NATIONAL INSURANCE CO LTD Vs. ARMAAN FISHERIES

JUDGEMENT

(1.) THIS first appeal has been filed by National Insurance Company Limited (hereinafter referred to as the Appellant) being aggrieved by the order of Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad (hereinafter referred to as the State Commission), which allowed the complaint of M/s Armaan Fisheries (hereinafter referred to as the Respondent/Complainant).

(2.) IN his complaint before the State Commission, the Respondent/Complainant, which is a registered partnership firm involved in the business of deep sea fishing operations, had purchased a fishing trawler "MFV Armaan" and after completing the necessary formalities pertaining to its survey and registration insured it for the period from 04.02.2002 to 03.02.2003 with the Appellant -Insurance Company for Rs.25 Lakhs. As per the conditions of the insurance policy, the premium was to be paid in four quarterly installments. Respondent/Complainant paid the first installment by cheque and the second and third installments by way of cash, which was collected by the Insurance Development Officer. However, since nobody came to collect the fourth installment, which was due on 03.11.2002, Respondent/Complainant on 01.11.2002 posted a letter to the Appellant -Insurance Company under a certificate of posting, enclosing a cheque for Rs.23,666/ - dated 01.11.2002 towards fourth installment, which was due on 03.11.2002 and requested for issue of receipt. On 09.11.2002 when the insured trawler was on the high sea for fishing the sky became overcast creating violent turbulence in the surface of the sea because of which the trawler collided and mounted on a sand bar and water entered the vessel and it started breaking. The crew took shelter in the sand bar patch and next day on reaching the shore immediately informed the Respondent/Complainant, who duly informed the Appellant -Insurance Company and requested it to depute a surveyor. Appellant -Insurance Company, however, declined to do so on the grounds that since the premium cheque was received from the Respondent/Complainant only on 14.11.2002, the policy had lapsed and, therefore, no claim could be entertained. Respondent/Complainant thereafter appointed an IRDA approved surveyor to assist in salvage operations and assess the loss, after which Appellant -Insurance Company was intimated on 18.01.2003 that the loss assessed by the surveyor was Rs.24.79 Lakhs after deducting salvage. Respondent/Complainant also filed a claim before the Appellant -Insurance Company requesting that Rs.24.79 Lakhs be paid to him as insurance claim, to which there was no positive response. Being aggrieved, Respondent filed a complaint before the State Commission on grounds of deficiency in service and requested that the Appellant -Insurance Co. be directed to pay it Rs.24.79 Lakhs with interest @ 24% per annum from 10.11.2002 and Rs.5 Lakhs as damages.

(3.) APPELLANT -Insurance Company on being served filed a counter reply admitting that the trawler was insured with it for a sum of Rs.25 Lakhs, for which three installments of premium were paid. However, so far as the fourth installment was concerned, it was the Appellant/Insurance Company, who reminded the Respondent/Complainant over phone on 01.11.2002 to arrange for payment of the fourth and final installment on the same day as the next three days were holidays and the third installment period would expire on 03.11.2002, after which the policy would automatically lapse. Appellant/Insurance Co. was, however, informed on phone that the partners of the Respondent/Complainant were not available but this information would be communicated to them. On 05.11.2002 Appellant/Insurance Company received an anonymous call that the insured vessel had drifted in the sea. Therefore, when Respondent/Complainant came to Appellant/Insurance Company's office on three occasions between 6th and 11th of November, 2002 expressing its intention to pay the premium towards the fourth installment, Appellant/Insurance Company insisted on inspecting the vessel. Respondent/Insurance Company, however, took the plea that it could not be brought for inspection since it was in the sea. It was also contended that the premium cheque for the fourth installment was received only on 14.11.2002 and the Respondent/Complainant was unable to prove that the letter was posted on 01.11.2002. Since the cheque was received 11 days after the expiry of the last date for payment of premium, the entire policy had automatically lapsed and the claim was rightly repudiated. The action of the Respondent/Complainant by trying to pay the premium after the vessel had drifted into the sea clearly indicated that they had not come with clean hands. The State Commission after hearing the parties partly allowed the complaint and observed as under ::