SINGIREDDY SANKARA VARA PRASAD vs United India Insurance Co. Ltd.

THIS appeal arises out of the order dated 28.11.2002 of the Andhra Pradesh State Commission in Original Complaint No. 3/96. Motor Fishing Trawler KKD-1849 owned by the appellant S. Sankara Vara Prasad for which a Hull Insurance Policy was taken by the respondent-United India Assurance Company, sank off Puri coast on 10.11.1993. An Insurance claim of Rs. 4 lakh was filed by the appellant. It is alleged that J.B. Boda, Surveyors, Bhubaneswar (Chief Surveyor - Capt. V.K. Narula) appointed by the Insurance Company to survey the loss, submitted their report on 22.3.1994 recommending accepting the claim. However, it is alleged that the Insurance Company appointed a second Investigator, Indian Maritime Survey, Consultation and Investigation Company whose Chief Surveyor, Capt. Jacob Rao gave his report on 28.6.1994 recommending that the Insurance claim should be repudiated. However, the Insurance Company took no action one way or the other.

AFTER waiting for a considerable time, the appellant, S.S.V. Prasad filed a complaint before the State Commission on 8.2.1996 alleging deficiency in service. It is only eight months after the complaint was filed that the Insurance Company repudiated the claim on 31.10.1996. The State Commission which heard the complaint observed that the story of sinking of the boat is doubtful and came to the conclusion that there was no deficiency of service on the part of the Insurance Company as the repudiation of the claim is neither arbitrary nor baseless. It is against this dismissal of the complaint that the appeal is filed before us. The State Commission held- (a) that the complainant did not give adequate details about the circumstances in which and the reasons because of which the boat sank; (b) that there was no adverse weather conditions at the time of alleged sinking; (c) that the salvage operation carried out by the vessels VPT 850 and VPT 448 on 12.11.1993 could not locate the sunken boat; (d) similarly, even the first Surveyor who recommended acceptance of the claim also could not locate the sunken boat; (e) that the villagers in the fishing villages closed to the area where the boat allegedly sank had not recovered any wreckage from the sunken boat; (f) that information about the sinking of the boat was not given immediately; (g) that the complainant did not inform about the sinking at the nearest Police Station (Ramba Police Station) but reported the case at a different place (Brahmagiri Police Station), and (h) lastly, that there are discrepancies in the statements of the drivers of the vessel VPT 850 and VPT 448 regarding rescue of the crew from the allegedly sunken boat.

The State Commission also relied upon the report of the second Investigator who recommended rejection of the claim on the ground that there is no evidence of sinking, and in that particular area, there have been many bogus claims of sinking fishing boats on the Insurance Company.

DURING arguments before us, the appellant/complainant challenged all these findings and argued that the decision of the State Commission is based on guess and surmises without any proper evidence. He has drawn our attention to his own affidavit as well as the affidavits of drivers of the rescue boats (A-20 and A-21), the affidavit of the driver of the salvage boat and the affidavit of the driver of the sunken boat. His argument is that if all these statements are read together, there are no discrepancies whatsoever. The driver of the sunken boat KKD 1849 stated that the boat sank at 5.00 p.m. on 10.11.1993 off the coast of Addagonda at a depth of 25 fathoms when they were trying to haul the catch and the pulley had got stuck and because of the excessive weight of the catch, the boat overturned and quickly sank. The complainant further avers that he came to know about the sinking at 9.00 p.m. on 11th when the driver and deck hands came to his house at Vishakhapatnam and reported the loss. They also reported that boat VPT 850 which was close-by saved five crew members of the sunken boat swimming in the sea. Similarly another boat VPT 448 rescued two other crew members. Both these rescues have taken place within hours of the sinking of the boat. However, boat VPT 850 returned to Vishakhapatnam only on 11th night at 9.00 p.m. and the rescued driver and deck hands reported the incident to the owner. This very boat VPT 850 at the request of the complainant left for salvage operation the next morning i.e. on 12.11.1993 at 9.00 a.m. They however could not locate the sunken boat. The other boat VPT 448 which rescued two other crew members at about 7.00 p.m. on 10.11.1993 returned to Vishkhapatnam only at about 10.00 p.m. on 13th, doing its own fish catch. The crew of VPT 850 did not know that the boat VPT 448 picked up two of the crew members from the sunken boat and similarly the members of VPT 448 did not know that some of the stranded crew was rescued by VPT 850.

SIMILARLY the appellant explained that Brahmagiri Police Station was the closest to the site of the accident and not Ramba Police Station as assumed by the State Commission. The Meteorological Department gives weather reports of major ports. But the conditions about micro weather at intermediate points like the place of the accident could only be known to the crew members of the port involved in the accident or of the rescue boats. In the present case there is no justifiable reason to disbelieve the say of the complainant that boat sunk. There is no reason to disbelieve the affidavit of the crew members and also the say of the crew of the rescuing boats as stated above. No adverse inference can be drawn for lodging the FIR at Brahmagiri Police Station, according to the complainant it was the nearest Police Station. In any set of circumstances there was no reason to disbelieve the report dated 22.3.1994 given by the Surveyor--M/s. J.B. Boda Surveyors (P) Ltd. Surveyors have considered as under the cause of loss regarding the sea condition: "Around 1500 hours the sea breezes start blowing and by 1700 hours these breezes gather considerable momentum. This is a local phenomena which is generally experienced off the Orissa Coast and by night-fall, the winds generally drop/subside." It further noted, "The rope sling suddenly jerked out of the groove on the sheave and was jammed between the chunt of the block and the sheave........The sudden shifting of the lop weight, caused the vessel to move from a positive stability to neutral stability and finally negative stability, which caused the trawler to heel over and sink. The cause of loss in our opinion may reasonably be attributed to loss of stability in rough sea which caused the trawler to sink."

IN any case, it is not the argument of the complainant that weather played a major part in this accident and that it is essentially because of the hanging overload of the catch that the boat became unstable and capsized. "The appellant challenged the appointment of the second Surveyor and INvestigator by the INsurance Company alleging that it cannot go on appointing Surveyors till it gives a report suitable to it. He further argued convincingly that though the second report is said to have been dated 28.6.1994, it is clear that no such report existed at the said date. It may be noted that the complainant filed an earlier complaint (original petition No. 459/1994) before the District Forum alleging delay on the part of the INsurance Company in deciding his claim one way or the other. On a promise from the INsurance Company that the matter is still under investigation and is yet to be decided, District Forum dismissed the complaint as premature. IN the course of these proceedings, INsurance Company filed a counter in November, 1994. However, in that counter no reference has been made to the so-called second investigation report. Had that report been available on 28.6.1994, the INsurance Company surely would have made reference to it in its counter statement. We are inclined to agree with this contention. The Surveyor who gave the second survey report described himself as Capt. P. Jacob Rao. The appellant argued before us that the qualification of Capt. Jacob Rao does not entitle him to call himself a Captain. IN this connection, our attention has been drawn to the said Jacob Rao''s statement in the course of proceedings in O.S. No. 329/1995 on file of Principal Sr. Civil Judge, Kakinada.

FURTHER, the so-called survey after lapse of 6-7 months of the incident is of no consequence and it cannot be relied upon to destroy the survey report of M/s. J.B. Boda Surveyors Pvt. Ltd. dated 22.3.1994. There is nothing unusual about the two rescue boats completing their schedule of fishing operations and coming back to Vishakhapatnam port two or three days later along with rescued crew members. The appellant has given information about the sinking of the boat as soon as he came to know about it and at the earliest opportunity. We find no discrepancies in the statements of the appellant, the drivers of rescue vessels and driver of the sunken boat when they are read together. The first Surveyor''s report has recommended the claim. It is relevant to point out that the Insurer also has responsibility to adhere to certain norms of service especially when the Surveyor recommended payment of the claim.

The relevant norms for service by insurer to the insured are: (i) effective protection of the interest of the insured; (ii) insurers duty to make diligent application of mind to the terms of the policy and the relevant materials and to accept the claim of the insured unless the insured has clear evidence of the breach of a condition on the part of the insured; (iii) onus of proof of breach of conditions by insured is on the insurer; and (iv) prompt settlement and payment of claim.

FOR the onus of proof in Halsbury''s Laws of England, Vol. 25, 4th Edn., p. 421, p. 254, it has been stated as under: "421. Onus of proof. As a general principle, the onus is on the insurers to prove that a condition has been broken, not on the assured to prove compliance on his part with each and every stipulation. It may well be that, if there is a question as to whether a contract of insurance has ever come into existence or begun to be operative, the assured has to prove the happening of any events necessary to its existence or operation, but where the question is as to the insurers'' liability under an admittedly effective policy, the rule as to the burden of proof is axiomatic in insurance law. It is open to the parties to alter this result of making an express stipulation that the onus of proof is to be on the assured, but very clear words are necessary to achieve such a result."

In the present case, the Insurance Company has not produced any evidence of substance to repudiate the claim. We are unable to agree with the arguments of the Insurance Company which repudiated the claim without valid reasons after the complaint was filed in the State Commission. There is no reason to disbelieve the say of the appellant that motor fishing trawler owned by him sank on 10.11.1993.

WE also note the unconscionable delay on the part of the Insurance Company in deciding the claim. The accident took place on 10.11.1993 and repudiation came only after three years i.e. on 31.10.1996, that too after the complainant had approached the District Forum and the State Commission for the first time, and to the State Commission, on second time. The appellant''s claim has been unjustly repudiated by the respondent Company. The appeal is therefore allowed and the order of the State Commission is set aside. A period of six months from the date of the claim is a reasonable time for an Insurance Company to decide of the claim. Keeping this in mind the respondent Company, United India Assurance Company is ordered to pay the insured sum of Rs. 4 lakh with interest at 8% from 15th May, 1994. In view of the above order the order of the State Commission is set aside. The respondent shall pay Rs. 10,000 as costs to the complainant. Appeal allowed.