IMPORTANT POINTS
(1) Insurance—Marine Hull & Machinery Policy—Engine fire in Vessel—Insurance claim rejected on the ground that Complainant had breached due diligence by using non-genuine spare parts during previous repairs—Whenever Insurer relies upon exclusion clause with respect to policy, onus of proving that case falls under exclusion clause of policy in question, is entirely on OP.
(2) Marine Hull & Machinery Policy—Mere non-reporting of a breakdown which could be addressed locally by Crew itself does not by itself constitutes sole ground for repudiation of entire claim.

JUDGMENT

AVM J. Rajendra, AVSM VSM (Retd.), Member—The present Consumer Complaint has been filed under Section 21of the Consumer Protection Act, 1986 (for short “the Act’) against the Opposite Party seeking to direct the OP:—

(A) Hold the opposite party in breach of its contract for insurance bearing policy No.620100/22/10/01/00000002 dated 28/07/2010 and hence liable for deficiency in service;

(B) Direct the opposite party to pay sum of Rs.3,58,07,524/- (Rupees Three Crores Fifty Eight Lakhs Seven Thousand Five Hundred and Twenty Four only) as originally claimed by, the complainant alongwith 12% interest p.a. from date of claim i.e. 17.08.2010;

(C) Grant compensation of Rs.50,00,000/- towards consequential loss caused to complainant by opposite party;

(D) Grant compensation of Rs.1,00,000/- towards legal costs incurred by the complaint at the hands of opposite party;

(E) Pass any other order or such further orders as this Hon’ble Commission deemed fit and proper in the facts and circumstances of the present case.

2. Brief facts of the case, as per the Complainant, are that the Complainant is a Shipping Company registered under the Indian Companies Act with registered office at Plot No.731, Road No.36, Jubilee Hills, Hyderabad 500 033 and engaged in the business of providing integrated logistics and shipping services in India. The Opposite Party (OP), National Insurance Company (NIA), is a wholly government-owned general insurance company and serves as the Service Provider to the Complainant. The Complainant had obtained Marine Hull & Machinery Policy No.620100/22/10/01/000000002 from the Opposite Party covering the period from 28.07.2010, to 27.07.2011, for a sum insured of Rs. 55 Crores, subject to various terms and conditions forming part of the policy. The policy was governed by the ITC Hull clause, Institute Warranties, Institute Classification clause, compliance with ISM code, Assignment clause, Premium Instalment clause, IRCC BBEW Exclusion Clause, War Cover as per GIC War risk, and SRCC Clause. Between 08.04.2010, and 15.06.2010, the Complainant as per industry requirements, procedure, and practice, arranged for periodical Class surveys to be conducted. Two such surveys were carried out in 2010 prior to the Policy period, whereby the Class of the Vessel was warranted to remain as specified in the Policy Warranty Clause. Following standard industry practice, the Complainant had appointed M/s Fleet Management Ltd. as its Manning Agent for the Vessel since 2008, continuing through the Policy Cover period. During the operation period of the Policy in question, on 02.08.2010, while the vessel was en-route from Colombo to Kandla at about 08:42 Hours, the Main Engine No.5 unit of the vessel experienced a scavenge fire, necessitating the stoppage of the Main Engine. The Main Engine cylinder liner was suspected to be cracked, and at 11:40 hours on the same day, the engine was restarted and the vessel proceeded at slow speed to safe anchorage off Cape Comorin for further investigation. Upon examination, the Main Engine unit No.5 was found to have a cracked cylinder liner. The vessel weighed anchor at 22:00 hours on 05.08.2010, and proceeded to Tuticorin Port, arriving at Tuticorin outer roads and anchoring at 11:12 hours on 06.08.2010. Subsequently, the Complainant’s representative and Wartsila’s (Main Engine Manufacturer) Service Engineer boarded the vessel at anchorage and conducted a preliminary inspection of damages and estimated repairs. In compliance with policy stipulations, the Complainant notified the OP about the incident on 17.08.2010 and requested the deployment of a surveyor to assess the loss and damages aboard the Vessel at anchorage. During the vessel survey period, the Complainant also informed the Class authorities to conduct their own vessel inspection. Upon receiving the Complainant’s notice, the OP appointed M/s J. Basheer & Associates as surveyor to evaluate the vessel and submit a report assessing the d