State Consumer Disputes Redressal Commission
Nawaz Shipping vs National Ins Co Ltd. on 8 June, 2023
DETAILS DD MM YYYY
Date of Judgment 08 06 2023
Date of filing 18 11 2011
Duration 20 06 11
IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION
STATE OF GUJARAT
COURT -2
CONSUMER COMPLAINT NO.68 OF 2011
COMPLAINANT: M/S. NAWAZ SHIPPING
(Through its Partner Mr. Salim G Sati)
316/317, Cross Road, P N Marg,
Jamnagar.
V/s.
OPPONENT: DIVISIONAL MANAGER,
NATIONAL INSURANCE COMPANY LIMITED
Divisional Office, 328/335, City Arcade,
Nr. DSP Bunglow, P N Road,
Jamnagar.
Coram: Hon'ble Mr. R N Mehta, Member
Appearance: Mr. Chirag Kothari, Advocate for Complainant Mr. V P Nanavaty & Mr. Darshil Parikh advocate for Opponent. (Order by Hon'ble Mr. R N Mehta, Member) [1]. The complainant above named is partnership firm and Mr. Salim G Sati has presented it for and on behalf of firm in his capacity as Managing Partner of the firm. In this complaint, the complainant has prayed for direction to opponent to pay the sum of Rs. 38,00,000/- together with interest @ 12 % p.a. from the date of complaint till realisation towards the loss suffered by complainant on account of negligence and deficiency in service on the part of the opponent insurer and further direct them to pay exemplary cost.
[2]. (2.01). It is the case of the complainant that complainant firm is indulged in business of shipping (Barge, Tug owners and operators) and have acquired licenses, registration with competent authorities. The complainant states that it has purchased Marine Hull Insurance Policy from the opponent Rnm CC682011 Page 1 of 18 (Herein after referred as "Insurer") for its Tug Known as "Tug- MT Rishi-1"
which was registered as Indian Vessel for the sum insured Rs.38,00,000/- and paid premium for the period from 22/4/2009 to 21/4/2010 as a result the opponent insurer issued Policy no. 300401/22/09/4100000005. It is alleged in the complaint that policy was got renewed periodically for seven years and every time, the insurer issued only schedule of policy which contains only two page to confirm the renewal. It is also stated that prior to 29/4/2009, the complainant had no occasion to lodge any insurance claim.
(2.02). It is also averred in the complaint that on 28/4/2009, when the insured Tug, "MT Rishi-1" was returning from completing successful unloading of Cargo, stranded on the riverbed due to low water. It waited there in expectation of next high tied so that it can re-float and commence its voyage. It is stated that at about 8.45 hrs., when tidal flow started to come in river Mahisagar, suddenly heavy tidal wave entered with great speed and Tug M T Rishi -1, listed her on starboard side and drifted in tidal current and finally capsized on to her starboard side. Thus, it capsized in river Mahisagar. It is stated that no sooner it came to know to complainant, it was communicated to opponent insurer on 29/4/2009 and further informed that two persons have lost their lives in this incident. The complainant then lodged claim with the insurer together with supporting documents to substantiate the amount of loss. The insurer had deputed surveyor M/s. G P Dave & Sons and M/s. J Basheer & Co. to assess the loss and complainant had supplied all necessary documents pertaining to ill- fated incident and regarding value of Tug.
(2.03) It is stated in the complaint that even after 24 months from the date of incident, the opponent insurer did not settle the claim and not informed the complainant reasons thereof. It is alleged that the opponent insurer had violated the guidelines issued by regulator IRDA for settlement of claim. It is alleged that the opponent insurer had wrongly repudiated first claim of the complainant vide its letter dated 1/6/2011. It is alleged that the said letter is written without there being any concrete base and knowingly twisted facts to avoid liabilities under the contract of insurance. The complainant insured thereafter also clarified the position however it has not reached to deaf ears of the insurer. When the opponent insurer did not settle claim of the complainant, help was sought from Padhiyar Hi Tech Pvt Ltd., who find out Rnm CC682011 Page 2 of 18 that salvaging efforts were made but due to high current of water and rough conditions, it was not possible. The complainant alleged that to avoid liability the surveyor appointed by the opponent insurer had concocted story of towing another Barge violating the permission granted by the Competent Authority. It is averred that in fact, the towing operation was done by "Success King" and insured Tug was going side by side to save human beings. It is absolutely false to repudiate liability on the ground that conditions of permission were violated. It was alleged that in the policy schedule, nowhere mentioned that voyage in Mahisagar river was restricted or not permitted.
(2.04) The complainant also averred that it has taken assistance from Advance Marine India Diving & Underwater Engineering Services who had opined in its letter dated 1/5/2009 that vessel salvageable. It is stated that the opponent insurer had agreed that premium will be paid in instalment and first such instalment was paid of Rs. 5640/- and because incident took place the insurer did not asked for further premium. It is alleged that after accepting part of premium the opponent insurer was under obligation to act fair and in reasonable manner and not to act arbitrarily, fanciful or in capricious manner. It is also further clarified that Tug MT Rishi- 1 was capsized not due to any negligence but due to act of god which is natural calamity and it is covered within scope of policy. Thus, the services of the opponent insurer are deficient and complainant is entitled for the amount claim in the complaint. The complainant has placed on record, copy of policy schedule of insurance contract, copy of Harbour Craft License issued by Gujarat Maritime Board which includes details pertaining to ownership, registration of Tug, name of tindel, period of validity of license etc. The complainant also has submitted copy of Registration of Tindel or Master, copy of permission letter issued by Mercantile Marine Department (Government of India), certificate as to qualification of Motor Engineer, copy of valuation report issued prior to policy, copy of agreement of purchase of Tug, copy of identity card issued to Master, sukani, seamen and Motor Engineers etc by the authority and copies of correspondence exchanged between parties.
[3]. (3.01). This Commission, after preliminary hearing passed order dated 21/12/2011 to admit complaint for adjudication under the Consumer Rnm CC682011 Page 3 of 18 Protection Act, 1986 (herein after referred as "The Act" or "Act") and issued notice to the opponents. The opponent on receipt of notice, appeared through advocate and filed reply (Page 158-169) which was taken on record. In the said reply the opponent insurer called upon complainant to prove that on 28/4/2009, insured vessel had permission for voyage from the Competent Government Authority. It is stated that on receipt of claim intimation, immediately M/s. G P Dave & Sons were appointed for preliminary survey and after its report it came to know that stake involved is more, M/s. J Basheer & associates was appointed to make survey and to assess the loss. It is stated that the said surveyor submitted its final report on 7/9/2009 and on that basis the complainant was called upon vide letter dated 27/10/2009 to clarify 15 points to finalise settlement of claim. However, the insured complainant gave evasive replies and which delayed settlement of claim. It is stated that being insurer, fullest opportunity was given to prove the loss within the scope of policy but when complainant failed repudiated claim vide letter dated 1/6/2011.
(3.02). Referring judgment of Hon'ble Apex Court in the matter between Ravneetsingh Bagga vs. KLM Royal Dutch Airlines, it is submitted that there is no case of deficiency in service. It is also further stated that surveyor has observed in its report that Gujarat Maritime Board (GMB) had issued limited permit for single voyage from Munjpur To Badi without any authority however there is evidence that there is violation of this condition. It is also further submitted that the aforesaid permission was granted with condition that command of insured Tug shall be with 1st class Master Shree Sateeshkumar Singh and 2nd class Engine Driver Nurislam S K, but it is observed that this condition was also not followed. It leads to increase the risk which is beyond scope of policy. It is also further submitted that Tug was taken from Munjpur to different places and return journey was commenced by Tug MT Rishi-1 is not from designated port. The casualty found to have occurred due to large tidal variation occurring in Gulf of Khambat which is not a "sea peril" to cover risk under insurance policy. Even permission granted by GMB was not falling within the scope of authority defined by Merchant Shipping Notice No.3 dated 6/5/2008 and necessary procedure was not followed. The loss would not fall within named perils in Section C of ITC Hull. It is further submitted that the policy in Rnm CC682011 Page 4 of 18 question permits coverage of perils only where navigable water is available. According to Insurer, river Mahisagar where incident took place is not navigable. It is submitted that Director General of Shipping, Ministry of Shipping has clarified that GMB was given interim authorization to issue voyage permits which was withdrawn vide letter dated 18/11/2009. It is also submitted that complainant insured had violated express warranty when Tug was handed over for operation to unqualified and incompetent man. It is also further canvassed that condition of Permission provides that in case if named person is unable to proceed with voyage, necessary changes are to be informed to authority so as to enable them to examine competency of a person who takes over charge of vessel. However, though insured was within the knowledge that Mr. Rajeshprasad had signed off did not disclosed it to authority and mislead the authority. It is submitted that drowning of vessel in Mahisagar is not falling within the scope of Marine Insurance Act, 1963. It is submitted that wilful non-compliance of requirement of law as to manning competent personnel amounts to gross violation, not simply because it disregard to voyage permission, but inviting risks voluntarily. The role and contribution of the qualified person in charge of Tug is always "condition precedent" for permission granted. The surveyor has observed tidal high was noted around 8.5 MT which was there from the beginning but because of improper manning, none could have managed it during voyage and resultant loss. There is evidence that Tug MT Rishi-1 was tied to barge "Sagar Darshan" on side and when said Barge pushed by high water surge, barge got floated but Tug could not and therefore Barge pushed down to Munjpur which Tug also followed. This undoubtedly confirms that Tug was involved in towing arrangement. The insured stated that Tug was going side by side on humanitarian ground itself suggests that it was within their knowledge that Tug is involved in Towing operation. This has violated terms of policy as well as condition for permission.
(3.03). It is denied that complainant was not aware of the provisions of clause 6 as it is renewed policy and it was never claimed prior to loss that it has not received terms and conditions of policy. The claim of complainant was not payable under the policy and reasons thereof were given in the letter of repudiation. It is also submitted in reply that nature of complaint and the incidence is such which requires voluminous evidences and therefore Rnm CC682011 Page 5 of 18 adjudication of complaint under The C P Act is not proper. It is submitted that delay in settlement of claim occurred due to circumstances beyond the control of the opponent and it was not intentional. Thus, it has been submitted that the claim of the complainant insured was not within the scope of policy and that has been decided after giving reasonable opportunity to insured for representation and therefore it cannot be said deficiency in service and complaint is require to be dismissed. The opponent has submitted copy of insurance policy, copy of final survey report of M/s. J Basheer & Associates with annexure, copy of letter of repudiation and copy of letter dated 27/10/2009 sent to complainant for clarification.
[4]. The complainant has filed rejoinder affidavit (page 307 -314) however in this affidavit insured has denied the fact what has been stated by the insurer in its reply. It is stated that since permission was granted by GMB, it does not require any further proof to prove this fact. It is also stated that complainant had replied in detail the queries raised by the insurer vide its letter dated 27/10/2009 and insurer has considered it evasive reply. The insurer thereafter submitted affidavit of Mr. Shaheed Basheer in support of the surveyor's report. Mr. Kothari has raised serious objection about identification of a person making solemn affirmation made by advocate of the insurer. It will be dealt with appropriately hereinafter.
[5]. (5.01). Both parties have submitted written submissions which are on record. During hearing, Mr. Chirag Kothari, advocate for the complainant submitted that page 14 of the compilation is receipt of insurance paid for renewal of insurance policy known as Marine Hull policy and accordingly policy was issued in the name of Amin Gulam Sati and Salim G Sati for the period from 22/4/2009 to 21/4/2010 which shows name of Tug MT Rishi-1, and sum insured is Rs.3800000/-. He submits that this is renewed policy and all previous policies have been placed on record. Mr. Kothari referred page 30 to submit that Tug MT Rishi-1 was duly registered with Competent Authority in the name of complainant firm. Referring page 54 he submits that the complainant had obtained valuation report prior to proposed for insurance and M/s. G P Dave & Sons have certified value of Rs.28,00,000/- whereas insurance policy was taken for Rs. 38,00,000/- means it is fully covered.Rnm CC682011 Page 6 of 18
(5.02). Mr, Kothari also submitted that when the insured Tug was on its return journey, on 28/4/2009, during low water, insured Tug stranded on riverbed of Mahisagar and it was waiting there to have next tide to re-float and to commence its voyage. This was communicated to insurer on 29/4/2009 but at around 8.45 am, tide water started flooding with high speed of wave due to which insured vessel listed on star board side and ultimately capsized. It is also submitted that during this incident, two persons lost their lives. Mr. Kothari submitted that till the filing of complaint, surveyor J Basheer seems to have not submitted his report itself is violation of IRDA guidelines and cause for deficiency in service. He also submitted that despite repeated requests for supply of terms and conditions of policy, the insurer has not supplied. Mr. Kothari also submitted that the complainant insured also have tried to minimise loss and took assistance from expert Advanced Marine India who reported that any attempt to salvage the vessel may not only jeopardise the vessel assisting in salvage but also to the personnel involved in the salvage. Thus, vessel was not salvageable causing total loss to the complainant insured. Mr. Kothari submitted that since permission was granted by local authority i.e. GMB, vessel started its journey and though the insurance company has repudiated claim on flimsy and vague grounds. He submits that there is nothing on record which supports the decision of insurer to disown liability. He also submits that insurer has given false reasons in letter of repudiation that too just to avoid legitimate claim of complainant insured. Despite sufficient clarifications were given, the opponent insurer willingly not considered it. He submitted that report of surveyor is not final word and there are series of judgments delivered by Hon'ble NCDRC and Apex Court even then insurer has repudiated claim only on recommendations of surveyor. Mr. Kothari submitted that insurer was misguided by concocted story of surveyor that insured Tug was involved in towing another Barge. Regarding voyage in Mahisagar, he submitted that in the insurance policy, no where it is stated that voyage in Mahisagar is barred. It is submitted that insurer has settled claim of another Tug where loss was caused arising out same incident. The complainant has given sufficient reply about permission to voyage but even then, claim was not settled and therefore complainant is entitled to relief claimed in the complaint with interest and cost.Rnm CC682011 Page 7 of 18
(5.03). Mr. Darshil Parikh for Mr. V P Nanavaty submitted that insurer has processed claim after intimation, obtained reports from surveyor, studied recommendations made by surveyor, called upon insured to submit their comments and after scrutiny of all those documents, if it concludes that claim is not payable, repudiated it and communicated it to insured. He submits that when the insurer has followed all procedure for settlement of claim and there is no arbitrariness in denying liability of indemnification, the claim is not tenable under the summary jurisdiction of Consumer Protection Act since there is no case of deficiency in service. He submits that mere allegation of deficiency in service or indulgence in unfair trade practice is not sufficient. The complainant must prove it on record. The complainant has undermined the warranty clause printed even on schedule of policy. Mr. Parikh submits that policy, sum insured, period of insurance and payment of instalment of insurance premium etc. are not in dispute. He submits that loss to insured vessel is also not in dispute but it did not cause because of insured peril and there is violation of statutory provisions and therefore claim is not payable. The insured has not complied with statutory requirement and handed over the vessel to incompetent person and under such circumstances, insurer is not liable to indemnify the loss. He submitted that there is not only one but series of violations and it has increased the probabilities of risk of loss and therefore the same is not payable under the policy. He also submits that natural weather conditions, waves and winds are not considered "sea perils" and therefore also loss is not payable. He has referred statutory provisions of Marine Insurance Act, 1963., Merchant Shipping Act,1958 to submit that non-compliance of statutory provisions amounts to violation of warranty that was given at the time entering contract of insurance and therefore Insurer is not liable to indemnify the loss. He submits that when the law provides that a person in- charge of vessel must have required qualification and if it is not complied with than in that case it is voluntary act of insured to increase risk for which insurer cannot be made liable. He also further submitted that when permission issued by Competent Authority provides that voyage can be taken only in fair weather condition, meaning thereby vessel cannot be permitted to ply if it is not fair-weather condition. Every act of the insured complainant has violated different statutory provisions and thereby caused Rnm CC682011 Page 8 of 18 breach of warranty too. The insurer cannot be saddled with liability of voluntary wrong done by the insured and its representatives.
(5.04) Mr. Parikh submitted that decision of repudiation of claim based on information provided by the insured and its representatives and therefore it was obligatory on the part of insured to prove it wrong by leading concrete and corroborative evidence. However, it was not done in this case and therefore insured now cannot submit that those facts were not correct. He submitted that although there is some delay in communicating decision of insurer to the complainant but it was not intentional and basic information as to non-admissibility of claim was communicated to insured when letter was written and called upon to offer its comments. Mere delay in communicating authoritative decision cannot be treated so gross shortcoming to make non-payable claim to payable under the contract of insurance. Mr. Parikh submitted that recommendations made by surveyor were studied, opportunity was offered to insured, but when insured gave evasive reply, the insurer was left with no option but to treat as violation of warranty and therefore claim was repudiated. He submitted that it is well established that all repudiated insurance claim cannot be a subject matter of "Consumer Dispute" under the provisions of Act. The complainant has not only to allege but also to prove fault, error, shortcoming etc on the part of insurer to claim reimbursement / compensation under provisions of The Act. In the instant case, the complainant has not proved anything on record and therefore not entitle to any relief and complaint should be dismiss with cost to opponent.
[6]. From the rival submissions, admissibility of insurance claim was denied only because there were breaches of warranties, non-compliances of statutory provisions. According to insured there was no breach at all and all necessary documents were submitted as demanded by the surveyor and insurer but even then, insurer took unreasonable period to decide as a result complainant had to suffer lot. It is in this circumstance, it is to be ascertain first whether in fact there were breaches as alleged by the insurer and if the answer is positive, was it so gross to deny entire liability under the contract of insurance?
(6.01). According to Mr. Kothari, the insurer was under obligation to supply full text of insurance policy which includes terms and conditions. But in the Rnm CC682011 Page 9 of 18 instant case, the complainant was given merely schedule of policy and being unaware of other terms, insured cannot be penalised by denying liability under the Contract. There cannot be any dispute that copy produced on record by complainant is merely schedule of policy. It is also not in dispute that the policy under which claim is lodged is a renewed policy. Page 16 is copy of Schedule of Insurance Policy produced by the complainant wherein details regarding name of insured, policy period, sum insured, premium paid, previous policy no., name of vessel, type of vessel and Registered No. of vessel etc have been given. It is also not in dispute that complainant has never asked to insurer prior to loss for supply of full text of insurance policy and therefore it is hard to believe that insured was not aware of the terms and conditions of policy. Over and above this indemnification clause of the policy reads as under:
"The company hereby promises and agrees with the assured, their Executors, administrators and assigns that the Company will insure against loss, damage, liability or expense subject to the clause, endorsements, conditions and warranties contained in the Schedule and/or attached hereto."
This makes it clear that warranties are mentioned in the Schedule itself. The policy document shows interest indemnified is "Hull and Machinery,"
Condition of Insurance is shown as ITC HULL- 1.10.83. Trading warranty reads as under:
"For Tugs employed in Inland water of India (excluding Bihar, West Bengal and Assam), warranted vessel employed for customary operations including towage operation in ___ inland waters with leave to proceed up to a radius of 12 NM in to the sea from prominent point of ____ Inland waters as designated by Port Authorities /Custom Authorities / Local Authorities during the fair-weather season as may be declared by Port authorities. Warranted vessel certified and licensed for trading by Competent Authority"
Thus, to employ the registered Tug in Inland waters, permission from Competent Authority is a must and it is permitted only during fair weather season declared by said authority. To ply Tug in Inland water registration is necessary. Incidence took place on 28/4/2009 and copy of registration placed on record shows that it was having registration validity till 21/8/2009 and therefore eligible to ply in inland waters. Page 33 to 36 shows that Gujarat Maritime Board has issued registration of Mr. Anilkumar as Master/Tindel for MT Rishi-1 for towing purpose and validity is up to 21/8/2009. However, during July 2008, change of Master was registered with GMB and it has registered name of Mr. Nurislam S K who was 2 nd class Engine driver and his validity renewed periodically and lastly valid up to Rnm CC682011 Page 10 of 18 15/5/2009. In the said document name of Mr. Rajeshkumar (2nd Class Master) was inserted on 21/8/2008.
(6.02). The case of complainant is that GMB had issued permission and document is produced as page 45-46 but copy was illegible and therefore readable copy, produced by opponent insurer is at page 225-226 is considered. It is addressed to complainant and dated April 29,2009 which reads as under:
"This has reference to M/s. J M Baxi & Co., Jamnagar's email dt. 27/4/2009 at 7.10 am receiving on email [email protected] requesting single voyage permission for M T Rishi-1 from Munjpur Jetty to Bedi port, Jamnagar.
Single Voyage permission was granted by email; accounts Rozi (J M Baxi) <acts_rozi @jmbaxi.com> to vessel M T Rishi-1 official No. BP-1042, from Munjpur Port to Bedi Port after completion of IOC project operation subject to conditions laid down in earlier similar cases as below vide email dt 27/4/2009:
(i). The vessel should follow the route as suggested: - Munjpur Port to Gopnath Point, Muidwarka, Veraval, Mangrol, Porbandar, Dwarka Point, Kachhalghar light house, Okha Light House, Nora Tapu, Chand Tapu, Kalubar Tapu, Piroton island, Bedi Port.
(ii). The vessel should have all life saving appliances and fire fighting appliances as per the survey certificate,
(iii). The vessel should report control room GMB ports enroute and keep a record of same by giving an ETA for the next halting point,
(iv). The vessel should maintain VRF contact with approaching point.
(v). the vessel should have sufficient drinking water and ration at least for 15 days contingency.
(vi). The vessel should cover hatches and secure them well to prevent any water intake.
(vii). The vessel should keep emergency pump for de-ballasting in case of any flooding of hatch
(viii). The vessel M T Rishi-1, official no. BP 1042 will be under the command of Mr. Satishkumar Singh-1st class Master, certificate no. 023, and Mr. Nurislam S K, 2 nd class Engine Driver Certificate no. 403/2007 dt.31/8/2007.
(ix). The vessel should follow R O R (Lights & Ships Rules)
(x). The master of vessel should carry Mobile Phone and should be in touch with M/s. Navaw shipping, Jamnagar's office every one hour
(xi). Voyage duration from 27/4/2009 to 4/5/2009
(xii). Emergency light should be available
(xiii). Medical kits should be available.
(xiv). In case of weather deteriorating, the vessel should take sheltered in the nearest port.
(xv). The vessel should have inflatable life raft of capacity of 10 personal and pyrotechnics, 4 hand flairs, 2 smoke floats (xvi). In case nominated Master and Engineer as mentioned above are unable to make Voyage, the concerned port officer is authorised to make suitable changes in the names provided, Certificate of Competency in original is sighted for the above ranks by the Port Officer and after giving permission he should intimate to this office for our record purpose. (xvii) Original documents should be submitted within one week without fail.
Report should be submitted to the undersigned on completion of Voyage.
Rnm CC682011 Page 11 of 18With warm regards, Sd/-
Chief Nautical Officer.
It seems from this letter that although official written permission was issued on 29/4/2009, but in principle it was sanctioned on 27/4/2009 through email. It has come on record from the statement given by one Mr. Mouddin K Maulla, sukhani that Mr. Rajeshprasad had signed off at Munjpur jetty and thereafter he was operating Tug as there was no other competent Master available. He has in term accepted that when Tug started return journey from Munjpur Jetty to Jamanagr, there was no certified Master on Tug and he was operating the same. This statement is notarised statement and complainant has not produced on record any material evidence to disprove this statement. This is also most surprising because, when insured vessel started voyage from Kandla to assist IOC operation, the permission was granted for Master Satiskumar and Mr. Nurislam S K and there was no name of Mr. Rajeshprasad in earlier permission also! Mr. Rajeshprasad was working as sukani and he was having temporary certificate of service for three months as special case. This makes it clear that Master Satiskumar was not there may be a first journey or return journey. Thus, journey was not operated in compliance of permissions granted. The surveyor of insurer has rightly described it in his report and valid objections have been raised. I have no hesitation in endorsing submission canvassed by the advocate for insurer that compliance of these conditions was mandatory since permission granted was subject to those conditions. Needless to mention that when competent Master was not available, the insured ought not to have started voyage. Secondly, when named person was not available, insured could have managed through another competent man to replace him and could have intimated to Port Authorities as mentioned in the condition. This was not done, on the contrary, operation was handed over to unqualified person. Obviously, this would have increased the risk which is contrary to warranty given by the insured. I could have understand if some problem like health of Master or Engineered compelled them to continue with journey, but in this case, Certified Master has not undertaken its duty from the beginning for the reasons best known to insured, and in such circumstances, returned journey could have been delayed till arrangements are being made.
Rnm CC682011 Page 12 of 18(6.03). Mr. Kothari submitted that mere non-compliance of conditions as to manning the vessel, ipso facto, does not permit the insurer to disown the entire liability. He submits that there is document on record at page 43 which shows that GMB has issued Certificate of Service to Mr. Rajeshprasad and it was renewed time to time. This certificate shows that he had worked for about eight years as sukhani of the inland vessel and therefore it cannot be believed that he had no competency. Mr. Parikh has rightly submitted that submission cannot be accepted because question is not of his working as sukhani, but it is fact that he cannot be termed as Master of the Vessel. To be a Master, a person must undergo an examination and Competent Authority should permit him to act as Master. Mr. Parikh referred Page 47 to submit that M T Rishi-1 had 470 BHP capacity and Sec.25 of Inland Vessel Act which reads as under:
"An inland mechanically propelled vessel having engines of one hundred or more nominal horsepower shall not proceed on any voyage unless she has-
(a). as her master a person possessing a first-class master's certificate granted under this Act, or a master's certificate granted or deemed to be granted under the Merchant Shipping Act, 1958 or a master's license granted under Sec.22A and applicable to such vessel and voyage, and
(b). as her engineer a person possessing an engineer's certificate granted under this Act, or granted or deemed to be granted under the Merchant Shipping Act, 1958 or an engine-driver's license granted under Sec.22A and applicable to such vessel and voyage"
This provision clearly states that voyage cannot be started if there is no body on board having first class Master's certificate. In this case, though Mr. Rajeshprasad was given certificate of service but it was not for First class Master as it appears at page 48 where his name is added as 2nd Class Master. Thus, in absence of availability of First Class Master on board, the vessel was not expected to start even voyage. The complainant has not adduced any evidence to show that any first-class Master was available on board when journey started. Violation of statutory requirement amounts to gross violation of warranty clause.
(6.04). It is submitted by Mr. Parikh that even GMB is not authorised to issue permission for voyage. In support of his submission, he referred page no. 173 which is M S Notice no.3 of 2008 dated 6/5/2008. It is submitted that this notice speaks about procedure for inspection and certification of vessel, seeking single/round/seasonal and sea voyages permission during fair weather season only without cargo and passengers. These guidelines came into force with effect from 15th May 2008 superseding D G S guidelines Rnm CC682011 Page 13 of 18 on voyage permission for inland vessel issued vide letter dt.13-NT (1)/2004 dated 6th Sep. 2005. According to these guidelines fair weather season for Arabian sea means 1st September to 31st May and foul season means 1st June to 31st August. It also suggests that Indian Register of Shipping has been delegated the authorisation to issue NOC for such voyages. It is also provided therein that if coastal state desires to do this inspection and certification directly, they may approach Director General of Shipping with proper justification displaying their capacity in respect of technical expertise and adequacy in the require strength of qualified persons to conduct this task effectively and efficiently. Meanwhile, IRS is authorised to conduct survey and issue NOC on behalf of D.G shipping in all such cases.
Mr. Parikh has submitted that there is nothing on record to prove that GMB was authorised to issue any such permission. He refers page no. 289 which is an application under The Right to Information Act, filed by one Mr. V N Jhaveri to Public Information officer of Director General of Shipping's office. In this application information sought was regarding Circular No./Gazette No. Date ,etc declaring /empowering the GMB, Govt. Of Gujarat to issue the inland voyage permissions. The answer given by the authority is at page 273 which reads as "No such document copy is available in this office". It is therefore submitted that GMB is not authority to issue permission. I am of the opinion that when the permission is granted by GMB, presumption can be made that it must have authority to do so and complainant insured cannot be penalise for the same even if GMB has exceeded its jurisdiction and issued permission. It is reasonably presumed that GMB, being "State" within the meaning and scope of Article 12 of Constitution of India that it must have acted fairly and in accordance with law. Even if the permission has been granted, the insured cannot violate the conditions imposed by the said authority and the moment it is proved that insured has violated condition for permission, the insurer can avoid its liability under the contract of Insurance.
(6.05). Mr. Parikh has submitted that in the instant case, two persons have lost their lives is admitted position. He submitted that Sec. 334 of Merchant Shipping Act, 1958 imposes obligation on the owner not to send "unseaworthy ship" for voyage and whomsoever violates it will be treated as Rnm CC682011 Page 14 of 18 guilty of offence. Now this "Unseaworthy" is defined in sub-Section (5) of aforesaid Section which reads as under:
"A ship is "unseaworthy" within the meaning of this Act when the materials of which she is made, her construction, qualifications of the Master, the number, description, and qualification of the crew including officers, the weight, description and stowage of the Cargo and ballast, the condition of her hull and equipment, boilers and machinery are not such as to render her in every respect fit for the proposed voyage or service"
As it is established hereinabove that the person who was in charge of Vessel was not qualified as per law and not competent also to undertake voyage and therefore it squarely falls within the scope of "unseaworthiness" of the ship and in such case, insured ought not to have send it for voyage. It is submitted that sending "unseaworthy" ship for voyage is clear violation of warranty that was given to insurer by the insured. The contract of Insurance is based on the warranty by which the assured undertakes that some particular thing shall or shall not be done, or that some condition shall be fulfilled, or whereby he affirms or negatives the existence of a particular state of facts. It is not necessary that warranty must be expressed, it may be implied also. A warranty, as above described, is a condition which must be exactly complied with, whether it be material to the risk or not. If it be not so complied with, then, subject to any express provisions in the policy, the insurer is discharged from liability as from the date of the breach of warranty. It is general presumption that everybody will abide by the provisions of law and will carry its business/ activity in accordance with law. The insured, by not complying with condition of permission, breached the warranty that is impliedly given to insurer and it has increased risk of insurer without any valid reasons. Therefore, insurer cannot be made liable to indemnify the loss.
(6.06). According to Mr. Kothari, the loss has occurred during ongoing voyage and therefore it is squarely covered within the scope of policy. Whereas, Mr. Parikh submits that loss was not on account of sea perils and therefore it is not covered. It is case of the complainant that while returning from IOC operation and on 28/4/2009, because of strong tidal currents and dragging of Barge "Sagar Darshan" insured vessel MT Rishi-1 was capsized at Mahisagar river near Sultanpur village. However, Mr. Parikh submits that in fact, the insured vessel was stranded on riverbed due to low water and when large tidal water came into Mahisagar, insured vessel started listing to its starboard side. Thus, loss has occurred due to tidal waves which is Rnm CC682011 Page 15 of 18 common and not sea perils. It is specifically mentioned in Schedule of Policy that ITC Hull (1.10.1983) will be coverage of scope of policy. The copy of ITC Hull (1.10.83) is produced on record by insurer wherein clause 6 Perils reads as under:
"6.1 This insurance covers loss of or damage to the subject matter insured caused by 6.1.1 perils of seas, rivers, lakes, or other navigable waters 6.1.2 fire, explosion 6.1.3 violent theft by persons from outside the vessel 6.1.4 jettison 6.1.5 piracy 6.1.6 breakdown of or accident to nuclear installations or reactors 6.1.7 contact with aircraft or similar objects, or objects falling therefrom, land conveyance, dock or harbour equipment or installation 6.1.8 earthquake, volcanic eruption, or lightening 6.2. This insurance covers loss of or damage to the subject matter insured causes by 6.2.1. accidents in loading, discharging, or shifting Cargo or fuel 6.2.2 bursting of boilers, breakage of shafts or any latent defect in the machinery or hull, 6.2.3 negligence of Master officers, Crews, or pilots 6.2.4 negligence of repairers or charter provided such repairer or charter are not assured hereunder 6.2.5 barratry of Master officers or crew Provided such loss or damage has not resulted from want of due diligence by the assured, owner or Managers 6.3 Master Officers, Crews or Pilots not to be considered owners within the meaning of this clause 6 should they hold shares in the vessel."
The above description of risk coverage makes it further clear that loss is not falling within the scope of any of above clause except 6.1.1 i.e., perils of sea or river or lakes. The term "perils of seas" refers only to fortuitous accidents and casualties of the seas. A peril of the sea is a danger arising from the action of the sea which cannot be expressly guarded against, such as storm, or leakage of the ship etc. Insurer is answerable for loss arising from the violent action of the elements, as distinguished from the silent, natural and the gradual action of the elements upon the vessel itself, which properly relates to ordinary action of nature. Tidal wave is most common so far sea is concerned. Therefore policy does not include the ordinary action of the winds and waves. It is also submitted further that where in the ordinary course of navigation, if the ship takes the ground at low water, a straining of the ship Rnm CC682011 Page 16 of 18 is also not loss by sea perils in the absence of any unusual circumstances. It is also submission from the insurer that river Mahisagar is never considered for navigable waters and therefore insured ought not to have entered through Mahisagar. Since it is not covered within the scope of perils of seas or rivers, I do not think it fit to discuss in detail about the same. From all angles, the claim is not maintainable and therefore insurer cannot be directed to indemnify the loss.
[7]. Mr. Kothari had submitted that surveyor had visited site only on 2/6/2009 and therefore what has happened between 28/4/2009 to 2/6/2009 is not within his knowledge. Whatever he has stated is not gospel truth and therefore his recommendations or observations cannot be accepted as if it is true facts. Mr. Parikh submits that surveyor has submitted his affidavit on record in support of his report. Mr. Kothari has strongly objected to it and submitted that incidence of 2009 and affidavit is filed in the year 2022 and that too by a person who had never participated in preparation of report. According to him, Mr. J Basheer, who had visited site and surveyed the loss whereas affidavit is filed by his son Mr. Shahid Basheer. Secondly, he submits that the affidavit was sworn at Mumbai on 28/10/2022 whereas signature of advocate who had identified Mr. S Basheer was in Ahmedabad and therefore it is not possible to identify him at Mumbai. He doubts that someone else might have signed for advocate. I am failed to understand, how this will help him to establish that loss was covered within the scope of policy or loss to vessel was payable. Even if affidavit of surveyor is discarded than also, it is rather admission on the part of the representative of insured that there was no qualified Master on board. Page 120, produced on record by complainant is crew list of Tug Rishi-1, wherein name of Mr. Rajeshprasad was shown as Master and Mr. Mouddin Maulla was sukhani. Mr. Maulla has given his statement to surveyor in the form of an affidavit wherein he has categorically said that Mr. Rajeshkumar had signed off and was not on board. Mr. Maulla has not been examined as witness before this Commission to even to state that what he has stated in affidavit is not true or no such affidavit has been signed by him. It is also immaterial because when GMB issued conditional permission, it refers names of Mr. Satishkumar Singh as 1st class Master and Mr. Nurislam S K as 2nd class engine driver. It is not even case of complainant that Mr. Satishkumar was Rnm CC682011 Page 17 of 18 present on Board. On the contrary, the complainant had given in writing that Mr. Rajeshkumar was Master on Board, but, even this fact was not correct. There is nothing on record that complainant insured has intimated this change to Port authority at any point of time and obtained necessary permission for change in names. It is established law that when a person having personal knowledge of fact assumes more credibility compare to a statement made by a person having no personal knowledge. Therefore, statement of Mr. Maulla cannot be ignored lightly. In these special set of circumstances, even if there may be some irregularities, it will not turn denial of claim into admissible one and therefore I will discard this objection/submission.
[8]. In Balaji Petrochemicals vs. National Insurance Company (Complaint no. 68 of 2010 order dt.12/10/2022) this Commission had an occasion to decide whether non-compliance of statutory provisions would have any effect as breach of terms of policy or not. Ratios of various judgments of Supreme Court and NCDRC were to the effect that statutory non-compliance itself is fundamental breach of the terms of policy because statutory provisions are made always for public good. In one such case, Hon'ble Justice V K Jain observed as under:
"...It would also be pertinent to state here that requirement of obtaining a license for storing hazardous goods in a warehouse cannot be said to be only a technical requirement since such a license can be issued only after ensuring that all the necessary firefighting measures have been provided in the warehouse." (CC 98/2009 NCDRC Bahubali Traders vs. Cholamandalam MS General Insurance) Thus, I do not have any hesitation to hold that violation of conditions of license also amounts to fundamental breach of policy conditions and therefore repudiation made by Insurer Company is quite justified. Merely because some more periods have been taken to settle the insurance claim will not alter the position as observed earlier. Thus, complainant is not entitled to any relief. Hence, I pass following order:
ORDER The complaint no. 68 of 2011 is hereby dismissed.
There shall be no order as to cost.
Pronounced by circulation on this 8th day of June, 2023 Mr. R N Mehta Member Rnm CC682011 Page 18 of 18