The Cuddalore District Consumer Disputes Redressal Commission has directed the United India Insurance Company Limited, Cuddalore to pay a customer ₹1.65 crore for wrongly repudiating a marine insurance policy claim.
Rajamani, a resident of Cuddalore, said in her petition that the company had repudiated her insurance claim after her cargo vessel MSV SRP Rajamani ran aground at Koottayi Beach in Malappuram district in Kerala on November 14, 2021.
The cargo vessel, carrying construction materials had departed from the Kozhikode port towards Minicoy in Lakshadweep in the early hours of November 13, 2021. However, about 130 nautical miles from the Kozhikode port, the vessel’s crew decided to return, in view of inclement weather. During their return there was heavy ingress of sea water into the engine room. Attempts were made to evacuate the sea water using double pumps. However, one of the pumps failed about 50 nautical miles off the Kozhikode port. The remaining pump could not handle the heavy ingress of sea water and a result, the engine came to a grinding halt. Subsequently, the vessel ran aground at Koottayi beach.
With the timely aid of the Tirur police and local residents, the crew members onboard the vessel were rescued. However, the cargo vessel was found totally wrecked and submerged in sea along with its cargo the next day.
The complainant informed the insurance company which deputed a surveyor to carry out his assessment. After a span of nearly 12 months, the insurance company repudiated the claim on the grounds that the complainant had breached the Duty of Assured (Sue and Labour) Institute Time Clause (ITC) by making no efforts to salvage the equipment and for leaving them it abandoned, thereby failing to minimise the loss.
The complainant then moved the Commission, which held that the complainant was not in a position to salvage the equipment and minimise the loss. There was no breach of the terms and conditions of the policy as claimed by the insurance company, it said. Hence, the repudiation made by the company was found to be arbitrary and unfounded, the Commission observed.
The Commission , headed by its president and judge D. Gopinath, directed the insurance company to pay the insured value of ₹1.65 crore to the complainant along with an interest of 9% from the date of repudiation of claim. It also directed the company to pay ₹1 lakh for deficiency in service and mental agony caused to the complainant. It also awarded ₹10,000 to her in legal expenses.
