NATIONAL INSURANCE CO LTD vs Premjibhai Ranchhodbhai Hodar Mangrol Matsyagandha

THESE appeals are directed against the order of the State Consumer Disputes Redressal Commission, Gujarat, dated the 19th November, 1993.

THE complainant Premjibhai Ranchhodbhai Hodar in Complaint No. 30 of 1993 claimed an amount of Rs. 2,50,000/ - with interest from 21.1.1988 for the sinking of fishing boat ''Prem Sagar'' and the complainant Matsodyog Registered Co -operative Society claimed Rs. 3 lakhs for the sinking of the fishing boat Matsyagandha No. 6 with interest from 21st January, 1988 till realisation. The undisputed facts in both the complaints were that the fishing boats were insured with the opposite party - Insurance Company. They were on fishing mission on 24.10.1987 in the Indian Ocean near Jakhau Port and on 25.10.1987 were forcibly taken away by Pakistani Coast Guards and the tindel and crew were imprisoned and the above referred fishing boats alongwith other 7 fishing boats were taken in custody at Karachi Port. Thereafter, the Pakistani Authorities released the seven boats. The owners'' representatives had taken possession of the fishing boats and went with the Tindel of Indian Country Craft MSV Mandakini to Karachi Port to tow the 9 boats. The owners'' representatives carried out general repairs to the hull and machinery so as to make them sea worthy. The mooring hawsers from all the fishing boats were passed to the vessel "Mandakini" and they were adequately secured and the vessel "Mandakini" sailed on 19.1.1988 with 9 fishing boats in tow for Okha Port. At the time of the commencement of the journey, the weather was found to be fair and seasonal and there were total 16 crew members including tindel on board. At the time when all the 9 fishing boats were towed, they entered Indian waters and thereafter, on 21.1.1988, there was some disturbance in the sea. The tindel then noticed that the mooring hawsers of five fishing boats had parted and they were adrift from the towing vessel. The tindel manoeuvred the vessel towards drifted boat and were resecured the vessel. Due to the frequent parting of mooring hawsers, the tindel observed his crew members who were kept on board the fishing boats to abandon the fishing crafts and all crew members were picked up on board "MSV Mandakini". Efforts to tow the fishing boat continued till 0500 hours on January 19, 1988 but owing to heavy swell at rough sea, mooring hawsers were frequently parted and all the fishing boats drifted alongwith heavy swell at midsea. The towing of the fishing boats was required to be abandoned and all the nine vessels sunk in the sea. Subsequently, one of them was found drifted on the shore. The loss was reported to the Port Authorities and also to the opposite party. The opposite party was requested to satisfy the insurance claim. On 27th September, 1992 the complainants were informed that the Insurance Company repudiated the claim on the ground of breach of express/implied warranty -manning warranty and navigation warranty. Before repudiation the Insurance Company appointed J.B. Boda Surveyors Pvt. Ltd. to enquire and submit the survey report. The Surveyors had reported that both the fishing boats were sea - worthy and no breach of trading warranty was committed.

THE opposite parties mainly raised the contention that the complainants had not placed adequate persons on the vessel to man it which amounted to breach of manning warranty. The breach of navigational warranty pleaded was that the craft could not be towed except was is customary or when in need of assistance was committed and, as such, the opposite party was not liable to indemnify the insured and pay the insured amount.

THE parties placed material on record in support of their respective contentions. After hearing the Counsel appearing for the parties and taking into consideration the evidence placed on record the State Commission came to the conclusion that there was no breach of manning warranty as well as the navigational warranty. As a consequence thereof, the complaints were allowed. Aggrieved by the order of the State Commission, the Insurance Company has assailed the order of the State Commission by filing the present appeal. We have heard the learned Counsel for the parties at length and perused the records with their assistance.

THE contentions raised on behalf of the appellant were that the State Commission erred in holding that no breach of navigation warranty was committed. The State Commission failed to appreciate that the insured had violated the important warranties of the insurance policy which resulted in the loss of the fishing vessels. Although the vessels were physically in a fit condition, as had been repaired at Karachi Port prior to their departure, and were in a position to sail on their own, they were made to be towed by MSV Mandakini. The vessels were not having even one member crew and therefore, it was clear breach of manning warranty. The boats in question had obviously sunk because those had been abandoned for want of adequate hands to keep them in control and were left to the mercy of the winds and waves. On the other hand, the Counsel for the respondents submitted that the finding of the State Commission that there was no adequacy of the manning of the fishing boat was correct and was based on evidence produced on the record.

WE have considered the relevant contentions of the parties. The Surveyors have, in their report, stated that the craft was at sea under tow, attended to by one crew member only and was therefore, grossly undermanned. The adequacy of manning depends upon the actual use of the vessel at the relevant time. It had come in evidence that the fishing boats were towed with the cargo vessel and were properly secured and had to follow the vessel and therefore, had not to move in any other direction except the direction of the vessel and, therefore, could be adequately manned by one crew member. The report of the Surveyor also shows that the vessel Mandakini and all the 9 fishing boats proceeded comfortably on 19th and 20th October, 1998 and only on 21st October, rough weather started and the ropes which were tied started breaking. We agree with the finding of the State Commission that the crew members tried to save the boats and re -tied the ropes but ultimately the efforts were required to be given up. The damage was, therefore, caused only because of the rough sea weather and not because of any inadequacy of manning of the boats. Regarding breach of warranty of navigation. Counsel for the appellant placed reliance on the observation of the report of the Surveyor wherein it was stated that as per the warranty of navigation condition towage was permissible in two circumstances : (1) when it was customary, or (2) when in need of assistance. The crafts were reported safely afloat in harbour with their engines in working condition and were not allowed to sail on their own power but were almost crippled by tieing them to a heavily loaded vessel.

ON this aspect of the matter, the State Commission observed that the boats were taken away by the Pakistani Coast Guards and were lying in Karachi Port for a period of more than 3 months and were required to be repaired for making them sea -worthy. Some assistance to such boats was, therefore, necessary and, therefore, the owners entered into a contract and paid Rs. 6,000/ - per boat to the owner of the vessel Mandakini and despatched for Okha Port through sea. The assistance was needed to tow the boats as the boats were lying at Karachi Port for a considerable period. Even though they were repaired, the owners must have thought that the boats might not sail safely through sea especially if there was any rough weather. Otherwise, there was no necessity for them to spend Rs. 6,000/ - for each boat. Need for the assistance therefore, was necessary and established. Whether the assistance was needed or not had to be considered in the light of the relevant circumstances and considering the circumstances the assistance to tow was necessary and needed at that time.

WE have examined the reasons given by the State Commission in the light of the contentions raised on behalf of the appellant. We find sufficient merit in the reasoning rendered by the State Commission. The finding is based on correct appreciation of the evidence placed on record. We see no ground to interfere with the findings arrived at by the State Commission. The next contention raised in the appeal by the appellant was that the claim was repudiated after holding proper inquiry and considering the report of the Surveyor, and, therefore, the Commission had no jurisdiction to entertain the complaint. On this aspect of the matter, the State Commission returned the finding that the proper inquiry was not held by the Insurance Company and the report of the Surveyor was also not impartial and proper. While considering the condition about navigational warranty and adequacy of manning they had not accepted the report of the Su rveyor for the reasons as recorded in the order. Much delay was caused by the Insurance Company in considering and taking final decision and after a considerable period suddenly repudiated the claim without sufficient and adequate reasons. Therefore, there was deficiency in service by the Insurance Company.

IN our opinion, the finding is based on cogent reasons. In view of the fact that the report of the Surveyor was not accepted by the Commission, the Commission was justified in holding that the complaint was entertainable and, there was deficiency in service by the Insurance Company. We see no reason to differ with the finding arrived at by the State Commission. In the result, we hold that the appeal is devoid of merit and it deserves to be dismissed. We order accordingly. The appellant shall pay costs of this appeal to the respondents which we quantify at Rs. 2,000/ -. Appeals dismissed with costs.