M/s THE NEW INDIA ASSURANCE CO. LTD. & ANR Versus SHASHIKALA J. AYACHI

M/s  THE NEW INDIA ASSURANCE CO. LTD.  & ANR Versus SHASHIKALA J. AYACHI

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



NON­REPORTABLE
    IN THE SUPREME COURT OF INDIA
     CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.7573 OF 2021
M/s  THE NEW INDIA ASSURANCE CO. LTD. 
& ANR. …Appellant(s)
Versus
SHASHIKALA J. AYACHI           …Respondent(s)
J U D G M E N T
V. RAMASUBRAMANIAN, J.
1. Aggrieved by an Order passed by the National Consumer
Disputes Redressal Commission directing them to make payment
of the sum assured under a Marine Insurance Policy, the Insurer
has come up with the above appeal under Section 23 of the
Consumer Protection Act, 1986.
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2. We have heard Shri Gaurav Agrawal, learned counsel for
the   appellant­Insurance   Company   and   Shri   Siddhartha  Dave,
learned senior counsel for the respondent­Insured.
3. The respondent took a policy of insurance for a sum of
Rs.1,62,70,000/­ from appellant No.2 herein, covering risks to
the Mechanical Sailing Vessel MSV Sea Queen. The period of
validity   of   the   policy   was   from   4.10.2010   to   3.10.2011.
Contending   that   on   30.05.2011,   the   vessel   MSV   Sea   queen,
which was the subject matter of insurance, sank in the high sea
between Oman and Pakistan, due to bad weather and rough
tides,   which   damaged   the   lower   portion   of   the   vessel,   the
respondent lodged a claim with the appellant­insurer.  Since the
claim was neither admitted nor repudiated, the respondent filed
a   consumer   complaint   on   the   file   of   the   National   Consumer
Disputes   Redressal   Commission.   Thereafter,   the   appellants
repudiated the claim by a letter dated 4.09.2013 on the ground
that the subject vessel was engaged in illegal activities and was
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hijacked   by   Somali   pirates   and   that   in   any   case   the
Meteorological reports of Oman and India showed absolutely fair
weather conditions on May 29­30, 2011 and that, therefore, the
claim was false.
4. But the National Consumer Disputes Redressal Commission
allowed the claim after recording the following findings:
(i) that though the incident took place on 30.05.2011, the
surveyor   was   appointed   on   3.06.2011   and   a   Final
Survey Report was sent on 25.03.2013, the claim was
repudiated by the appellant only on 4.09.2013, which
was after more than two years of the incident and that
therefore the inordinate delay violating Regulation 9 of
the Insurance Regulatory and Development Authority
(Protection   of   Policyholders’   Interests)   Regulations,
2000, constituted deficiency in service; 
(ii) that though the insurer raised a dispute with regard to
the place and nature of the incident, the claim of the
respondent­complainant in this regard was supported
by the statement of the crew members of the subject
vessel which was recorded by the Superintendent of
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Customs and the Immigration Officer, while the plea of
the insurer was not supported by any evidence; 
(iii) that   the   Report   of   the   Meteorological   Departments
relied upon by the insurer had nothing to do with the
place of the accident; 
(iv)  the   plea   of   the   respondent­complainant   that   SOS/
distress calls were made from the sinking vessel, was
corroborated by the statement of the crew members;
and 
(v) that it was too late for the insurer to raise a dispute
with regard to the value of the vessel.
5. On the basis of the above findings, the National Consumer
Disputes Redressal Commission directed the appellant­Insurance
Company   to   pay   the   respondent,   the   sum   assured   of
Rs.1,62,70,000/­ together with interest @ 9% per annum. It is
against the said order that the appellants have come up with the
above statutory appeal.
6. The dispute between the parties revolves only around facts
especially with respect to the place of occurrence of the event and
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the   manner   in   which   the   same   happened.   According   to   the
respondent­complainant,   the   subject   vessel   commenced   its
voyage   from   Dubai   to   Mombasa   on   10.03.2011.   The   vessel
reached   Mombasa   on   28.03.2011.   On   21.04.2011,   the   vessel
started from Mombasa and reached Djibouti on 5.05.2011. The
vessel left Djibouti on 21.05.2011 on its return journey back to
India. But on 30.05.2011 the vessel encountered bad weather
and rough tides when it was between Oman and Pakistan. The
rough tides damaged the lower portion of the vessel resulting in
water entering the vessel and submerging it. According to the
respondent­complainant, the crew of the vessel made a distress
call, which was received by the crew of another vessel by name
MSV Chetak and they came to the rescue of the crew of the
sinking vessel. The crew of MSV Sea Queen left the sinking vessel
and boarded MSV Chetak which brought them to Mandvi on
3.06.2011. The crew gave statements to the Superintendent of
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Customs, Mandvi on 3.06.2011 and to the Immigration Officer on
4.06.2011. Thereafter the respondent lodged the claim.
7. But the version of the appellant­Insurance Company was
that the vessel was plying in Somalia waters, in violation of the
policy  condition  and  that  the  vessel could  not  have  sunk  at
Latitude 24.40° N and Longitude 61.43° E, as it was 200 nautical
miles North of the position where vessel was supposed to be,
keeping   in   mind   her   course.   The   place   where   the   vessel
supposedly sank was not falling in the line of track from Oman to
India. Moreover the Meteorological Departments of Oman and
India confirmed to the Surveyors, on the basis of the weather
reports for Persian Gulf that the weather was absolutely fair on
May 29­30, 2011. Therefore, it was contended by the appellant
that the vessel could not have sunk in the manner projected by
the respondent, especially at the place indicated by them.
8. Thus, there were two versions, both about the place of the
incident and about the manner in which the incident had taken
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place. The  National Consumer Disputes Redressal Commission
accepted the version of the respondent­complainant solely on the
basis of the statements of the 10 crew members, made to the
Customs and the Immigration Authorities. Since the statement of
the crew members of the subject vessel was also corroborated by
the  Nakhuda1
  of the rescuing vessel MSV Chetak, the National
Commission found the version of the respondent­Complainant to
have been proved.
9. But what the National Consumer Commission failed to see
was that there were more questions that remained unanswered
in the version of the respondent­complainant and that there were
more missing links. First of all the respondent­complainant did
not state anywhere in the complaint as to where exactly the
mishap had happened. In paragraph 9 of the complaint, the
respondent stated only broadly that the vessel encountered bad
weather   and   rough   tides,   when   it   was   between   Oman   and
Pakistan.   As   per   the   statement   of   Shri   Osman   Suleman
1 Nakhuda is a Persian word meaning Captain/Master of a vessel
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Sumbhania who claimed to be the  Tandel  (Head of the ship or
boat) of the subject vessel MSV Sea Queen, the vessel started its
voyage   from   Djibouti   on   21.05.2011   towards   India,   but   it
encountered bad weather on N 23=40 and E 61 =43°, between
Oman and Pakistan.   In the statement Shri Harun Abdreman
Ruknani,   the   Tandel   of   the   rescuing   vessel   MSV   Chetak,   he
claimed that on 30.05.2011 at about 10 o’ clock in the morning,
they were at N 23=40 and E 61 =43° and that they received a call
for help on their Wireless Radio.
10. Interestingly,   the   exact   place   of   the   occurrence   of   the
incident was mentioned by both the above named persons, only
in the statements given to the Superintendent of Customs on
3.06.2011. In the statements made by both the aforesaid persons
on 4.06.2011 to the Immigration Officer Mandvi Sea Check Post,
the exact place with Longitude and Latitude were not mentioned.
11. The Marine Casualty Report dated 16.07.2012, issued by
the Marine Mercantile Department, Kandla, of the Government of
8
India, contains a column in Column No.47 relating to weather
conditions. The respondent places reliance upon the said report
to   show   that   the   vessel   sank   due   to   bad   weather.   But
interestingly, column 47 of the report does not contain any detail
except stating broadly that there was rough weather. Column
No.47 of the Report reads as follows:
“CASUALTY DATE : 30.05.2011
47. Weather conditions : ROUGH WEATHER
1. Wind direction: force:
ii. Tide/current direction: NORTH REST Rate:
iii. Swell direction: Right:­
iv. Precipitation: Visibility: POOR”
12. It may be seen from the above that none of the sub­columns
relating to weather direction, force, swell direction, precipitation
etc. in Column No.47 has been filled up in the Marine Casualty
Report.
13. More interestingly Column Nos.50 to 53 expose the falsity of
the statements made by the Captains of both the ships to the
Customs Authorities on 3.06.2011. Column Nos. 50 to 53 of the
Marine Casualty Report reads as follows:­
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“50. Date­ 30.05.2011
51. Local time: 4.00 AM
52. Place­BETWEEN OMAN AND PAKISTAN.
52. Coordinates: ­ 23.04 N 61.43 E
53. Extent of damage to Ship: TOTAL LOSS”
14. According to Column Nos.50 and 51, the incident happened
at 4:00 a.m. local time on 30.05.2011. But according to the
statement of Shri Osman Suleman Sumbhania,  Tandel  of the
sunk vessel, the entire crew was saved at approximately 10 o’
clock in the morning. The relevant portion of the statement of
Shri   Osman   Suleman   Sumbhania   made   to   the   Customs
Authorities on 3.06.2011 reads as follows:­
“I also submit that due to the sinking of our
vessel we abandoned it and to save our souls we
lowered and boarded the small boat of our vessel
in which there were 09 crewman of the vessel
besides   me   and   at   approx   10   o   clock   in   the
morning the Tandel of the vessel MSV Chetak
saved us and safely boarded us on their vessel.”
15. It is common knowledge that the time of receipt of the SOS
message by the rescuing vessel and the actual time of rescue of
the   crew   of   the   sinking   vessel   cannot   be   the   same.   Even
10
according to the respondent, the subject vessel MSV Sea Queen
could travel only at a speed of 6­7 knots. Unless the rescuing
vessel is in close proximity, the time of the SOS call and the time
of rescue cannot be the same. Keeping this in mind if we have a
look at the statement made by Shri Harun Abdreman Ruknani,
Tandel of the rescuing vessel it makes interesting reading.  The
relevant portion of his statement reads as follows:­
“On   date   30.05.2011   during   morning   time
approx. 10 ‘o clock, N. 23=40 E 61=43 degree
passing   between   Oman   and   Pakistan,   the
weather was rough hence our course was slow,
and during this time period we heard the call for
help on our Wireless Raio (VHF) of Shri Osman
Suleman Sumbhania, Tandel (Nakhuda) of MSV
Sea Queen MNV1423, that the lower portion of
their   vessel   was   damaged   due   to   the   bad
weather and rough tides and there was a breach
of water in their vessel and it had started to sink
and they called for help to save their souls.”
16. According   to   the   above   statement,   the   Tandel   of   the
rescuing vessel heard the call for help on his wireless radio at
10 o’ clock in the morning. But according to the statement of the
Tandel of the subject vessel, they were rescued at 10 o’ clock in
11
the morning.  However, the Marine Casualty Report indicates the
time to be 4:00 a.m. on 30.05.2011. This crucial contradiction
has   been   completely   overlooked   by   the  National   Consumer
Disputes Redressal Commission.
17. The enquiry by the Surveyors with Muscat Radio revealed
that no SOS calls were made from the Nakhuda of MSV Sea
Queen nor was any response from the rescuing vessel reported.
The Meteorological Departments of both countries namely Oman
and   India   confirmed   that   the   weather   for   the   specific   area
coordinates, Latitude 23=40° N and Longitude 61 =43° E, was
fair. In contrast to the absence of details in the sub­columns of
Column No.47 of the Marine Casualty Report, the Final Survey
Report gives minute details. The relevant portion of the Final
Survey Report reads as follows:­
“We   contacted   Meteorological   Dept   of   Oman   who
confirmed   no   adverse   weather   report   all   along   the
coast of Oman or in the vicinity – Normal weather
reported for the alleged incident date and also a day
before and after.
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We   Contacted   Meteorological   Dept   of   India   and
enquired for weather report for Persian Gulf on May
29th and 30th , 2011 for the specific area co­ordinates
Latitude 23.40 North and Longitude 61.43 East and
requested them for details on wind speed, wave height,
current and swell, We were provided weather report
from India which says good weather prevailed in the
Persian Gulf in and around the location where the
vessel was reportedly sunk as under: 
29.05.2011
Synoptic situation – Weather seasonal over Persian Gulf
Weather – Fair
Wind – Mainly southwesterly 10 to 15 knots gusting 230 knots
Visibility – Good
Sea – Smooth to Slight
30.05.2011
Synoptic situation – Weather seasonal over Persian Gulf
Weather – Fair
Wind – Mainly southwesterly 10 to 15 knots gusting 230 knots
Visibility – Good
Sea – Smooth to Slight”
18. Another important feature noted by the Surveyor is that the
normal practice for the Indian Dhows trading from Indian West
Coast to the Arabian Gulf Ports and Yemen/Africa, in the month
of May is to sail along the coast of Southern Oman and after
crossing Kuria Muria Islands and Ras Madraka and set course
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North easterly to Gujarat. The skipper of Sea Queen confirmed to
the Surveyors that they also followed the same route. But the
coordinates   provided   by   the   rescuing   vessel   showed   that   the
rescuing vessel was positioned at 200 miles North. Therefore, the
Surveyor was compelled to draw the inference that MSV Sea
Queen could not have been in the area where she reportedly
sank.
19. All the above aspects were not taken note of by the National
Consumer Disputes Redressal Commission.
20. Admittedly the Directorate General of Shipping had issued a
Circular dated 31.03.2010 prohibiting the operations/trading in
waters South or West of the line joining Salalah and Male. The
Certificate of Inspection of the vessel dated 26.08.2010 reiterates
that sailing vessels are prohibited to ply South or West of the line
joining Salalah and Male as per the Circular dated 31.03.2010
issued by the DG Shipping. The Circulars issued by the DG
Shipping, especially with regard to the safety and security of the
14
vessels and the crew are to be read as part and parcel of the
policy conditions.
21. The   reason   why   the   aforesaid   condition   assumes
significance in the case on hand is that there was a query on
25.10.2010 both from the coast guard and DG Shipping about a
piracy attack on the subject vessel MSV Sea Queen. The query
was made at about 16:50 hrs. on 25.10.2010 and a reply was
sent   by   the   respondent   through   her   representative   at   about
18:12 p.m. on the same day.  The reply mail reads as follows:­
“Respected sir
In reference to telephonic discussion with you, I
most   humbly   say   that   my   sailing   vessel   MSV   sea
queen is safe and there is no piracy attack on my
vessel.
I   have   already   inform   the   coast   guard
(indsan@vsnl.net)   and   D.G.Shipping
(dgcommcentre@satyammail.net)   via   email   that   my
vessel sea queen is safe, on dated 24­10­10.
That other information regarding vessel’s registration,
ownership, address, mmsi no etc are true and correct.
There are fourteen Indian crew on sea queen and she
is on the way to Yemen loaded with general cargo. Last
year my vessel sea queen was under repair at Mandvi
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for 9 month and then for rest of the 4 month she was
plying between gulf and Somalia. I again confirm that
my vessel sea queen is safe and there is no piracy
attack on her.”
22. Again on 27.10.2010 a query was made through e­mail at
about   4:57   p.m,   about  (i)  the   position   of   the   vessel   on
23.10.2010; (ii) the current position of the Dhow; and (iii) crew
list.   A   reply   was   sent   on   behalf   of   the   respondent   at   about
5:51p.m.   on   the   same   day   stating   that   the   vessel   was   near
Madarka Yemen on 25.10.2010 and that the exact position as on
23.10.2010 was not known.
23. To show that the suspected piracy attack on the vessel on
25.10.2010 could not have been true, the respondent relied upon
a   Ship   Security   Certificate   purportedly   issued   by   the
Mediterranean Naval Security Bureau. Though it was contended
by the learned counsel for the appellant that it was a forged and
fabricated document, we do not think that we need to go so far as
to discredit the said certificate. The exchange of e­mail about the
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suspected piracy attack demonstrated at least that the vessel
was plying in the prohibited location.
24. Therefore, we are of the view that the Consumer Forum
which has a limited jurisdiction to find out if there was any
deficiency in service, could not have allowed the complaint on the
basis of sketchy pleadings supported by doubtful evidence. The
delay on the part of the Insurance Company in securing the Final
Survey   Report   and   the   further   delay   in   issuing   the   letter   of
repudiation, cannot per se lead to the complaint being allowed.
The delay in processing the claim and delay in repudiation could
be one of the several factors for holding an insurer guilty of
deficiency in service.  But it cannot be the only factor. 
25. Therefore, we are of the considered view that the  National
Consumer   Disputes   Redressal   Commission  was   in   error   in
allowing the complaint.  There was no categorical evidence of any
deficiency   in   service   on   the   part   of   the   appellant­Insurance
Company. Hence the appeal is allowed and the impugned order
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of the National Commission is set aside. However, there will be
no order as to costs.
…..…………....................J.
     (Hemant Gupta)
.…..………......................J.
(V. Ramasubramanian)
NEW DELHI
JULY 13, 2022.
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