New India Assurance Co. Ltd. vs PATITAPABAN KARAN

THE Cuttack District Forum by order dated 5.5.2004 made in C.D. Case No. 231 of 2003 has directed the New India Assurance Company Limited to settle the claim of the complainant within three months from the date of receipt of the order. Being aggrieved by the aforesaid order the Insurance Company has filed C.D. Appeal No. 385 of 2004. THE complainant has filed C.D. Appeal No. 30 of 2005 praying for a direction to the Insurance Company to make payment as per the claim laid in the complaint. Both the appeals being analogous they were taken up together for hearing and are disposed by this common order.

THE case of the complainant is that he availed loan of Rs. 1,69,000 on 5.2.1997 from the Cuttack Gramya Bank, Judum Branch for the purpose of pisciculture by excavating his tank. He started the project with the technical assistance of the Fishery Extension Officer. THE pisciculture project tank was insured with the New India Assurance Company Limited for Rs. 1,69,000. An amount of Rs. 8,837 was paid as premium. During the period from 29.10.1999 to 1.11.1999 there was super cyclone in the costal Orissa which totally devastated the pisciculture project tank as a result there was heavy loss. THE devastation took place during the subsistence of the policy. On being informed, the Branch Manager of the Cuttack Gramya Bank along with the Fishery Extension Officer conducted spot verification of the damaged tank and they assessed the loss at Rs. 82,500. THE Bank requested the Insurance Company to settle the claim. THE Insurance Company instead of settling, repudiated it on the ground that there was "no total loss" and therefore the policy does not cover it. THE Insurance Company filed written version contending inter alia that the complaint was barred by time and the policy does not cover the claim. The Gramya Bank filed written version supporting the plea of the complainant.

By the impugned order the District Forum overruled the plea of limitation and held that the complainant sustained loss of Rs. 82,500 as the pisciculture was affected by the super cyclone. It accordingly directed the Insurance Company to settle the claim.

THERE is no dispute that the complainant availed loan of Rs. 1,69,000 from the Judum Branch of Cuttack Gramya Bank for the purpose of pisciculture by excavating his tank in February, 1997. It is also an admitted fact that the pisciculture tank project was insured with the Insurance Company for Rs. 1,69,000. Heavy amount of Rs. 8,873 was paid as premium. It is not controverted that during the subsistence of the policy the pisciculture project was affected on account of super cyclone. In view of the admitted position mentioned above, the question that arises for consideration is whether the plea of the Insurance Company that as there was no total loss to the pisciculture project, insurance coverage does not extend to it is valid. Counsel for the Insurance Company by referring Clauses 8 and 9 of the Inland Fish Insurance Scheme submitted that the claim is not entertainable because the policy covers only total loss and in the instant case loss was partial. Learned Counsel for the respondent while disputing the above contention submitted that the exclusion clause was not included in the policy nor was it disclosed to the complainant and therefore the Insurance Company is not entitled to claim benefit of the exclusion clause. In this connection he placed reliance on the decision of Supreme Court in M/s. Modern Insulators Ltd. v. Oriental Insurance Co. Ltd. in I (2000) CPJ 1 (SC)=II (2000) SLT 323=2000 (1) CPR 93 (SC). Clause 8 of the Inland Fish Insurance Scheme as well as Clause 9(4) may be extracted hereunder. 8. Insurance Coverage This policy covers only total loss and in case the percentage of loss of any particular stage is equal to or exceeds 80% of the total population of fish in pond it is treated as total loss. However collective loss of different incidents will not be treated as total loss for the purpose of claim. "9. Exclusions (i) xxx xxx xxx (ii) xxx xxx xxx (iii) xxx xxx xxx (iv) Partial loss of any kind."

Bare perusal of the aforesaid would indicate that in case the percentage of loss is equal to or exceeds 80% of the total population of the fish in pond it is treated as total loss. It is the case of the complainant that due to the cyclone the entire pisciculture project tank was devastated. In the joint verification report submitted by the Manager of the Gramya Bank and the Fishery Extension Officer it has been mentioned that the pond was submerged under water and the fishes and fries were going outside from the tank. This indicates that because the tank was submerged under water there was loss of the entire population of fish reared in the tank. The Insurance Company has failed to adduce any evidence that the percentage of loss was less than 80% of the total population of the fish. Therefore the exclusion clause is of little assistance to the Insurance Company.

AT this stage we may consider the submission of the Counsel of the complainant that the Insurance Company cannot rely upon the exclusion clause when the same was not included in the policy. The Supreme Court in the case of M/s. Modern Insulators Ltd. (supra) has held as follows: "It is the fundamental principle of insurance law that atmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties known. The insured has a duty to disclose and similarly it is the duty of the Insurance Company and its agents to disclose all material facts in their knowledge since obligation of good faith applies to both equally."

Counsel for the complainant emphatically denies that the Clauses 8 and 9(4) of the Inland Fishery Insurance Scheme were included in the policy or the contents were disclosed to him. There is nothing on record to show that aforesaid clauses formed part of the policy. Insurance Company has also not adduced any evidence to prove that those provisions were brought to the notice of the complainant. Therefore, reliance on Clause 8 and Exclusion Clause 9(4) by the Insurance Company is of no avail. We may now deal with the plea of the Insurance Company that the complaint was barred by time. The plea of limitation taken by the Insurance Company is misconceived. It is true that the cyclone took place in October 1999 and the pisciculture project tank was damaged, but the Insurance Company repudiated the claim in March 2002. The cause of action arose only after communication of repudiation and the complaint having been filed on 24.9.2003 we have no hesitation to hold that it is within time. The crucial question is extent of loss sustained by the complainant. The Branch Manager of the Bank as well as the Fishery Extension Officer inspected the tank and assessed the loss at Rs. 82,500. There is no reason as to why we should not accept the above assessment. We cannot lose sight of the fact that the heavy amount of Rs. 8,873 was paid as premium for affecting the insurance. The damage was done in October, 2002. The complainant is entitled to interest for the delay in settling the claim.

CONSIDERING the facts and circumstances we are of the opinion that, ends of justice would be met if the claim is settled at a consolidated amount of Rs. 1 lakh. We order accordingly. The impugned order is modified. We hold that the complainant is entitled to Rs. one lakh as full and final settlement of the claim and this amount should be paid by the Insurance Company to the financier Cuttack Gramya Bank, Judum Branch before 30.6.2007 failing which it shall carry interest @ 9% per annum from the date of incident (30.10.1999).

IN the result C.D. Appeal No. 385 of 2004 filed by the INsurance Company is dismissed. The complainant''s C.D. Appeal No. 30 of 2005 is allowed. Appeal No. 385/2004 dismissed. Appeal No. 30/2005 allowed.