Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 971 OF 2014
M/s Rajankumar and Brothers (Impex) ….Appellant(s)
Versus
Oriental Insurance Company Ltd. ….Respondent(s)
J U D G M E N T
MOHAN M. SHANTANAGOUDAR, J.
1. This appeal arises out of judgement of the National
Consumer Disputes Redressal Commission (‘NCDRC’) dated
12.11.2013, dismissing the consumer complaint filed by the
Appellant herein.
2. The timeline of events giving rise to the present appeal is
as follows: The Appellant is a partnership firm in the business of
Signature Not Verified
Digitally signed by
NEETA SAPRA
Date: 2022.11.01
09:58:12 IST
Reason:
importexport of various commodities, including steel coils. The
1
Respondent insurance company issued a Marine Cargo Cover Note
(hereinafter ‘Cover Note’) dated 14.5.2010 for a sum of 12,63,712.50
US Dollars, covering voyage from any port in China to Mumbai Port.
It was stated in the aforesaid Cover Note that a policy document
would be issued once the Appellant furnished the requisite
particulars of the vessel in which the cargo was being carried.
Accordingly, the Appellant forwarded the particulars of ‘KhalijiaIII’,
the vessel in which the cargo was to be carried (hereinafter ‘subject
vessel’), to the Respondent, vide letter dated 26.5.2010. It was
stated in this letter that the subject vessel was built in March 1985,
and its “class” was specified as ‘I.R.S.’. The Appellant’s case is that
it had communicated the aforementioned details regarding the
subject vessel to the Respondent, as well as the Respondent’s
insurance broker, as per the documents presented by the Overseas
Seller.
2.1 Thereafter, Hangzhou Cogeneration (Hong Kong) Co. Ltd.
(hereinafter ‘Overseas Seller’), through its agent M/s Kirtanlal &
Sons, shipped 80 prime hot rolled steel coils weighing 2000 Metric
Tonnes on board the subject vessel from Caofeidian Port, China to
2
the Appellant, for discharge at Mumbai Port. The subject vessel was
carrying on board consignments of prime hot rolled steel coils of
seven other importers who had also imported them from the same
Overseas Seller. Subsequently, the Respondent’s brokers issued a
single voyage policy dated 2.7.2010 (hereinafter ‘Marine Insurance
Policy’) to the Appellant. It is undisputed that the Marine Insurance
Policy covered all risks as per the Institute Cargo Clauses (A),
Institute War Clause, and Institute Strike Clause.
2.2 The subject vessel reached Mumbai port on 6.7.2010 and
was allotted a berth on 14.7.2010 for discharge of the cargo.
However, on account of failure of the vessel’s crane during
discharge, further discharge could not take place, and the subject
vessel was removed from the allotted berth by an order of the port
authorities. Subsequently, on 19.7.2010, the Appellant came to
know that the subject vessel had run aground on the midnight of
18.7.2010. Thus, by letter dated 20.7.2010, the Appellant informed
the Respondent that there was a possibility of them claiming under
the Marine Insurance Policy.
3
2.3 Thereafter, the shipowners engaged the services of M/S.
Smit Singapore Private Ltd. (‘Salvors’) for the purpose of recovering
the cargo. The shipowners also appointed M/s Richard Hogg
Lindley as the General Average Adjustor (‘GAA’). The GAA sent an
email dated 27.7.2010 to both the Appellant and the Respondent,
stating that the situation had given rise to a “General Average”. The
concept of General Average, in maritime law, refers to a loss
mitigation measure whereby all those who are interested in a
marine adventure make pro rata contributions towards the losses
sustained or expenditure incurred in time of peril for the common
1
good of all parties. For instance, if a ship runs aground, as in the
present case, the shipowners and the cargo interests are mutually
liable for reimbursing the losses arising from such an event. If there
is a contract of marine insurance in respect of the voyage, the
insurer will be liable for reimbursing the amount on behalf of the
assured cargo owner.
Accordingly, the Appellant requested its insurer i.e. the
Respondent, to issue a General Average Guarantee in ‘Form B’, as
1 Kyraki Nouassia, The Principle of Indemnity in Marine Insurance Contracts: A
Comparative Approach (Springer, 2007) 161.
4
required by the GAA. The Respondent consequently issued a
guarantee dated 3.8.2010, agreeing to pay the GAA on behalf of the
Appellant, for contribution towards the General Average, as well as
towards other special charges. These documents were submitted by
the Appellant to the GAA.
2.4 After the receipt of the General Average Guarantee, the
GAA requested the Appellant to pay a separate salvage security of
25 per cent of the ‘Cost, Insurance, and Freight’ (‘C.I.F.’) value of
their cargo, which amounted to 256,880 US dollars. Hence, by letter
dated 5.8.2010, the Appellant requested the Respondent to issue
the salvage security. The Appellant contends that the Respondent
did not issue the separate salvage security as required, resulting in
the withholding of the release of the Appellant’s consignment at
Mumbai port, and exposing it to heavy demurrage and likelihood of
further damages. In addition to not issuing the salvage security, the
Respondent, by letter dated 20.8.2010, informed the Appellant that
they were withdrawing the General Average Guarantee, ‘Form B’
issued by them earlier in respect of the Appellant’s consignment on
5
the subject vessel, on account of noncompliance with the ‘Institute
Classification Clause’ (‘ICC’) in the Marine Insurance Policy.
2.5 Unfortunately for the Appellant, on 7.8.2010 there was a
collision between the subject vessel and a navy vessel in the waters
near Mumbai Port. On 13.8.2010, the Salvors claimed a maritime
lien on the cargo. Further, the Salvors initiated arbitration
proceedings against the Appellant and the shipowners. During the
course of the aforesaid arbitration proceedings, the Salvors
obtained interim orders from the Hon’ble High Court of Mumbai,
restraining the Appellant from removing their consignment from
Mumbai Port. Ultimately, vide order dated 24.8.2010, the High
Court directed that the Appellant would be allowed to take its
consignment on furnishing security in the form of a bank guarantee
in the sum of Rs. 14 crores. The Appellant furnished the security as
directed and took delivery of the consignment from the Mumbai Port
Trust on 3.9.2010. On 2.12.2011, the Arbitrator passed an award
against the Appellant and other cargo owners, finding them liable
for reimbursing the costs incurred by the Salvors.
6
2.6 The Appellant, by letter dated 2.2.2012, requested the
Respondent to settle the losses incurred by it, and also forwarded a
copy of the aforementioned arbitration award dated 2.12.2011. A
legal notice was also sent on 21.6.2012, followed by a reminder on
4.7.2012, but these went unanswered. Hence, the Appellant filed a
consumer complaint before the NCDRC against the Respondent,
asking for compensation on account of the losses incurred, for
deficiency in service, and for the legal and other incidental
expenses.
2.7 The Respondent did not file a written statement before
the NCDRC, and its request for consideration of written arguments
was rejected. However, counsel for the Respondent was allowed to
make oral submissions on the questions of law involved in the case.
The NCDRC found that the Appellant had failed to prove that the
subject vessel was in compliance with the ICC stated in the Marine
Insurance Policy. It noted a communication dated 9.8.2010, in
which the Respondent’s claim settling agent in London had
informed the Respondent that the subject vessel was classed with
Lloyd’s Register of Shipping until 10.10.2007, after which Lloyd’s
7
had withdrawn the aforesaid classification, and that the subject
vessel appeared to be outside the scope of the ICC. The NCDRC
further found that the subject vessel had been more than 25 years
old on the date of loss i.e. when it ran aground on 18.7.2010, and
the Appellant had not produced any document showing that the
subject vessel was classed as ‘I.R.S.’ Hence, the complaint was
dismissed.
3. Heard learned counsel for both parties.
3.1 Learned counsel for the Appellant submitted that the
‘I.R.S.’ classification was granted to the subject vessel by the
‘International Register of Shipping’, which is an independent
classification society. Further, that after the issuance of the Cover
Note, the Appellant had provided all particulars regarding the
subject vessel, and expressly asked the Respondent whether the
subject vessel was acceptable. It was argued that had the
Respondent indicated at the time of the issuance of the Marine
Insurance Policy that the classification was not acceptable; the
Appellant could have paid an extra premium to purchase the policy.
8
This is as per the terms of Clause 6 of the Cover Note, which reads
thus:
“6 For coverage of shipments by sea: the vessel shall
conform to the current Institute Classification Clause;
otherwise the cover shall be subject to additional steamer
extra premium such as coverage, under tonnage, non
classification and non approval extra at underwriter’s
discretion.”
Learned counsel also referred to the Institute Marine
Cargo Clause (A) (‘Cargo Clause’) within the Marine Insurance
Policy, which provides for waiver of any breach of implied
warranties of seaworthiness of the subject vessel. He argued that
under the terms of the Cargo Clause, the Respondent would have
the right to not indemnify the Appellant only if the Appellant or its
servants were privy to such unseaworthiness. It was argued that
the Appellant was merely a cargoimporter, and not the vessel
owner, and had communicated all the particulars of the vessel as
provided to it by the Overseas Seller. Therefore, the Appellant could
not be said to have been privy to the unseaworthiness, if any, of the
subject vessel.
9
Lastly, it was contended that indemnification by the
Respondent could not be dependent on the amount of loss caused
to the insured or on the nature of accident that caused the loss. It
was argued that that once the Respondent provided the General
Average Guarantee, it was estopped from claiming that the
appellant had breached the ICC.
3.2 On the other hand, learned counsel for the Respondent
argued that there was a clear breach of the ICC, inasmuch as the
Appellant had failed to disclose that the classification granted to the
subject vessel by Lloyd’s Register of Shipping had been withdrawn
on 10.10.2007. So far as the I.R.S. classification is concerned, it
was submitted that ‘I.R.S.’ referred to Indian Register of Shipping,
and not International Register of Shipping, as claimed by the
Appellant. Furthermore, it was contended that although the
Appellant claimed to possess a certificate proving the ‘I.R.S.’
classification of the subject vessel, it had neither submitted the said
certificate to the Respondent, nor produced the same before the
NCDRC.
In response to the Appellant’s argument that the
Respondent was estopped from claiming breach of the ICC by its
10
conduct in providing the General Average Guarantee, it was
submitted that at the time when such Guarantee was sought for by
the Appellant, the priority of all parties involved was to ensure
mitigation of losses by saving as much of the cargo as possible. It
was only after the collision of the subject vessel on 07.08.2010 that
the Respondent began investigating into the seaworthiness of the
vessel, and found out that it was not a classed vessel at the time of
issuance of the Marine Insurance Policy. Therefore, it was
submitted that the Respondent would not be estopped from
claiming breach of the ICC merely because it had, in good faith,
provided the General Average Guarantee so as to mitigate the
Appellant’s losses.
4. Upon our perusal of the material on record and after
hearing the learned counsels, we find that two issues arise in the
instant case:
First , whether the Appellant had committed breach of
warranty with respect to compliance with the ICC?
Second , whether the Respondent had waived such breach
of warranty by the Appellant?
11
5. With respect to the first issue, it is not disputed that both
the Cover Note and the Marine Insurance Policy stated that the
‘ICC’ would be one of the warranties/terms of insurance.
Additionally, Clause 6 of the Cover Note, as mentioned supra,
prescribed that the subject vessel needed to conform to the current
ICC, in the absence of which, the insurance cover would be subject
to payment of an additional premium.
At this juncture, we find it useful to dwell upon the scope
and relevance of the ICC in marine insurance contracts. The ICC is
drafted and issued by the Joint Cargo Committee of the Lloyd’s
Marketing Association (a premier marine insurance market in
London) in consultation with insurance and shipping interests. It is
commonly understood that this ‘classification’ relates to the
2
seaworthiness of the vessel in which the cargo is carried. The
relevant portion of the latest version of the ICC, as revised in 2001
(‘ICC 01/01/2001’), which was in force at the time of the Marine
Insurance Policy, and continues to be in force till date, reads as
follows:
2 See John Dunt, Marine Cargo Insurance (Informa Law, Routledge, 2009)166.
12
“ QUALIFYING VESSELS
1 This insurance and the marine transit rates as agreed
in the policy or open cover apply only to cargoes and/or
interests carried by mechanically selfpropelled vessels of
steel construction classed with a Classification Society
which is:
1.1 a Member or Associate Member of the International
Association of Classification Societies (IACS), or
1.2 a National Flag Society as defined in Clause 4 below,
but only where the vessel is engaged exclusively in the
coastal trading of that nation (including trading on an
interisland route within an archipelago of which that
nation forms part).
Cargoes and/or interests carried by vessels not classed
as above must be notified promptly to underwriters for
rates and conditions to be agreed. Should a loss occur
prior to such agreement being obtained cover may be
provided but only if cover would have been available at a
reasonable commercial market rate on reasonable
commercial market terms.
AGE LIMITATION
2 Cargoes and/or interests carried by Qualifying Vessels
(as defined above) which exceed the following age limits
will be insured on the policy or open cover conditions
subject to an additional premium to be agreed.
Bulk or combination carriers over 10 years of age or
other vessels over 15 years of age unless they:
2.1 have been used for the carriage of general cargo on
an established and regular pattern of trading between a
range of specified ports, and do not exceed 25 years of
age, or
13
2.2 were constructed as containerships, vehicle carriers
or doubleskin openhatch gantry crane vessels (OHGCs)
and have been continuously used as such on an
established and regular pattern of trading between a
range of specified ports, and do not exceed 30 years of
age.
xxx
PROMPT NOTICE
5 Where this insurance requires the assured to give
prompt notice to the Underwriters, the right to cover is
dependent upon compliance with that obligation.”
(emphasis supplied)
As is evident from the above, the ICC 01/01/2001
imposes two requirements to ensure that the vessel complies with a
certain minimum standard of seaworthiness. The first is a
classification requirement which requires that the vessel should be
classed with a Classification Society which is a Member/Associate
Member of the International Association of Classification Societies
(‘IACS’) or, in the case of vessels engaged exclusively in coastal
trading, a National Flag Society. The second is an age limitation in
respect of the insured vessel. The IACS consists of 12 member
societies, as listed below:
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(i) American Bureau of Shipping (A.B.S.)
(ii) Bureau Veritas
(iii) China Classification Society (C.C.S.)
(iv) Croatian Register of Shipping (C.R.S.)
(v) Det Norske VeritasGermanischer Lloyd (D.N.V.G.L.)
(vi) Indian Register of Shipping (I.R.S.)
(vii) Korean Register of Shipping (K.R.)
(viii) Lloyd’s Register (L.R.)
(ix) Nippon Kaiji Kyokai (ClassNK)
(x) Polish Register of Shipping (P.R.S.)
(xi) Registro Italiano Navale (R.I.N.A.)
(xii) Russian Maritime Register of Shipping (R.S.)
The official statement provided by the IACS about its
Quality Standards is significant for understanding why
classification of a cargo vessel with a membersociety of the IACS,
as opposed to any other society, is considered as a yardstick to
judge whether the voyage policy can be reasonably insured.
Members of the IACS have to comply with the IACS ‘Quality System
Certification Scheme’ (QSCS), which, after 25 years of continuous
15
evolution, is considered as the ‘gold standard’ for ship classification
societies. Moreover, every IACS member is required to have its own
‘Internal Quality Management System’ for ensuring that classed
vessels meet certain minimum criteria of quality. The audits of all
IACS members, and of those societies who wish to be considered for
such membership, are carried out by independent accreditation
3
bodies, which lends further legitimacy to the classification
accorded to vessels by IACS members.
Thus, it can be inferred from the above that an
underwriter/insurer would usually trust the quality of, and be
prepared to issue a reasonable premium for, a vessel classed with
an IACS member society. On the other hand, the insurer may
demand a higher premium, or deny insurance cover altogether, for
a voyage in respect of a vessel classed by a nonIACS member
society. Hence, the ICC prescribes classification with a member of
the IACS as the baseline for ensuring that the policy involves less
risk for the underwriter.
3 International Association of Classification Societies,
Quality System Certification
Scheme (QSCS), http://www.iacs.org.uk/quality/qualitysystemcertificationscheme
qscs/ (Last visited Feb. 2, 2020).
16
Therefore, Sub Clause 1 of the ICC 01/01/2001 provides
that cargo interests are obligated to promptly notify insurance
underwriters if the cargo is being carried by a vessel which is not
classed as prescribed in the ICC, and Clause 5 makes it clear that
failure to provide such information will lead to exclusion of the
insurance cover.
5.1 It has been contended by the Appellant that the NCDRC
has erred in relying on the older version of the ICC, i.e. the 1978
version. We are in agreement with the said contention of the
Appellant, inasmuch as the 1978 version of the ICC was replaced
by the ICC 13/4/92, the ICC 1/8/97, and the ICC 01/01/2001. As
mentioned supra, the ICC 01/01/2001 is the most recent version of
the ICC, and the one which is relevant for the purpose of the
present case.
However, the most recent version of the ICC, i.e., ICC
01/01/2001, parts of which we have quoted earlier, does not help
the Appellant’s case inasmuch as it is stricter in its import. We find
it useful to undertake a comparative analysis of the older versions
of the ICC and the ICC 01/01/2001 in this regard. Clause 1 of
17
previous versions of the ICC stated that, “ The marine transit rates
agreed in this insurance apply only to cargoes and/or interests…
classed as below by one of the following classification societies.”
This phrasing had led to confusion as to whether a failure of the
vessel to comply with the classification requirement would mean
that the risk was completely excluded from cover or merely that the
premium rate, as agreed upon, would no longer apply and the
4
assured would have to pay a different premium rate. Hence, in the
ICC 01/01/2001, Sub Clause (1) was modified to read as follows:
“This insurance and the marine transit rates as agreed in
the policy or open cover apply only to cargoes and/or
interests…classed with a Classification Society...”
(emphasis supplied)
The word ‘insurance’ was specifically added in the ICC
01/01/2001 to clarify that the insurance itself, and not merely the
rate of premium, is subject to compliance with the classification
5
requirement. Furthermore, the 1978 version provided that:
“Cargoes and/or interests carried by mechanically self
propelled vessels not falling within the classification of
the above are held covered subject to a premium and on
conditions to be agreed.” (emphasis supplied)
4 Dunt, supra note 2, at 167.
5 Dunt, supra note 2, at 167.
18
The aforementioned ‘held covered’ provision acted as a
saving clause to cater for situations where an assured discovered
that the vessel in which their cargo was being carried fell outside
the classification and/or age requirement in the ICC. In such a
situation the assured cargo owner could still avail of the insurance
cover subject to negotiating payment of an additional premium with
the insurer.
English jurisprudence stipulates two requirements to
avail of such ‘held covered’ provisions first , ‘prompt notification’ to
the underwriter, and second , the availability of cover at reasonable
commercial market rates. However, the wording of the ‘held covered’
provision in the ICC 1978, quoted supra, did not expressly state
these requirements, leading to the apprehension that it may be
interpreted to mean that cover could be obtained in all cases,
without any precautionary measures being followed by the assured.
Hence, it appears that in order to avoid any confusion, the ICC
01/01/2001 has been drafted to expressly incorporate the aforesaid
two requirements. Under the ICC 01/01/2001, the assured must
immediately inform the insurer/underwriter if they discover that
19
the vessel carrying the cargo does not meet the classification
requirement.
Additionally, if the vessel is such that a prudent
underwriter would not be prepared to underwrite the risk at a
reasonable premium, the assured is not entitled to the insurance
6
cover. These requirements are important because, as discussed
earlier, the classification of the vessel is a significant factor for
influencing the underwriter’s decisionmaking as regards whether
an insurance cover should be issued for the marine voyage or not.
5.2 We find it useful to refer to some of the common law
decisions on the impact of noncompliance with the classification
requirement in the ICC. The courts of Singapore and Hong Kong
have frequently been seized with this question, and have held that
noncompliance would render the claim of the assured excluded
from cover, and that it is the burden of the assured to inform the
insurer about such noncompliance and negotiate a reasonable
premium beforehand.
6 Dunt, supra note 2, at 168.
20
5.3 In Everbright Commercial Enterprises Pte Ltd v. Axa
[2001] SGCA 24, the respondent
Insurance Singapore Pte Ltd
insurance company issued an ‘open cover note’ to the appellant in
that case, trading in respect of shipment of wood logs from the
Solomon Islands to Tuticorin, India. The arrangement between the
parties under the terms of the aforesaid ‘open cover’ was that the
appellant would provide the respondent’s insurance broker, Wilcom,
the details with respect to the description of the goods, and the
ports of loading and discharge, for the purposes of issuance of the
cover note. However, the particulars of the carrying vessel were to
be declared subsequent to the cover note being issued. The
insurance policy was to be issued only once the vessel was on the
way to the port of discharge.
The cover note was issued by Wilcom on behalf of the
insurer on 9.5.1997. On 2.7.1998, the appellant communicated the
particulars of the ship to Wilcom, including that the class of the
vessel was ‘HSR100A1’. Subsequently, before the insurance policy
could be issued, the ship was lost. The insurer came to know that
the ship was a ‘phantom ship’, i.e. one which has no valid
21
classification, is not registered with any recognized ship registry,
and is usually operated by criminals. Hence, the insurer repudiated
the appellant’s claim on the ground that the vessel did not comply
with the requirements of the ICC 13/4/92 (which was the version of
the ICC in force at that time) as stipulated in the cover note.
The Singapore Court of Appeal upheld the repudiation. It
also held that though the appellant cargo company had given
prompt notice, it would not be saved by the ‘held covered’ clause as
no reasonable underwriter would agree to issue cover for a vessel
with a suspicious classification background, even for a higher
premium. It is pertinent to note that the above decision in
Everbright Commercial Enterprises (supra) was rendered in the
context of the ICC 13/4/92 when the ‘held covered’ provision did
not expressly provide for the requirements of ‘prompt notification’
and ‘availability of reasonable premium’. However, the Court relied
upon the common law interpretation of ‘held covered’, as laid down
in the decisions of Thames and Mersey Marine Insurance Co Ltd
v. H T Van Laun & Co [1917] 2 KB 48 and Liberian Insurance
22
Agency Inc v. Mosse [1977] 2 Lloyd’s Rep 560, to incorporate the
aforesaid requirements, and made the following observations:
“ 35 In construing this clause, we should bear in mind
that the purpose of adopting the ICC is to ensure that the
vessel chosen by the insured to carry his cargo would
meet certain standards of seaworthiness and
maintenance by virtue of the fact that the carrying vessel
is classed by one of the wellestablished international
classification societies listed in the ICC and is within
certain age limits. In an opencover insurance, as in the
present case, the ICC is adopted and forms part of the
cover note, and is principally intended to deal with the
agreed rates of premium for the insurance of a shipment
in a case where the cover is provided before the
particulars of the carrying vessel are declared to the
underwriter. Where the carrying vessel subsequently
declared has a listed classification and is within the age
limitation, the ICC applies the agreed rates of premium
for the insurance of such shipment. Where, however, the
carrying vessel declared does not have a listed
classification or is not within the age limitation, such
agreed rates are not applicable for the insurance of the
shipment; but in such event, the shipment is,
nonetheless, covered and falls within the held covered
clause, subject to the payment of a premium as well as
on conditions to be agreed between the underwriter and
the insured. In Marine Reinsurance (1981) by Robert
H Brown and Peter B Reed, the learned authors said at
p 127:
When operating a cargo open cover the underwriter
is not in a position to examine each risk separately, nor
to assess it on the basis of the carrying vessel. He is
obliged to accept all valid declarations declared under the
open cover. However, to ensure that he obtains a
premium commensurate with the additional risk arising
23
from the use of inferior vessels or bad management he
attaches a “classification clause” to the open cover. The
effect of this clause is to apply a higher premium rate to
shipments carried by overseas vessels that do not meet
the minimum requirements of the classification clause.
The held covered clause is in effect a safety net to provide
shippers a cover for their cargoes in the event that the
carrying vessels declared by them do not satisfy the
requirements as to class and age specified in the ICC,
subject to the payment of a premium and on conditions
to be agreed…
Xxx
53 Reverting to the present facts, one has to ask what
a reasonable commercial rate of premium would be, that
would have been fixed, if the parties were aware of all the
facts affecting the risk involved in shipping the cargo on
board the Sirena 1 . No regard should be given to the fact
that the Sirena 1 eventually turned out to be a phantom
ship since that would be erroneously taking into account
the “casualty” that happened later. Instead, the focus
should be on all the facts that were available on 2 July
1998, when Everbright declared the details of
the Sirena 1 to AXA…It is clear from the Greenock case
([49] supra ) and the two cases which followed it, that it
does not matter that the relevant facts affecting the risks
were not known to the parties until after the loss had
already occurred. All the facts that were available at that
time should be taken into account. The following are the
relevant and undisputed facts about the Sirena 1 which
we find could have been known to the parties on 2 July
1998:
24
(a) The vessel was not classed by any recognised
classification society. Its classification was stated as
HSR100A1. It is unclear which classification society
classed the vessel. It was speculated that “HSR” could
either be Hellenic Shipping Registry of Greece or
Honduras Shipping Registry. A proper check would have
revealed that the Sirena 1 had no proper classification…
(c) The vessel was not listed or found in the Lloyd’s
Register of Ships…
(e) The cover was on Institute Cargo Clauses (All
Risks) terms.
(f) The shipment was a chartered shipment, where
there is higher risk involved, bearing in mind the size and
value of the cargo to be insured.
54 Before the incidence of the loss, it was probably
unlikely that a reasonable and prudent underwriter
would conclude with reasonable certainty that
the Sirena 1 was a phantom ship. But it does not follow
that a reasonable and prudent underwriter would be
prepared to provide insurance for the kind of risks
involved. In our view, when confronted with the facts
which we have discussed, a reasonable and prudent
underwriter would be put on enquiry and upon enquiry,
they would find that there was no record of Sirena 1 , and
what emerged would be a vessel with a highly suspect
background. Clearly, there were sufficient warning signs
which would persuade a reasonable and prudent
underwriter to reject providing cover rather than to
accept a higher premium to cover the increased risks.
This is especially so since the policy required was on
Institute Cargo Clauses (All Risk) terms and the value to
be insured was high as it was a chartered shipment. In
our judgment, in the circumstances, a reasonable
commercial rate of premium would not be available for
insuring the shipment of logs on board the Sirena 1 , and
25
consequently Everbright would not be able to invoke
successfully the held covered clause…”
(emphasis supplied)
Thus, it can be seen from the above that the lack of
recognized classification was a significant factor in leading the
Court to conclude that the appellant therein would not be saved by
the ‘held covered’ clause. This is because no underwriter/insurer
would agree to insure a high value shipment, and include all risks
arising thereunder for a voyage involving a vessel which is of
suspect classification, even if the assured agreed to pay a higher
premium in respect of the same.
The Court further held that the fact that the insurer had
not specifically informed the appellant, prior to loss of the ship, that
the vessel was not included in the ICC, would not amount to a case
of estoppel by silence or acquiescence. Rather, it was held that it
was the obligation of the assured to ensure that the shipment
complied with the terms and conditions of the cover note, as
elucidated by the Court in the following terms:
“57 In considering this issue of estoppel, it is helpful to
bear in mind the obligations of each party in effecting the
26
insurance under the cover note. It is not disputed that
the insurance sought to be effected by Everbright with
AXA was not a facultative insurance where the insured
provides full details of the shipment, including the
relevant particulars of the vessel, to the underwriter for
consideration on whether the shipment would be
accepted for immediate insurance. What the parties here
had arranged for was an opencover insurance or one
akin to an opencover insurance, where a cover note
incorporating the ICC was first issued for the prospective
shipment of cargo and the relevant particulars relating to
the shipment were to be declared later by Everbright to
AXA. In respect of this arrangement, the obligation was
on Everbright to ensure that their shipment complied
with the terms and conditions of the cover note, and only
if such shipment complied with the terms would there be
insurance coverage for the shipment. AXA, on their part,
had no right to reject a vessel which complied with the
terms and conditions, but they were under no obligation
to inform Everbright, if the vessel declared did not fall
within the terms of the ICC.”
It is true that the Court’s reasoning in was
Everbright
significantly predicated upon the fact that the respondent insurer
had issued an ‘opencover’ insurance in which the insurer had only
issued a covernote based on the details of the cargo and the port of
origin and destination of the voyage, and the relevant particulars of
the vessel had not been provided to the insurer in advance. This is
important to note because in the present case, though the
Respondent initially issued the Cover Note dated 14.5.2010 (supra)
27
without knowing the particulars of the vessel, it subsequently
issued the Marine Insurance Policy dated 2.7.2010 after having
received the Appellant’s communication that the vessel was classed
as ‘I.R.S.’
Subsequent commonlaw decisions, however, have held
that the obligation of the assured to inform the correct details in
respect of the vessel’s classification extends even where a policy is
issued after the particulars of the vessel have been provided.
5.4 In Nam Kwong Medicines & Health Products Co. Ltd.
[2002] 2 Lloyd's Rep. 591, the insurer
v. China Insurance Co. Ltd.
denied liability for loss of goods during sea voyage inter alia on the
ground that the vessel was unclassified, and thus, there was a
breach of the ICC. It was contended by the insured that in
‘facultative’ insurance covers where there was no warranty that the
ship was classed with an approved classification society, and where
an ‘overage’ surcharge (i.e. an extra premium with respect to the
age of the vessel) had been duly paid, the ICC could not be made
applicable.
28
The High Court of Hong Kong rejected the argument of
the insured, holding that facultative insurance covers and the ICC
were not mutually exclusive, and that the requirement of ICC
classification was no different from the one that existed in open
cover insurances. The Court also reaffirmed the principle of English
law as stated in Liberian Insurance Agency (supra), i.e., that the
‘held covered’ clause in insurance contracts could not be invoked in
cases where it would have been impossible to insure the risk at a
reasonable commercial rate of premium.
5.5 In v.
Kam Hing Trading (Hong Kong) Ltd. The
People’s Insurance Co. of China (Hong Kong) Ltd. and Anr.
[2010] 4 HKLRD 630, the respondent insurance company
repudiated the claim of the appellant cargo seller on the ground
that the vessel carrying was not classed in compliance with the ICC.
It may be worth noting that in Kam Hing Trading (supra), the
appellant cargo company had produced a certificate to show that
the vessel was classed by the International Register of Shipping.
However, it was observed by the High Court of Hong Kong that the
29
International Register of Shipping was not a Member or Associate
Member of the IACS, as required by the ICC 01/01/2001.
It was argued by the appellant that the burden to verify
whether or not the vessel was classed was upon the insurer, and
that once the insured had provided the name of the vessel to the
insurer, the insurer had the means to verify the class of the vessel
from registers/databases of ships, and the subsequent issuance of
a marine cargo policy by the insurer amounted to acceptance of the
nonclassed vessel.
The High Court of Hong Kong, referring to the decision of
the Singapore Court of Appeal in
Everbright Commercial
Enterprises (supra), held that as per the ICC 01/01/2001, the
insured was obligated to disclose that the vessel was not classed in
accordance with the ICC. The Counsel for the appellant sought to
distinguish Everbright on the ground that in Kam Hing , a policy
had been issued subsequent to the open covernote. However, the
High Court of Hong Kong held that the obligation to disclose the
vessel’s classification was a continuing obligation the assured was
30
required to provide a ‘prompt notice’ to the insurer once it became
privy to the fact that the vessel was nonclassed, even if such
information was discovered after the policy had already been
issued. The following observations of the High Court of Hong Kong
are relevant to the instant case:
“172. It was the evidence of Mr Bilney, which in its
substantially amended form I accept, that the ICC/01
class requirement is of central importance, and
constitutes a condition of the insurance. I also accept the
evidence of Mr Xie that such internal check as was made
by the insurer did not extend to class, and in any event
my view is that as a matter of principle that in the
situation as had arisen the plaintiff was obliged to ensure
by ‘prompt notice’ to the insurer that the carrying vessel
was an “approved” vessel in terms both of the Open
Cover and after issue of an actual policy; the Open Cover
and the Cargo Policy each incorporated the ICC, and I
have no doubt that this must be a continuing obligation
on the part of the insured.
xxx
174. It follows that I reject the plaintiff’s submission that
the legal/evidential ‘burden’ of discovering the non
compliant class of the vessel lay on the insurer, which in
light of such information as it may then discover of its
own volition then has to evaluate whether, and upon
what terms, it is going to assume the increased risk, just
as I reject the argument that the formal issuance of a
cargo policy effectively is conclusive of the insurer’s
acceptance of the situation and/or that by such issuance
31
a ‘nonICCclassed’ vessel thereby is, in effect, somehow
transmuted to an ICC/01 ‘approved vessel’.
xxx
179. Accordingly, I reject the argument that in the
circumstances of this case the information given by the
insured to the insurer constituted ‘prompt notice’ in
ICC/01 terms (see clauses 1 and 5 of ICC/01), and that
thereafter it was the responsibility of the insurer to do
its own investigation from the primary (but patently
incomplete) data provided by the putative insured, and
thereafter to ‘fill in the blanks’ in terms of acceptance
or otherwise arising from any perception of increased
risk due to any knowledge which may have been gained
as to the ‘nonICCclassed’ status of this carrying
vessel.
180. I accept the contention of the 1st defendant that
the whole object of the ICC/01 even absent an express
‘held covered’ clause is to place the underwriter on
risk, and that if the assured wishes to seek extended
cover as for example, due to the use, as here, of a
nonICCclassed vessel then “prompt notice” ( vide
Clause 5 of the ICC) must be given to underwriters.
xxx
181. In this context I record, and also accept, Mr
Bartlett’s submission that the plaintiff never pleaded a
case that it did send ‘notice’ to the insurers, and
factually never did so, although he noted that at trial
Mr Sussex but “faintly” had referred to an email from a
Mr Sunny Ng of the plaintiff to loss adjusters dated 27
December 2007 as comprising such ‘notice’. I agree
with the submission that this email clearly was nothing
of the sort, and said no more than it was attaching
documents pursuant to a request from the loss
adjusters for such documents, and made no mention of
a desire to engage in negotiation for revised insurance
terms, and thus could not possibly constitute nor
32
purport to be a ‘notice’ to insurers; indeed, in her
evidence Ms Lui had confirmed that the plaintiff had
never sent nor instructed the 2nd defendant to send
such a notice to the insurer under ICC/01.”
(emphasis supplied)
Therefore, where the insurer issues the insurance policy
based on incomplete or incorrect details provided by the assured,
it does not amount to acquiescence to improper classification of
the vessel. It is the duty of the assured to provide the full and
correct particulars of the vessel at the time of issuance of the
policy, irrespective of whether or not the insurer carries out any
due diligence from their end. Since no such prompt notice was
given by the appellant in (supra), the High
Kam Hing Trading
Court held that the appellant was excluded from the scope of the
insurance cover. The High Court further observed that even if
such evidence had been given, there was no evidence to show that
premium could have been obtained at reasonable market terms,
and hence the ‘held covered’ clause would not apply.
5.6 Thus, it can be seen from the above decisions that where
a vessel is not classed with a recognized classification society in
terms of the ICC, any loss incurred by the cargoowner will be
33
excluded from the scope of the insurance cover. Further, the cargo
owner is required to immediately notify the underwriters and
negotiate an additional premium if the vessel is not classed in
accordance with the ICC.
5.7 In the instant case, it is apparent that neither was the
subject vessel in compliance with the ICC clause, nor had the
Appellant given prompt notification to the Respondent about such
noncompliance. The Appellant, in its letter dated 26.5.2010 (supra)
had informed the Respondent that the vessel is of ‘I.R.S.’ class.
However, the full form of ‘I.R.S.’ was not specified. As mentioned
supra, the Appellant has contended that the NCDRC wrongly
interpreted the term ‘I.R.S.’ to mean ‘Indian Register of Shipping’
and that the subject vessel was actually registered and classified
with the ‘International Register of Shipping’. However, our perusal
of the official website of the International Register of Shipping
7
shows that its official acronym is ‘INTLREG’. Whereas ‘I.R.S.’ is the
8
official acronym of the ‘Indian Register of Shipping’. Hence the
7
See International Register of Shipping, ‘About’, https://intlreg.org/about/.
8 See Indian Register of Shipping, ‘About IRClass’, https://www.irclass.org/about
irclass/.
34
Appellant’s contention that ‘I.R.S.’ refers to the International
Register of Shipping is prima facie not sustainable.
The Appellant had also averred in its complaint before the
NCDRC that the Overseas Seller had produced a certificate dated
11.6.2010, certifying that the subject vessel was registered with an
approved Classification Society as per the Institute Classification
Clause. Further, that as per the said certificate, the class of the
subject vessel was equivalent to Lloyd’s 100A1, and the subject
vessel was seaworthy and not more than 30 years old. However, no
such evidence of the vessel’s classification was ever provided to the
Respondent. It is true that the Appellant has, during the course of
hearing this appeal, placed the certificate dated 11.6.2010 before
this Court. However, a perusal of the certificate shows that is only a
selfcertification wherein the vessel owners have claimed that the
subject vessel is classed with an approved classification society as
per the ICC clause. It cannot be taken as conclusive evidence that
the vessel was actually classed with an IACS member society.
Even if we were to accept the Appellant’s contention that the
vessel is classed with the International Register of Shipping
35
(hereinafter ‘INTLREG’ for convenience), this does not help its case
inasmuch the INTLREG is not one of the 12 accredited Member
Societies of the IACS. Rather, it is the I.R.S. which is an IACS
member. It has never been the case of the Appellant that the
subject vessel was classed by the Indian Register of Shipping. It is
also not the Appellant’s case that the subject vessel was classed
with a National Flag Society. Hence we find that the Appellant had
committed breach of the classification requirement contained in
Clause 1 of the ICC.
5.8 The letter dated 26.5.2010 sent by the Appellant to the
Respondent, in respect of the ship’s particulars, cannot be said to
constitute ‘prompt notification’ as the particulars of the subject
vessel’s classification were not clearly specified therein. The
Respondent may have, in good faith, assumed that ‘I.R.S.’ meant
that the subject vessel was classed with the ‘Indian Register of
Shipping’, and may have consequently inferred that the subject
vessel fell within the scope of the ICC clause.
It was only pursuant to the Appellant’s request for release of
separate salvage security that the Respondent’s claim settling
36
agents, M/s. W.K. Webster & Co., London by email dated 9.8.2010
informed the Respondent that as per their investigation, the subject
vessel was classed with Lloyd’s Register of Shipping only until
10.10.2007, after which the classification was withdrawn. Hence it
was only from this email that the Respondents came to know that
the shipment may fall outside the scope of the insurance cover, as
per the terms of the ICC. Consequently, we find that the ‘prompt
notification’ requirement has not been satisfied, and there is no
ground for the application of the ‘held covered’ clause.
5.9 Further, as per the observations of the Singapore Court
of Appeal in (supra), we
Everbright Commercial Enterprises
consider it highly unlikely on the facts of this case that any prudent
underwriter would have agreed to cover the risk involved in a such
a high value shipment under the Marine Cargo Clause (which
covers almost all risks of loss or damage), even though the
Appellant had no documentary evidence on record to prove the
classification of the subject vessel. However, neither of the parties
has led evidence on whether the Respondent would have agreed to
insure the policy for a reasonable premium had the correct
37
particulars of the subject vessel been disclosed. Hence we do not
consider it appropriate to record any findings on the same. In any
case, such question does not arise inasmuch as the Appellant did
not provide “prompt notification” in the first place. Hence, as
provided under Clause 5 of the ICC, the insurer’s liability is
automatically discharged.
Consequently, we conclude that the Appellant had
committed breach of the warranty contained in the Marine
Insurance Policy requiring the subject vessel to be classed in
accordance with the ICC, and such breach of warranty discharged
the liability of the insurer.
6. The second issue which then arises for our consideration
is whether the Respondent had, through its conduct or in any of its
communications, waived the requirement of compliance of the
subject vessel with the classification requirement of the ICC. In this
regard, it may be of use to refer to Sections 35 and 36 of the Marine
Insurance Act, 1963 (‘1963 Act’):
“ 35. Nature of warranty. —(1) A warranty, in the
following sections relating to warranties, means a
promissory warranty, that is to say a warranty by which
the assured undertakes that some particular thing shall
38
or shall not be done, or that some condition shall be
fulfilled, or whereby he affirms or negatives the existence
of a particular state of facts.
(2) A warranty may be express or implied.
(3) A warranty, as above defined, is a condition which
must be exactly complied with, whether it be material to
the risk or not. If it be not so complied with, then, subject
to any express provision in the policy, the insurer is
discharged from liability as from the date of the breach of
warranty, but without prejudice to any liability incurred
by him before that date.
36. When breach of warranty excused. —(1) Non
compliance with a warranty is excused when, by reason
of a change of circumstances, the warranty ceases to be
applicable to the circumstances of the contract, or when
compliance with the warranty is rendered unlawful by
any subsequent law.
(2) Where a warranty is broken, the assured cannot avail
himself of the defence that the breach has been
remedied, and the warranty complied with before loss.
(3) A breach of warranty may be waived by the insurer.”
A warranty imposes certain obligations on the insured,
and Section 35(3) makes it amply clear that a warranty needs to be
complied with, regardless of whether or not its noncompliance
materially affects the risk involved in carrying the shipment. As a
corollary, when a warranty is not complied with, i.e., there is a
breach of warranty, the insurer is discharged from liability from the
39
date of such breach, by virtue of Section 35(3). At the outset,
therefore, it is important to note that the scheme of the 1963 Act is
clear inasmuch as the automatic consequence of a breach of
warranty is discharge of the insurer’s liability. Such discharge of
liability does not require any express conduct or representation
from the insurer.
However, Section 36(3) of the 1963 Act provides that the
insurer may waive a breach of warranty. Such a waiver may be
done either by or by way of incorporating certain terms in the
insurance contract, such as the ‘held covered’ clause in the ICC or
the exclusion clause found in the Institute Cargo Clauses, or by a
representation or conduct of the insurer. We shall first examine
whether the Respondent had waived the breach of warranty by way
of incorporating certain terms in the contract.
6.1 In the instant case, though the Respondent initially
issued the Cover Note dated 14.5.2010 without knowing the
particulars of the vessel in which the Appellant’s cargo was to be
carried, it subsequently issued the Marine Insurance Policy after
the particulars of the subject vessel, including the purported
40
classification of ‘I.R.S.’, were received. However, while the
importance of the ICC is undoubtedly more significant in cases of
‘opencover’ insurances where the specific details of the vessel
carrying the cargo are not known to the insurer, as held in
Nam
Kwong Medicines (supra), a ‘facultative’ insurance policy in which
the details of the subject vessel are specified, need not be mutually
exclusive with the ICC.
It is not the Appellant’s case that the Respondent had
chosen to issue the Marine Insurance Policy despite being informed
by the Appellant that the vessel was nonclassed. Rather the
Appellant had represented that the subject vessel was ‘I.R.S.’
classed. That being the case, as noted in
Everbright Commercial
Enterprises and Kam Hing Trading (supra), it was not the
Respondent’s burden to have investigated the Appellant’s claim and
informed the Appellant that the subject vessel was nonclassed.
Hence, at the outset it is important to note that the mere formal
issuance of the Marine Insurance Policy by the Respondent does
not indicate ‘acceptance’/waiver of the vessel’s classification or lack
thereof.
41
6.2 At this juncture, it may be pertinent to refer to Clause 5
of the Marine Insurance Policy which provides for exclusion of loss
arising from unseaworthiness of the subject vessel.
“5.1 In no case shall this insurance cover loss damage or
expense arising from unseaworthiness of vessel or craft…
5.2 The Underwriters waive any breach of the implied
warranties of seaworthiness of the ship and fitness of the
ship to carry the subjectmatter insured to destination,
unless the Assured or their servants are privy to such
unseaworthiness or unfitness.”
It was contended by the Appellant that noncompliance
with the ICC stood waived by Clause 5.2, as stated above. However,
it cannot be said that the ICC was an ‘implied’ warranty within the
meaning of Clause 5.2. It was stated on the face of the Marine
Cargo Cover dated 14.5.2010 and the Marine Insurance Policy that
the ICC is one of the warranties/terms of insurance.
In any case, the Appellant’s stand is that the subject
vessel was classed with the ‘INTLREG’ (which it has mistakenly
referred to as ‘I.R.S.’). As the Singapore Court of Appeal has
observed in (supra) and as
Everbright Commercial Enterprises
discussed supra, the very purpose of adopting the ICC is to ensure
42
that the vessel chosen by the insured meets certain minimum
standards of seaworthiness, by virtue of being classed with one of
the wellestablished member societies of the IACS. The Appellant,
having known that the subject vessel was classed with the
‘INTLREG’, which neither was nor is a member of the IACS, was
privy to the fact that the subject vessel was not compliant with the
minimum standard of seaworthiness as laid out in the Marine
Insurance Policy. Clause 5.2 only waives breaches of implied
warranties of seaworthiness where the assured was not privy to the
unseaworthiness of the vessel. Hence, the Appellant would not be
saved by Clause 5.2 of the Policy, and it cannot be said that the
Respondent had waived the breach of warranty before the
Appellant’s claim, by incorporating Clause 5.2 of the Policy.
6.3 We may now turn to whether the Respondent waived the
breach of warranty by its conduct or any representation. During the
course of arguments, it was put to the learned counsel for the
parties whether the act of provision of General Average Guarantee
amounted to a waiver of breach of warranty. It is commonly
understood that a waiver in the context of marine insurance, apart
43
from one already provided for by way of ‘held covered’ or other such
terms in the insurance contract, must include two elements,
namely, (i) knowledge of the insurer, and (ii) unequivocal
representation of the insurer. The presence of both these elements
is indispensable.
For instance, after the occurrence of loss, even if the insurer
makes an express representation that it would affirm the contract
and indemnify the loss, if the insurer can prove that such a
representation was made without the knowledge that there was a
breach of warranty on part of the insured, the liability of the insurer
would stand discharged from the date on which the warranty was
breached. Similarly, mere knowledge on the part of the insurer that
there was a breach of warranty would not amount to a waiver, in
9
the absence of an express representation to that effect.
6.4 Insofar as the element of knowledge is concerned, if the
vessel carrying the insured cargo incurs loss, and the insurer seeks
to investigate into whether or not there was a breach of warranty,
no knowledge can be attributed to the insurer until such
9 Baris Soyer, Warranties in Marine Insurance (Cavendish, 2001) 206213.
44
10
investigation is completed. Once there is knowledge, the second
element, i.e., unequivocal representation comes into play. The
representation must be of such a nature that it is sufficient for the
insured to conclude that the insurer is aware of the breach of
warranty and has chosen to waive such breach and indemnify the
loss. The determination of whether or not these elements are
present assumes more complexity in cases where such a
representation comes from an agent of the insurer, or where such
an agent has knowledge of the breach. However, these arguments
with respect to representations made by the insurer’s agent have
not been raised before us, and hence, such issues need not be
addressed for the purposes of the present case.
6.5 Under the facts and circumstances of this case, the
breach of warranty occurred when the Appellant informed the
Respondent by letter dated 26.5.2010 that the subject vessel was
classed by ‘I.R.S.’, thereby indicating the subject vessel was
compliant with the ICC. After the subject vessel ran aground on the
10 Id , 209.
45
midnight of 18.7.2010, the Appellant requested the issuance of
General Average Guarantee, and the same was issued on 3.8.2010.
At the outset, the General Average Guarantee in ‘Form B’
dated 3.8.2010 issued by the Respondent to the GAA was only an
undertaking to pay the shipowners and the GAA on behalf of the
Appellant for their contribution to the General Average, as and
when such contribution was ascertained. This Guarantee was
issued as per Clause 2 of the Marine Insurance Policy, under which
the Respondent had agreed to cover all general average and salvage
charges. Clause 2 reads as follows:
“2. This insurance covers general average and salvage
charges, adjusted or determined according to the
contract of affreightment and/or the governing law and
practice, incurred to avoid or in connection with the
avoidance of loss from any cause, except those excluded
in Clauses 4, 5, 6 and 7 or elsewhere in this insurance.”
(emphasis supplied)
At the time the aforesaid General Average Guarantee
dated 3.8.2010 was issued, the Respondent was still under the
impression that the subject vessel is in compliance with the ICC.
Obviously, such impression was based on the representation made
46
by the Appellant that the subject vessel was classed with I.R.S. It
was only by the email dated 9.8.2010 from its claim settling agent
that the Respondent came to know that the subject vessel does not
meet the prescribed classification. Subsequently, the Respondent
withdrew the Guarantee and refused to pay the separate salvage
security. Hence, the issuance of the General Average Guarantee
cannot be understood as a waiver inasmuch as the Respondent, on
the date of such issuance, did not have the knowledge of the breach
of warranty committed by the Appellant and was only fulfilling its
duty to contribute to the General Average (as explained supra) in
good faith, as required by Clause 2 of the Marine Insurance Policy.
6.6 Further, in any case, at the time of issuing the General
Average Guarantee, the Respondent did not expressly state that it
was aware of the noncompliance with the ICC and it was waiving
the same. In fact, the moment the breach of warranty was
discovered, the Respondent initiated steps to withdraw the General
Average Guarantee that had been issued by them and refused to
pay the additional salvage security, which clearly demonstrates that
there was no intent to waive the breach of warranty. Therefore, it
47
cannot be said that the Respondent had waived the breach of
warranty through its conduct or representations after the claim was
made by the Appellant.
7. Since we have concluded that the liability of the insurer
was discharged on account of the breach of warranty caused by
noncompliance with the classification requirement within the ICC,
we do not consider it relevant to deal with the age limitation
requirement therein for the purpose of the present case.
8. It is pertinent to note that during the course of hearing
the present appeal, three other parties, namely K. Amishkumar
Trading Pvt. Ltd., Baijnath Melaram and Viraj Impex Pvt. Ltd.
(‘Intervenors’) filed Intervention Applications No. 3 of 2016, No. 4 of
2016 and No. 5 of 2016 respectively in the present appeal. The
aforesaid Intervenors filed individual consumer complaints against
the Respondent before the NCDRC, which are presently pending
adjudication.
The Intervenors’ applications were allowed by this Court vide
order dated 27.10.2017. We do not consider it appropriate to
decide the Intervenors’ claims on merits at this stage, especially
48
since these may require separate findings of fact as to the terms
and conditions of the policies issued by the Respondent to them,
the warranties made by the Intervenors to the Respondent and so
on. Hence, we direct that the Intervenors be relegated to record
their evidence before the NCDRC, and the NCDRC is requested to
hear the matters on merits and decide the same expeditiously, in
accordance with the law as stated by us above.
9. Thus, we conclude that the Appellant had committed
breach of warranty and the same was not waived by the
Respondent. As a result, the Respondent rightly repudiated the
claim of the Appellant.
10. In view of the above, the impugned judgement of the
NCDRC stands confirmed, and the appeal is dismissed.
……..………………………………….J.
(MOHAN M. SHANTANAGOUDAR)
…………………………………………J.
(K.M. JOSEPH)
NEW DELHI
FEBRUARY 07, 2020
49