Consumer Protection Act, 2019 – s.67 – Insurance Contract – The appellant company insured its voyage and the vessel with the respondent insurance company – The insurance contract contained a special condition that the “voyage should commence & complete before the monsoon sets in” – The vessel undertook voyage on 06.06.2013 and on the very next day it got anchored due to bad weather and engine failure – The insurance claim of the appellant was repudiated on the ground that the vessel set sail after monsoon set in thereby breaching the special condition in the insurance contract – NCDRC dismissed the complaint of the appellant on account of the doctrine of Uberrima fidei (good faith) being compromised – Correctness:
Held: There is no doubt that the policy was taken for a period of one month (16.05.2013 to 15.06.2013) to cover the voyage from Mumbai to Kolkata – Further, as per the DGS Circular, foul weather commences on 1st May itself on the East Coast – The respondent’s contention that they had no knowledge of the voyage and that they believed that the Vessel would be laid up at the Kolkata harbour during the foul season is unacceptable and is to be rejected – The appellant had mentioned in the form that the purpose of insurance is to undertake the voyage from Ghodbunder Jetty in Mumbai to Kolkata harbour – The only logical conclusion of the information provided is that the insurance was availed to cover the foul weather period along the west and east coast – Even if the voyage was undertaken immediately, i.e. on 16.05.2013, the Vessel would have arrived at the Kolkata harbour in the first week of June 2013, i.e. after the commencement of foul weather season on the east coast – There is absolutely no permutation and combination in which the appellant could have fulfilled this condition under the policy, given its voyage from Mumbai (west coast) to Kolkata (east coast) via several coastal States – Further, the special condition necessitates that the voyage commences and is completed before monsoon sets in – If the condition is to be interpreted strictly, then the assured would be unable to make a claim in case of a marine accident where the vessel is unable to complete its voyage due to a peril, rendering the special condition impossible to comply with – Ultimately, the assured would be without any remedy under the insurance – This amounts to an absurdity, vitiating the very purpose behind an insurance contract – As a result, the special condition cannot be treated as a condition precedent to waive any liability under the policy – It has been impliedly waived by the parties due to its non-material nature – In the instant case, the respondent is not entitled to repudiate the claim of the appellant on the ground of breach of the special condition – The matter is remanded to the NCDRC with a direction to determine the extent of the insured sum liable to be paid by the respondent to the appellant. [Paras 18, 21] Insurance – Interpretation of Insurance contract – Uberrima Fides:
Held: It is trite to state that the interpretation of the Insurance Contract falls upon the same principles as the interpretation of any contract, except that there exists a requirement of uberrima fides, i.e. good faith on part of the assured – It is therefore well-settled that the policy and all the terms therein ought to be construed strictly, to the extent possible. [Para 11] Rule of Construction – Contra proferentem – Discussed. [Para 15]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Ankit Gyan. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.