State Consumer Disputes Redressal Commission
M/S. Amma Lines Ltd. vs Oriental Insurance Co. Ltd on 31 January, 2013
BEFORE THE
HON'BLE STATE CONSUMER DISPUTES REDRESSAL
COMMISSION,
MAHARASHTRA, MUMBAI
Complaint
Case No. CC/06/128
1. M/s. Amma Lines Ltd.
304, Shiv Smrit Chambers, 49, Dr. Annie Besant Road, Worli, Mumbai - 400 018.
...........Complainant(s)
Versus
1. Oriental Insurance Co. Ltd.
Off. at Oriental House, 1st
floor, 7, Jamshedji Tata Road, Churchgate, Mumbai 400 020.
............Opp.Party(s)
BEFORE:
HON'BLE Mr.Justice S.B.Mhase PRESIDENT
HON'BLE MR. Narendra Kawde MEMBER
PRESENT:
Adv. Abhimanyu Singh proxy
advocate for
Adv. V. Subramanian for the Complainant
Adv. Smt. Sneha Dwivedi for the Opponent
ORDER
(Per Shri Narendra Kawde, Honble Member ) (1) The complainant is a limited company registered under Companies Act, 1956 engaged in business of carriers as owners and operators of dumb barges and floating pontoon crane and filed this consumer complaint alleging deficiency in service against the Oriental Insurance Co.Ltd. (hereinafter referred to as insurance company) for repudiation of the insurance claim payable under the insurance policy subscribed to extend the insurance cover to their vessel, Dumb Crane Pontoon CP-4 (hereinafter referred to as the vessel) for damage sustained to the vessel due to peril of the sea.
(2) The salient facts giving rise to file this consumer complaint are that the complainant company is the owner of the vessel. Marine Hull Machinery Insurance Policy bearing No. 111900/000/00000/22/2005/30114 dated 01/12/2004 was subscribed to extend insurance cover of the vessel for the period of 13/11/2004 to 12/11/2005 with sum insured of `60 lakhs and the additional sum assured of `60 lakhs to cover the voyage of the said vessel.
The insured vessel sustained heavy damages during validity period of policy due to abnormal and extraordinary movement of rise and fall of the water i.e. due to peril of the sea on 26/12/2004. When the said vessel was safely anchored at Chennai Fishing Harbour Project, came to be grounded on the breakwater. The incident which directly caused loss of the vessel was due to heavy swells and tides of mammoth proportions referred to as tsunami by the newspapers. The damage sustained to the vessel was constructive total loss and the vessel was turned into the condition of beyond repairs. This incidence deprived the complainant company of the vessel resulting into loss. The incident was promptly reported to the opponent insurance company. Authorised surveyor was appointed by the insurance company, who carried out preliminary survey. The said surveyor advised to assess the salvage of the said vessel through potential salvors. Though the vessel was beyond repairs as it was a total constructive loss, the complainant heeded the advice of surveyor and established contact with the potential salvors. As per the list provided by the initial surveyors, in spite of best efforts put in by the complainant for establishing contacts with various hull surveyors, no response came forward finally from any of the hull salvors.
Since the vessel was beyond the repairs and it was the case of total loss and seized to be property that was insured was not capable of being repaired. Even after having put in best and honest efforts to get the hull salvor finally none of the salvors came forward and accordingly the complainant informed these facts to the opponent insurance company. The claim was filed for total estimated loss of `60 lacs i.e. to the extent of sum insured with interest of `19,14,000/- thereon. The complainant company complied with all the requirements to settle the loss on account of damage. However, the opponent insurance company repudiated the insurance claim under exclusion clause No.5 of the terms & conditions of the insurance company which reads as under:-
ln no case shall this insurance cover loss damage liability or expense caused by earthquake or volcanic eruption.
(3) The basis of surveyors report led to repudiation of the insurance claim who observed that the proximate cause of loss was earthquake or volcanic eruption and remote cause for such cause flooding of sea water which according to the surveyor was beyond scope of insurance policy. Aggrieved with the repudiation, the complainant company filed this consumer complaint alleging deficiency in service as the claim payable under the insurance policy has not be paid.
(4) The opponent insurance was served and appeared by filing written version and affidavit in evidence. The contents of the complaint are denied by the insurance company stating that the loss sustained to vessel was due to earthquake and volcanic eruption that occurred on 26/12/2004 leading into tsunami phenomena. It is further stated that upon receiving intimation from the complainant, the authorized surveyor was appointed to carry out the survey. The surveyor reported that due to sudden water flooding because of tsunami phenomena on 26/12/2004, the complete area was flooded and mooring ropes parted and vessels drifted. The vessel was drifted but remained in sheltered area.
The vessel was resting on tripods/Acrobats (RCC breakers) outside south-east break water of old Kashimedh fishing harbor. No damages except water leaking during drifting were noticed.
Finally, surveyor recommended to assess salvage and accordingly forwarded list of certain players in the field. However, the complainant did not show any interest in assessing the salvage of the vessel, though there were good offers from the interested salvors.
As per the terms and conditions of the policy, perils of the sea are covered whereas damage due to earthquake is outside the purview of the policy terms & conditions and therefore the insurance claim as stated was rightly repudiated under the exclusion clause 5 of the policy. The surveyor reported earthquake and volcanic eruption as proximate cause of loss and flooding of water as a remote cause. The proximate cause is excluded from the scope of the policy and therefore the remote cause is the peril of the sea would automatically stand excluded from the scope of the policy. Taking the defence, the insurance company tried to justify fully the repudiation of the insurance claim.
(5) Bare perusal of the record shows that the primary survey report and finale detailed survey report of the authorized surveyor attributed the damage to vessel due to earthquake and volcanic eruption leading to tsunami.
The opponent insurance company was interested in assessing the salvage value as at the given point of time. The surveyor could not assess the damage to the vessel as it was drifted in the fishing area. Certain names of dealers dealing in salvage were also recommended. The complainant as suggested by the insurance company tried to establish contact with the salvors. For one reason or other, the salvage deal could not be arrived at. Insurance company relied on the salvage offer of B.Rajlaxmi Marine for `18 lacs, who also put a condition for `2 lacs for mobilizing the team and equipments.
It is the case of the complainant that they have seriously tried to contact with salvors, but none of the salvors were finally offered to proceed in the matter. They have also produced offer letter received from Rajlaxmi Marine (salvors) quoting value of `20.50 lacs with conditions of extending of `5 lacs to be paid to the salvors along with work order. However, contrary to this, it is the statement on affidavit of the complainant that unfavourable conditions prevailing at the time of salvage the subject vessel safely and on account of the fact that heavy expenditure in excess of the value was involved which was required to be incurred by the complainant on account of salvage and furthermore there was no clear guarantee of the salvaging the said vessel, the complainant requested the insurance company to treat the damaged vessel as total loss and settle the complainants claim under the policy. However, in absence of exact salvage carried out by the complainant, the insurance company closed the file of the complainant as no claim adhering to exclusion clause 5 of the insurance policy.
(6) Though it is the case of the complainant that vessel was damaged beyond the repairs yet receipt of certain quotations from the salvors contradicts stand taken in the matter. In the absence of salvage, the authorized surveyor did not work out the loss and recommend net loss to the insurance company. The insurance company placed on record reference material demonstrating that earthquake and volcanic eruption leading to tsunami and also placed on record demonstrating that damage due to tsunami is not covered under the insurance policy. As against this material, the complainant did not attribute any documentary evidence to disprove that earthquake with volcanic eruption as no a proximate cause leading to tsunami.
(7) The learned advocate of the complainant tried to submit that the repudiation of the insurance claim as arbitrary one but did not make legal submissions as to how repudiation of the claim is unjustifiable. The learned advocate of the insurance company relied on the surveyors report and reference material placed on record to demonstrate that earthquake with volcanic eruptions leads to tsunami that occurred on 26/12/2004 resulting into damage of insured vessel.
(8) The complainant as observed failed to make out a case on deficiency in service against the opponent insurance company. In view of this, we do not find merit in the consumer complaint. We hold accordingly and pass the following order.
ORDER (1) Consumer Complaint stands dismissed.
(2) In the given circumstances, parties to bear their own costs.
Pronounced on 31st January, 2013.
[HON'BLE Mr.Justice S.B.Mhase] PRESIDENT [HON'BLE MR. Narendra Kawde] MEMBER pgg