Marine Insurance Act, 1963 – ss.35, 37, 41(5) and 55 – Warranties requirement – Rules for Building and Classing:
Held: If the requirement is not complied with, then the insurer is discharged from liability as from the date of breach of warranty but without prejudice to any liability incurred before that date. In a time policy, there is no implied warranty that the ship shall be seaworthy at any stage but where with the privity of the assured, the ship is sent to sea in an unseaworthy state, the insurer is not liable for any loss attributable to unseaworthiness – In view of the warranty requirement, the assured is expected to bring to the notice of the Classification Society the shortcomings or the defects if any, before the issue of such Class Certificate since the insurance coverage to be provided by the insurer is based on such Class Certificate which is assumed to have been issued by the Classification Society after keeping in view all aspects including the defects if any brought to their notice. [Para 16] Consumer Protection – Marine Hull Insurance Policy – Surveyor recommended rejection of the claim of the appellant – Plea of the appellant that the word of the surveyor is not final: Held: Such plea would not assist the appellant – The surveyor recommended rejection of the claim mainly on the reason that the earlier defect with reference to seaworthiness was not brought to the notice of the Classification Society – It is in that regard the surveyor referred to the inquiries made by him from the Classification Society and indicated that the persons representing the Classification Society stated that the said deficiencies were not brought to their knowledge – Though it was contended that such indication in the surveyor’s report being hearsay cannot be relied upon, in the absence of any material on behalf of the appellant to indicate that they had intimated the Classification Society, there was no obligation in terms of the legal position for the insurance company to make such inquiry – Therefore, the inquiry made by the surveyor was an additional factor which was not rebutted or controverted with any other evidence by the appellant. [Para 20]
Consumer Protection – Marine Hull Insurance Policy was subject to the vessel possessing a Class Warranty – Knowledge on the part of the insurer that there was breach of warranty, if amounts to a waiver: Held: Mere knowledge on the part of the insurer that there was a breach of warranty would not amount to a waiver in the absence of an express representation to that effect – Though during the subsistence of the insurance policy for the earlier term there was a claim lodged towards damage to the main engine of the port and crank shaft, based on the recommendation of the surveyor substantial amount had been paid, on account, to the appellant since such advancement of the amount was towards the replacement of the engine crank shaft – Except for the knowledge of the insurer that in view of the waiting period prescribed by the manufacturers for supply of the engine crank shaft for replacement, repairs were carried out and a voyage would be undertaken for urgent delivery of the cargo during the subsistence of the earlier policy period, there is nothing on record to indicate that prior to the issue of the instant insurance policy for the period 09.11.2006 to 08.11.2007 or during subsistence the replacement of the engine had been waived – Thus, when the respondent insurance company relied upon the Class Certification to issue the policy there was no express or implied waiver – Appellant has not established that the defects were brought to the notice of the Classification Society and thereafter the certificate was obtained – Thus, when it is subsequently noticed that these defects were not intimated and the warranty class had not been complied, the Classification Certificate would automatically become invalid – In fact, the fact that the replacement of the engine crank shaft had not been made came to the knowledge of the insurer only when the final surveyor report was submitted on 19.02.2007 after the policy had already been issued on 09.11.2006 and the accident had occurred on 03.12.2006 – As such there was no waiver on the part of the respondent insurer in this case. [Para 21]
LIST OF CITATIONS AND OTHER REFERENCES
Ceyaki Shipping Pvt. Ltd. vs. New India Assurance Pvt. Co. Ltd. Consumer Case No.278 of 2011 dated 21.03.2017; Marine Offshore Pvt. Ltd. vs. China Insurance Company (Singapore) Pvt. Ltd. & Anr., (2006) 4 SLR 689 – distinguished.
New India Assurance Company Limited vs. Protection Manufacturers Private Limited, (2010) 7 SSC 386 : [2010] 8 SCR 61; New India Assurance Company Ltd. vs. Pradeep Kumar, (2009) 7 SCC 787 : [2009] 16 SCR 508 – held inapplicable.
Ranjan Kumar and Brothers v. Oriental Insurance Co., (2020) 4 SCC
364 : [2020] 6 SCR 163; Sea Lark Fisheries vs. United India Insurance Company and Anr., 2008 (4) SCC 131 : [2008] 2 SCR 346; Contship Container Lines Limited vs. D.K. Lall & Ors., 2010 (4) SCC 256 : [2010]
3 SCR 460 – referred to.
OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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