PRAKASHBHAI NARANBHAI SUYANI vs BRANCH MANAGER, UNITED INDIA INSURANCE CO. LTD

BY way of this complaint complainant has prayed for indemnity amount of Rs. 16,00,000/- to be paid by way of A/c. payee cheque in favour of Chief Executive Officer and Vice-Chairman, Gujarat Maritime Board, Ahmedabad A/c. Shri Prakash Naranbhai Suyani, Veraval, with simple interest at the rate of 18 per cent and cost of the litigation on account of the fact that the Marine Cargo Carrier Ship ''M.S.V. Nilkanth'' which was treated to have capsized on high sea on or around 14.11.1993 during the period of its insurance under the policy of insurance from 11.10.1993 to 10.1.1994 issued by the opponent Insurance Company in favour of opponent Gujarat Maritime Board A/c. Shri P.N. Suyani (complainant herein).

THIS complaint came to be filed on 22.3.1996 before the opponent Insurance Company had an occasion to repudiate the claim which was done by letter dated 6th November, 1996 during the pendency of this complaint. Opponent Insurance Company resisted the claim on number of grounds inter alia on the ground that the complaint was premature inasmuch as the matter was still under investigation with regard to whether the vessel in fact capsized on high sea or whether it was captured by Pakistani Authorities in which event the complainant would not be entitled to the insurance amount. We need not go into the detailed facts and circumstances of the case and the material placed on record of the complaint and the question whether the vessel capsized on high sea or whether it was captured by the Pakistani Authorities and whether repudiation of claim by the opponent Insurance Company during the pendency of this complaint is just, proper and bona fide for the simple reason that the claim of one of the cargo owners was settled by the another Insurance Company (New India Assurance Co. Ltd.) when a suit of indemnity amount was pending before the Bombay High Court. In that view of the matter the only controversy which has been canvassed before this Commission is with regard to whether the complainant would be entitled to interest or not and, if yes, what rate of interest.

We have heard the learned Advocates for the parties. We have gone through the record of this complaint for that limited purpose. It is not in dispute that the inquiry with regard to the fact of loss of the vessel was going on during the whole of the period between the date on which the claim was preferred by the complainant and that date on which the complaint was filed. This can be visualised from the fact that certificate for cancellation of the registration of the vessel was issued by communication dated 7th June, 1994 from the Port Officer, Gujarat Maritime Board, Veraval Port subject to the permission to be obtained from Mercantile Marine Department and finally cancellation was issued on 1.9.1994 with a copy endorsed to the opponent Insurance Company. Even at that point of time the inquiry with regard to whether the vessel was captured by the Pakistan Authorities or not was still in progress. Correspondence did ensue between the authorities in that regard. The Surveyors happened to be party to the correspondence with regard to the investigation which was going on. All that happened during the intervening period as noted above. A cargo claim was settled by the New India Assurance Co. Ltd. in a pending matter before the Bombay High Court on 30.9.1997. That evidence has been placed on the record of this complaint on or around 5th April, 2003.

WE have gone through the decision in the case of Ghaziabad Development Authority v. Union of India, II (2000) CPJ 1 (SC)=IV (2000) SLT 654=(2000) 6 SCC 113, and Abati Bezbaruah v. Dy. Director General, Geological Survey of India, II (2003) SLT 65=(2003) 3 SCC 148 (para 18). The principle laid down by the Apex Court is that grant of interest is a matter of discretion of the concerned judicial authority. It is also settled law that discretion is to be exercised judicially bearing in mind all the attending facts and circumstances of the case. Insofar as the present case is concerned circumstances have been noted hereinabove. Besides, the opponent Insurance Company has not been able to gather any evidence worth the name for showing before this Commission that the vessel has in fact been captured by the Pakistani Authorities. More than reasonable period has passed since the time when the vessel was found missing. Section 58 of the Marine Insurance Act, 1963 speaks about reasonable period in these words "where the ship concerned in the adventure is missing, and after the lapse of a reasonable time no news of her has been received, an actual total loss may be presumed". After going through the aforesaid exercise even the surveyor of the opponent Insurance Company could confirm the fact that the vessel had capsized. The survey report is on the record of this complaint. It is also dated 12th August, 1995. The survey report of New India Assurance Company Ltd. is dated 24.1.1996. It would, therefore, appear that the passage of the period till the date of the filing of this complaint is explained by both the Insurance Companies in respect of the claims one of which is for consideration in this complaint. In our considered opinion, bearing in mind all the above facts and circumstances of the case it would be just, proper and reasonable to award interest at the rate of 10 per cent from 1st October, 1995 till payment.

SINCE no other question arises in this complaint and is submitted for consideration of this Commission we pass following order. Opponent Insurance Company is directed to deposit a sum of Rs. 16,00,000/- with interest at the rate of 10 per cent per annum from 1st October, 1995 till such deposit in this Commission. The amount so directed shall be deposited by the opponent Insurance Company within six weeks from today. The opponent Gujarat Maritime Board will consider the question of reduction of rate of interest in the light of its policy which has been submitted by the learned Advocates for the parties in this Commission. It will work out the amount payable by the complainant to Gujarat Maritime Board and summit its report before this Commission so as to enable this Commission to issue payment of the amount deposited by the opponent Insurance Company to the opponent Gujarat Maritime Board.

THIS complaint is accordingly granted with no order as to cost. Complaint disposed of.