FILONIO VAZ vs NEW INDIA ASSURANCE CO. LTD.

THE complainant and his deceased partner, Caetano Vaz, obtained a loan of Rs. 5,00,000/- from the opposite party No. 2 for the purpose of acquisition of a fishing trawler, namely, "Holy Mary". In addition to this loan, he spent from his own source another sum of Rs. 5,00,000/- for procurement of materials and equipment required for the trawler. THE trawler was fully insured with the opposite party No. 1 and lien was marked in favour of the opposite party No. 2. THE purpose of lien was that, in case of destruction of the fishing trawler, the amount payable by the opposite party No. 1 as against the insurance policy should be paid directly in the account of the opposite party No. 2 and that whatever dues payable by the complainant to the opposite party No. 2 would be fully adjusted from the insurance money to be paid by the opposite party No. 1. THE building of the trawler was completed on or around February, 1989. It was waterborne by the end of February, 1989 for trial and successfully commissioned on 14.2.1990. It so happened that in that season it could be run only about two months after which it had to be anchored on account of off season and rough sea weather. Unfortunately, on its first voyage of the rext season the trawler met with a fatal accident in the sea and got capsized on 24.7.1990 with all its material on board. THE complainant reported the accident immediately to the opposite party No. 2 and also to the opposite part No. 1 with a view that the due amount of insurance should be paid by the opposite party No. 1 and the complainant would get himself free from the liability of the loan account with the opposite party No. 2. THE opposite party No. 1 received the report of the accident in writing from the complainant on 25.7.1990. THEreafter the complainant exchanged correspondence to sort out his claim for years together but the opposite party No. 1 delayed the settlement of the claim demanding one document or the other in this respect. It was only vide letter dated 18.12.1996 that the opposite party No. 1 offered to make a payment of a sum of Rs. 3,71,450/- only as a matter of settlement. In the meantime, the opposite party No. 2 filed a special civil suit before Quepem Court seeking for recovery of the loan dues and obtained a decree to the tune of Rs. 5,00,000/- with interest thereon, at the rate of 12% per annum, with quarterly rest from the date of the loan till the actual payment besides costs. THE entire dues held to be payable by the complainant are on account of the investment in the trawler and consequent upon the non-payment of the insurance money by the opposite party No. 1. THE opposite party No. 1 is, therefore, liable to pay the entire dues payable to the opposite party No. 2 in addition to the other losses suffered by the complainant besides the Bank loan of Rs. 5,00,000/- with interest accrued thereon and other losses sustained by him in his business for about six years which are estimated at Rs. 1,35,000/-. Thus the total loss amounting to Rs. 11,30,411/- by the complainant which the opposite party No. 1 was duty bound to timely and expeditiously to clear. THE opposite party No. l''s failure to do so amounts to deficiency in service on his part for which he is liable to pay compensation. He, therefore, prayed that the opposite party be ordered to pay to the opposite party No. 2 all the dues which were directed to be paid by the Quepem Court and also pay an amount of Rs. 11,30,411/- as well as interest from 24.2.1997, at the rate of 15% per annum, till the actual payment by the opposite party No. 1.

IN the written version of opposite party No.1, apart from raising some preliminary technical objections, stated that the complainant''s claim for the loss of the trawler had already been decided and payment offered to opposite party No. 2. The claim was allowed on compassionate grounds, after having been approved for settlement on non standard basis in the sum of Rs. 3,71,450/- and was offered to the opposite party No. 2 in view of the fact that the complainant had assigned the policy to the said opposite party No. 2. The claim had to be approved on non standard basis because the cause of the loss was not established. The vessel was alleged to have dashed against an underwater object which was not identified and thus the loss appears to be doubtful. The opposite party No. 1 denied that they were liable to satisfy the claim in the suit adjudicated by the Quepem Court. The opposite party No. 1 also denied that there was any deficiency in service rendered by them consequent upon the fact of the loss of the vessel having not been established that was due to any peril covered by the policy. The claim had to be rejected irrespective of the same having been approved on compassionate grounds for settlement. We have heard learned Counsel and considered the documentary and affidavitary evidence on record. Admittedly the complainant, the owner or co-owner of the trawler "Holy Mary", partly financed by a loan obtained from opposite party No. 2, got the vessel fully insured, initially for a period from 10.3.1990 to 9.6.1990 and subsequently extended from 10.6.1990 to 9.9.1990, for Rs. 7,50,000/- including the Hull and the machinery. On the same occasion an additional insurance was also obtained for a further amount of Rs. 2,50,900/- covering the net and other accessories attached to the trawler. It is also not in dispute that during the period of the validity of the policy, the vessel sunk of Betul Coast on 24th July, 1990. The Case of the complainant is that the accident occurred on account of the dashing of the trawler while busy in the fishing operations against an underwater object as a result of which it got capsized and sunk with all its machinery on board. The Report dated 20th March, 1991 of the Surveyor Justin Carasco appointed by opposite party No. 1 confirms the fact of the sinking at well as of the total loss of the vessel although no definite finding has been given as to the actual cause of the sinister and/ or identification of the purported underwater object which might struck the bottom of the vessel. The Surveyor however, has clearly registered that on the day of its inspection carried on at the place of the occurrence he, alongwith the owner of the trawler (complainant) and the Development Officer of the opposite party No. 1 went down the coastline to the south of Rajbag, at a place known as Kuddem, and down the steep slope at the waterfront the complainant showed them the wreck of his trawler. The lower section of the trawler Hull turned upside down and the keel up was shown as washed lying among and on the rocks. Elsewhere, among the rocks, were also seen few planks and small sections of the trawler Hull. This description clearly indicates the total destruction of the vessel consequent upon its dashing against any hard underwater object which, although could not be identified, had certainly the potential of causing the total disintegration of the trawler essentially build on wooden planks. Hence the determination of the nature of the object which hit the vessel appears to be irrelevant and immaterial. Being so the opposite party No. 1''s contention that, due to the failure of the complainant in establishing or identifying what type of object struck the vessel, the cause of the loss could not be found as due to any insured peril covered by the policy is grossly fallacious and misconceived. If the opposite party No. 1 had really any reservations upon the genuiness of the complainant''s case in respect of its vessel having been hit by an underwater hard object, it was open to them to thoroughly investigate and determine the exact cause of the accident. This does not appear to have been done by the opposite party and the Report of the Surveyor Carasco seems on this aspect quite perfunctory. However, in our opinion, the affidavit of the complainant and the same Report are entirely consistent with the complainant''s claim as to the cause of the sinister and its consequences leading to the total destruction of the trawler which, in our estimation, means that he has fully discharged his burden of proof. Thus the burden of disproving that it was not so and that, instead, the responsibility of the vessel''s sinking was due to the complainant''s fault is to be deemed as shifted towards the opposite party No. 1.

Further, the opposite party No. I''s plea that there were also several other flaws in the complainant''s claim which warranted its rejection is manifestly vague and remained unsubstantiated by any reliable evidence on record. Hence there was no scope for the opposite party to repudiate the complainant''s claim or simply approve it on merely compassionate grounds on non standard basis, at 50% of the assessed loss, making an offer of Rs. 3,71,450/- only and this also as a final settlement of the claim. In our view the complainant has rightly rejected this kind of an unfair proposal but, even assuming that there could be any ground for the opposite party to make such an offer, the very fact of the inordinate delay in materialising it before the respondent represents, no doubt, a gross deficiency in service for which they are certainly liable to duly compensate to the complainant.

ON the other hand we are satisfied that the above mentioned Surveyor''s Report does not come to any definite conclusion as to the cause of the accident and, in the absence of any finding on the contrary, the complainant''s word otherwise corroborated by reliable circumstantial evidence, was bound to be accepted by the opposite party No. 1. In this respect the observations recorded in the final part of the Report regarding the alleged registration of the trawler and of the net only after the sinking of the vessel and the reported loss of the net as well as the fact of the warning given to the fishermen about the bad weather, are also to be summarily discarded as impertinent and totally uncalled for. Similarly, the opposite party No. 1 ''s futile effort to half-heartedly suggest that the net has not been lost and was instead recovered by the complainant remains, in our judgment, one more empty exercise ostensibly aimed at circumventing the real issue so as to justify their failure to acknowledge the genuineness of the complainant''s legitimate claim. Indeed, in terms of the policy, the opposite party No. 1 was duty bound to refund the actual value of its cost, in addition to the loss of the vessel which were both fully insured against such type of risk. Therefore, in the absence of any proof in this regard made by the opposite party No. 1 to substantiate his one more defence plea, we are inclined to reject it as impermissible and devoid of any merit. The record amply shows and the copious correspondence exchanged between the complainant and opposite party No. 1 so speaks, the absolute lack of concern displayed by the appellant in the expeditious and proper processing of the required formalities in order to adjudicate the complainant''s prayer and the very fact that a claim presented in July, 1990 merited a meaningless offer of an unfair settlement only in December, 1996, indicates the extent of the deficiency in service and the total unprofessional approach on the part of the opposite party No. 1 in dealing with the legitimate expectations of the insured parties, placed in such a distressful situation, to be promptly attended to and given relief in an adequate redress of their misfortune.

IN the result, we hold that the complainant has successfully proved the case of the deficient service rendered by the opposite party No. 1 in failing to positively adjudicate the complainant''s claim within a reasonable time for any valid reason, making him thus entitled to be adequately compensated for both material and moral loss suffered on this count. We, therefore, direct the opposite party to effect the payment of the whole sum contemplated by the INsurance Policy in the amount of Rs. 10,00,000/-, covering the risk on the machinery and Hull as well as on the nets and its accessories, within 30 days from the date of this order with interest on the amount due, at the rate of 18% per annum, right from 24.1.1991, i.e., after a period of 4 months from the date of the filing of the complaint, which in our calculation, is reasonably enough for the opposite party to settle it, till the actual payment of full amount. The opposite party shall also pay costs to the complainant on account of this protracted litigation which we quantify at Rs. 3,000/-. Order accordingly. Complaint allowed with costs.