State Consumer Disputes Redressal Commission
The New India Assurance Co. Ltd. vs Milton Fernandes on 25 September, 2017
1
BEFORE THE GOA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION,
PANAJI - GOA
FA No. 15/2017
The New India Assurance Co. Ltd.
Having office at Jaganath Building
Near Railway station,
Margao Goa,
Represented by
Divisional Manager,
Rishika T. Ojha,
Wife of Mr. Narendra Mohan Ojha,
aged about 40 years,
having office at 3rd Floor,
Velho Building,
Rua Conde de Torres,
Panaji, Goa. ... Appellant
v/s
Mr. Milton Fernandes,
Son of G. Fernandes,
Aged 37 years,
Self employed,
Residing at house No. 17,
Ambelim, Banda,
Assolna, Salcette Goa. ... Respondent
Adv. Shri. A. Kakodkar for the Appellant.
Adv. Shri. S. Kholkar for the Respondents.
Coram: Shri. Justice U. V. Bakre, President
Shri Jagdish Prabhudessai, Member
Dated: 25/09/2017
JUDGMENT
[Per Justice Shri. U. V. Bakre, President] 2 This appeal is directed against the order dated 20/10/2016 passed by the Consumer Disputes Redressal Forum, South-Goa (the 'Forum', for short) in Consumer Complaint No. 16/2016. The Appellant was the Opposite Party (OP for short) and Respondent was the Complainant in the said Complaint. Parties shall hereinafter be referred to as per their status in the said Complaint.
2. The said Complaint was filed with a prayer to direct the OP to pay to the Complainant the balance sum of Rs. 2,46,499/- towards indemnifying the Complainant for the actual loss/damage/expenditure suffered by him along with interest @ 18% p.a. from 01/04/2014 till payment; compensation of Rs. 50,000/- along with interest and costs of litigation of Rs. 20,000/- .
3. Case of the Complainant was as follows:-
The Complainant was the owner of mechanized fishing vessel named "MFV MACSON" which was insured with the OP and the insurance policy "HULL AND MACHINERY INSURANCE" issued by the OP was bearing No.141400/22/13/01/00000032 covering the period from 03/06/2013 to 02/06/2014. The sum insured was Rs. 20,00,000/- and the Complainant had paid the premium of Rs. 1,12,400/-. Earlier there was valuation of the said vessel done by the OP through expert valuer and the vessel was valued at Rs. 20,00,000/- being Rs. 14,00,000/- of the hull, Rs. 5,25,000/- of the engine, gear box and accessories and Rs. 75,000/- of the dinghy and accessories. On 24/02/2014 at about 6.00 p.m. while the said vessel was engaged in regular fishing operations in deep sea off the coast of Aguada, the tindel (driver of the vessel) found the oil pressure gauze suddenly having dropped to zero reading thereby signaling failure of oil pump and in order to prevent further damage to the engine and various parts, the tindel shifted to neutral gear and stopped the engine. The tindel (driver) of the said vessel immediately reported the incident over telephone to the owner/Complainant and thereafter the Complainant engaged the services of a rescue vessel and towed his 3 damaged vessel to Cutbona Jetty for inspection and repairs. The Complainant intimated the above incident of breakdown of engine to the OP as per the procedure and lodged claim under policy of Insurance. The OP appointed their Surveyors and Loss Assessors namely "Poseidon Insurance Surveyors and Loss Assessors Private Limited" for inspection who inspected the said vessel at Cutbona Jetty on 25/02/2014 and after inspection instructed the Complainant to dismantle the engine for inspection and on 26/02/2014, they inspected the dismantled engine. Upon inspection, the said surveyors/loss assessors among other things found that the crank shaft and idler gear were damaged. They also found the piston rings, main and connecting rods and bearings were damaged. Since repairs were not possible in Goa the said engine block was taken to Mangalore for repairs in consultation with said surveyors and loss assessors. On 04/03/2014, when new parts were brought to the workshop at Mangalore, the said surveyors carried out further inspection before the new parts were fitted in to the engine and okayed the same. There were couple of more inspections done in the following days by the said surveyors and after complete repairs, they conducted the test trial of the engine on 08/03/2014 and found it to be performing satisfactorily. Thereafter the Complainant submitted the bills/invoices and receipts of the expenditure to the surveyors and loss assessors of the OP. The total expenditure was Rs. 4,15,999/- The Complainant also complied with other requirements of the OP. However the OP wrote a letter dated 28/03/2014 to the Complainant intimating that the loss was assessed at Rs. 2,09,199/- and further after various deductions the final amount payable to the Complainant was stated to be Rs. 1,68,600/-. The Complainant, by letter dated 04/04/2014, asked for details of the assessment and vide letter dated 08/04/2014, the OP furnished the details and requested the Complainant to accept the said amount of Rs. 1,68,000/- and to discharge the OP by signing discharge voucher sent along with the said letter in full and final settlement of the claim. After perusing the 4 statement of assessment provided by the OP. The Complainant found that some major parts were damaged and replaced during the repairs with full knowledge of the said surveyors and loss assessors were excluded from the purported settlement. The Complainant was aggrieved by the arbitrary action of the OP which prompted him to write back to the OP. On 27/05/2014 pointing out that the real cause of damage to the machinery which was due to sudden failure of oil pump resulting in the damage to the crank shaft and other major parts of the engine. However the OP through its Claims - Hub at Panaji addressed a letter dated 23/06/2014 to the Complainant falsely claiming that the cause of damage to the machinery of the said vessel was not covered as per the subject policy. The Complainant then engaged the experts in the field of marine repairs and products by name Bala Enterprises at Mangalore and Pramod S. Pai Kane at Muxir, Velim who gave in writing the cause of damage and effect of failure of oil pump of other major parts of the machinery. Thereafter the Complainant asked for relevant documents under RTI Act and sent a notice dated 21/10/2015 to the OP demanding reconsideration of its decision and settlement of the claim in full. By letter dated 09/01/2016, the OP, through its Claim -Hub at Panaji, informed the Complainant that it had closed the file as "no claim" for the two reasons given in earlier letter dated 29/09/2015. In fact no letter giving 2 reasons was received by the Complainant. The claim could not have been closed as "no claim" since it was partly paid to the extent Rs. 1,68,600/-. The decision to close the claim file was improper and dishonest and amounted to unfair practice. The said policy covered the peril of damage to the major parts or any latent defect in the machinery or hull of the said vessel and therefore the OP is liable to pay the full cost of the repairs /parts. The Conduct of the OP demonstrates deficiency in service. Hence the Complaint.5
4. The Complainant relied upon various documents which were listed in the Complaint and the copies of which were produced on record.
5. By way of written version, the OP alleged as under:
The Complaint does not fall under the purview of Consumer Protection Act, 1986 as there is no deficiency in service on the part of the OP. The Complainant had claimed that his vessel had lack of oil lubricant due to oil pump failure. Failure and blockage of oil is a machinery break down and is covered under machinery break down policy. The Hull Policy "IFVC" does not cover all machinery breakdowns. The OP had appointed the surveyor namely 'Poseidon Insurance Surveyors and Loss Assessors Pvt. Ltd.' represented by the surveyor Shri. Santhosh Kumar V. K. who conducted the survey of the vessel against the occurrence of the incident of oil pump failure and submitted his report on 19/03/2014 to the OP and based on his detailed inspection, investigation and loss assessment, the OP recommended the vessel's machinery and re-construction cost to Rs. 2,09,199/-. The OP, in view of the report of surveyors, assessed the loss as under:
1. Loss assessed by Surveyor Rs. 2,09,199/-
2. Less deductible under Policy Clause 12 Rs. 20,000/-
3. Less deductible under Policy Clause 13 Rs. 20,000/-
4. Less Salvage Rs. 599/-
NET AMOUNT Rs. 1,68,600/-
The OP thereafter paid Rs. 1,68,600/- towards the damages to the Complainant. According to the Surveyors, the damages to the parts of engine were caused due to starvation of coolant and consequential overheating resulting in distortion of parts in the engine. The damage to the crank shaft is attributed to the latent defect in the crank shaft gear. The said amount of Rs. 1,68,600/- was accepted by the Complainant from the OP against the recovery of loss 6 to his vessel. The incident had occurred on 24/02/2014 which is outside the lay-up period. In view of the above, whatever alleged by the Complainant which is contrary to the case of the OP is false.
5. The Complainant filed his own affidavit in evidence whereas the OP filed the Affidavit in evidence of its Divisional Manager named Shri. Rafael L. J. Lobo. Both the parties filed written arguments before the Forum.
6. Vide the impugned order, the Forum held that the Complainant has proved that he incurred expenditure of Rs. 4,15,099/- and that the OP is bound to indemnify in totality. The Forum held that the OP was guilty of deficiency in service. The Forum further held that the OP was liable to pay interest @10% from the date of filing of Complaint till actual payment. According to the Forum the report of the surveyor does not correspond to the factual position. The Forum observed that the OP has not brought on record the report of any independent expert. It was found that the Surveyors had not given any reason for their findings. The Complaint was therefore partly allowed. The OP has been directed to pay to the Complainant the balance amount of Rs. 2,46,999/- along with interest of 10% from the date of filing of Complaint till actual payment and also to pay compensation of Rs.
25,000/- and cost of Rs. 10,000/-. The OP is aggrieved by the above order.
7. Records and proceedings of Consumer Complaint No. 16/2016 were called for. Both the parties have filed written arguments before this Commission. We have also heard oral arguments. Mr. Kakodkar, Lr. Counsel, argued on behalf of the Appellant whereas Mr. Kholkar, Lr. Counsel, argued on behalf of the Respondent. We have gone through the entire material on record.
8. The Complainant has pleaded that he is self employed in fishing activity and has the Mechanized Fishing Vessel named "MFV 7 Macson" and has employed crew and other workers for his fishing activities. The Complaint, otherwise, pertained to the service of insurance rendered by the OP towards consideration paid by the Complainant to it. Hence the Complainant is Consumer as defined under Section 2(d) of the Consumer Protection Act, 1986 (the 'Act', for short). Mr. Kakodkar has not pressed for the contention that the Complainant does not satisfy the mandate of being a "Consumer" under the Act. Hence we need not go in any further detail insofar as the said aspect is concerned.
9. Indisputably, the policy was valid as on the date of incident. It is the contention of Lr. Counsel for the OP that the incident occurred due to lack of oil/lubricant on account of oil pump failure which is a machinery break down payable under 'Machinery Oil Pump Breakdown Policy' and that the Complainant does not have such policy but has a "Hull Policy (IFVC)" which does not cover all the machinery breakdowns. However, a perusal of the policy issued by the OP in favour of the Complainant reveals that it is a policy for hull and machinery. Be that as it may, though the 'Poseidon Insurance Surveyors and Loss Assessors Pvt. Ltd.', the surveyors appointed by the OP have stated in paragraph 1.5 of the report that the type of cover is 'Marine Hull Policy', however, in paragraph 1.8 of the report they have specifically stated that the interest insured under the said policy was hull and machinery of MFV "Macson". A perusal of the true copy of the insurance policy produced by the OP itself nowhere says that it is a "Marine Hull Policy". The title of the said policy is "Policy Schedule for Hull Machinery Insurance - Fishing Vessel". The Surveyors have assessed the loss at Rs. 2,09,199/- and salvage value at Rs. 500/- and the OP, after certain deductions namely Rs. 20,000/- under clause 12, Rs. 20,000/- under clause 13 and Rs. 599/- towards salvage, has approved the claim for Rs. 1,68,600/- and has even paid that amount to the Complainant. It does not lie in the mouth of the OP now to claim that the policy was only a Hull Policy (IFVC) which does 8 not cover machinery breakdown. There is no force in the above contention of the Lr. Counsel for the OP.
10. The insured value was Rs. 20,00,000- and the Complainant was paying annual premium of Rs. 1,12,400/- i.e. Rs. 14,00,000/- of the Hull, Rs. 5,25,000/- of the engine, gear box and accessories and Rs. 75,000/- of dinghy and accessories. The incident of breakdown of engine had occurred on 24/02/2014 at about 6.00p.m. Immediately the OP was intimated about the said engine breakdown and lodged the claim of Rs. 4,15,099/- of loss. Admittedly, the surveyors of the OP had inspected the vessel at Cutbona jetty on 25/02/2014 and had asked the Complainant to dismantle the engine and on 26/02/2014, the dismantled engine was inspected and the surveyors found that the crank shaft and the idler gear, piston rings, main and connecting rod and bearings were damaged. Since the repairs to the vessel were not possible in Goa, the said engine block was taken to Mangalore for repairs in consultations with the said surveyors of the OP. Further admittedly, a few days later, on 04/03/2014, when the new parts were brought in the workshop at Mangalore, the said surveyors of the OP carried out further inspection before the said new parts were fitted into the engine and had approved the same. Admittedly, after the repairs, the said surveyors conducted the test trial of the engine on 08/03/2014 and found it to be performing satisfactorily. The necessary new parts were purchased from 'Bala Enterprises' at Mangalore who issued the invoices. The said invoices have been all produced by the Complainant and the aggregate amount of these bills is. Rs. 6,69,445.99/-. The vessel was partly repaired by 'Trinethr Engineering and Boring Works' at Mangalore and the Cash Memo issued by said Trinethr is produced by the Complainant which is for Rs. 20,050/-. The Turbocharger was purchased from 'Infra Agencies' and the invoice issued by said Infra Agencies for Rs. 39,375/- is produced by the Complainant. Towards towing the said vessel, Mr. Gasper Fernandes had charged Rs. 25,000/- and this receipt issued by 9 said Gasper Fernandes is also produced by the Complainant. Towards transportation charges of the engine block from Cutbon jetty to Mangalore and vice versa, Mr. Parvez Mohamad charged Rs. 12,000/- and the receipt issued by said Parvez for that amount is also produced by the Complainant. Lastly, an amount of Rs. 38,000/- was paid by the Complainant to Ulhas Mesta towards removal, dismantling and cleaning of engine parts such as connecting rod bush, main bearings, connecting bearings, piston assembly, main bearing sleeve, cylinder block assembly, cylinder head stud, cylinder liner, crank shaft, piston rings, oil seal, main bearing oil seal, and all consumable items of the engine. The receipt towards the above amount issued by said Ulhas Mesta has been produced by the Complainant. The total of all the above receipts/invoices comes to Rs. 8, 03,870.99/- . However, the Complainant submitted the bills, invoices and receipts worth Rs. 4, 15, 099/- only to the OP and made a claim of the said amount. The expenditure incurred by the Complainant towards the purchase of new parts and repairs, etc. was made with the knowledge of the surveyors of the OP.
11. According to the surveyors of the OP, their close inspection and the nature of damages to various parts of the engine as described in the report revealed that the same were caused due to starvation of coolant and consequential overheating/thermal shock resulted in distortion of parts in the engine like piston, piston rings, etc. The surveyors reported that the damage to the crank shaft was reasonably attributed to latent defect in the crank shaft gear. The surveyors therefore alleged that the mishap appeared to be accidental and fortuitous in nature. If the mishap was accidental and fortuitous in nature, then why the surveyors at all considered the claim partly for admittance to the extent of Rs. 2, 09,199/- is a question which arises for consideration.
12. Mr. Kakodkar, Lr. Counsel for the OP read out clause 6 of the 'Institute Fishing Vessel Clauses' (IFVC) and contended that since the 10 damage to crank shaft was attributed by the surveyors to latent defect in the crank shaft gear, the surveyors have rightly rejected the claim towards crank shaft and the Complainant cannot claim any amount towards the same. Clause 6 of IFVC provides for perils. Clause 6.1 read with clause 6.2.2 of the IFVC stipulates that this insurance covers loss or damage to the subject matter insured caused by bursting of boilers, breaking of shafts or any latent defect in the machinery or hull. Thus if the loss or damage is caused by any latent defect in the machinery, then the insurance covers loss or damage to the vessel. In the report, the surveyors of the OP have mentioned that the damage to crank shaft is reasonably attributed to latent defect in the crank shaft gear. But it appears that the surveyors have excluded the cost of crank shaft by taking it for granted that the policy covered only the hull. The surveyors have not stated that the crank shaft gear is not a part of the engine or of the machinery of the vessel. The Complainant is insured for hull and machinery of the said vessel. Bala Enterprises has certified that due to failure of the oil pump of the engine, the other parts of the engine got damaged such as crank shaft, liner, piston, etc. Such sudden failure of the oil pump of the engine was intimated to the OP and it amounts to a latent defect. There is also no support to the report of the surveyors to the effect that the damages were caused due to starvation of coolant and consequential overheating. The assessment of loss done by the surveyors appears to be one-sided since major and expensive parts have been excluded without considering the invoices/receipts issued to the Complainant. At one hand, the OP says that the cause of damage to the said vessel was not covered under the policy and on the other hand the OP has paid Rs. 1,68,600/- to the Complainant as against his claim of Rs. 4,15,099/-. Insofar as the deductions under clauses 12 and 13 of the IFVC are concerned, the OP has produced the true copy of the insurance policy but the said clauses no. 12 and 13 contain blanks due to which it cannot be understood as to why Rs. 20,000/- towards each clause had to be deducted.
1113. In the circumstances above, we do not see any illegality in the operative part of the impugned order of the Forum. There is no merit in the appeal.
14. In the result, the appeal is dismissed. No order as to cost.
[Shri. Jagdish Prabhudessai] [Justice Shri. U. V. Bakre]
Member President