State Consumer Disputes Redressal Commission
M/S. Aqua World, vs New India Assurance Co. Ltd., on 13 November, 2013
BEFORE THE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PANAJI- GOA CC. No. 15/2013 M/s. Aqua World, a registered partnership firm having its office at Joffre Residency, 2nd Floor, Panaji-Goa. 403 001, represented by its partners 1. Mr. Peter Vaz 2. Narendra Padte Complainant v/s. New India Assurance Co. Ltd., Velho Building, 3rd Floor, Rua Conde De Torres, Panaji Goa. 403 001. .Opposite Party Complainant is represented by their Manager Shri. L.B. DSouza. OP is represented by Adv. Shri. E. Afonso. Coram: Shri. Justice N.A. Britto, President Shri. Jagdish Prabhudessai, Member Dated: 13/11/2013 ORDER
[Per Justice Shri N.A. Britto, President] This consumer complaint filed on 30/08/13 is being disposed off by this order.
2. The admitted facts are as follows:-
2.1.
The complainant is a firm of two partners. The complainant owns a cruise passenger launch known as M.L. Carnaval having registration No. PNJ 342.
2.2.
The complainant insured the said launch for Rs. 30 lacs under a marine hull policy effective from 00.00 hrs of 28/09/09 to midnight of 27/09/10 by paying a premium of Rs. 26,772/-. In terms of this policy, the OP was to indemnify the complainant only in case there was total loss, actual or constructive. The relevant clause of the said policy reads as follows:
6.1. This insurance covers total loss (actual or constructive) of the subject matter insured caused by 6.1.1.
Perils of the seas, rivers lakes or other navigable waters.
2.3.
The complainant desired to take the said launch from Panaji to Mumbai for repairs and therefore obtained a separate insurance policy for a single voyage from Panaji to Mumbai by paying a premium of Rs. 3,640/- effective 16.30 hrs of 13/04/10.
2.4.
On 17/04/10 on the way to Mumbai the launch encountered bad weather and cyclonic winds and sustained damage. Complete upper deck collapsed on the port side by breaking of starboard stanchions, etc. Other details of the damage can be seen from para 3 of the report dated 26/04/10 of the surveyors Trans Ocean Marine and General Survey Agencies. The launch dropped anchor at Colaba Light House and thereafter was towed to Elephanta jetty by a tug name Vijay. This policy did not specify that the duty to indemnify was only in case of total loss. On the contrary, condition 4.1 reads as follows:-
4.1. This insurance covers loss of or damage to the subject matter insured caused by 4.1.1. Perils of the seas rivers lakes or other navigable waters.
2.5.
It also has another condition which reads as follows:
14. No claim shall be allowed, other than in general average, for wages and maintenance of the Master, Officers and Crew, or any member thereof, except when incurred solely for the necessary removal of the Vessel from one port to another for the repair of damage covered by the Underwriters, of for trial trips for such repairs, and then only for such wages and maintenance as are incurred whilst the Vessel is under way.
2.6.
The complainant reported casualty to the OP by their letter dated 17/04/10. The surveyors conducted a survey on 21/04/10 and submitted a preliminary report on 26/04/10 and after certain documents sought for were provided to him, the surveyor submitted an intermediate report dated 12/06/10.
2.7.
The complainant by letter dated 26/04/12 submitted to the OP repair bills amounting to Rs. 28,81,909/- but by letter dated 4/7/12 the OP repudiated the claim since the damages sustained by the complainants vessel were partial in nature and the same fell outside the purview of the first policy.
3. The complainant, therefore, filed the complaint for (a) a direction for payment of compensation of Rs. 28,81,909/- (b) to pay Rs. 21,18,091/- for financial loss suffered by the complainant due to wrongful rejection of the claim, mental torture, etc and
(c) for payment of interest at the rate of 18% and costs.
4. Contesting the complaint, the OP has taken two defences:-
1.
The loss sustained by the complainant of Rs. 28,81,909/- was only partial loss as against the insured value of Rs. 30 lacs.
2. The complainant has included in the said bills of Rs. 28,81,909/- bills of wages paid to the crew which is not payable under the policy.
5. Shri. DSouza, the complainants manager would submit that the policies obtained by the complainant were separate and had to be read independently. He would submit that the complainant has paid a sum of Rs. 28,81,909/- by cheques, a payment which is not disputed by the OP. Shri. DSouza further submits that the complainant had to pay the sailors who were employed in order to maintain the vessel and therefore the complainant is entitled for the said expenditure. Shri. DSouza has submitted that the complainant is also entitled for compensation for delay in settling the claim.
6. On the other hand, Shri. E. Afonso , the lr. advocate of the OP, would submit that the terms and conditions of the second policy have got to be read with the terms and conditions of the first policy, and if so read, the terms would suggest that the OP was liable to indemnify the complainant only in case of total loss to the vessel and not in the case of partial loss, as is the case at hand. Shri. Afonso would submit that the OP would have indemnified the complainant only in case there was total loss to the vessel. Lr. advocate also submits that wages paid by the complainant on the maintenance of the launch are to be excluded in terms of Clause 14 of the second policy.
7. We are unable to accept the first defense taken by the OP. We are inclined to accept the submission made on behalf of the complainant that the complainant had obtained two policies with their own terms and conditions, which have to be read independently. The second policy by virtue of Clause 4.1., did not restrict, unlike the first policy, that the complainant would be indemnified only in case of total loss. (actual or constructive). On the other hand, the second policy, by virtue of Clause 4.1 stipulated that loss or damage to the subject matter would be indemnified. It does not say that total loss or damage would be indemnified. Therefore, Clause 4.1 admits payment of partial loss or damage.
7.1.
The OP was not entitled to read Clause 4.1 of the second policy into the first policy. Any attempt in that direction would make the policy ambiguous. Assuming the second policy was issued as an endorsement to the first policy as contented, then we will be left in one policy with two sets of conditions one which favours the OP and the other which favours the insured. A contract of insurance is like any other contract except that it is uberrimae fidei. It is well settled position in law that if a term or a clause is capable of two possible interpretations, one which is 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 (see United India Insurance Company Ltd., vs. M/s. Pushpalaya Printers, 2004(2) CPR 62). If both the clauses are read as part of one policy, one which favours the insurer and the other to the insured that would make the policy ambiguous. In case of ambiguity or doubt the policy needs to be construed contra proferentem i.e. against the insurer. This is on the assumption that Clauses 6.1 and 4.1 form part of the same policy. However, we have concluded that both the policies were issued independently on their own terms and conditions and in view of Clause 4.1 of the second policy, the complainant was entitled to be indemnified for partial loss.
8. The complainant would not be entitled to the expenses of Rs. 5,32,000/- as per the bills submitted by the complainant as this expenditure pertains towards the wages paid to the crew which the complainant is not entitled to in terms of Clause 14 of the second policy reproduced hereinabove. The second defence needs to be accepted.
9. Complainant was certainly entitled to Rs. 23,59,909/-. Therefore the repudiation of the claim of the complainant by letter dated 4/7/12 is but fanciful, arbitrary, unreasonable and illegal and therefore would amount to deficiency in service on the part of the OP.
10. The OP ought to remember that they owe their existence for the benefit of the policy holders and not vice versa and if any claim is to be rejected the same has to be done with some sense of responsibility.
Although the Apex Court observed in LDA vs. M.K. Gupta, AIR 1994 SC 787, that the days of capricious or malafide exercise of powers are over, the OP continues to exercise power arbitrarily.
11. In FA No. 26/10 by order dated 4/7/12 in the case of National Insurance Company vs. Smt. Princy Roy, this Commission has held that the liability to pay compensation for mental agony, harassment, emotional suffering, mental discomfort, etc. is by way of additional liability arising from the charge of the deficiency of service as defined under Section 2(1)(g) of the C.P. Act, 1986. This conclusion is based on our previous order dated 4/10/12 in FA No. 12/12 in the case of Jet Airways (India) Ltd & anr. vs. Ms. Urjita V. Damle which was rendered relying on Ghaziabad Development Authority vs. Balbir Singh (2004) 5 SCC 65 and Alok Tandon vs. Scandinavian Airlines System, 2001 CTJ 85 & other decisions. The complainant therefore would be entitled to additional compensation of Rs. 25,000/- on that count.
12. For reasons aforesaid we proceed to allow the complaint partly and direct the OP to pay to the complainant a sum of Rs. 23,59.909/- in terms of prayer (a) Rs. 25,000/- in terms of prayer (b) and Rs. 10,000/- in terms of prayer (c). The amount ordered to be paid in terms of prayer (a) shall carry interest at the rate of 9+2% from 12/07/10 until payment (see Regulation 9(6) of IR & DA Regulations, 2002). Payments shall be made to the complainant within a period of 30 days and in case not made the sums ordered to be paid under (b) and (c) shall carry interest at the rate of 9% until the same are paid.
[Shri. Jagdish G. Prabhudesai] [Justice Shri N. A. Britto] Member President