B.K. Taimni, Member:
1. Appellant was the complainant before the State Commission, where he had filed a complaint alleging deficiency in service on the part of the respondent Insurance Company.
2. Briefly stated the facts leading to filing the complaint were that the complainant who had taken two steel Barges on Sub-lease from a lessee of the State PWD, had got these two Barges insured with the respondent Insurance Company for the period from 28.7.1995 to 27.7.1996. It was the case of the complainant that on 5.10.1995 as usual the two barges went to fishing harbour, Kakinada, unloaded the material and returned back to East Coast Jetty near canal of New Port area. They were tied at the said Jetty. There were heavy rains, gale winds and heavy currents in the sea waves from 6.10.1995 to 9.10.1995 and the water current in the canal from the mouth of the sea increased as a sequel to which some mooring ropes were used to further secure the Barges. By 11.10.1995, the condition of weather has become rough and there was heavy rain with gale winds, and at about 12.00 mid night of 11/12.10.1995, due to severe flood-water and water currents, the mooring ropes of Barges snapped as a result of which the Barges started drifting into the open sea and merged in the sea. It was the case of the complainant that he employed salvage party but they failed to trace the Barges. This incident was reported to the Insurance Company, the Port Authorities and Station House Officer, Kakinada. Since the case of compensation was not getting settled between the parties, a complaint was filed before the State Commission, who after hearing both the parties and perusal of extensive material on record, especially, the Surveyor’s Report, dismissed the complaint, hence this Appeal before us.
3. We heard the learned Counsel for the parties at considerable length. It was the case of the learned Counsel for the appellant that as per Report received by them from the India Meteorological Department (IMD), which appears at page 47 of the Paper-book, there was ‘M’ flag hoisted on 11.10.1995 and it was lowered only on 12th October, 1995 at 8:30 a.m. As per Andhra Pradesh Gazette Extraordinary, Flag ‘M’ is defined as ‘Ebb current is strong rendering navigation over bar dangerous. Hence, the reliance placed by the State Commission and the Surveyor, on the wind speed is not a correct approach to adopt in such a case. The Police report is in their favour. Salvage parties were engaged but they could not trace the boat. They have also filed affidavit of two Laskars, which has not been relied upon by the State Commission, which should have been done as they were the primary witnesses. Another important point made by the appellant is that the time taken by the respondent is much beyond the prescribed period of settling the claim. The episode of the two Barges getting sunk happened on 12.10.1995. The matter was reported the same day. The Surveyor also visited the site the same day. Final report of the Surveyor was received only on 26.5.1998, based on which claim was repudiated, hence taking almost three years to repudiate the claim is not acceptable.
4. After hearing the learned Counsel for the respondent and after perusal of material on record, we find that we have got two reports of IMD on record. There is no disputing the fact that the report of the IMD (appearing at page 47 of the paper-book) does mention the hoisting of ‘M’ flag on 11.10.1995 but at the same time, we have another reports of the IMD on record (appearing at pages 43 to 46 of the paper-book) showing that the wind speeds on 12th at 8:30 a.m. was only 3 knots or 6 km/ph. Even if it is accepted that this is the time when ‘M’ flag was lowered for argument’s sake, yet we are unable to accept that on the night of 11th/12th October 1995, the sea was so rough and there was ebb tide, yet these two Barges being 31.00 mtrs. long tied with additional strong mooring ropes would disappear without leaving a trace, especially, when the wind speed noted within a period of 6 to 8 hours is 3 knots per hour.
5. The final report of the Surveyor make a very clear observation that the verification made by them from the so-called salvage party did not confirm that any such operation were taken by the alleged salvage party, which the Surveyor verified on 12.10.1995 itself from the Kakinada Port Office. According to their VHF Message Register, no unmanned/abandoned steel barges in Kakinada at sea area sighted. In this connection, we also like to reproduce paras 3.3 and 3.4 of the Surveyor’s Report, which reads as under:
'3.3 As per the confessional statements, the insured have organized the salvage/search operations during the same period as we have carried out search operations, i.e., 12.10.1995 to 20.10.1995. Further, during the same period 12.10.1995 to 20.10.1995, we the undersigned Surveyors have independently carried out search operations. In such a case if the confessional statements submitted by the insured are true, then we must have either crossed/met the so called search party during search operations or at least our inquiries during the same period must have revealed that insured have carried on search operations.
3.4 On 24.11.1995 and subsequently during March, 1996 we have Met insured representatives Sri C. Sridhar, S/o C. Visweswara Rao - Managing Director of M/s. Navayuga Engineering Co. Ltd., and Sri K. Vijaya Bhaskar at their office in Vishakhapatnam and during our discussions insured representatives have accepted that as on the date of our meeting they have not undertaken any salvage operations and subsequently we have also written letter to the insured on 18.5.1996 to explain us the reasons for not undertaking salvage operations - copy of our letter enclosed.'
6. These observations remain unrebutted and are self-explanatory and need no further elaboration or clarification to hold that no salvage operation was carried out as alleged by the appellant.
7. It is also pertinent to note that despite efforts by the Surveyor, the members of the watch and ward, namely, Shri P. Koteshwara Rao and D. Satyanarayana, whose notarised statements were produced, yet despite repeated requests, these deponents were never produced before the Surveyor for the interaction, hence an adverse inference has to be drawn against the appellants.
8. In the aforementioned circumstances, like the State Commission, we also see that in the given circumstances, the appellant has not been able to substantiate or prove that he lost two insured barges on account of drifting into deep sea on the night of 11th/12th October, 1995, in view of which we see no merit in the appeal, hence dismissed on merits.
9. However, we see lot of merit in the contention that the respondent Insurance Company cannot take almost three years to repudiate the claim. Section 64 UM (32) of the Insurance Act, envisages a reasonable time to be taken by the Survey
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or to submit their report but in this case, by no stretch of imagination, more than 2 years time taken by the Surveyor and its repudiation by the Insurance Company after almost 3 years, cannot be said to be a reasonable period. In our view this is clearly a case of deficiency in service on the part of the respondent, for which, the respondents are liable to pay to the appellant a compensation, which we fix at Rs. 50,000 along with interest @ 9% p.a. from the date of filing of the complaint till the date of payment. This amount will be paid by the respondent Insurance Company to the appellant within 6 weeks from the date of passing of this order. 10. Only to this extent appeal is allowed and order passed by the State Commission stands modified. Appeal partly allowed.