1.      Heard Mr. Abhay Mahajan, Advocate, for the complainant and Mr. Pankaj Seth, Advocate, for the opposite party.

2.      M/s. K.G.N. Ore Carrier (the Insured) has filed above complaint, for directing Oriental Insurance Company Limited (the Insurer) to pay (i) Rs.15000000/- with interest @15% per annum from 02.05.2011 till the date of payment, as insurance claim; (ii) Rs.190403/-, towards sue and labour cost; (iii) Rs.349069/-, towards cost of adjuster’s service; (iv) litigation costs; and (v) Any other relief, which is deemed fit and proper in the facts and circumstances of the case.

3.      The facts as stated in the complaint and emerged from the documents attached with it, are as follows:-

(a)     M/s. K.G.N. Ore Carrier (the Insured) was a partnership firm, registered under Partnership Act, 1932. The Insured was the owner of several barges in the State of Goa and used to let it for carrying Iron Ore lumps or fines, from the various loading points in State of Goa or the Panaji Port, for the purposes of onward loading on various ships, calling at the said ports for export of such lumps or fines. The Insured was owner of one such barge, named as “M.V. Noor IV”, which was built of steel materials in the year 1984, having gross tonnage capacity of 642.50 MT, which was jumboized in the year 1992, increasing its tonnage capacity to 671.34 MT and carrying capacity (dead weight tonnage) of 1100 MT and registered with the Caption of Ports, Government of Goa, Panaji under Registration No.PNJ 137 as an inland vessel. The Insured purchased the said barge, in November, 2007, from its previous owner and got its name changed from “M.V. Jay” to “M.V. Noor IV”. The name of the Insured and changed name of the barge were duly registered in the Registration Certificate. For the purpose of plying the said barge in inland water of Goa, the Insured obtained “Certificate of Survey” from the Caption of Ports, Government of Goa, Panaji, which was renewed time to time and on the date of incident, it was valid. The Oriental Insurance Company Limited (the Insurer) is a public insurance company and used to provide insurance services to the general public. The Insured obtained “Hull & Machinery Insurance Policy No.163100/22/2010/232, for a period of 23.01.2010 to 22.01.2011, for Rs.15000000/-, from the Insurer, which was renewed for a period of 23.01.2011 to 22.01.2012, vide Policy No.131700/22/2011/270, for sum of Rs.15000000/-.

(b)  The barge “M.V. Noor IV” was loaded with 1100 MT of Iron Ore fine at Sinari Jetty on 08.02.2011. The barge proceeded from Sinari Jetty to Panaji Port anchorage on 08.02.2011 at 17:15 hours, where Iron Ore fine had to be unloaded on the ship “M.V. Dariya Vishnu”. The barge reached alongside the said ship “M.V. Dariya Vishnu” at 23:00 hours on 08.02.2011. However by that time the said ship had already completed loading. Therefore, the master of barge was instructed to go to berth No.9 at Mormugao Port, where the barge reached on 09.02.2011 at 12:00 hours. The master of the barge was instructed by the hirer on 20.02.2011 to proceed Panaji anchorage for discharge of Iron Ore fine on another ship “D.D. Vigour”.

(c)     The barge reached alongside the said ship “D.D. Vigour” at 11:00 hours on 20.02.2011. By the time, the barge reached alongside the said ship “D.D. Vigour”, sea condition had become bad due to bad weather. Due to which, the ship started rolling and the hull of the ship and the barge were coming in contact to each other. Because of banging of the barge with the ship, the master moved the barge away from the ship and anchored the barge in the close vicinity of the ship at 23:00 on 20.02.2011, by releasing the ropes. At the same time a loud cracking sound was heard from mid ship area of the barge. The master found that the barge was breaking up from the mid ship area and front part of the barge was sinking. The master immediately instructed the crew members to wear life jacket and save their life. The ship “D.D. Vigour” picked up four crew members and save them. The barge “Mitrayani” picked up the master and the engine driver and save them but Gourang Mondal, one crew fell into sea and could not be saved. Entire barge sank into the sea.   

(d)     The police registered Accident Report No.01/2011 on 21.02.2011. After inquiry, on written complaint of Mahesh Kerkar, Sub-Inspector of Police, FIR No.48/2011 was registered at 20:50 hours on 22.02.2011 at police station Calangute, district North Goa, against the master Abdul Hamid Gazi and the driver Sapan Sardar.

(e)     The Insured informed the Insurer about the incident. The Insurer appointed ‘Scansea Marine, Vasco-da-Gama’ for survey on 21.02.2011, who submitted Preliminary Survey Report dated 23.02.2011 that due to cracking up in the mid hull, the barge sunk on 20.02.2011 at 23:00 hours. The Insured engaged M/s. Aquatic Diving and Marine Services Company, Vasco-da-Gama to carry out under water videography, who conducted videography and submitted its report and videography on 24.02.2011. Scansea Marine after examining all the materials submitted Interim Report dated 12.03.2011, stating that the barge lost its original structure having broken up in two pieces and being a complete wreck, leaving no scope for salvaging. The Insured engaged M/s. Madgavkar Salvage Panaji, Goa on 05.04.2011 for removal of the wreck. The wreck removal was completed and certified by the Captain of the Port on 02.05.2011. The Insured had separate cover for wrack removal from P & I Club, who settled it. The surveyor Scansea Marine submitted Survey Report dated 02.05.2011, stating that there was total loss of the barge but observed that the master had acted negligently and the loss may be attributed to ‘crew negligence’.

(f)        The Insurer appointed a second surveyor namely ‘Mr. Uday Bhogate and Associates, Mumbai, who conducted survey and submitted Survey Report dated 11.11.2011, stating that on balance of probabilities, the accident could have been due to latent defect, developed in hull or due to negligence in repair attending to strength members of the barge. After persistent follow up by the Insured, the Insurer wrote a letter dated 26.07.2012, approving the claim for Rs.9000000/- and sought for execution of discharge voucher as full and final settlement. The Insured, vide letter dated 30.07.2012, raised a protest that in view of total loss, the Insured was entitled for Rs.150/- lacs. Deduction of Rs.60 lacs was not acceptable and demanded for payment of Rs.90/- lacs without execution of discharge voucher. However, the Insurer did not respond.

(g)     The Insured approached Leena Modi and Associates, Mumbai, a qualified loss adjuster and sought for their opinion, forwarding entire papers and survey reports. Leena Modi and Associates, Mumbai, after examining entire record, gave its report dated 15.11.2012, stating that the Insured was entitled for Rs.150/- lacs towards loss of the barge, Rs.190403/- towards sue and labour charges and Rs.349069/- towards adjuster’s fee. Then this complaint was filed on 14.12.2012, alleging deficiency in service.

4.      The Insurer filed its written reply on 31.07.2013 and contested the complaint. The facts relating to obtaining insurance policies, loss occurred to the barge on 20.02.2011, appointment of the surveyors, Survey Reports dated 02.05.2011 & 11.11.2011 and letter dated 26.07.2012, approving the claim for Rs.9000000/-, have not been disputed. The Insurer stated that taking sympathetic view, the claim was approved on non-standard basis for Rs.90/- lacs although in view of the reports of the surveyors, the claim was liable to be repudiated. The Insured did not sign discharge voucher as such payment has not been made. There was no deficiency in service, on its part. The barge was manufactured in the year 1984 and jumboized in the year 1992. Although the barge was very old but it was overloaded to 1100 metric tonnes of Iron Ore fines due to which the barge broke up from the mid ship area and sunk. The press reports also highlighted that the barge was overloaded without taking safety measure.  From the reports of the surveyors it was proved that the Insured had committed negligence in repairs, attending to strength members of the barge and failed to detect the reduction of intrinsic strength of the hull of the barge. The barge met in an accident in the year 2006 and 2009 but the Insured did not exercise due diligence in taking remedial measures to mitigate the impact of repeated accidents of the barge. The barge broke up from the mid ship area and sunk on the date of incident due to reduction of its strength. As per the letter dated 21.03.2011 of I.V. (Goa) Masters, Engine Drivers Welfare Association, even Abdul Hamid Gazi, the master of the barge was not present on the barge at the time of incident and the Insured has falsely implicated him in the criminal case. The insured did not disclose that the barge met in an accident in the year 2006, in the Proposal Form for obtaining insurance policy, which amounts to violation of Section 19 and 20 of the Marine Insurance Act, 1963. The Insurer also raised preliminary issues relating to maintainability of the complaint.  

5.      The Insured filed Rejoinder Reply, in which, the accident of the barge in the year 2006 was not denied but it has been stated that at that time, the Insured was not its owner. It has been denied that Abdul Hamid Gazi, the master was not present on the barge at the time of incident. Affidavit of Evidence of Abdul Karim Noor Mohammed and various documentary evidence. The Insurer filed Affidavits of Evidence of S.C. Bisht, the Manager and Uday G. Bhogate, the surveyor and documentary evidence. Both the parties have filed their written synopsis. This Commission, vide order dated 13.11.2014, directed the Insurer to pay Rs.90/- lacs to the Insured without prejudice to the right of the parties, raised in the complaint. The Insurer paid Rs.90/- lacs through cheque dated 16.12.2014.

6.      We have considered the arguments of the counsel for the parties and examined the record. The Insurer gave reasons for settlement of the claim on non-standard basis i.e. (i) the barge was overloaded due to which the barge broke up from the mid ship area and sunk; (ii) the Insured committed negligence in repairs, attending to strength members of the barge and failed to detect the reduction of intrinsic strength of the hull of the barge; and (iii) the barge met in an accident in the year 2006 but this fact was concealed in the Proposal Form; and (iv) as per the letter dated 21.03.2011 of I.V. (Goa) Masters, Engine Drivers Welfare Association, even Abdul Hamid Gazi, the master of the barge was not present on the barge.

7.      A perusal of the Proposal Form shows that Point No.2 (1) (c), sought information of the incident occurred in last four years to the vessel. The incident dated 30.05.2006 was not falling within four years when Policy No.131700/22/2011/270 was taken for the period of the period of 23.01.2011 to 22.01.2012. Before lodging FIR No.48/2011 at 20:50 hours on 22.02.2011 at police station Calangute, district North Goa, against the master Abdul Hamid Gazi and the driver Sapan Sardar, the police registered Accident Report No.01/2011 on 21.02.2011. After inquiry, Mahesh Kcrkar, Sub-Inspector of Police, lodged the FIR, in which, Abdul Hamid Gazi was named as such, his presence cannot be doubted. Certificate of Survey was issued on 11.01.2011 to the barge “M.V. Noor-IV”. The surveyor in Survey Report dated 02.05.2011 found that all relevant certificates i.e. Certificate of Registry, Certificate of Annual Survey were valid at the time of accident, the barge was manned by certified master and driver and crew as per rules, the barge had loaded to its normal certified capacity and limited to approved drafts. As such, it is not proper to say that the Insured had committed negligence in repairs or the barge was over loaded.

8.      Clause 6.2 of Institute Time Clause (Hull) 1.10.83 provides that the insurance covers loss of or damage to the subject matter insured caused by 6.2.2 bursting of boilers, breakage of shafts or latent defect in machinery or hull; 6.2.3 negligence of master, officers, crew or pilots; 6.2.4 negligence of repairers or charterers provided such repairers and charterers are not an Assured hereunder. Loss caused to the barge was fully covered with insured perils. There was no ground for settlement of the claim on non-standard basis.  Insurance coverage was for Rs.15000000/- and the amount deductible was Rs.282000/-. The surveyor found total loss. As such, the Insured was entitled for Rs.14718000/-. The Insurer was liable to settle the claim within one month after receiving survey report. The Insured is entitled to interest @9% per annum after one month.

O R D E R

In view of the aforesaid discussion, the complaint is partly allowed. The opposite party is directed to pay Rs.14718000/- with interest @9% per annum from June, 2011 till the date of payment, within a period of two months from the date of the judgement. The opposite party is entitled to adjust the amount Rs.90/- lacs already paid to the complainant and calculate interest on remainder.