IMPORTANT POINT
In a Marine Cargo Voyage policy, Motor Vessel if was not classified M.V. claim of insurance rightly denied.

ORDER

Anup K. Thakur, Presiding Member.—By this order it is proposed to decide C.C. No.205 of 2012 and C.C. No.206 of 2012. In C.C. No.205 of 2012, the complainant is M/s. Mauria Udyog Ltd. and in C.C. No.206 of 2012, the complainant is M/s. Jotindra Steel & Tubes Limited. Both had purchased marine cargo specific voyage insurance policy from United India Insurance Co. Ltd., Noida (OP-1 henceforth) and facts in both are almost identical.

2. Arguments were heard on 25.11.2020. Facts were taken from CC 206 of 2012.

3. Learned Sr. Counsel for the complainant briefly narrated the facts. On 04.06.2010, a Marine Cargo Specific Voyage Policy No.221800/21/10/01/00000043 (policy hereafter) was taken by the complainant from OP1 (Annexure-1). This policy, for voyage from Jingtang, China to Kandla Port, Gujrat, covered a consignment of H.R. Steel Coils with the sum insured at Rs.10,31,93,25/-. Premium paid was Rs.22,764/-. Details such as Invoice, Container Details, Vessel name etc., were not shown initially in the policy; instead, the relevant box for these details carried the remark “To be declared”. Subsequently, these details were submitted to OP1 and were duly endorsed in the policy on 20.07.2010 (Annexure-4). Learned counsel explained that the initial policy read with this endorsement made the whole policy of insurance.

4. Per the plaint, on 18.7.2010, the marine vessel, Khallijia-3 (M.V. hereafter), at 20:45 hours, experienced ingress of water below the water line, which caused damage to cargo. Since there were other cargoes also on the M.V., general average principle became applicable. So, a Salvor, M/s. Smith Singapore Pvt. Ltd., was appointed who, in turn, appointed another company to procure guarantees from the affected parties i.e. owner of the M.V. and owners of their respective cargoes. OP provided a guarantee on behalf of the complainant on 10.8.2010 (Annexure-8). This guarantee was however recalled by the OP on 12.8.2010 (Annexure-9). Learned counsel submitted that in the recall letter, OP had taken the ground that the M.V. classification was not as required under the ‘Institute Classification Clause’ of the policy and resultantly, it was constrained to withdraw the ‘average guarantee’ given to the Adjusters.

5. Counsel referred to complainant’s letter to the OP dated 15.6.2010 (Ann.-2) whereby all relevant details of the shipment, including the name of the M.V., MV Khalijia 3 V.10086, had been furnished. Again, vide letter dated 7.7.2010 (Ann. 3), the complainant had, in continuation of letter dated 15.6.2010, enclosed invoice number, packing list, copy of bill of lading to the OP. On this basis, OP had duly endorsed the policy (Ann.-4).

6. Learned counsel then drew attention to the policy schedule (Ann.-1), specifically to the box describing the “Terms of Insurance Cover: As per the following Clauses”, and thereunder, to clause no. 8 viz. “Institute Classification Clause with deletion of held cover provision”. He pointed out that the first 7 clauses – Important Notice, Institute Radio-Active Contamination Exclusion Clause, Institute Replacement Clause, Institute War Clauses (Cargo), Institute Strike Clauses (Cargo), Strike, Riots & Civil Commotion Clause and Cargo ISM endorsement were all elaborated in the body of the policy. Not so, however, the clause “Institute Classification Clause with deletion of held cover provision” (supra). His argument therefore was that this clause was never meant to be operationalized at any point of time else it would have also found elaboration in the body of the policy. He then argued that it was this clause which was the basis for repudiation of the insurance claim. He submitted that except for this, the policy covered the voyage from Jingtag, China to Kandla Port, Gujarat, India, “On Warehouse to Warehouse Basis”, and thus clearly covered the incident which took place in Mumbai, enroute to Kandla and warehouse.

7. He further submitted that despite intimation of 15.6.2010 (supra) having be