HAJIDAUD HAJI HARAN ABU vs UNITED INDIA INSURANCE CO. LTD.

THE complainant has alleged that the failure on the part of the Opposite Party - Insurance Company in settling his claim on the Insurance Policy constitutes a deficiency in service under the Consumer Protection Act, 1986.

THE facts briefly are that the complainant Shri Haji Daud Haji Haran Abu had purchased a vessel ''Chandra-Vasa'' from the registered owner of the vessel by an agreement of Sale of 6th June, 1982. He had got the vessel insured with the Opposite Party - Insurance Company and the insurance was renewed from time to time. The last renewal policy was for one year from 16th October, 1986 when this vessel was insured for a sum of Rs. 13,00,000/-. During its voyage in June, 1987 from Dubai to Bombay with a cargo of dates, the vessel ran into a hurricane as a result of which it sank in the sea along with its crew. It is this loss of vessel which has given rise to this claim under the Insurance Policy.

THE Opposite Party Insurance Company has not paid the claim on the ground that the complainant Haji Harun Abu had no insurable interest in the vessel ''Chandra Vassa''. The true owner of this vessel was Shri Ramesh Chandra Gordhandas Faldu in whose name the vessel is registered; the vessel is also mortgaged with the Director of Port, Government of Gujarat against a loan of Rs. 11,25,000/-. The complainant has purchased this vessel from Shri Faldu in the year 1982 for a total Sum of Rs. 3,00,000/-out of which he paid a sum of Rs. 1,01,001 as earnest money and the balance of Rs. 2 lakhs was payable when the possession of the vessel was handed over to the purchaser. All the transfer papers in respect of the vessel were signed and presented to the various Department.

THOUGH the complainant claims to have paid the consideration of Rs. 3 lakhs in full, he was unable to produce the stamped receipt in token of having paid the balance consideration of Rs. 2 lakhs to the owner of the vessel. The ownership of the vessel was registered with the Gujarat Maritime Board, Gujarat According to the Maritime Board, the purchaser Shri Haji Haran Abu was only an administrator of the vessel but not the owner of the vessel. We have gone through the records and we have heard the parties. We are of the opinion that there is merit in the complaint of the complainant for the following reasons: (i) The insured had paid the amount of consideration of Rs. 3 lakhs in full: Rs. 1 lakh as earnest money deposit and the balance of Rs. 2 lakhs by way of bank draft. He has however, not been able to produce the receipt in support of the payment of Rs.21akhs. It is, however, not clear to us as to how the Opposite Party can maintain that the complainant had no insurable interest in the vessel and that therefore, no liability could arise under the policy of insurance. It was the duty of the Insurance Company to have verified the title of the insured at the time of insuring the vessel and issuing the policy of insurance. This was not a matter in the special and exclusive knowledge of the insured only. The proposer for insurance could have easily asked to produce his title to the vessel which he was getting insured by payment of premium from time to time.

THE agreement of sale is between the registered owner of the vessel and the purchaser i.e., the complainant before us. It appears that the title in this property was not transferred in the name of the complainant inasmuch as the mortgagee also had an interest in the property along with the purchaser. The possession of the vessel and its custody was with the complainant. In fact it is seen from the communication of 25th September, 1992 by the Gujarat Maritime Board to the Insurance Company that the insured was considered by the Board as an administrator and averred that the insurance amount should be paid only to the Maritime Board.

WE are unable to appreciate the contention of the insurer that the complainant had no insurable interest pending cancellation of the registration in the name of Shri Faldu and registering the vessel in the name of Shri Haji Daud Haji Haran Abu, the complainant. It is also ununderstandable that the Opposite Party Insurance Company should have continued to receive the insurance premium from year to year and yet when the insured property is lost, the insurer raises the question of the party, "which had paid the premium all these years, having an insurable interest or not. From the facts of the case we have no doubt that the complainant was the de facto owner of the vessel. He had its possession and he had paid the premium by getting insured this vessel. He could not have done this if he had no insurable interest in the said property. The agreement of sale clearly notes that the vessel has been financed by the Government of Gujarat and the outstanding amount payable on that account viz. Rs. Ten Lakhs would stand transferred to the name of the purchaser and repayment thereto would be the liability of the purchaser, from the date of the agreement viz. 8th June, 1982; only the amounts due to the Maritime Board for the period prior to the date of the agreement would be the liability of the vendor of the vessel. The agreement also envisaged the transfer of the vessel to the name of the purchaser in the records of the Government Port Trust of the Customs Department records. It is also not the contention of the Opposite Party Insurance Company that it has received any claim from any other party for the vessel after 1989 when the vessel sank.

FROM the totality of these facts, there is no doubt that the complainant has insurable interest in the property and repudiation or non-payment of the claim on the ground that the insured had no insurable interest was not correct, fair or proper. In the result, there has been deficiency of service on the part of the Insurance Company. We therefore, accept the petition and direct that the Opposite Party-Insurance Company shall pay to the insured the it due under the policy of insurance viz. lakhs with interest @ 18% p.a. from the expiry of four months from the date on which the claim was lodged with the insurer viz. the United India Insurance Co. Ltd. The complainant is allowed Rs. 2,500/- as costs.