JUDGMENT
Dalveer Bhandari, J.
1. This appeal is directed from the judgment dated 25th
April, 2001 passed by the National Consumer Disputes
Redressal Commission, New Delhi in Original Petition No.79 of
1995.
2. The brief uncontroverted facts in nutshell are as under:-
Respondent No.1, M/s Ozma Shipping Co. is the owner of
a sailing vessel. The same was insured on 14.12.1987 for a
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sum of Rs.21,50,000/-. A total premium of Rs.40,832.50 was
paid for the period covering 14.12.1987 to 13.3.1988. The
insurance was extended from 14.3.1988 to 13.6.1988 by
paying a premium of Rs.30,383/-.
3. It may be pertinent to mention that before issuing the
policy the Surveyor appointed by the appellant Insurance
Company thoroughly inspected the vessel and issued a
valuation certificate. The Surveyor after inspecting the vessel
certified that the market value of the vessel was Rs.
21,50,000/-. The Surveyor gave a very comprehensive report
and took note of the fact that a major over-hauling of the
engine and accessories and reconditioning and painting of the
Hull had been carried out during 1987. It may be pertinent to
mention that the Surveyor had considered all relevant factors
in its report.
4. Sections 29 and 68 of the Marine Insurance Act, 1963
are relevant in connection with the present controversy
involved in this case. It would be appropriate to set out both
these sections:-
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"29. Valued Policy:- (1) A policy may be either
valued or unvalued.
(2) A valued policy is a policy which specifies the
agreed value of the subject matter insured.
(3) Subject to the provisions of this Act, and in the
absence of fraud, the value fixed by the policy
is, as between the insurer and assured,
conclusive of the insurable value of the subject
intended to be insured, whether the loss be
total or partial.
(4) Unless the policy otherwise provides, the value
fixed by the policy is not conclusive for the
purpose of determining whether there has
been a constructive total loss."
Section 68 reads as under:-
"Total Loss - Subject to the provisions of this Act,
and to any express provision in the policy, where
there is a total loss of the subject matter insured-
(1) if the policy be a valued policy, the measure of
indemnity is the sum fixed by the policy;
(2) if the policy be an unvalued policy, the measure
of indemnity is the insurable value of the
subject- matter insured."
5. It is clear from the section 29(3) that the value fixed by
the policy between the insurer and the assured is conclusive of
the insurance value.
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6. The vessel sailed from Beypore to Kavarati loaded with
goods at around 3 p.m. on 23.4.1988. The said vessel sank
with the entire cargo.
7. Respondent no.1 lodged the insurance claim with the
appellant insurance company on 6.5.1989. The appellant
insurance company immediately deputed the Surveyor and
carried out the spot survey. The Surveyor submitted the
report advising carrying out proper investigation. The
appellant insurance company agreed to settle the claim of
respondent at Rs.15 lacs.
8. Respondent no.1 filed a complaint before the National
Consumer Disputes Redressal Commission (For short, the
`National Commission'). The complainant prayed that the
insurance company be directed to pay the entire insured
amount of Rs.21,50,000/- with 18% rate of interest from the
date of calamity i.e. from 23rd April, 1988 along with the
compensation and costs.
9. The appellant insurance company submitted before the
National Commission that the valuation report of the Surveyor
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of M/s Ozma Shipping Company was not correct because the
value of the said vessel was not more than Rs.15 lacs,
therefore, respondent No.1 is not entitled to an amount more
than Rs.15 lacs.
10. It was stated by the appellant company that in the
proposal form it was nowhere stated that it had remodeled and
reconditioned the vessel by spending a sum of over Rs.5 lacs
in the year 1989 and it was alleged for the first time vide
order dated 28th February, 1990.
11. According to the appellant insurance company the
market value of the vessel would decrease year after year and
it could not enhance to such an exorbitant figure by mere
reconditioning, painting and remodeling. The insurance
coverage was obtained for a higher sum insured than the
actual cost by deliberately concealing the material facts.
These pleas of the appellant company are totally devoid of any
merit when the Surveyor appointed by the insurance company
found the value of the vessel as Rs.21,50,000/- and the
appellant company accepted the insurance premium on
Rs.21,50,000/-. According to the National Commission, as the
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Surveyor took note of the fact that a major overhauling of the
engine and accessories and reconditioning and painting of the
Hull had been carried out during 1987, there seems to be no
justification from deviating from that figure.
12. There are following undisputed and uncontroverted facts
in this case:-
(I) vessel sailed form Beypore to Kavarati loaded
with goods on 23.4.1988 and according to the
Surveyor after inspecting the vessel he certified
the market value of the vessel as
Rs.21,50,000/-.
(II) The premium was admittedly paid on that
amount.
(III) The said vessel sank with the entire cargo.
13. The National Commission held that on consideration of
the relevant factors the valuation of the vessel was valued as
Rs.21,50,000/-. On the basis of the valuation, the insurance
premium was paid on the amount of Rs.21,50,000/-. The
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National Commission also came to the definite finding that the
complainant was not guilty of any concealment of facts.
14. On consideration of the totality of the facts and
circumstances, the impugned judgment of the National
Commission is absolutely correct and the National
Commission was fully justified in directing the insurance
company to pay the value of the entire vessel Rs.21,50,000/-
with interest at the rate of 12% per annum from 4 th April,
1991.
15. It may be pertinent to mention that when the valuation of
the vessel had been carried out by the Surveyour of the
insurance company who came to the conclusion that the value
of the vessel would be Rs.21,50,000/- then the Insurance
Company should not hesitate to pay the amount which is
legitimately due to the complainant particularly when there is
no dispute that the entire vessel with cargo insured with the
appellant sank while the vessel was sailing from Beypore to
Kavarati.
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16. We have heard the learned counsel for the parties and
carefully perused the impugned judgment. In our considered
view no interference is called for. We make it clear that in
case the entire amount in the sum of Rs.21,50,000/- has not
been paid to the respondent company, the same would be paid
as expeditiously as possible and in any event within six weeks
from the date of communication of this judgment. If some
amount has been paid by the appellant insurance company to
respondent No.1 in that event they would ensure that the
adjustment of that amount is done and the remaining amount
be paid to respondent No.1 within six weeks from the date of
this judgment along with interest.
17. Before parting with this case we would like to observe
that the insurance companies in genuine and bona fide claims
of the insurers should not adopt the attitude of avoiding
payments on one pretext or the other. This attitude puts a
serious question mark on their credibility and trustworthiness
of the insurance companies. Incidentally by adopting honest
approach and attitude the insurance companies would be able
to save enormous litigation costs and the interest liability.
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18. The tendency of approaching the Apex Court in every
such case also needs to be effectively curbed.
19. The appeal being devoid of any merit is accordingly
dismissed with costs which is quantified at Rs.25,000/- to be
also paid by the appellant Insurance Company to respondent
No. 1 within six weeks from today. The appeal is accordingly
disposed of.
............................................J.
(Dalveer Bhandari)
...........................................J.
(Harjit Singh Bedi)
New Delhi;
August 25, 2009
