THAMMU NARAYANA RAO vs BRANCH MANAGER, NEW INDIA ASSURANCE CO. LTD.

THIS appeal is filed against the order dated 14th September, 2001 passed by the Andhra Pradesh State Commission in Complaint No. 107 of 1994 whereby the complaint was dismissed. Brief facts of the case are: T. Narayana Rao, Appellant, is the original Complainant before the State Commission who was the owner of mechanized fishing boat NZM-120 which was purchased by him taking loan. After obtaining necessary licences required from the Port Department, he insured it with the Respondents, New India Assurance Co. Ltd, for a sum of Rs.2,45,000/- for the period from 26.3.1990 till 25.6.1990. The said boat was valued and assessed by the licenced marine surveyor, M/s. Superintendents Company of India Pvt. Ltd., Kolkata. While the boat was out at fishing operation near Gilakaladindi, Machilipatnam coast on 8.5.1990, there was a cyclone warning issued by Port Authorities, hence, the boat was kept in the Harbour Canal Jetty at Machilipatnam. Subsequently, there was heavy rain with gale winds with about 220 km speed and this weather continued upto 10.05.1990. It is the case of the Appellant that due to heavy gale winds, his boat was broken into pieces and sunk in the canal alongwith the other boats on 9.5.1990. This fact was duly informed to the Port Authorities and the Respondents.

THE Respondents appointed M/s. J.B. Boda Surveyors Pvt. Ltd., Bombay to assess the damage. The said Surveyors visited the spot of accident and duly conducted the survey and also participated in the salvage operations. The said Surveyors came to the conclusion that the cost of repairs to the hull and machinery to bring the vessel to pre-accident condition would be Rs.2,83,000/- i.e. in excess of the sum insured, namely, Rs.2,45,000/-. They, therefore, recommended that the case may be treated as "constructive total loss" and payment be made accordingly. They also assessed the cost of salvage at Rs.5,000/- and the salvage value of the recovered items at Rs.44,000/-. They finalized the valuation of salvage, engine with gearbox and hull plankings on "as it is where it is basis" for Rs.44,000/- and also took consent letter from the Appellant and recommended the payment of salvage expenses. The Respondents did not settle the claim despite several requests. The Appellant after waiting for 18 months being in a desperate financial position sent a telegram on 6.2.1992 seeking urgent settlement of the claim. The Respondents replied on 20.3.1992 stating that the claim was under process. After waiting for sufficiently long time the Appellant filed the complaint in the State Commission on 6.12.1992 claiming Rs.2,45,000/- towards constructive loss with interest at 18% p.a. from the date of the accident; for salvage expenses of Rs. 19,000/-; for loss of income at the rate of Rs.6,000/- p.m. from 9.5.1990 and also damages of Rs.50,000/-, in all totaling Rs.6,02,000/-

THE Respondents allege that there were inconsistencies and discrepancies in the Surveyor''s Report regarding the occurrence of cyclone, gale winds and rain followed by tidal waves. The Appellant''s version of the boat getting stuck up and sunk in the canal and getting broken into pieces were also not believed. Although Respondents have admitted that the said boat was insured during that period, it was felt by their authorities that it should be further investigated and the matter was entrusted to SYTCO Surveyors of Vishakhapatnam on 21.4.1992. In the Surveyors report given by the SYTCO Surveyors, the Respondents relied upon the following contradictions to the claim of Appellant regarding i) engine ii) scantilings of keel and frame flankings etc. iii) volume of salvage iv) extension of license by Nizampatnam authorities while the vessel was laid up in Gilakaladindi v) Non-insurance coverage of the vessel in the earlier years and vi) tidal wave, and the claim was not approved by them. Since the SYTCO Surveyors gave the report without going to the spot and without contacting the insured and opined on the analytical study of the available records, the Respondents reinvestigated the claim once again. In July 1992, the Regional Office of the Respondents in Hyderabad appointed Coastal Consultants Pvt. Ltd. for reinvestigation of the claim. After thorough investigations, they submitted their report dated 21.3.1994 holding that the claim is false and deserves repudiation, further explaining that the reason for the delay in submitting the report was solely due to non-cooperation of the Appellant. Based on the report of Coastal Consultants Pvt. Ltd., they repudiated the Appellant''s claim on 10.8.1994 wherein it is stated that the Appellant did not incur any real loss in view of the findings of the investigators.

THE original Complainant filed a complaint with the Andhra Pradesh State Commission on 6.12.1992. It appears that during the shifting of the office of the State Commission, the case records were misplaced and the Complainant filed a fresh complaint on 19.7.1994. The State Commission examined all the findings of the third Surveyor but essentially relied on three of the findings to dismiss the complaint. These are; firstly the Insurance cover is taken for a period of three months and that too during the lay off period i.e. between 26.3.1990 to 26.6.1990 is unnatural. Secondly, while renewing the registration of the vessel, the authorities of the Nizampatnam Port inspected the vessel on 9.4.1990 at Nizampatnam Port whereas the Complainant states that the vessel was tied up at a different place, Gilakaladindi from 1.4.1990; this is another improbability. Thirdly, whereas the licence of the vessel shows that it should operate between 10 Km from the coast, it is surprising that it was not insured for as many as three years after its construction in 1996.

WE have carefully heard the arguments of both the parties and perused the record. As stated above, the Insurance Company appointed three Surveyors one after another, namely M/s. J.B. Boda; M/s. SYTCO Surveyors and M/s. Coastal Consultants, who gave their reports respectively on 21.11.1990; 21.04.1992 and 21.3.1994. The report of M/s. SYTCO Surveyors shows that they are not surveyors but they are actually investigators who gave a brief report raising certain doubts about the authenticity of the earlier report of M/s. J.B. Boda. It would be clearly seen that M/s. SYTCO Surveyors did not visit the spot, did not record evidence of witnesses but have based their comments on analysis of M/s. J.B. Boda''s report. The third Surveyor M/s. Coastal Consultants who was appointed over two years after the event, took another two years to submit a report essentially saying that the claim is false one and doubting the existence of the vessel itself. The Insurance Company took five more months after receipt of the third Surveyor''s report and repudiated the claim only on 10.8.1994 i.e. after filing of the second complaint before the State Commission.

FURTHER , the three reasons of the State Commission mentioned above are really extraneous to the alleged incident of sinking of the vessel on 9.5.1990 due to strong winds blowing at 220 km per hour followed by a tidal wave of which facts have been established. Admittedly there was cyclone on the date of accident while the Respondents argue that the vessel was insured from 26.3.1990 to 25.6.1990 which is an off-season, the fact remains that on 9th May, there were other vessels also which were anchored at Gilakaladindi and the fishermen were advised by the Port Authorities to evacuate the place because of severe adverse weather conditions. There could be various reasons as to why the vessel was not insured for the previous three years into which we need not go. Only relevant question would be whether there was insurance coverage on the date of accident. The fact remains that the Respondents have not shown any valid reason as to why the report of the first Surveyor, M/s. J.B. Boda and Co. who is the only one who visited the site of the accident within 9 days after the event, should be discarded. The opposite parties slept on the insurance claim for four years and three months and even then repudiated the claim only after two complaints were filed before the State Commission one on 6.12.1992 and again on 19.7.1994. Under the circumstances, we set aside the order of the State Commission and allow the appeal.

SINCE the first Surveyor M/s. J.B. Boda had recommended that payment should be made on the basis of constructive total loss, we order that the insured sum namely Rs. 2,45,000/- minus salvage of Rs. 44,000/- should be paid to the Appellant/Original Complainant within a month from the date of this order. This amount of Rs. 2,01,000/- would carry an interest @9% p.a. from the date of filing of the complaint namely 6.12.1992 till the date of payment. The appeal is allowed, accordingly. Respondents shall pay Rs.5,000/- as cost to the Appellant.