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

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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

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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

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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

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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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