New India Assurance Co. Ltd. vs Bhagaban Behera and Others

Krushna Ram Mohapatra, J.—This appeal is directed against judgment and decree dated 25.08.1993 and 09.09.1993 respectively passed by learned Subordinate Judge, Berhampur in M.S. No. 28 of 1985-III. The defendants 1 and 2 before the trial Court are the appellants and plaintiffs are respondents 1 and 2 respectively in this appeal. Defendant No. 3 is respondent No. 3 in this appeal.

Shorn of unnecessary details, the suit was filed for a declaration that the loss sustained to the Trawler of the plaintiffs as ''Constructive Total Loss'' (for short ''CTL'') and hence the defendants 1 and 2 are liable to pay the insured amount of Rs. 2.80 lakh along with interest at the rate of 12% per annum from 03.06.1982 till the date of actual payment to the plaintiffs or to defendant No. 3.

With the financial assistance of defendant No. 3, namely, Indian Bank, Gopalpur Branch in the district of Ganjam, the plaintiff No. 1 purchased a Trawler, namely, ''Jalapari''; it was insured with defendant No. 2 through defendant No. 1. The policy was issued jointly in the name of plaintiff No. 1 and defendant No. 3 (the financier). The policy covered the risk of the Trawler, along with its hull, machineries with accessories, fitted with Rustun engine for a sum of Rs. 2.80 lakh. The Trawler was being used for fishing purpose in and around Paradip Port. On 3rd June, 1982, the Metallurgy Department issued a cyclone warning. At 4.30 PM there was heavy rain followed by strong wind and around 6.30 PM, the cyclone hit the Paradip Port. As a result, the wheel house of the Trawler ''Jalapari'' was blown out and the trawlers anchored near Kakinada point dashed against each other. The plaintiff No. 1 along with his watchman who were in the trawler tried their level best to protect it. But when the cyclone gathered momentum, they had to run to the place of safety to save their lives. At about 5.00 AM on the next morning, i.e., on 4th June, 1982 the plaintiff No. 1 and his watchman found the trawler ''Jalapari'' capsized and lying under other trawlers and the same was completely damaged. Thus, the plaintiff No. 1 on the very same day informed the incident as well as the condition of the trawler at the nearest Police Station as well as to defendants 1 to 3. The defendant No. 1, namely, the Divisional Manager of the New India Assurance Company Limited acknowledging receipt of the information sent through telegram as well as letter replied the plaintiff No. 1 on 16.06.1982 to take all precautions to minimize the loss and salvage the trawler in consultation with their approved surveyor, namely, J.B. Boda Marine and General Survey Agencies Private Limited. Being instructed by defendant No. 1, said Surveyor conducted the survey of the ill-fated trawler ''Jalapari'' on 29.06.1982 and observed that other trawlers were lying atop ''Jalapari'', the hull was badly broken and the wheel house was completely wound off. After the survey, the surveyor advised the plaintiff No. 1 to salvage the trawler immediately. As per the instruction, the plaintiff No. 1 engaged M/s. Marine Garrage of Paradip who got the trawler salvaged at a cost of Rs. 15,000/-. After the salvage, the plaintiff No. 1 got the trawler ''Jalapari'' examined/inspected through M/s. Mahanadi Engineering Works, a registered boat builders of Odisha on 30.06.1982. On thorough examination, it gave an estimate of Rs. 1,45,100/- towards repair to be effected to the hull. Likewise, the plaintiff got the engine of the boat examined by M/s. Greaves Cotton Co. Ltd., Bhubaneswar, who inspected the boat on 30.06.1983 and submitted an estimate of Rs. 1,05,000/- for repairing of the engine. The loss to the accessories, i.e., equipments like nets and outer board etc. was to the tune of Rs. 40-45 thousand. As such, the plaintiff No. 1 was required to spend an amount of Rs. 2.80 to Rs. 2.85 lakh to make the trawler seaworthy. As the cost of repairing was almost equal to the original cost of a trawler, the plaintiff No. 1 sent a notice to defendants 1 and 2 to abandon the trawler and treat the loss as CTL. He also sent the notice to defendants 1 and 2 protesting the manner of survey conducted by the Surveyor, M/s. J.B. Boda appointed by them. On receipt of the notice, the plaintiff No. 1 received a sum of Rs. 9,000/- only towards salvage charges. However, the defendants 1 and 2 did not respond to the estimate submitted by the plaintiff No. 1. Finding no other alternative, the plaintiffs got the damaged trawler surveyed through a private surveyor, namely, M/s. D. Mishra, a Marine Engineer, who is also registered Marine Vessel Surveyor, who reported the loss to the trawler as CTL. The survey report of M/s. D. Mishra was sent to defendants 1 and 2 to release the insured amount treating the loss to the trawler as CTL. Due to the indifferent attitude of defendants 1 and 2 in redressing the grievance of the plaintiffs, the suit was filed for the aforesaid relief.

The defendant No. 2 only contested the suit by filing written statement denying the averments made in the plaint. In its written statement, the defendant No. 2 averred that the original insurance policy should be produced by the plaintiffs in Court to maintain the claim from defendants 1 and 2. It further contended that the survey report submitted by an outsider might have been procured for unlawful gains of the plaintiffs. The defendant No. 2 further contended that the survey report submitted by its Surveyor does not disclose a CTL to the trawler ''Jalapari'' and the loss of the trawler was partial one. As the insurance policy covers only CTL and not a partial loss to the trawler, the plaintiffs are not entitled to any amount under the insurance policy. Thus, they prayed for dismissal of the suit with cost.

Defendant No. 3 though filed a separate written statement did not contest the suit. It contended that the plaintiffs had incurred a loan of Rs. 2,17,500/- and over draft of Rs. 10,000/- for purchase of trawler. The transaction was not a joint venture of plaintiff No. 1 and defendant No. 3. The trawler was purchased for the business of the plaintiff No. 1 only. It further contended that due to non-payment of the loan installments TMS No. 1 of 1985 was filed by the defendant No. 3 and both the plaintiffs were held liable jointly and severally to pay the suit amount. Thus, defendant No. 3 contended that the suit as against it is not maintainable and liable to be dismissed with cost.

Taking into consideration the rival contentions of the parties as many as five issued were framed by the learned Trial Court, out of which issues 1 and 2 are relevant for adjudication in this appeal. The same are reproduced hereunder.

"1. Whether the trawler "Jalapari'' was insured during the year 1982-83 and whether during the period of the alleged storm, the boat in question was insured for a sum of Rs. 2,80,000/-?

Whether defendants 1 and 2 are liable to pay the insurance compensation amount to the plaintiffs?"

In order to substantiate their respective case, plaintiffs examined as many as three witnesses and exhibited several documents including the survey report submitted by the private surveyor as Ext. 1, copy of estimation as Ext. 6, copy of insurance policy as Ext. 9, abandonment notice as Ext. 11 and some communications between the plaintiffs and defendants. The defendant No. 2, on the other hand, examined one witness, namely, the Surveyor who conducted the survey on behalf of the Company and exhibited his report as Ext. ''A'' and few other documents.

Learned Civil Judge taking into consideration the rival pleadings, evidence and materials on record decreed the suit against defendant No. 2 on contest and ex parte against defendant No. 1 with cost. The suit was dismissed as against defendant No. 3. Learned Civil Judge declared the loss sustained to the trawler as CTL and directed both defendants 1 and 2 to pay a sum of Rs. 2.80 lakh to defendant No. 3 with interest at the rate of 12% per annum from 03.06.1982 till the date of payment and further directed the defendant No. 3 to adjust the said amount against the decreetal amount in TMS 1 of 1986.

The sole contention of the defendants 1 and 2 (appellants herein) that the loss sustained to the trawler cannot be termed as Constructive Total Loss (CTL), but the same is partial loss as evidenced from Ext. ''A''. The further case of defendants 1 and 2 was that the learned Trial Court has not appreciated the evidence on record in its proper perspective which has resulted in gross miscarriage of justice.

Mr. S.S. Rao, learned counsel for the appellants (defendants 1 and 2 contended that as per the terms and conditions of the insurance policy (Ext. 9), the plaintiffs would be entitled to the sum assured only when there is a CTL to the trawler and they would not be entitled to any amount for partial loss of the trawler. He drew my attention to Clause-1 of the insurance policy which reads as follows:--

"1. This insurance covers only:--

Total Loss (Actual or Constructive) of the Vessel (including total loss directly caused by:--

Accidents in loading discharging or shifting cargo or fuel

Explosions on shipboard or elsewhere;

Breakdown of or accident to nuclear installations or reactors on shipboard or elsewhere;

Bursting of boilers breakage of shafts or any latent defect in the machinery or hull;

Negligence of Master Officers Crew or Pilots;

Negligence of repairs provided such repairers are not Assured(s) hereunder;

Contact with aircraft;

Contact with any land conveyance, dock or harbor equipment or installation

Earthquake, volcanic eruption or lighting provided such loss has not resulted from want of due diligence by the Assured, Owner or Managers. Masters Officers Crew or Pilots not to be considered as part Owners within the meaning of this clause should they hold shares in the Vessel).

In ascertaining whether the Vessel is a constructive total loss the insured value in the policies on hull and machinery shall be taken as the repaired value and; nothing in respect of the damaged or break-up value of the Vessel or wreck shall be taken into account.

No claim for constructive total loss based upon the cost of recovery and/or repair of the Vessel shall be recoverable hereunder: unless such cost would exceed the insured value in the policies on hull and machinery."

Hence, he contended that the plaintiffs would not be entitled to any amount for the partial loss sustained to the trawler as reported by M/s. J.B. Boda, their Surveyor. He further contended that the accessories do not include a net and outer board which has not fixed to the trawler. Thus, the cost of accessories as calculated by the plaintiffs is not proper and justified. Learned Trial Court has lost sight of the aforesaid material aspect and decreed the suit which is liable to be set aside.

Mr. D. Mohapara, learned counsel for the plaintiffs (respondents 1 and 2 herein) strongly refuted the submissions of Mr. Rao. He submitted that the defendants 1 and 2 never disputed the estimates submitted under Ext. 1. They did not dispute the estimates given by M/s. Mahanadi Engineers as well as Greaves Cotton Co. Limited. Moreover, the loss of accessories as calculated by the plaintiffs was also not disputed. The Defendant No. 2 in his written statement only made an evasive denial to the pleadings in paragraph 14 of the plaint wherein, the plaintiffs have made out the details of loss sustained to the trawler. He further submitted that the defendants have never denied the contention of the plaintiffs that the fishing net and outer board are the accessories attached to the trawler. The defendants have also not put any suggestion to the witness in that respect. Hence, such a factual plea at a belated stage should not be entertained at all. Moreover, the plaintiff No. 1 was an unemployed youth and by taking financial assistance from defendant No. 3 was earning his livelihood. Due to the unfortunate natural calamity of the year 1986 his source of livelihood was lost. He has been fighting litigation to establish his right since then. Thus, the appeal deserves no consideration and therefore the same is liable to be dismissed.

On perusal of paragraph-14 of the plaint, it appears that the plaintiffs had spent Rs. 15,000/- towards salvage of the trawler by engaging a marine carriage of Paradip Port. The cost of repairing of the hull was estimated at Rs. 1,45,100/- by M/s. Mahanadi Engineering Works, a registered boat builders of Odisha. Likewise, an estimate of Rs. 1,05,000/- was submitted by Greaves Cotton Limited, Bhubaneswar for repair of the engine. It is also specifically pleaded that the plaintiff No. 1 had lost accessories of the boat to the tune of Rs. 40-45 thousand. Thus, an amount of Rs. 2.80 lakh was estimated to be the cost to make the trawler seaworthy. As the said amount is almost equal to the original cost of the boat, the plaintiffs sent a notice to defendants 1 and 2 for abandonment of the repairing of the boat and to declare the loss to be CTL. In reply to paragraph 14, the defendant No. 2 replied as follows:--

"9. That the averments made in para-14 of the plaint are not true. It is created by the plaintiff to achieve wrongful gain with the help of a outside surveyor. This defendant does not admit or believe or rely on the survey report of the outside surveyor, as this defendant has the persons to survey."

The Surveyor engaged by the plaintiff No. 1 to assess loss was examined as PW-1. He in his deposition categorically stated that he has got license from the Controller of Insurance to make survey of the boats. He is a marine engineer by qualification. He estimated the loss to the trawler at Rs. 3,01,500/-. Though he was cross-examined by defendants 1 and 2, not a single question was put to him with regard to correctness of Ext. 1, i.e., the survey report. The suggestion to the effect that the report under Ext. 1 was prepared in connivance with the owner was denied by him.

No material is available on record to disbelieve the evidence of PW-1 as well as the survey report submitted by him marked as Ext. 1. No material is available on record to show that fishing net is not an accessory of a trawler. In fact, the trawler is meant for fishing and without a fishing net, a trawler becomes useless. Mr. Rao argued with vehemence that the unit fitted to the trawler can only be termed as an accessory and not equipment carried with the trawler. Fishing net is not fitted with the trawler. The same is detachable and is being carried with the trawler at the time of fishing. Thus, the same cannot be treated to be an accessory. There cannot be any quarrel over the fact that a trawler is only meant for fishing and fishing net is an integral part of the trawler for its purposeful utilization. The Oxford Dictionary meaning of the word ''accessory'' is an ''additional or extra thing, a small attachment or fitting''. In view of the above, fishing net is nothing but an accessory of a trawler, which is covered under the insurance policy. Thus, the contention of Mr. Rao to the effect that the fishing net is an additional or extra thing, a small attachment or fitting and not an accessory of the trawler is not acceptable.

The next contention of Mr. Rao that the loss incurred to the trawler is not CTL, but a partial loss. Getting an intimation from the plaintiff No. 1, the surveyor of the defendants 1 and 2, namely, M/s. J.B. Boda inspected the damaged trawler ''Jalapari'' and submitted its report under Ext. ''A'' treating loss to the trawler to be partial one. The plaintiff No. 1 being not satisfied with the report submitted by M/s. J.B. Boda Survey Private Limited, Bhubaneswar (Ext. A) wrote to defendants 1 and 2 to make the survey through an outsider to which the defendant No. 1 did not reply. Thus, finding no other alternative, the plaintiff No. 1 got the damaged trawler surveyed through a private surveyor (PW-1) who submitted his report as per Ext. 1. Ext. 1 was sent to defendants 1 and 2 vide letter under Ext. 7. However, defendants 1 and 2 never replied to the same. The defendant No. 2 in his written statement also does not dispute the genuineness of Ext. 1. During cross-examination of the witnesses of the plaintiff, no question with regard to genuineness of Ext. 1 was put to them. Except an evasive reply in the written statement at paragraph-9, the defendant No. 2 does not even deny the pleadings made in paragraph-14 of the plaint, wherein, the plaintiffs have furnished details of loss sustained to the trawler. Thus, the case of the plaintiffs with regard to loss to the trawler goes uncontroverted. In that view of the matter, the contention of Mr. Rao to the effect that trawler has not sustained a total loss (CTL) and the loss sustained to the trawler is a partial one cannot be accepted. On perusal of the impugned judgment it appears that learned Trial Court has dealt with all the issues in detail with reference to the pleadings and evidence, both oral and documentary. Finding on each of the issues including issues 1 and 2 appear to be reasonable and backed by materials on record. Thus, the same needs no interference.

In that view of the matter, the appeal being devoid of any merit is dismissed accordingly with cost.