PER SHRI. S.S. PATIL - HON’BLE MEMBER :
1) Complainant is a company and dealing with a business. Opposite Party is a Insurance Company.
This is a complaint filed by the Complainant for deficiency in service on the part of Opposite Parties as it repudiated the insurance claim submitted by the Complainant, on untenable ground.
The facts of the case as alleged by the Complainant are that, the Complainant had insured its Jack up rig “Friendly Dolphin 1” (hereinafter referred to as “the rig”) with the Opposite Party for various marine risks. The Policy was issued on 03/02/98. (Marine Hull Insurance Policy) vide No.021000/22/03/11/23/97.
The Jack up rig was to be towed by theTug m.t. Gurpur from the Port of Nagapattinam to Port of Chennai in Oct., 98. The Surveyor Basheer & Associates had surveyed the rig and the tug at Nagupattinam on 06/10/98 in order to ascertain the suitability for the trip from Nagapattinam to Chennai. The above said surveyor appointed by the Opposite Party had then issued a tow approved certificate. The tug was also in satisfactory condition. When the tug proceeded on voyage from Nagapattinam the wind speed was less than Beaufort scale 4 as evidenced by the deck log. During the voyage on or about 10/10/98 the said tug started rolling and pitching heavily and it was observed that Rig’s AFT Port side leg broke and fell in to sea.
2) The master of the tug, filed a note of protest on 12/10/98. This fact was communicated to Opposite Party by letter dtd.12/10/98. But the Opposite Party has alleged that the Complainant had not taken prior approval for the towage. The Complainant has then informed the Opposite Party vide letter dtd.27/10/98 that the towage operation from Chennai to Nagapattinam and from Nagapattinam to Chennai was approved by the surveyor J Basheer & Associates who had been appointed by the Opposite Party and as such the Complainant had complied with the warranty as stipulated in the insurance policy.
3) The surveyor inspected the damage on 12/10/98. A report dtd.10/11/98 was prepared by him. The Complainant submitted to the surveyor, the repair estimates obtained from five parties and requested the surveyor to settle the claim of Rs.34,76,248/- vide its letter dtd.19/07/99. Again after giving some additional clarification it was requested to recommend the unrepaired claim of the Complainant. Accordingly the surveyor by his report dtd.25/03/2002 recommended Complainant’s claim of Rs.19,85,468/-, as an estimate of the fair and reasonable amount. At the same time the surveyor also alleged that there was no port clearance in respect of the tug. The tug was also not manned as per Rules requirement.
4) After receiving the surveyor’s above said report, the Opposite Party by its letter dtd.30/10/02 repudiated the claim on various untenable grounds. It is the contention of the Complainant that no objection certificate from Mercantile Marine Department was not mandatory and a circular issued by them to that effect was enclosed by the Complainant and sent to the Opposite Party. The Complainant explained that the jack up rig is not ship within the meaning of mercantile shipping Act, 1958 and hence, inspection was not required from load line. Inspection by MMD was not necessary and hence, the voyage adventure was not unlawful. The Port Clearance Certificate was issued by the customs Authority at Nagapattinam. The ship log clearly indicate that the wind speed was Beaufort Scale 2. The weather report was not available when the tug proceeded on voyage on 06/10/98. The surveyor had issued towage approval certificate implied that the rig was seaworthy.
5) The Complainant has further averred that the Opposite Party had sent the Complainant a letter dtd.03/11/04 which revealed that the surveyor had given his opinion by concluding that “the incident of engine stoppage and resultant heavy rolling and pitching of the jack up platform inflicting damage to its leg structure might not have been due to direct result of those deficiencies pointed out in their earlier report as the tow had completed 3 days of the voyage in similar weather and sea state without any eventuality. Still the Opposite Party rejected the claim. The Opposite Party did not furnish the copy of the surveyor’s subsequent report to the Complainant.
6) The Complainant further stated that the circumstance in which the jack up rig sustain the damage, is covered under the policy. The Complainant asserts that the proximate cause of the damage to the leg structure of the jack up rig was heavy weather as opined by the surveyor of the Opposite Party.
7) Complainant submitted that the policy taken by it was a time policy and there is no implied warranty of seaworthiness in time policy. Therefore, the Complainant submitted that the Opposite Party has wrongly rejected its insurance claim which amounts to deficiency in service on Opposite Party’s part.
8) The Complainant has further stated that the claim amount of Rs.19,85,000/- was recommended by the surveyor of the Opposite Party only.
9) The Complainant has finally prayed for refund of Rs.19,85,000/- towards the insurance claim with interest @ 12% p.a. from the date of the complaint till realization and the cost of this complaint. The Complainant has attached the xerox copies of the relevant documents in support of its complaint. The complaint was admitted and notice was served on the Opposite Party. The Opposite Party appeared before this Forum through it Ld.Advocate and submitted its written statement wherein it denied almost all the allegations made by the complaint and specifically submitted that the case involves complex issues and therefore, it is a subject of Civil Court. This Forum has no jurisdiction to entertain the case.
10) The Opposite Party has further averred that as per Sec.41 of the Marine Insurance Act, there is an implied warranty in the Voyage Policy that, the ship shall be seaworthy at the time of commencement of the voyage. The Opposite Party has stated that the Dolphine-1 was not in a seaworthy condition. The fitness of the vessel requires that the Hull of the vessel must be competent. It is further stated that Dolphin-I did not run around, nor did it hit against the hidden rocks, nor was it involved in collision with other vessel. While the tow was proceeding, the aft portside leg of jack up platform broke and fell in to sea. The Opposite Party opined that this shows that Dolphine-1 was not seaworthy.
11) The Opposite Party has further submitted that the tug of 1492 k.w. propulsion power was not manned properly as per the provision of Merchant shipping Act. The towing tug’s safe minimum manning certificate was not produced before the surveyor. The Opposite Party stated that the tug was unseaworthy within the meaning of Sec.41 of Marine Insurance Act & hence, the Opposite Party is absolved from the liability. As per Sec.35 of the Marine Insurance Act, a warranty whether express or implied must be complied with. If it is not complied with, subject to any provision in the policy, the Opposite Party is discharged from the liability, from the date of breach of the warranty. The Opposite Party further stated that it is absolved of any liability under the Marine Insurance Policy.
12) The Opposite Party has further clarified that, the surveyor had issued towage approval certificate subject to the following condition –
a) Tow to depart during day light.
b) Vessel to depart in weather condition beaufort scale 4 and below and associated sea state together with favourable
weather forecast.
c) Tow speed not to exceed 4 knots.
d) Tow to proceed hugging the coast.
e) Tow master to exercise its own discretion in case of any Navigational Hazard and enter a port of Refuge in case of
adverse weather or other emergency.
f) Tow muster to indicate tow speed/sea weather condition and position every 6 hours to his base office who in turn should
appraise the office of the warranty surveyor.
g) All statutory/mandatory clearance of concerned agencies be obtained before commencement. The Opposite Party has
alleged that the Complainant failed to comply with the above conditions and further stated that when tug proceeded on its
voyage from Nagapattinam the wind speed was far less than Beaufort Scale 4.
13)The Opposite Party has asserted that the Complainant failed to submit Port Clearance Certificate, Safe Manning Certificate and Safety Equipment Certificate as per the terms and conditions of the Marine Hull Insurance Policy. It has clarified that the Complainant has taken port clearance for tug only without the tow being mentioned. The manning certificate of the tug was not as per the Merchant Shipping Act, Sec.76 for the size of BHP of vessel. It reiterated that no safety equipment certificate was submitted by the Complainant. The Complainant has not obtained no objection certificate from MMD for trip in tow of jack up platform Friendly Dolphin-1 by tug Gurpur from Nagapattinam to Chennai before 06/10/1998. This is mandatory requirement. Sec.43 of Marine Insurance Act, 1963 stipulates that “there is implied warranty that the adventure insured is lawful one and that so far as the assured can control the matter, the adventure shall be carried out in lawful manner. The Opposite Party has alleged that the adventure was unlawful as the Complainant had not obtained the NOC from M.M. D. authority.
14) The Opposite Party also pointed out that while the tow was on its way to Chennai, on 9/10/98, at about 7.00 hrs. it was decided to increase the length of the tow line for which the main engine was lowed down, and at that time the engine suddenly stopped. Thereafter the engine could not be started. This is obviously happened because Dolphine-1 was not in seaworthy condition etc.
15) The Opposite Party has denied that the surveyor had recommended the claim of Rs.19.58 Lacs towards unrepaired damage of the Rig.
16) The Opposite Party has submitted that, it had repudiated the claim vide its letter dtd.30/10/02 and thus, the cause of action had arisen on 30/10/02 and not from 03/11/04. Finally the Opposite Party has prayed for dismissal of the complaint.
17) The Complainant has filed affidavit of evidence and written argument wherein it reiterated the facts mentioned in the complaint. Opposite Party also submitted the written argument and some document wherein it reiterated the facts mentioned in the written statement. We also perused the Marine Insurance Act. We heard the Ld.Advocates for both the parties and perused the documents submitted by both the parties. The issues before us are as follows –
i) Whether the complaint is filed within the time limit ?
ii) Whether the complainant is a consumer of the Opposite Party ?
iii) Whether there is a deficiency in service on the part of Opposite Party ?
18) In this case the Opposite Party had finally repudiated the claim vide its letter dtd.03/11/04 after referring the matter and obtaining the 2nd opinion of its surveyor. The complaint was filed on 26/05/6. Therefore, it has been filed within the prescribed period of limitation after the cause of action arose.
19) The Complainant has paid the premium to the Opposite Party. The Complainant has sought indemnity for the loss of the rig’s portside leg, as it broke and fell in the sea water during the voyage from Nagapattinam to Chennai during the period from 06/10/98 to 11/10/98. Therefore, the Complainant is certainly a consumer within the meaning of Sec.2(1)(d) of the Consumer Protection Act. In view of the judgement in Harsolia Motors V/s. National Insurance Co. Ltd. I (2005) CPJ (NC)
20) Regarding the deficiency – the Complainant has insured its Jack up Rig Friendly Dolphin-1 with Opposite Party. During the validity of the insurance policy the voyage of the Rig along with tug Gurpur started from Nagapattinam to Chennai on 06/10/98. The Towage had the approval certificate of the appointed surveyor issued on 07/10/98. In this certificate the surveyor has certified on the following points. “The towing arrangements were found satisfactory at 13.30 hrs. on 06/10/08.” “tow of the Barge friendly Dolphin-I is approved for trip in tow of tug NT Gurpur.” Commencing approximately 17.00 hrs. on 06/10/98.” From this certificate it appears that the surveyor has given certain instructions to the insured such as, (1)Tow to depart during day light, ii) Vessel to depart in weather condition Beaufort scale 4 & below, iii) Speed not to exceed 4 knots, iv) Tow to proceed hugging along the coast, v) Tow Master to indicate tow speed/sea/weather condition and position every 6 hr. to his base office who in turn should apprise the office of the warranty surveyor, vi) All statutory clearance of concerned agencies should be obtained prior to commencement of tow.”
21) It is admitted by the Opposite Party in its letter dtd.30/10/98 that approval certificate was issued by warranty surveyor on 06/10/09 however, with certain conditions. The above instructions stated in the certificate, have been construed as the conditions of that certificate. From reading the further contents of this letter it reveals that the Complainant had not obtained the no objection certificate from Mercantile Marine Department for towing Dolphin-1 by tug Gurpur. However, the surveyor in his report has specifically mentioned that the above said instructions or the points are “Recommendations” and in the last paragraph the surveyor had concluded as follows –
“Conclusion”
“The tow friendly Dolphin-1 had left under tow by tug MT Gurpur on 06/10/98 at 17.30 hours. The tow as inspected by us, on 06/10/098, alongwith towing vessel, was in satisfactory condition.”
“It is our opinion that provided the voyage offers no risks other than those normally accepted to underwriters.”
It is the contention of the Opposite Party that the Complainant had not obtained N.O.C. for towing the rig but it has not clarified or explained as to under what provision, it is mandatory to have such certificate for towing the rig alongwith the tug. Therefore, the contention of the Opposite Party that the voyage was unlawful does not hold water.
22) The other contention of the Opposite Party is that the Complainant has not obtained clearance for towing the Jack up Rig Dolphin-1. In this respect the tug Gurpur was hired by the Complainant the master of the tug has obtained the clearance Certificate for this tug. The Jack up friendly Dolphin-1 being a platform without any propelling machinery or in other words, it is not a ship, Port Clearance Certificate from the customs department was not obtained. In this respect, the Opposite Party has not cleared whether a port clearance certificate was required for the dumb platform i.e. Dolphin-1, which is non propelling device and it is required under what provision.
23) The Opposite Party has further raised an objection that as per the tow approval certificate of the surveyor, vessel should depart in weather condition beaufort scale 4 and below. We have perused the report of the surveyor regarding the weather condition on 06/10/98 i.e. the day of forecast on which the vessel (towage) sailed. It indicated the weather report as below -
1) Sea state – Generally moderate.
2) Winds – Mainly westerly 15 knots gusting to 20 to 25 knots occasionally.
3) Weather – Scattered rainspells.
There is no mention about the Beaufort scale. The Opposite Party has also not explained the relationship between the Beaufort Scale and the other measure of the weather condition. This weather report is also from Chennai and related to the Tamilnadu and Pondechery coast and not of Nagapattinam coast. Therefore, it cannot be said from this report that the weather report at the time of departure at the place of departure was above Beaufort Scale 4.
24) The Opposite Parties contention that the tow Gurpur sailed from Nagappattinam not during day time. Here it is again reiterated that, Opposite Party has termed this as a condition where as the surveyor has termed the same point as the recommendations and the Opposite Party has not explained as under what provision these stipulations are to be complied with. In this respect the surveyor himself in his survey report stated that “the tow friendly Dolphin-I had left under tow by tug Gurpur on 06/10/98 at 17.30 hrs. This does not establish that the tow left the port not during day time. Therefore, the allegations of the Opposite Party in this respect and the subsequent conclusion based on this assumption that the towage of Dolphin-I was unlawful and the ship was not sea worthy does not hold water.
25) Inspite of the conclusion of the surveyor in his report that the “tow as inspected by us on 06/10/98 alongwith a towing vessel, was in satisfactory condition.” The Opposite Party in his letter dtd.30/10/02 has stated that the ship was not sea worthy. This only shows that the Opposite Party has arrived at the conclusion to protect its own interest and to avoid its liability towards the insurance claim of the Complainant.
26)The main reason for the causing the loss is that during the voyage, at the end of the voyage (on 09/10/98), there was a rough sea, and the Dolphin-I was pitching and rolling heavily. It was drifting alongwith the MT tug. The main engine of the tug stopped and it was not starting. This condition was continued for abut 9 to 10 hours and during this period the damage occurred. The aft portside leg broke and fell in the sea. This incident is covered by the perils mentioned in the insurance policy i.e. “Perils of the Sea” Clause 4.1 states that “This insurance covers Loss of or damage to the subject matter insured caused by perils of the seas etc.” In this case the damage to the Rig’s Aft Port side leg occurred due to perils of the sea but the Opposite Party has repudiated the claim on the technical ground that the vessel did not sail during the day time, and certain documents such as port clearance for the dumb platforms was not obtained, NOC, of MMD was not obtained etc. Even these objections are not substantiated by the Opposite Party as discussed above. The Opposite Party has raised the point of non compliance of the Sec.41 of Marine Insurance Policy and thereby it has tried to absolve of the liability but the conclusion raised by Opposite Party stated earlier is without any logic and its contention is not substantiated by cogent evidence. The surveyor’s report itself has contradicted and nullified the objections raised by the Opposite Party.
27) Another important point raised by the Opposite Party is that the ship should be properly manned as per Sec.76(3)(b) of the Merchant Shipping Act. This provision is applicable to the ship having propulsion power of 750 k.w. or more and less than 3000 Kws. In this respect, the Complainant has produced the certificate from the MMD stating that safe manning certificate as per IMO resolution No.A 481, (XII) is not required for ships below 500 GT. Since the vessel MT Gurpur has been operating in coast at water of India, there is no statutory requirement for the vessel to posses any safe manning certificate. The surveyor’s approval report dtd.07/10/98 indicated the number of crew, master’s towing experience and details of the other officers on the board. The surveyor specifically had mentioned that “the vessel under gears, were considered satisfactory for the purpose of tow.” The tow, alongwith the towing vessel was in satisfactory condition.”
28) The Complainant has vehemently submitted that the NOC from the M D is not mandatory. On this submission the Opposite Party has stated that it is necessary. Under this situation the Opposite Party has not clarified under what provision the NOC was required. In this respect the Complainant has relied on the circular from the DG Shipping dtd.29/10/2002 and earlier circular dtd.25/05/92 and Opposite Party has not rebutted this contention.
29) Therefore, in view of the above discussion, in this case, the loss of Rig’s Aft Port side leg occurred during the validity of the insurance policy and as per the risk covered under the said policy. The Opposite Party repudiated the insurance claim for unjustifiable grounds and thereby it is deficient in service by repudiating the said insurance claim on the ground as mentioned above.
30) The Complainant has prayed for the unrepaired damage settlement of Rs.19,85,000/-. The surveyor appointed by the Opposite Party has also recommended this amount in following words –
“We had perused the same and based on the nature and extent of damage, we certify an estimated amount of Rs.19,85,468/- as fair & reasonable.” However, the surveyor had also mentioned that there were breaches of certain conditions. These breaches were discussed earlier and after discussing the same we have come to the conclusion as mentioned in para 29 above and we pass the order as follows –
O R D E R
i.Complaint No.288/2006 is partly allowed.
ii The Opposite Party is directed to pay Rs.19,85,000/- (Rs.Nineteen Lacs Eighty Five Thousand Only) to the
Complainant against its insurance claim under Insurance Policy No.021000/22/03/11/23/97.
iii.Opposite Party is also directed to pay the interest on Rs.19,85,000/- at the rate of 9 % p.a. from 25/04/2002 to the
Complainant.
iv.Opposite Party is also directed to pay Rs.5,000/- (Rs.Five Thousand Only) to the Complainant towards the cost
of this complaint.
v. Opposite Party is directed to comply with the above said order within 30 days from the date of receipt of this
order.
vi. Certified copies of this order be furnished to the parties.
