NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
C. Viswanath, Presiding Member
Smt. Shashikala J. Ayachi – Complainant
versus
M/s. New India Assurance Company Ltd. and Ors. – Opp. Parties
Consumer Case No.126 of 2013
Decided on 9.3.2021

IMPORTANT POINT
“In no case a Surveyor shall take more than six months from the date of his appointment to furnish his report.”

Headnote:

Consumer Protection Act, 1986 – Section 21 : [Consumer Protection Act, 2019 – Section 58] – IRDA (Protection of Policy Holders Interest) Regulations, 2000 – Regulation 9(2) – Vessel – Loss – Repudiation of claim – Legality – Insured vessel of complainant sunk – Sum assured was Rs. 1,62,70,000/- – Incident in question took place on 30.5.2011 – Surveyor was appointed on 3.6.2011 – Final Survey Report filed on 25.3.2013 – Complaint filed on 2.5.2013 – As per Regulation 9, in no case a surveyor shall take more than six months from the date of his appointment to furnish his report – Deficiency in service found on part of Insurance Company in not deciding the claim within the stipulated period – Place of incident as mentioned by the complainant found correct – Statements of Crew Members also found not fabricated – Insurance Company thus directed to pay insured amount of Rs. 1,62,70,000/- with interest @ 9% p.a.

Held: Heard Learned Counsel for the Complainant as well as Opposite Parties No.1 & 2/Insurance Company. Learned Counsel for the Complainant submitted that the vessel of the Complainant sunk on 30.05.2011; Surveyor was appointed on 03.06.2011 and Surveyor submitted his Final Report on 25.03.2013 i.e. 21 months after his appointment, which is violation of Regulation 9 (2) of Insurance Regulatory and Development Authority (Protection of Policy Holders Interest) Regulations, 2000 and Regulation 13 (3) of Insurance Surveyors and Loss Assessors (Licensing, Professional Requirements and Code of Conduct) Regulations, 2000, which prescribe a maximum period of 30 days for submission of final Survey Report from the date of appointment of the Surveyor. It was further submitted that copy of the Survey Report was not provided to the Complainant and same was supplied as an Annexure to the Reply. Opposite Parties sat over Complainant’s claim for more than two years and it is during the pendency of the present proceedings that the claim has been repudiated vide letter dated 04.09.2013, which is violation of Regulation 9 (5) of Regulation 9 (5) of Insurance Regulatory and Development Authority (Protection of Policy Holders Interest) Regulations, 2000, which provides that the Insurer has to decide the claim within a period of 30 days from the date of receipt of Surveyor’s report.

It was submitted on behalf of the Complainant that Opposite Parties repudiated the claim of the Complainant inter alia on the ground that the Complainant had violated the conditions of the Insurance Policy. Complainant was neither explained nor supplied the terms & conditions of the Insurance Policy. She was supplied only Cover Note of the Insurance Policy. Thus, principle of estoppel is applied against the Opposite Parties while repudiating the claim of the Complainant. Opposite Parties have also taken the ground that the vessel of the Complainant was sailing in Somalian waters in violation of the policy conditions and was hijacked by Somali pirates. In fact, at the time of incident the vessel was sailing between Oman and Pakistan in the Northern Arabian Sea and the Opposite Parties have not submitted any evidence to support their allegation.

Learned Counsel for the Complainants further submitted that the Surveyor Report as well as repudiation letter mentioned that the vessel sank at Coordinates bearing Latitude 23.400 North and Longitude 61.430 East (approximately 66 km away from the place of incident), whereas the vessel sank at the Coordinates bearing Latitude 23.040 North and Longitude 61.430 East. Opposite Parties also relied on the report issued by Indian Meteorological Department for Persian Gulf for Coordinates bearing Latitude 23.400 North and Longitude 61.430 East, whereas the Complainant’s vessel was actually plying in Northern Arabian Sea at Coordinates Latitude 23.040 North and Longitude 61.432 East. Thus, said report of Indian Meteorological Department is totally irrelevant and cannot be relied upon. Opposite Parties have also relied on the report issued by Sultanate of Man which states that normal weather conditions prevailed on 29.05.2011 and 30.05.2011 along the cost of Oman and in the vicinity thereof. However, the said weather report states about the wind speed for selected coordinates and far off from the actual coordinates where the vessel sunk.

It was further submitted that Opposite Parties have not considered the statements of the crew members, which were recorded in the presence of Superintendent of Customs and the Immigration Officers at Mandvi Port. These statements are free from influence, threat or pressure. It was submitted that it is a settled proposition of law that if the Surveyor’s submits a wrong report and the Insurance Company repudiates the Insurance Claim based on that report, then the repudiation is unjustified. It is submitted that the Complaint be allowed and Opposite Parties be directed to pay the Insurance Claim as prayed above.

Learned Counsel for the Opposite Parties submitted that the Insurance Claim of the Complainant was repudiated giving justified reasons in the repudiation letter. It was submitted that immediately after receipt of intimation of alleged incident and loss Opposite Parties deputed Inchcape Shipping Services as Surveyor to carry out the survey and assess the loss and also deputed an Investigator to ascertain the genuineness of cause of loss. On receipt of Survey Report as well as Investigator’s report, Opposite Parties after thorough examination of both the reports and relevant terms and conditions of the policy, came to the conclusion that the insurance claim was not admissible, therefore, the claim was repudiated and communicated to the Complainant. In the investigation report, it was revealed that the vessel in question was sailing in Somalia waters in violation of Maritime Security Advisory and instructions of Director General of Shipping, Government of India and the Complainant has suppressed this material fact from the Opposite Parties as well as this Commission.

It was further submitted that from the weather reports of Oman and our Country, it is clear that weather conditions were absolutely fair on 29th & 30th May, 2011. There was no SOS/distress signal received by nearest port/radio station of Oman which makes it abundantly clear that there was no sinking of the vessel. Complainant has also not placed on record any evidence on record to establish that the crew members of the vessel made a distress call for help and received help from MSY Chetak, which brought them to Mandavi on 03.06.2011. There is contradiction in the statements of the Complainant and Master & crew members about the damage. Learned Counsel for the Opposite Parties submitted that the claim of the Complainant is based on the report of Shri G.P. Dev and Sons, Surveyors without any instructions or information to the Opposite Parties/Insurance Company and the Opposite Parties could not have the opportunity to examine or counter the said report. Therefore, the Insurance Claim based on the report of G.P. Dev and Sons, Surveyors cannot be allowed. It was also submitted that all the crew members of the vessel are illiterate and cannot write. Their statements were got prepared by incorporating false and incorrect information on the behest of the Complainant.

First issue before me relates to delay in deciding the claim by the Insurance Company. Incident took place on 30.05.2011; Surveyor was appointed on 03.06.2011, who filed his Final Survey Report on 25.03.2013, after filing of Complaint dated 02.05.2013. Thereafter, claim of the Complainant was repudiated by the Insurance Company on 04.09.2013. Regulation 9 of the Insurance Regulatory and Development Authority (Protection of Policyholders’ Interests) Regulations, 2000 provides that “In no case shall a surveyor take more than six months from the date of his appointment to furnish his report.” Further “On receipt of the survey report or the additional survey report, as the case may be, an insurer shall within a period of 30 days offer a settlement of the claim to the insured. If the insurer, for any reasons to be recorded in writing and communicated to the insured, decides to reject a claim under the policy, it shall do so within a period of 30 days from the receipt of the survey report or the additional survey report, as the case may be.” From a perusal of the said provision it is clear that Surveyor is duty bound to furnish the Survey Report within a period of 6 months from the date of appointment. Furthermore, the Insurer is also under obligation to settle the claim within 30 days from the receipt of the Survey Report. In the present case, the claim was raised by the insured on 31.05.2011 and the Surveyor was appointed on 03.06.2011. However, the Final Survey Report was furnished on 25.03.2013, i.e. after a delay of 15 months over and above the time limit of 6 months as provided by Regulation 9. Thereafter, claim of the Insured was repudiated on 04.09.2013, i.e. after a period of over 5 months from the date of furnishing the Final Survey Report. The Opposite Parties have not explained the inordinate delay in processing the claim of the Complainant. Record also reveals that the Complainant had made several representations to the Opposite Parties seeking an update on processing of their claim and vide communication dated 08.11.2012, the Complainant even expressly sought for a copy of the Surveyor’s Report, which was not provided by the Opposite Parties. The Complainant was provided a copy of the Surveyor’s Report only after the Complaint was filed and as part of the reply to the Complaint by the Opposite Parties. From the above, it is clear that provisions of Regulation 9 have been violated by the Surveyor as well as Insurance Company. Thus, there was deficiency in service on the part of the Opposite Party/Insurance Company in not deciding the claim within the stipulated period.

20. Learned Counsel for the Opposite Parties also raised the issue of place of incident and submitted that as per Survey Report the vessel sunk at coordinate Latitude 23.400 North and Longitude 61.430 East, which is approximately 36nn (66 kms) away from the place of incident as stated by the Complainant. Learned Counsel for the Complainant submitted that the vessel sank at Latitude 23.040 North and Longitude 61.430 East, which is clear from the statements of the crew members of the vessel and the said statements were provided to the Surveyor. Statements of crew members regarding the incident were recorded by the Superintendent of Customs, Mandvi. The Tandel of MSV Chetak also gave statement to the Superintendent of Customs, Mandvi. On 04.06.2011, statements of crew members were recorded by the Immigration Officer, Mandvi Police. Opposite Party did not file any evidence contrary to the same. Therefore, it is clear that the place of incident as stated by the Complainant is correct.

Learned Counsel for the Opposite Parties/Insurance Company disputed the fact that there was bad weather on that date of incident. He submitted that as per Meteorological Reports of Oman and our country there was absolutely fair weather conditions on 29.05.2011. Learned Counsel for the Complainant submitted that when the vessel was between Oman and Pakistan, there was bad weather and rough tides, damaged the lower portion of the vessel and water entered inside, as a result of which, the vessel sunk. Learned Counsel for the Complainant submitted that Opposite Parties relied on the report issued by Indian Meteorological Department for Persian Gulf for Coordinates bearing Latitude 23.400 North and Longitude 61.430 East, whereas the Complainant’s vessel was actually plying in Northern Arabian Sea at Coordinates Latitude 23.040 North and Longitude 61.432 East. The report of Indian Meteorological Department is totally irrelevant and cannot be relied upon. It is clear that the place of incident as mentioned by the Complainant is correct.

Next issue is whether SOS/distress calls were received from the Nakhuda of Sea Queen or not. Learned Counsel for the Complainant stated in the rejoinder affidavit that a distress call was sent from MSV Sea Queen and the same was received by MSV Chetak, who responded to it, which is clear from the statements of the crew members of MSV Chetak recorded by the Superintendent of Customs, Mandvi on 03.06.2011, stating that a distress call was received by them and they rescued the crew members of MSV Chetak and the statements of the crew members of the sunk vessel duly corroborated with the statements of crew members of the rescuing vessel.

Opposite Parties/Insurance Company also raised the issue relating to the value of the vessel. It was submitted that the claim of the Complainant was based on the report of G.P. Dave and Sons, Surveyors without any instructions or information to the Opposite Parties/Insurance Company and the Opposite Parties could not have the opportunity to examine or counter the said report. It is important to note that the report of G.P. Dave & Sons is dated 25.08.2010. However, the Insurance Policy is dated 11.12.2010. It is very much clear that the Opposite Party/Insurance Company had ample opportunity to verify the said report before issuing the Insurance Policy. At this stage, Opposite Party/Insurance Company cannot take the plea that they did not have the opportunity to counter the survey report. Otherwise also, Opposite Parties could not produce any evidence contrary to the survey report dated 25.08.2010. This argument of the Opposite Party is rejected.

Opposite Parties further took the objection that Crew members were illiterate and their statements relating were got prepared to make a false case. It is relevant to mention that the statements of crew members regarding the incident were recorded by the Superintendent of Customs, Mandvi. The Tandel of MSV Chetak also gave statement to the Superintendent of Customs, Mandvi. On 04.06.2011, statements of crew members were recorded by the Immigration Officer, Mandvi Police. Statement of Tandel of MSV Chetak was also recorded by him. Thus, it cannot be said that the statements of the crew members were fabricated to file a false case.

In view of the foregoing discussion, Complaint is allowed. Opposite Parties/Insurance Company is directed to pay insured amount of Rs.1,62,70,000/- with 9% interest from the date of Complaint till realization, within a period of eight weeks from the date of this order. There shall be no order as to costs. (Paras 13 to 25)

Result: Complaint Allowed.