has thereafter refused to interfere in the concurrent findings recorded by the State Commission and National Commission while ___________________________________________________________________________ Page No.17 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC dismissing the Special Leave Petition. The Apex Court in Life Insurance Corporation of India Versus. Hira Lal considered definition of the term 'accident' in various dictionaries and held that dictionary meaning of the word shows that it has to be something unexpected and non- attributable to the person concerned like the consumer suffering blindness. The judgment therefore does not assist the case of Petitioner in its attempt to treat the claim towards the routine wear and tear to the engine's turbo charger as an accident.
29) Now I turn to Petitioner's alternate submission that the issuance of policy was based on warranty given by the first Respondent that no claim was made on it during the last five years. What must be noted here at once is that the declaration relating to 'accident' was in respect of the past three years, whereas the warranty of 'no claim' which was not part of signed proposal form, but came as an attachment to the insurance policy, is in respect of the period preceding five years. Going strictly by the declaration in the signed proposal form, an 'accident' occurring in respect of any vessel of the first Respondent three years prior to purchase of insurance policy would not affect the contract of insurance. However, going by the warranty in Condition No.8, 'claim' made in respect of such accident occurring five years prior to purchase of insurance policy would render the contract of insurance void. There thus appears to be apparent inconsistency between the declaration in signed proposal form and the condition of warranty. The signed proposal form indicates that the contract of insurance was based on a representation that none of the vessels of the first Respondent had suffered in accident within a period of 3 years. No declaration was required to be given in the proposal form as to whether any claim was raised by the insured in respect of the routine repairs and maintenance ___________________________________________________________________________ Page No.18 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC of any vessel during the past period. Therefore, the warranty of 'no claim' in the terms and conditions attached to the insurance policy will have to be necessarily read in conjunction with the declaration relating to accident made in the signed proposal form.
30) Settlement of claim by IFFCO-Tokio in respect of the incident of 9 May 2006 is for usual repairs and wear and tear of the vessel-M.T. Twinkle. IFFCO-Tokio's letter dated 6 February 2017 would indicate that the claim was in respect of 'damage to the main engine turbo charger'. The NCDRC has held that the said act of damage to main engine turbo charger was not attributable to any accident and was a result of normal wear and tear. As observed above, the warranty of no claim in Condition No.8 needs to be read essentially in conjunction with declaration relating to accident in the signed proposal form. The SCDRC and NCDRC have rightly held that the said incident of 9 May 2006 is not attributable to any accident amounting to making of any false representation.
31) Even if the warranty of 'no claim' is to be strictly construed, it becomes difficult to believe that the claim settled by IFFCO-Tokio in respect of the incident dated 9 May 2006 relating to damage to main engine turbo charger would be in violation of the warranty of no claim. Petitioner relied upon IFFCO-Tokio's letter dated 6 February 2017 in which there was information relating to settlement of two claims in respect of the vessel-M.T. Twinkle. So far as the second claim relating to incident of 24 June 2007 is concerned, Mr. Vidyarthi has fairly admitted that since the said incident has occurred after issuance of the said insurance policy, the said claim would not violate warranty of 'no claim'. However, it is the first claim relating to incident of 9 May 2006, which ___________________________________________________________________________ Page No.19 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC the Petitioner is strenuously relying upon in support of its contention that the same violated the warranty of 'no claim' made in respect of the vessels in its fleet in preceding five years.
32) The relevant Condition No.8 warranted that no claim was 'made' on Seven Islands fleet during the last five years. Thus, the warranty was in respect of 'making' of the claim. The NCDRC has recorded a finding of fact that the claim in respect of the incident dated 9 May 2006 was lodged by the first Respondent with IFFCO-Tokio on 6 December 2006. This is borne out from the letter dated 6 February 2017 of IFFCO-Tokio. The insurance policy in the present case was issued after signing of proposal form on 23 November 2006 though the same bears the date of 8 November 2006. The policy was in respect of the period from 8 November 2006 to 7 November 2007. Thus, the claim of IFFCO-Tokio in respect of the incident of 9 May 2006 was 'made' much after issuance of the insurance policy. I therefore do not find any element of perversity in the concurrent findings of facts recorded by SCDRC and NCDRC that the claim was lodged subsequent to the issuance of the subject insurance policy.
33) The NCDRC has rightly invoked the doctrine of contra- proferentem which is clearly applicable in the present case. The NCDRC has relied upon Constitution Bench judgment in General Assurance Society Ltd. Versus. Chandumull Jain and another17 in which it is held as under :
11. A contract of insurance is a species of commercial transactions and there is a well established commercial practice to send cover notes even prior to the completion of a proper proposal or while the proposal is being considered or a policy is in preparation for delivery.
A cover note is a temporary and limited agreement. It may be self 17 AIR 1966 SC 1644 ___________________________________________________________________________ Page No.20 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC contained or it may incorporate by reference the terms and conditions of the future policy. When the cover note incorporates the policy in this manner, it does not have to recite the term and conditions, but merely to refer to a particular standard policy. If the proposal is for a standard policy and the cover note refers to it, the assured is taken to have accepted the terms of that policy. The reference to the policy and its terms and conditions may be expressed in the proposal or the cover note or even in the letter of acceptance including the cover note. The incorporation of the terms and conditions of the policy may also arise from a combination of references in two or more documents passing between the parties. Documents like the proposal, cover note and the policy are commercial documents and to interpret them commercial habits and practice cannot altogether be ignored. During the time the cover note operates, the relations of the parties are governed by its terms and conditions, if any, but more usually by the terms and conditions of the policy bargained for and to be issued. When this happens the terms of the policy are incipient but after the period of temporary cover, the relations are governed only by the terms and conditions of the policy unless insurance is declined in the meantime. Delay in issuing the policy makes no difference. The relations even then are governed by the future policy if the cover notes give sufficient indication that it would be so. In other respects there is no difference between a contract of insurance and any other contract except that in a contract of insurance there is a requirement of uberrima fides i.e. good faith on the part of the assured and the contract is likely to be construed contra proferentem that is against the company in case of ambiguity or doubt. A contract is formed when there is an unqualified acceptance of the proposal. Acceptance may be expressed in writing or it may even be implied if the insurer accepts the premium and retains it. In the case of the assured, a positive act on his part by which he recognises or seeks to enforce the policy amounts to an affirmation of it. This position was clearly recognised by the assured himself, because he wrote, close upon the expiry of the time of the cover notes, that either a policy should be issued to him before that period had expired or the cover note extended in time. In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words 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. Looking at the proposal, the letter of acceptance and the cover notes, it is clear that a contract of insurance under the standard policy for fire and extended to cover flood, cyclone etc. had come into being.
(emphasis added)
34) In United India Insurance Co. Ltd. Versus. Pushpalaya Printers18, the Apex Court has followed the Constitution Bench 18 (2004) 3 SCC 694 ___________________________________________________________________________ Page No.21 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC judgment in General Assurance Society Ltd. Versus. Chandumull Jain and has held in para-6 as under :
6. The only point that arises for consideration is whether the word "impact" contained in clause 5 of the insurance policy covers the damage caused to the building and machinery due to driving of the bulldozer on the road close to the building. It is evident from the terms of the insurance policy that the property was insured as against destruction or damage to whole or part. The appellant Company agreed to pay towards destruction or damage to the property insured to the extent of its liability on account of various happenings. In the present case both the parties relied on clause 5 of the insurance policy.
Clause 5 is also subject to exclusions contained in the insurance policy. That a damage caused to the building or machinery on account of driving of vehicle on the road close to the building is not excluded. Clause 5 speaks of "impact" by any rail/road vehicle or animal. If the appellant Company wanted to exclude any damage or destruction caused on account of driving of vehicle on the road close to the building, it could have expressly excluded it. The insured possibly did not understand and expect that the destruction and damage to the building and machinery is confined only to a direct collision by vehicle moving on the road with the building or machinery. In the ordinary course, the question of a vehicle directly dashing into the building or the machinery inside the building does not arise. Further, "impact" by road vehicle found in the company of other words in the same clause 5 normally indicates that damage caused to the building on account of vibration by driving of vehicle close to the road is also included. In order to interpret this clause, it is also necessary to gather the intention of the parties from the words used in the policy. If the word "impact" is interpreted narrowly, the question of impact by any rail would not arise as the question of a rail forcibly coming to the contact of a building or machinery would not arise. In the absence of specific exclusion and the word "impact" having more meanings in the context, it cannot be confined to forcible contact alone when it includes the meanings "to drive close", "effective action of one thing upon another"
and "the effect of such action", it is reasonable and fair to hold in the context that the word "impact" contained in clause 5 of the insurance policy covers the case of the respondent to say that damage caused to the building and machinery on account of the bulldozer moving closely on the road was on account of its "impact". It is also settled position in law that if there is any ambiguity or a term is capable of two possible interpretations, one beneficial to the insured should be accepted consistent with the purpose for which the policy is taken, namely, to cover the risk on the happening of certain event. Although there is no ambiguity in the expression "impact", even otherwise applying the rule of contra preferentem, the use of the word "impact"
in clause 5 in the instant policy must be construed against the appellant. Where the words of a document are ambiguous, they shall be construed against the party who prepared the document. This rule applies to contracts of insurance and clause 5 of the insurance policy ___________________________________________________________________________ Page No.22 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC even after reading the entire policy in the present case should be construed against the insurer. A Constitution Bench of this Court in General Assurance Society Ltd. v. Chandmull Jain [AIR 1966 SC 1644 :
(1966) 3 SCR 500] has expressed that (AIR p. 1649, para 11) "in a contract of insurance there is requirement of uberrima fides i.e. good faith on the part of the assured and the contract is likely to be construed contra proferentem, that is, against the company in case of ambiguity or doubt".
35) There is clear ambiguity in the present case as the declaration sought in the signed proposal form relating to 'accident' occurring in preceding three years, whereas Condition No.8 relating to warranty, in respect of which no declaration was sought, is in respect of making of 'claim' in preceding five years. Also, the insurance cover commenced prior to submission of signed proposal form, the condition relating to warranty came attached to the insurance policy issued after submission of signed proposal form. Thus, issuance of policy was not based on any representation made by the insured relating to non-
making of any claim in preceding five years. There is thus clear ambiguity in the signed proposal form and the conditions appended to the insurance policy. Therefore, the doctrine of contra-proferentem would clearly be attracted in the present case and in the light of ambiguity, the construction will have to be necessarily made against the party drawing the conditions of insurance. It must also be noted that as against the requirement of the insured making a conscious declaration relating to accident in the proposal form, it was required to merely sign the printed conditions appended to the insurance policy without having any choice of making any alteration therein.
36) In fact, in Life Insurance Corporation of India Versus. Hira Lal sought to be relied upon by the Petitioner, the Apex Court has approved the finding recorded by the High Court that when two ___________________________________________________________________________ Page No.23 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC interpretations are possible, the one beneficial to the consumer is to be followed.
37) Mr. Vidyarthi has relied upon English judgment in Newcastle Fire Insurance Co. (supra) in support of his contention of importance of warranty to the contract of insurance. There can be no doubt to the proposition that once the contract of the insurance is based on a warranty, the policy would become void if the warranty is found to be false or based on misrepresentation. However, in the present case, the contract of insurance was never based on the warranty made by the first Respondent. The risk cover in favour of the insured began much before signing of proposal form. The proposal form did not contain any clause for warranty. The condition of warranty came to be incorporated only after issuance of the insurance policy. Therefore, it cannot be contended that the contract of insurance was based on warranty made by the First Respondent. For the same reasons, reliance of Mr. Vidyarthi on the judgment of the Apex Court in Hind Offshore Pvt. Ltd. is misplaced. In that judgment, the Apex Court has held that as per the provisions contained in Marine Insurance Act relating to warranties, if the requirement is not complied with, the insurer is discharged not only from the liability from the date of breach of warranty but also to any liability incurred before that date. In the case before the Apex Court, the class certificate was procured in respect of the vessel without making full disclosure about previous damages and repairs to the vessel. Under the provisions of the Marine Insurance Act, 1963 there is no implied warranty that the ship is seaworthy and that the insurer is not liable for any loss attributable to unseaworthiness in the event if it is found that ship is sent to sea in an unseaworthy state. In the light of facts of that case, where there is a provision for automatic suspension of class certificate upon failure to submit information relating to damage, ___________________________________________________________________________ Page No.24 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC failure, deterioration or repair to the bureau, the very warranty of class certificate failed and the insurance policy became void. The judgment therefore will have no application to the facts of the present case. The judgment is also on the issue of waiver where it was sought to be contended that the insurer was aware of past repairs on account of claim submitted to it. However, the Apex Court has rejected the defence of waiver and accepted the contention of insurance company who had relied upon class certificate for issuance of policy.
38) In my view, therefore there is absolutely no case for the Petitioner on merits. Rejection of claim by it is clearly erroneous. Though the Consumer Complaint and First Appeal were argued before the SCDRC and NCDRC purely on merits, now a twist is sought to be added by the Petitioner by contending that the SCDRC's order was corum non-judice since the same was passed by its Member sitting singly. Reliance is placed on judgments of Single Judge of Rajasthan High Court in Divisional Manager, N.I.C. Ltd., Jodhpur (supra) and State of Rajasthan through District Collector, Jodhpur Versus. Rajendra Tanwar & Ors. (supra) in support of the contention that order passed by Single Member of SCRDC is without jurisdiction. Mr. Vidyarthi has relied on Order passed by Single Judge of the Rajasthan High Court in Kamal Travels Kokks International (supra) which is upheld by the Division Bench and the Special Leave Petition against Order of the Division Bench is dismissed by the Hon'ble Supreme Court. On the other hand Ms. Jeejeebhoy has relied on judgment of Division Bench of Allahabad High Court in Ansal Properties and Infrastructure Ltd. (supra) in which it is held that jurisdiction, powers and authority of the State Commission may be exercised by single Member of the Bench to be constituted by the President and such Bench may comprise of President himself alone. According to Ms. Jeejeebhoy, attention of ___________________________________________________________________________ Page No.25 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC Rajasthan High Court was not invited to the judgment of Division Bench in Ansal Properties and Infrastructure Ltd. and that therefore the judgments of Single Judges of Rajasthan High Court are per incurium. She has submitted that the Order passed by the Apex Court dismissing SLP in Kamal Travels Kokks International does not lay down any law. She has also submitted that in Kamal Travels Kokks International the issue was relating to a Technical Member of SCDRC deciding the Compliant sitting singly, whereas in the present case, Presiding Judicial Member has decided the Complaint. On the other hand, it is Mr. Vidyarthi's contention that the Apex Court has not merely dismissed the SLP but considered the provisions of the Consumer Protection Act 1986 and thereafter upheld the Order passed by the Division Bench of the Rajasthan High Court.
39) There thus appears to be serious debate amongst parties about jurisdiction of Single Member of SCDRC to decide the Consumer Complaint. In my view this debatable issue need not be decided in the present case for myriad of reasons. Firstly and most importantly, this issue was never raised by the Petitioner before either of the fora. In its appeal filed before the NCDRC, it did not challenge the order of SCDRC on the ground of lack of jurisdiction. Secondly, the order of SCDRC has now merged with the order passed by the NCDRC, which is under challenge before this Court. There is no objection of jurisdiction about NCDRC as two Members of NCDRC has decided the Appeal. Thirdly, there cannot be an abstract proposition that in every case fair appeal would not cure unfair trial. Fourthly, setting aside the order of SCDRC on the technical ground of jurisdictional error at this stage would not be appropriate. The incident in respect of which claim was raised had occurred on 9 May 2006 and by now period of 18 long years has lapsed. The First Respondent had initially filed complaint before the NCDRC in ___________________________________________________________________________ Page No.26 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC the year 2007 and it was relegated to the jurisdiction of SCDRC by order dated 6 November 2015. Thereafter, the Respondent No.1 lodged complaint before the SCDRC in the year 2015, which came to be allowed by order dated 22 September 2021. Petitioner did not raise the issue of jurisdiction in its First Appeal No.849/2021 filed before NCDRC, which has upheld the order of SCDRC on merits on 31 July 2023. Considering this position also, I am not inclined to interfere in the impugned order passed by NCDRC on the ground of defect in exercise of jurisdiction of single Member of SCDRC in deciding the complaint. Lastly, when this Court is satisfied that the concurrent view taken by SCDRC and NCDRC is valid, this Court would be loathe in exercising jurisdiction under Article 227 of Constitution of India considering the unique facts and circumstances of the case.
40) Petitioner has invoked the jurisdiction of this Court under Article 227 of the Constitution of India, which is corrective in nature and need not be exercised to correct very error of law or fact. In Garment Craft (supra), the Apex Court has held in para-15 as under :
15. Having heard the counsel for the parties, we are clearly of the view that the impugned order [Prakash Chand Goel v. Garment Craft, 2019 SCC OnLine Del 11943] is contrary to law and cannot be sustained for several reasons, but primarily for deviation from the limited jurisdiction exercised by the High Court under Article 227 of the Constitution of India. The High Court exercising supervisory jurisdiction does not act as a court of first appeal to reappreciate, reweigh the evidence or facts upon which the determination under challenge is based. Supervisory jurisdiction is not to correct every error of fact or even a legal flaw when the final finding is justified or can be supported. The High Court is not to substitute its own decision on facts and conclusion, for that of the inferior court or tribunal. [Celina Coelho Pereira v. Ulhas Mahabaleshwar Kholkar, (2010) 1 SCC 217 : (2010) 1 SCC (Civ) 69] The jurisdiction exercised is in the nature of correctional jurisdiction to set right grave dereliction of duty or flagrant abuse, violation of fundamental principles of law or justice.
The power under Article 227 is exercised sparingly in appropriate cases, like when there is no evidence at all to justify, or the finding is so perverse that no reasonable person can possibly come to such a conclusion that the court or tribunal has come to. It is axiomatic that ___________________________________________________________________________ Page No.27 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC such discretionary relief must be exercised to ensure there is no miscarriage of justice.
(emphasis added)
41) In Estralla Rubber (supra), the Apex Court has held in para-6 as under :
6. The scope and ambit of exercise of power and jurisdiction by a High Court under Article 227 of the Constitution of India is examined and explained in a number of decisions of this Court. The exercise of power under this article involves a duty on the High Court to keep inferior courts and tribunals within the bounds of their authority and to see that they do the duty expected or required of them in a legal manner. The High Court is not vested with any unlimited prerogative to correct all kinds of hardship or wrong decisions made within the limits of the jurisdiction of the subordinate courts or tribunals.
Exercise of this power and interfering with the orders of the courts or tribunals is restricted to cases of serious dereliction of duty and flagrant violation of fundamental principles of law or justice, where if the High Court does not interfere, a grave injustice remains uncorrected. It is also well settled that the High Court while acting under this article cannot exercise its power as an appellate court or substitute its own judgment in place of that of the subordinate court to correct an error, which is not apparent on the face of the record. The High Court can set aside or ignore the findings of facts of an inferior court or tribunal, if there is no evidence at all to justify or the finding is so perverse, that no reasonable person can possibly come to such a conclusion, which the court or tribunal has come to.
42) Considering the sound exposition of law in judgments in Garment Craft and Estralla Rubber, I do not think this to be a fit case to warrant any interference in the view taken by SCDRC and NCDRC.
43) This Court is also satisfied that the justice is not on the side of Petitioner. It would be apposite to refer to the Division Bench judgment of this Court on State of Bombay Versus. Morarji Kuwarjee 19 wherein the Chief Justice M. C. Chagla speaking for the Division Bench has held in paras-42 and 44 as under :
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42. ......... This is, on the contrary, a case where the premises requisitioned for a public purpose are occupied by a Government servant and are sought to be taken possession of by the landlord by asking the Court to throw the Government servant out and restore possession to the landlord when that landlord has never shown his need of those premises by occupying them himself. Therefore, this is clearly a case where justice is not on the side of the petitioner, it is on the side of the State, and we see no reason why we should grant any relief to the petitioner.
xxx
44. With respect to the learned Judge, the matter is much more serious than merely the question of this particular vacancy of 1956 not being relevant to the vacancy which is the subject matter of the requisition order. On a writ petition, as we have already said, the petitioner has not merely to show good faith, but he has not to suppress any facts and has also to show that justice lies on his side. If the learned Judge had taken these circumstances into consideration and then had come to the conclusion that the discretion should be exercised in favour of the landlord, then undoubtedly we would not have interfered with the order passed by the learned Judge.
(emphasis added)
44) In M.P. Mittal Versus. State of Haryana and Ors. 20, the Hon'ble Apex Court has held that discretionary jurisdiction of this Court can be declined when the Petitioner seeks to secure dishonest advantage to perpetuate the unjust claim. The Apex Court held in para- 5 as under :
5. Now there is no dispute that the appellant knowingly and deliberately entered into the Guarantee agreement, and is liable as Guarantor to make payment of the dividend due from Messrs Depro Foods Limited. Nor is it disputed that the amount due, with interest, stands at Rs 2,02,166 -- in respect of the period ending with the year 1977. It was not contended that the appellant in fact does not possess sufficient funds or cannot avail of sufficient personal property for the purpose of discharging the liability. The record also shows that before instituting coercive proceedings, the Assistant Collector provided the appellant an opportunity to pay up the amount due from him, and that the appellant made no attempt to discharge the liability. When that is so, we are of opinion that he is not entitled to relief in these proceedings. The appeal arises out of a writ petition, and it is well 20 (1984) 4 SCC 371 ___________________________________________________________________________ Page No.29 of 31 Tuesday, 8 April 2025 ::: Uploaded on - 09/04/2025 ::: Downloaded on - 09/04/2025 22:01:43 ::: Neeta Sawant WP-12656-2023-JR-FC settled that when a petitioner invokes the jurisdiction of the High Court under Article 226 of the Constitution, it is open to the High Court to consider whether, in the exercise of its undoubted discretionary jurisdiction, it should decline relief to such petitioner if the grant of relief would defeat the interests of justice. The Court always has power to refuse relief where the petitioner seeks to invoke its writ jurisdiction in order to secure a dishonest advantage or perpetuate an unjust gain. This is a case where the High Court was fully justified in refusing relief. On that ground alone, the appeal must fail.
(emphasis added)
45) The point relating to defect in jurisdiction of SCDRC on account of decision of complaint by presiding judicial member sitting singly is sought to be raised as an afterthought directly before this Court when there is no semblance of merit in repudiation of claim by the Petitioner-Insurance Company. This Court would otherwise not interfere in the impugned orders in exercise of jurisdiction under Article 227 of the Constitution of India by upholding the objection of jurisdiction sought to be raised on behalf of the Petitioner which is essentially aimed at prolonging the litigation between the parties. If objection is accepted at this stage, even though no patent illegality is traced in the findings on merits, proceedings will have to be remanded to the SCDRC for being decided afresh by the Bench comprising of two or more members. As observed above, the litigation was initiated by the First Respondent in the year 2009 initially before NCDRC which came to be redirected to SCDRC on account of pecuniary jurisdiction. Both the parties argued their respective cases on merits before the SCDRC and thereafter before NCDRC without making any qualms about defect in jurisdiction. By now period of 16 years has lapsed from the date when the complaint was initially filed. This is yet another ground why this Court is not inclined to entertain the plea of lack of jurisdiction considering the unique facts and circumstances of the present case.
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46) I am therefore not inclined to interfere in the Orders passed by SCDRC and NCDRC by entertaining Petitioner's plea of defect in jurisdiction of Single Presiding Member of SCDRC in deciding the Complaint. The issue appears to be debatable and needs to be resolved in some other case. The issue is therefore left open to be decided in an appropriate case.
47) Considering the overall conspectus of the case, I do not find any valid ground to interfere in the impugned orders passed by the SCDRC which has now merged with the order passed by the NCDRC. The petition is devoid of merits. It is accordingly dismissed without any order as to costs.
Digitally
signed by
NEETA [SANDEEP V. MARNE, J.]
NEETA SHAILESH
SHAILESH SAWANT
SAWANT Date:
2025.04.09
11:03:22
+0530
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