State Consumer Disputes Redressal Commission
Natvar Parikh Industries Ltd vs National Insutrance Co. Ltd on 23 April, 2014
C-128-2008
BEFORE
THE HON'BLE STATE CONSUMER DISPUTES REDRESSAL
COMMISSION,
MAHARASHTRA, MUMBAI
Complaint
Case No. CC/08/128
NATVAR PARIKH INDUSTRIES LTD.,
Asian Building, 2nd Floor,
R. Kamani Marg, Ballard Estate,
Mumbai 400 001.
...........Complainant(s)
Versus
NATIONAL INSUTRANCE CO. LTD.,
D.O. NO.VI 250600,
Maker Bhavan No.1,
Sir Vithaldas Thakersey Marg,
Mumbai 400 020.
............Opp.Party(s)
BEFORE:
HON'BLE MR. P.B. Joshi, PRESIDING
MEMBER
HON'ABLE MR. Narendra Kawde MEMBER
PRESENT:
Mr.Shirish Deshpande, Advocate
for the Complainant.
None for the Opponent.
ORDER
Per Honble Mr.Narendra Kawde Member:
1. Complainant is a Company engaged in business of handling, transporting, contracting, hiring, leasing, warehousing of containers and also operators, hirers, manufacturers, dealers and assemblers etc. The Company had given on Charter the dumb barge N.P. Sushila and the motor tug N.K. Enakshi to M/s. Dolphin Offshore Enterprises ( India) Ltd., for a period 19th July, 2005 to 23rd August, 2005. Both vessels had made several voyages till April, 1st 2006 when given on charter. Said dumb barge on its voyage from Bhavnagar Port to ONGC Platform at Mumbai High on 1st April, 2006 with bulk cement of cargo capsized at about 06.00 a.m. on 2nd April, 2006 in the mid-sea. The Complainant Company availed Marine Hull Policy No.250600/22/05/41000040 for a period 06.08.2005 to 05.08.2006 to provide insurance cover for hull and machinery for `49,50,000/- with additional coverage for P & I cover for `50,50,000/-. The incident of capsizing the barge was duly intimated to the Opponent National Insurance Co. Ltd. (hereinafter referred to as the Insurance Company in short).
The Insurer thereupon appointed M/s.Marine & General Survey Agencies, to carry out the survey of the incident.
2. This matter was scheduled for pronouncement of judgement on 27/03/2014.
However, on the said date same bench was not available and certain queries were required to be clarified by the Complainant and therefore, it was adjourned to 11.04.2014 and finally it was reserved for pronouncement of order on 29/04/2014 after hearing Ld.Counsel of the Complainant along with the Complainant. Opponent preferred to remain absent.
3. The official surveyor carried out the survey and submitted their report on 04.08.2006 to the Insurance Company admitting the incident of capsizing the barge observing total constructive loss of the barge for `49,50,000/-. Surveyor also estimated scrap value of `26,50,000/- of the barge. However, based on certain observations in the survey report the insurance Company finally repudiated the insurance claim allegedly payable under the Insurance Policy by letter dated 30th November, 2007. The following are the main grounds invoked for repudiation of the claim:
The Complainant Company carried modifications on the said barge by installing 6 silos which were not informed to the Opposite Party.
The barge was being towed from Aft instead of from Forward.
The probable cause of capsizing of the barge could be preexistence of cracks or developing cracks during service which allowed slow ingress of water.
Loss not payable since the loss is not attributable to the perils of the Sea.
4. Aggrieved with the repudiation the Complainant preferred to file this consumer complaint, alleging deficiency in service for repudiating the claim and claim amount of `51,75,000/- towards loss along with interest @12% per annum w.e.f. 1st October, 2006 till date of the actual payment and requesting for adequate costs to pursue this litigation along with penal interest @3% p.a.
5. The Opponent Insurance Company appeared by filing written version denying the claim of the Complainant on the ground that the complaint involves complex issues of both law and facts and production of both oral and documentary evidence by both the parties to establish various facts involved in the incident. More particularly the Opponents contested about sea-worthiness of the insured barge to undertake the voyage from Bhavnagar to Bombay High, fitness certificate to carry the bulk cement, and lack of the precautionary measures required to be taken to prevent capsizing, measures taken about stability of the barge in the voyage, compliance of Merchant Shipping (Loadline) Rules, 1979 for stability criteria, evidence to establish that the incident of capsizing was due to perils of the sea. Further, it is contended in the written version that structural modifications by installing 6 silos without intimation to the Insurance Company, ingression of sea water due to existing cracks, facilities for turning of the barge at Bhavnagar Port, competency of the Master/Crew of the barge to handle/navigate of the barge on the date of capsizing. There is general denial of the claims of the Complainant about losses suffered as averred in the written version.
6. The consumer complaint pertains to the year 2008 which is taken on board for hearing and disposal. At the time of final hearing of the complaint, the Ld.Counsel for the Opponent preferred to remain absent, therefore, we heard Ld.Counsel for the Complainant Mr.Shirish Deshpande at length and the matter was reserved for orders.
7. On going through the record placed before us, we find that the incident of capsizing of the barge is not in dispute and on going through the report of official surveyor followed up the matter with several communications through their expert (Magnus) by sending communications dated 2nd January, 2007, 1st March, 2007, 1st June, 2007, 5th July, 2007, 25th July, 2007. To the dismay of the Complainant the Opponent Insurance Company repudiated the claim vide their letter dated 30th November, 2007. Now, the issue before us is, whether the grounds invoked for repudiation of the Insurance claim are sustainable or otherwise. The fist ground for repudiation is that the Insurance Policy did not cover all risks and the Insurance was operative for specified perils only. The Insurance Cover was granted for the loss or damage due to perils of the sea and several listed perils under Clause 6.1 and 6.2 of the Insurance Policy. Another ground taken out by the Insurance Company is, Policy Clause 4.1 which stipulates that the policy gets automatically terminated when the vessel is given on a bareboat charter unless the Insurers consent is obtained. There was no consent whatsoever for chartering bareboat. The last ground invoked is about the increase in weight due to adding of the Silos on the vessel and also the ground of towage from Aft is required to be done in extra ordinary circumstances.
8. The Ld.Counsel of the Complainant drawn our attention to the terms and conditions of the Insurance Policy condition 4.2 and pleaded that invoking the policy and Clause 4.2 for repudiation of the claim amongst other grounds is totally not sustainable as the purpose of availing the marine insurance policy was to provide insurance cover to the dumb barge which was given on hire as an occupation of the Complainant and it was well within the knowledge of the Complainant.
9. It is necessary to analyze the survey report and on careful scrutiny thereof, we find that the Surveyor assessed the loss and recorded his finding as case of total loss. All the requisite licenses, permission were valid at the time of occurrence of the incident and mainly attributed the incident as not covered as perils of the sea which are listed in the policy (though not defined). Furthermore, the surveyor held unconceivable reason for the loss as presence of the water under dock compartment due to preexisting cracks or the cracks developed during the survey which allowed slow ingress of water in the standboard sink tanks which finally resulted into capsize of the vessel. Surveyor further observed capsizing of the barge as the probability of slow ingress of water during the cracks.
10. The Ld.Counsel for the Complainant argued that certain facts have been duly recorded in the survey report such as installation of 6 silos of bulk cement on the deck which was meant for strengthening was duly verified by the competent authorities and were approved as they were fit in the permissible norms. This is one of the grounds which was taken up for repudiation is nullified in the eyes of the law need not be taken into consideration. The submissions of the Ld.Counsel in this behalf are sustainable as the argument is supported by the observations made by the official surveyor himself in the survey report. The Insurance policy was issued covering loss due to perils of the sea as covered under policy clause 6.1. The Ld.Counsel for the Complainant drawn our attention to the policy condition no.6.1 describing perils of the sea. As rightly pleaded, perils of the sea is not defined but certain facts have been covered as the perils of the sea like fire, explosion, violent theft by persons from outside the vessel, jettison piracy, breakdown of or accident to nuclear installations or reactors, contact with aircraft or and finally earthquake volcanic eruption or lightning. The case pleaded in the complaint and the claim filed by the Complainant states that none of the perils enumerated in policy condition no.6.1 is attributed for capsizing of the barge. The Complainant has put up the case since beginning that capsizing of the barge is an accident. Therefore, one of the grounds for invoking claim not attributing to the perils of the sea is not tenable as there is no tangible evidence led by the Opponents to disprove the incident otherwise. As regards towage of Barge, from Affidavit, objection raised by Opponent is not supported by port authority, therefore, not tenable.
11. Now, the final and foremost ground invoking clause 4.2 of the policy for repudiation of the claim needs to be dealt with, which speaks that policy terminates automatically unless underwriters agree to counter it in writing. It is the case of the Complainant that the Complainant has been engaged in the business of handling, transporting, contracting, hiring, leasing, warehousing of containers. Marine policy availed to provide the insurance cover was well within the knowledge of the Opponent Insurance Company. Intimation/permission for leasing the barge is untenable ground which is not even observed by the Official surveyor in his report. Therefore, this ground of repudiation also goes away as there is nothing on record to show anything contrary which underwriters had agreed.
12. Coming to the loss assessed by the Surveyor. Surveyor reported a case of total loss. Scrap value was assessed to `26,50,000/- and the net estimated loss at `23,00,000/-. However, the Complainant received a sum of `8,00,000/- as value of salvage which was sold to M/s. Raj Sales Corporation, Jamnagar, as per the agreement dated 18th August, 2007 and incurred expenditure of `10,25,000/- for salvaging the barge, as stated in the affidavit of evidence filed by the Complainant.
The Complainant is silent on the point whether the procedure of inviting bid to ascertain salvage and for incurring expenditure was invited and highest bid for the salvage and lowest for the incurring expenditure was accepted or not. Complainant ought to have followed the due procedure on both the occasions.
Complainant is relying on survey report for total loss, approval of IRS for stability of the vessel, sea worthiness surveyed by IRS. However, loss claimed under the policy is total loss minus the salvage value received by the Complainant. Survey report in this behalf therefore cannot be altogether ignored.
13. The Opponent Insurance Company relied on the orders in M/s. Vani Marine Private Limited V/s. New India Assurance Company Limited, decided on 25.01.2001 reported in I(2001) CPJ 26 (NC), wherein the Honble National Commission has observed that the loss due to sinking of trawler was not due to perils of the sea. The case can be distinguished as the Complainant therein could not lead any evidence to show that the trawler had sunk. In the case on hand it is admitted position of capsizing barge. Therefore, ratio of this case is not applicable.
14. The Opponent further relied on the Honble Supreme Court judgement in the case of United Salt Works and Industries Ltd., decided on 17th March, 1993, reported in Vol.79(1994) Company Cases 108. It was gain failure of the Complainant to lead any evidence to prove that the loss to the cargo was due to perils of the sea. The ratio of this judgement also will not be applicable as case of the Complainant is not that the loss was due to perils of the sea but it is the accident of the barge while in the process of navigation. Besides this, the Opponents have not led any evidence to support the grounds invoked for repudiation of the claim.
15. We have considered this case in its entirety and come to the conclusion that repudiation of the claim on unsustainable grounds by the Opponent is not justified. At the same time claim of the Complainant for total loss with addition of expenditure incurred on salvaging is not entirely tenable. Therefore, as observed by the Surveyor, the estimated total loss admissible under the policy as a claim would be `23,00,000/-. Since the repudiation of the claim is on unsustainable ground, the Complainant needs to be suitably compensated by awarding reasonable rate of interest to meet the ends of justice. We hold accordingly and pass the following order:
ORDER
(i) Complaint is partly allowed.
(ii) Opponent National Insurance Co. Ltd., is directed to pay an amount of `23,00,000/- to the Complainant with interest @6% per annum from 25.08.2008 i.e. from the date of filing of this complaint till realization of the entire amount, within a period of 60 days from the date of this order.
(iii) In the circumstances, parties to bear their own costs.
Pronounced on 23rd April, 2014.
[HON'ABLE MR. P.B. Joshi] Presiding Judicial Member [HON'ABLE MR. Narendra Kawde] Member ep