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SUPREME COURT OF INDIA
A.S. BOPANNA, M.M. SUNDRESH, JJ.
Hind Offshore Pvt. Ltd. – Appellant
Versus
IFFCO - Tokio General Insurance Co. Ltd. – Respondent
Civil Appeal No. 7228 of 2015
Decided On : 09-08-2023
(A) Consumer Protection Act, 1986 – Section 23 – [Consumer Protection Act, 2019 – Section 67] – Marine Insurance Act, 1963 – Sections 35, 37, 41(5) and 55 – Insurance – Marine Hull Insurance Policy – Consumer complaint dismissed by NCDRC – Vessel on a voyage from suffered major damage to its port main engine – In a time policy, there is no implied warranty that ship shall be seaworthy at any stage but where with privity of assured ship is sent to sea in an unseaworthy state, insurer is not liable for any loss attributable to unseaworthiness – Mere knowledge on part of insurer that there was breach of warranty would not amount to waiver in absence of express representation to that effect – In instant case, when respondent insurance company relied upon Class Certification to issue policy there was no express or implied waiver – Appellant has not established that defects were brought to notice of Classification Society and thereafter certificate had been obtained – In such a situation when it is subsequently noticed that these defects were not intimated and warranty class had not been complied, Classification Certificate would automatically become invalid – There is no waiver on part of respondent insurer – Appellant had failed to establish that warranty class had not been breached by them – Order passed by NCDRC upheld. (Paras 16, 21, 24 and 25)
(B) Insurance Act, 1938 – Section 45 – Marine Insurance Act, 1963 – Section 19 – Insurance Policy – Issue of policy is based on trust (Uberrima Fide) – In absence of any material on behalf of appellant to indicate that they had intimated Classification Society, there was no obligation in terms of legal position for insurance company to make such inquiry. (Paras 20, 22 and 23)
Facts of the case:
Present appeal is directed against order of National Consumer Disputes Redressal Commission dated 15.05.2015 dismissing the consumer complaint filed by appellant herein. Question is as to whether consideration made and conclusion reached by NCDRC would admit of any perversity or error in its reasoning.
Findings of Court:
NCDRC having considered relevant aspects of matter in its correct perspective has arrived at its conclusion, which would not call for interference.
Result – Appeal dismissed.
JUDGMENT :
A.S. BOPANNA, J.
1. The present appeal is directed against the order of the National Consumer Disputes Redressal Commission (hereinafter for short “NCDRC”) dated 15.05.2015 dismissing the consumer complaint filed by the appellant herein.
2. The brief facts leading to the claim before the NCDRC are that the appellant entered into Bareboat Charter Party Agreement dated 02.10.2006 for a sea vessel known as M.V. Sea Panther (hereinafter for short “vessel”) the registered owner whereof is Astron Equities S.A. The appellant obtained ‘Marine Hull Insurance Policy’ in respect of the said vessel from the respondent bearing policy no. 21212985 covering the vessel for various risks including the ‘perils of the seas’ for an insured sum of Rs. 8,26,92,000/- for the period 09.11.2005 to 08.11.2006. The Marine Hull Insurance Policy is subject to the vessel possessing a Class Warranty.
3. On 22.02.2006, the vessel on a voyage from Singapore to Mumbai suffered major damage to its port main engine. Dhiraj Offshore Surveyors and Adjusters Pvt. Ltd. conducted a preliminary inspection on 22.04.2006 and opined that the crankshafts and connecting rods were found beyond repair. Since the wait time for the replacement of the engine crank shaft was six months, considering the urgent commercial commitments, the main port engine was temporarily repaired. The appellant had presented an invoice of Rs. 1,32,66,803/- towards the cost to be incurred. The respondent on the recommendation of Dhiraj Offshore Surveyors and Adjusters Pvt. Ltd. issued a cheque for Rs. 1,00,00,000/- dated 09.06.2006 as an advance payment for replacing the engine crank shaft and other components.
4. Subsequent to the term of the first policy ending, the appellant entered into a fresh Marine Hull Insurance Policy in respect of the vessel, bearing policy no. 21306557 covering the vessel for various risks including the ‘perils of the seas’ for an insured sum of Rs. 8,26,92,000/- for the period 09.11.2006 to 08.11.2007. The American Bureau of Shipping (hereinafter for short “ABS”) conducted a survey on the vessel on 29.09.2006 and 14.10.2006 and issued Class Certificate dated 19.10.2006 extending the Class Certificate until 30.06.2009. The Class Certificate constitutes a representation by ABS as to the structural and mechanical fitness of the vessel.
5. Unfortunately for the appellant, on 03.12.2006, the vessel on a voyage from Mumbai to SLQ Complex, Mumbai High South Field was struck by a Tug Boat ‘Sea Ways 9’ as a result of which the vessel sank with all cargo on board. The appellant submitted a claim amounting to Rs. 8,26,92,000/- due to the total loss of the vessel and cargo. As per the procedure, the respondent appointed M/s. J. Basheer and Associates Surveyors Pvt. Ltd. (hereinafter for short “surveyor”) as the surveyors to assess the loss. The surveyor on visiting the ABS ascertained that the owners/representatives of the appellant had not informed the ABS about the previous damage to the port main engine and ABS only based on their inspection, had issued the Class certificate dated 19.10.2006. The surveyor’s report also states that the Country Manager of ABS also reported that if a Vessel sustains any damage to either Hull or Machinery and the same is not reported to the Class, then the Class would deem to be automatically suspended as per ABS Rules for Building and Classing Steel Vessels-2005 Edition, Part 1, Chapter 1, Section 2 heading ‘Suspension and Cancellation of Classification’.
6. In the meanwhile, Dhiraj Offshore Surveyors and Adjusters Pvt. Ltd. submitted its final report on 19.02.2007. As per their conclusion, it was considered unlikely that the vessel will be recovered and as such permanent repairs to the port main engine will not be effected, as were supposed to be done as a consequence of the first accident. Thus, it was recommended that the sum of Rs. 1,00,00,000/- paid as “on account” on the basis of their report dated 22.04.2006 be recovered.
7. In that backg
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