State Consumer Disputes Redressal Commission
M/S. Valient Shipping Co.Pvt. Ltd., vs The New India Assurance Company ... on 12 April, 2012
BEFORE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PANAJI GOA Compl. 10/07 M/s. Valient Shipping Co.Pvt. Ltd., A Company incorporated under the Provisions of Companies Act, 1956, Regd.Office: FO-14, Sapana Terraces, Swatantruya Path, Vasco da Gama, Goa 403 802. .. Complainant V/s 1. The New India Assurance Company Limited, Body Corporate having its registered office At New India Assurance Building, 87, M. G. Road, Fort Mumbai 400 001. Represented by its Managing Director 2. The New India Assurance Company Limited, Divisional Office: First Floor, Santa Palegia Building, Dattatreya Deshpande Road, Vasco da Gama, Goa Opposite Parties Adv. Shri Khandeparkar present for the Complainant. Adv. Shri E. Afonso present for the Opposite Parties Coram: Shri Justice N. A. Britto, President Smt. Vidhya R. Gurav, Member Dated: 12/04/2012 ORDER
[Per Justice Shri N. A. Britto, President] The Complainant has been paid Rs.75,19,400/- towards salvage charges on 07/04/05 and Rs.69,18,497/- towards repair charges on 26/06/06. The Complainant claims the balance due by way of the present complaint filed on 16/10/07.
2. Some facts may be stated, which are undisputed, to dispose off this complaint.
The Complainant is a Company incorporated under the provisions of the Companies Act, 1956.
3. The Complainant owns a barge namely M.V. DivyaI, MRH 657, which was insured with the Opposite Party under Marine Hull Policy dated 23/11/04 for Rs.1.75 crores. The said barge on 01/01/2005 was loaded with iron ore and was mastered by Uday Keluskar when at about 16.40 hours it got grounded off Aguada Sand Bar. It sank except a small portion of aft and sustained damage.
4. The Captain of Ports and the Opposite Party, the insurer, were duly informed. At the instance of the Opposite Party one Mr. K. N. Trivedi conducted a preliminary survey and then Shri A. M. Gawarikar, Proprietor of Trans Ocean Marine and General Survey Agencies, an approved Surveyor, was appointed to conduct a final survey for taking decision on salvage operations and subsequent course of action. Quotations for Salvage were called for by the Complainant. Two quotations were received and at the recommendation of Mr. A. N. Gawarikar, Madgaonkar Salvage were entrusted with the work of salvaging the barge, though their quotation was higher. The reasons for choosing Madgaokar Salvage are mentioned in the report. Madgaonkar Salvage salvaged the barge on 03/02/2005 and the Complainant took the said barge to Nigel Shipyard Pvt. Ltd. for repairs considering the size of the barge and as the said shipyard was the only dry dock then available.
5. According to the Complainant, the barge was repaired by Nigel Shipyard under the supervision of Surveyor Shri S. G. Kare of ABS Pacific a Classification Society and appointed by the Captain of Ports and the said Mr. A. N. Gawarikar appointed by the Opposite Party. Apparently Shri S. G. Kare, though from American Bureau of Shipping Pacific was appointed for the purpose of section 7 of the Inland Vessels Act, 1917 while Shri A. M. Gawarikar was appointed for the purpose of section 64 UM (2) of the Insurance Act, 1938. Classification Society Organizations main function is to carry out surveys of ships while being built and at regular intervals of construction, as can be seen from the observations of Calcutta High Court in Judgment dated 07/05/2010 in GA No.3121 of 2009 in GMS Marine Co. Ltd. V/s. Owners and Parties interested. Its purpose is to set and maintain standards of construction and upkeep of ships and their equipments. Each classification Society has a set of rules governing the requirements for Surveys and, for a ship to maintain her class she must comply with these rules. In most countries it is not obligatory for the ships owners to have his ship classed but there would be considerable difficulties in trading if the ship were not, since it is often a condition of the ship insurance and a requirement of most charterers and shippers. Classification Societies also inspect and approve the construction of ship containers. These organizations exists in most of the principal maritime countries.
6. Nigel Shipyard carried out the repairs as per the recommendations of the said Shri S. G. Khare, appointed by the Captain of Ports.
The barge was undocked on 19/04/2005, kept at Jetty for 20 days and finally taken from the Jetty on 9/05/05.
7. According to the Complainant, the Opposite Party deducted Rs.4,15,000/- from the first bill when what was deductible was only Rs.3.15 lacs. According to the Complainant the Opposite Party is liable to pay balance amount of Rs.48,73,747.27 towards the repair bill .
The Complainant sent a notice dated 02/12/06 which was received by the Opposite Party on 05/12/06 but was not replied to nor complied with.
8. As regards the salvage bill although the case of the Opposite Party was that Rs.75,19,400/- were paid on 07/04/05 towards full and final settlement, it is now conceded by both the parties that what was deductible under the policy was Rs.3.15 lacs and according to the Opposite Party a sum of Rs.1,00,000/- was retained by them towards TDS liability and it is now submitted on behalf of the Opposite Party that Rs. 1 lakh would be refunded to the Complainant upon proof of payment of Income Tax.
9. Admittedly , the Complainant had paid to Madgaonkar Salvage a sum of Rs.79,34,400/- after deducting a sum of Rs.1,74,557/- as TDS and Rs.3,491/- as Education Cess as can be seen from the receipt issued by Madgaonkar Salvage on 7/04/2005. Cheque for the said amount was sent by the Complainant by letter of the same date. Then the Complainant had claimed the amount from Opposite Party. As submitted on behalf of the Complainant the explanation given by the Opposite Party is illogical. The Opposite Party had no right to retain Rs.1,00,000/- and pay the balance due after deducting the deductible amount. It was not the case of the Opposite Party that Rs.1,00,000/- would be the amount payable as Income Tax. How could the Opposite Party without calculating the Income Tax just retain Rs.1 lakh? The only option for the Opposite Party was to pay the Complainant the entire amount of the bill, deducting the deductible, or pay the sum of Rs.79,34,400/- after deducting the deductible including TDS and Educational Cess as was done by the Complainant whilst making the payment to Madgaonkar Salvage. The Complainant therefore would be entitled for refund of the said amount from the Opposite Party of Rs.1,00,000/- wrongly retained. Incidentally, it may be stated that the salvage bill was approved by Shri A. M. Gawarikar in his survey report dated 08/02/05 (at page 20) and there was no particular reason for the Opposite Party not to have approved the same in its entirety. The Opposite Party has made use of the said sum depriving the Complainant from using the same and therefore it would be just and proper that the Opposite Party pays to the Complainant interest thereon @ 9% from 08/04/2005 until payment.
10. Before going to the repair bill, some more facts are required to be stated.
11. The Complainant has filed the affidavit of one of their directors namely, Shri V. M. Barucha dated 2/6/2008 and an additional affidavit dated 15/03/2010. The Opposite Party filed the affidavits of Shri U. S. Kakodkar, Asst. Manager of the Opposite Party on 24/10/2008 and that of Shri A. M. Gawarikar on 15/06/2009. They have been cross-examined by questionnaires. The additional affidavit of V. M. Barucha and the affidavit of S. G. Khare filed on 15/03/2010 have been kept out of record by order of Commission dated 9/4/2010.
12. Shri E. Afonso, the Learned advocate of the Opposite Party has faintly submitted that the Complainant may be asked to approach the Insurance Regulatory and Development Authority as was done in the case of Vishnu Tex V/s New India Assurance Co. Ltd., and another (2008 STPL (CL)468NC). On the other hand, it has been submitted by Shri Khandeparkar Learned advocate on behalf of the Complainant that the Complainant is entitled to approach this Forum under the Consumer Protection Act, 1986 even if there is an arbitration clause and in this regard Shri Khandeparkar has placed reliance on Skypack Couriers Ltd. (AIR 2000 SC 2008).
13. We are not inclined to accept the submission of Learned Advocate Shri E. Afonso. There is no doubt that the Insurance Regulatory and Development Authority constituted under the Insurance Regulatory and Development Act, 1999, by virtue of section 14 thereof, administratively is entitled to settle insurance claims and all other terms and conditions of contract of insurance but there is nothing in the said Act, and nothing has been shown to us, which creates a bar for the consumers not to approach a Forum under the Consumer Protection Act, 1986 to settle their insurance claims. In fact, The Apex Court in SkyPak Couriers Ltd. (Supra ) has stated that even if there is an arbitration clause in an Agreement and a Complaint is made by the Consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be barred to the entertainment of the complaint by Redressal agency constituted under the Consumer Protection Act since the remedy provided under the Act is in addition to provisions of any other law for the time being in force. It is not the case of the Opposite Party that there is an arbitration clause in the insurance policy in question. Even if there is one , it is also not the case of the Opposite Party that the Opposite Party has invoked the said arbitration clause, as is required under section 8 of the Arbitration and Conciliation Act, 1996, which requires a party to apply for arbitration not later than when submitting his first statement on the substance of the dispute. This Commission by unreported order dated 13/12/2011 in M/s. Alka S. Naik Vs Shivprasad Kakodkar and 2 others has held as follows:
The Consumer Protection Act does not derogate Section 8 of the 1996 Act. In any event, the 1996 Act being a special law and having been enacted later in point of time ought to prevail over the provisions of the Consumer Protection Act. As stated by the Apex Court in decisions cited hereinabove, Section 8 of the 1996 Act is peremptory and casts an obligation on the judicial authority to refer the parties to arbitration or in other words Section 8 conveys a legislative command to refer the dispute to arbitration, once the prerequisites of Section 8 are satisfied.
14.
The view arrived at by us in our Order dated 13/12/2011 is based on subsequent decisions of the Apex Court.
The remedy provided under the Insurance Regulatory and Development Act, 1999 does not bar a Consumer from approaching the Forum under the Consumer Protection Act, 1986. There is no proposition of law laid down in Vishnu Tex (Supra) and therefore our respectful departure. We are not inclined to follow the course of action followed in the said case which was decided in peculiar facts and circumstances of that case.
15. Shri E. Afonso Learned advocate on behalf of the Opposite Party would then contend that Shri A. M. Gawarikar is approved Surveyor and his report is final. Learned Advocate would submit that the Opposite Party was bound by his report and in case the Complainant was not satisfied, the Complainant had to approach the IRDA. The Learned advocate submits that as things stand there is no contrary report and therefore Shri Gawarikars report needs to be accepted. On the other hand, Shri Khandeparkar, Learned advocate of the Complainant would submit that in case the Opposite Party had given Shri Gawarikars report in time, the Complainant would have approached some other Surveyor or Loss Assessor. Shri Khandeparkar would submit that the report of Shri Gawarikar should not be looked into because the existence of said report was not disclosed to the Complainant till the filing of the affidavit. Learned advocate submits that the Complainant had given a legal notice on 02/12/2006 and that too after writing 4 letters and yet the existence of said report was not disclosed to the Complainant. Learned Advocate submits that the repairs were done under supervision of Shri Gawarikar and if he had any objection Shri Gawarikar ought to have pointed out the same to the Complainant at the time of execution of the work and only then that the Complainant would have had an opportunity to decide whether to execute such items of work or not and having not objected to the works carried out by the Complainant, the Opposite Party is now estopped from taking any objections to the work executed and from denying the payment made on account of the said works. Shir Khandeparkar would submit that Shri Gawarikar deserves no credibility because when he was asked for details of marine surveys conducted by him, he stated that his old records were damaged during floods of July 2005 from his office situated at Panvel.
16. We have already noted that the Complainant did file the affidavit of the said Shri Suresh G. Khare on or about 15/03/2000 which by virtue of the Order of this Commission dated 09/04/2010 is required not to be taken into consideration. Incidentally, we may observe that Shri A. M. Gawarikar slashed down the fees payable to Shri S. G. Khare by 35% from Rs. 1,09,495 to Rs.38,323.25 as reasonable and not only that adversely commented on the certificate given by him observing that it did not give requisite confidence level and therefore it could not be admitted or accepted in totality, as due degree of care in certification was not exercised.
17. Be that as it may the Complainant had issued receipts that the Complainant had accepted the sum of Rs.75,19,400/- (copy at Pg. 43) and Rs.69,18,497/- (copy at Pg. 84) as on account payments but that would not take the Complainant neither here nor there for they are the receipts issued by the Complainant and not by the Opposite Party. If they were issued by the Opposite Party, they could have been looked at differently. One does not know as to what happened to the report of Shri K. N. Trivedi or whether he had given any report at all. Although Shri Gawarikar was appointed by the Opposite Party to conduct final survey, it appears that at no stage he was asked to assess the loss caused. Much ado has been made by the Complainant about the said report or reports of Shri Gawarikar. We have already noted that Shri Gawarikar did visit the vessel in question after it was salvaged on 03/01/05 and 07/02/05 and then he prepared survey report dated 08/02/05. What we have on record is the said report from pages 1- 20 plus copies of photographs. At that time neither the Hull nor the machinery of the barge in question was repaired. Then comes the report dated 27/02/2006 which is the scrutiny report and has got to be considered as such. It runs in 122 pages. It records the amount claimed by the Complainant as Rs.1,16,92,243.04 and the amount considered as reasonable by him as Rs.69,42,268.55. By letter dated 27/04/2006 addressed to the Opposite Party certain errors have been corrected and the second figure has been corrected from 69,42,268.55 to 69,18,497. By letter dated 03/04/2007 the Opposite Party asked for reasons for items disallowed and Shri Gawarikar by letter dated 04/04/07 stated that by his report dated 27/02/2006 he had discussed each and every item and various reasons given by him could be summarized as follows:
1.
Higher Sections used.
2. Thinned down plates renewed on insurance account.
3. The tyres were on board (fenders) when salvaged the claim is also lodged for replacement of tyres.
4. The Mandatory requirement of survey by Captain of ports claimed from Insured Company.
5. Insurance contract do not allow bottom painting (entire) and this portion was not allowed.
18. Shri Gawarikar concludes that basically he had discussed each and every item in his scrutiny report dated 27/02/2005. He also referred to the discussion with Owners representatives.
From the above it follows that the scrutiny of the bill claimed is contained in the report of Shri Gawarikar dated 27/02/2006. The submission that Shri Gawarikar could not have given reasons within one day i.e. to say from 3rd to 4th April, 2007 from the receipt of letter of the Opposite Party is erroneous and cannot at all be accepted. The reasons in detail were already available in the report dated 27/10/2006. The contention that he gave 3 reports needs to be reflected. We are also unable to accept that the Complainant was unaware of the scrutiny made by Shri Gawarikar into their claim of the repair bill. The written version was filed on 18/03/2008 clearly indicates that according to the Opposite Party their claim on repair bill on 26/6/2006 for Rs.69,18,497/- was settled on the basis of the assessment of damage made by the Surveyor. Complainant could have always asked for and received the said scrutiny report. That apart Shri Gawarikar was in constant touch with the Complainant while the scrutiny of their repair bill was being made. The Complainant was well aware that even the salvor was appointed at the recommendations of Shri Gawarikar, on behalf of the Opposite Party, and therefore as prudent businessman, the Complainant ought to have known that any repairs or improvements made by them would be subject to Shri Gawarikars assessment and ought to have done the same under consultation. After all the Opposite Party was only required to make good the loss suffered by the Complainant and not to pay for improvements made. Shri Gawarikar by way of answer to the Questionnaire has stated that he has been practicing as the Marine Surveyor from the year 1981 and from 1987 he was empanelled by all public sector insurance companies including the Opposite Party. He has stated that after completion of 10 years bond in the Indian Navy and after 4 years training in practical construction of warships and theoretical naval architecture he joined as Inspection Engineer in the year 1981 of Pressure Vessels at Testils, Ahmedabad. On further questions being asked, he stated that he had requested for all drawings of the vessel indicating scanting but only some, which have been specified by him in answer to question 5 were produced.
According to him, superstructure drawings were not submitted for comparison and the Complainant, the assured, never deducted any amount for usage of higher sized members at the time of repairing and opined that higher size members were fitted during earlier refits but original drawings submitted by the owners were not complete and sizes of plating and rolled sections shown in the drawings prepared by the builder and approved by Classification Society were different (smaller) when compared to plating and rolled sections used and claimed by the owners.
He concluded that drawings submitted to him did not indicate that they were earlier (prior to damage) sizes and therefore could not be admitted or accepted (that is only one aspect of the report given by him).
19. We have perused the said scrutiny report given by said Shri Gawarikar on the basis of which the repair bill of the Complainant has been settled. Subsection 2 of section 64 UM of the Insurance Act, 1938 does not provide that no claim in respect of loss exceeding Rs.20,000/- shall be admitted for payment unless the report is obtained. At the same time the Proviso stipulates that subsection (2) will not abridge the right of the Insurer to pay or settle any claim at any amount different from the amount assessed by the approved Surveyor/ Loss Assessor. No Insurer, unless there are compelling reasons, will settle any claim for more amount then the amount assessed by approved Surveyor. The scrutiny report of Shri Gawarikar appears to be reasonable and the action of the Opposite Party in settling the repair bill of the claimant on the basis of the same in our view calls for no interference. That apart, there is no other expert evidence than that of Shri Gawarikar, surveyor/ loss assessor, not to accept the same.
20. In view of the above, we allow the complaint partly and direct the Opposite Party to pay to the Complainant Rs.1,00,000/- being part of the salvage bill with pending and future interest @ 9% from 8/4/005 until payment. As the repair bill is finally settled on the basis of the scrutiny made by Shri Gawarikar the claim for the balance of Rs.48,73,747.27 does not survive. Complainant is held entitled for costs of this Complaint which are fixed at Rs.10,000/- .
[Smt. Vidhya R. Gurav] [Justice Shri N. A. Britto] Member President