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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
V.B. Gupta, Presiding Member, Prem Narain, Member
National Insurance Co. Ltd. —Appellant
versus
Atlantic Shipping Services —Respondent
First Appeal No.285 of 2010
(Against the Order dated 30/04/2010 in Complaint No. 27/2005 of the State Commission Gujarat)
Decided on 4.1.2016
Counsel for the Parties:
For the Appellant:Mr. M.N.Krishnamani, Sr. Advocate with Mr. Rajiv Kumar, Advocate
For the Respondent:Mr. Ankit Shah, Advocate
IMPORTANT POINT
When a ship is insured Insurance Company must do their inspection about hull, body and machinery of ship.
Headnote:Consumer Protection Act, 1986—Sections 17, 19 and 21—Insurance—Hull and Machinery Policy—Sinking of ship—Insurance Company repudiated claim on the basis that no peril of sea operated and that loss of vessel was caused by fatigue failure which was caused by normal wear and tear—Compensation of Rs.72,50,000 with 6% interest and cost pf Rs.10,000/- awarded by State Commission—When ship was insured Insurance Company must have done their inspection about hull, body and machinery of ship—Ship has being travelling on that route quite regularly and load in fateful journey was less than load capacity of ship—Ship has broken down amidst mid waters of sea and ship was not brought out of sea and final survey report was not available—There is no alternative but to believe that ship broke down due to peril of sea—As wreckage has not been physically examined by Surveyor operation of this peril also cannot be ruled out—Complainant is entitled to insurance amount under policy—Appeal dismissed. (Paras 8 to 11)
Result: Appeal dismissed.
Being aggrieved from the order dated 30.4.2010 of the State Consumer Disputes Redressal Commission, Gujarat (in short ‘the State Commission’), National Insurance Co. Ltd. has filed the present appeal.
2. In short the case is that MV.TIMO ship of the respondent was insured for Rs.72,50,000/- with the appellant from 22.09.2004 to 21.09.2005 under the hull and machinery policy. Ship sank on 1.11.2004 while going from Blackberry Port to AnchordBuranted. The ship was carrying 845 MT of iron ore fines. The Insurance Company was informed of the accident on 1.11.2004 itself. The port office issued notice to the respondent on 5.11.2004 to bring out the vessel or destroy it. The respondent issued advertisement for salvaging vessel and finally work was given to Kanishka Salvage & Under Water Services Pvt. Ltd. As the notice was received by the respondent, he sent reminders to the Insurance Company to settle the claim as early as possible. Finally, the Insurance Company repudiated the claim on 1.6.2005 on the basis that no peril of the sea operated and that the loss of the vessel was caused by fatigue failure, which was caused by normal wear and tear. The respondent then filed a consumer complaint before the State Commission, which vide its order dated 30.4.2010 accepted the complaint and passed the following order:-
“Complainant is hereby sanctioned.
Insurance Company is ordered to pay to the complainant an amount of Rs.72,50,000/- (Rupees seventy two lacs fifty thousand only) with 6% interest from date of filing of a claim, for the loss to the ship, as per the policy terms.
Further , to give to the complainant an amount of Rs.10,000/- (Rupees ten thousand only) being the expenses.
To implement this order within 30 days from the date of the order.”
3. The present appeal has been filed by opposite party/appellant against the order of the State Commission.
4. Heard learned counsels for both the parties and perused the records carefully.
5. Learned counsel for the appellant stated that from the surveyor’s report dated 19.12.2004 it is clear that M.V.TIMO ship broke down from the middle with a cracking sound and it was due to fatigue of the hull and body of the ship which has nothing to do with the peril of the sea. All the crew have given evidence to this effect before the surveyor. The ship was built in the year 1958 in Italy and was quite old and has completed his life. Due to continuous usage its hull and body had developed fatigue. Learned counsel also pointed out that the surveyor report also shows that the weather on the day of the accident was quite normal and that the capacity of the vessel was about 1100 MT whereas, the actual load was only about 845 MT. The water at the site of the accident was about 10 meter deep and the ship has not collided with any object like some other vessel or any stationary rock. The surveyor in his survey report has observed the following:-
“Perils covered under the hull policy are as follows.:
1. Perils of the seas, rivers, lakes or other navigable waters.
2. Fire, Explosion.
3. Jettision.
4. Piracy.
5. Breakdown of or accident to nuclear installations or reactors.
6. Contact with air craft or similar objects, or objects falling therefrom, land conveyance, dock or harbour equipment or installation.
7. Earthquake, volcanic Eruption or Lightening.
8. Accidents in loading, discharging or shifting cargo or fuel.
9. Bursting of boilers, breakage of shafts, or any latent defect in the machinery or hull.
10. Negligence of Master, Officer, Crew or Pilots.
11. Negligence of repairers or charterers
12. Barratry of Master, Officers or crew.
The cause of damages and cracking, braking and sinking of vessel M.V.TIMO does not fall under said any named peril.
In the circumstances, we are of the opinion that sinking of the vessel or her loss can not be attributed to insured peril.
Policy Exclusion
In our opinion, the cause of loss, can be attributed to fatigue failure of the metal structure of the
