Insurance firm told to pay ₹1.75 cr. to owners of shipping vessel


The National Consumer Disputes Redressal Commission here directed an insurance company to compensate ₹1.75 crore to owners of a shipping vessel which sank in the sea after it was hit by some unidentified object from the bottom.

The consumer court gave the decision on a petition filed by the owners of the vessel named ‘Dhananjay’, complaining that their insurance claim was denied by the Oriental Insurance Company Limited.

Sank in 2009

The owners stated that their vessel was en route to Sharjah on December 16, 2009, when it was hit by some unidentified object at the bottom which resulted in ingress of water causing it to finally sink. Immediate intimation to the authorities ensured that no lives were lost.

Surveyor appointed

When the owner intimated the insurance company, it appointed a surveyor. In the report, the surveyor said the reason for sinking of the vessel was found to be “contact/impact with some unidentified underwater floating object”.

Finding it to be a case of total loss, the owners filed a claim with insurance company.

Oriental Insurance, on the other hand, appointed another surveyor, which came to the conclusion that the vessel was poorly maintained, and propelled by engine as against sails, which caused vibrations over a period, causing the breach in the hull and the vessel. Based on the second surveyor’s report, the insurance firm rejected the claim.

“Instead of making any extraordinary claim qua the cause of accident, record reveals they [owners] preferred to simply state what they did know which was that they did not know. This cannot be held against the complainants [owners] as argued on behalf of the opposite party [Oriental Insurance],” the court said.

With the vessel sunk at the bottom the sea, the court noted, “It is reasonable to say that nobody involved in the sailing of the vessel really knew as to what precisely was the cause of the accident”.

Benefit of doubt

“Law is established that in a case where it is not clear whether there is doubt over the admissibility of a claim in terms of the insurance policy, benefit of doubt should go to the insured,” the court held.

It directed the Oriental Insurance to pay ₹1.75 crore with 6% interest from the date of rejection of the claim on June 6, 2012, till realisation. It also ordered the insurance company to pay an additional ₹50,000 to the owners towards cost of litigation.