P.S. Narayana, J.
1. Heard Sri S.Ravi, learned Counsel representing the appellant/ defendant and Sri S.Narasimha Rao, the learned Counsel representing the respondent/ plaintiff.
2. The appeal is preferred by the unsuccessful defendant in O.S. No.441 of 1983 on the file of the Principal Subordinate Judge, Kakinada. The respondent/plaintiff filed a suit for recovery of Rs. 1,79,687-50 ps towards the compensation amount payable under Marine Hull Policy. The respondent as plaintiff had pleaded in the plaint as follows:
'The plaintiff is a Co-operative Society registered under A.P. Co-operative Societies Act. The defendant is an Insurance Company. The plaintiff is the owner of a mechanised fishing Sarkar Boat No. 9 K.D.-573. It was insured with the defendant under the Marine Hull Policy 82741242/97 82741242/97 , dated 21.12.1978. The said Insurance Policy covers amongst other things of total loss, constructive total loss, partial loss, etc., to the said boat. As per the terms of the Policy, the plaintiff had to pay a premium of Rs. 3,519-75 ps. in quarterly instalments and the defendant should indemnify the plaintiff for total loss, constructive total loss and all such losses or damage as mentioned in the said policy. The plaintiff paid the premium of Rs. 246/- for extension of the Insurance for the said boat on the Orissa Coast as well as West Bengal Coast, which the defendant accepted and had undertaken to cover the risk from 28.2.1979 to 30.2.1979. The above Insurance Policy is a valued Policy. It was valuedfor Rs. 1,15,000/-. While so on 27.3.1979 when the boat was returning from Astrangi it was sunk in the sea at Chintapallibasti at a depth of about 20 fathoms, due to fortuitous incursion of sea water into the Boat through stern tube as a result of the accidental breakage of propeller shaft. The plaintiff allotted the said boat to P.S.R.Ch.K. Mohan Deva Varma, who intimated about the sinking of the boat to the defendant as well as to the Port Authorities. On 31.3.1979 the Surveyor who was deputed by the defendant has proceeded along with the leader of the boat to the place of the accident. However the defendant did not send any copy of the report nor did the defendant pay the amount to the plaintiff. Thereupon, the plaintiff issued a registered notice on 10.3.1981 by claiming the policy amount with interest for which the defendant gave a reply repudiating its liability by stating that the claim of the plaintiff falls outside the purview of the policy. Engine and other components were manufactured by Messers. Rustom Hons, which is a reputed and experienced manufacturer in Marine Engines. The Government of A.P. after inspecting the boat fixed longevity of the boat for 7 years. The defendant executed a premium on 1.1.1979 by keeping in mind the sea worthiness of the boat. After making inspection, the Port Authorities renewed the certificate of sea worthiness on 3.2.1979. The breakage of the propeller shaft could not be due to wear and tear and under the circumstances, breakage of propeller shaft could be due to metal fatigue or some other accident caused. The fortuitous incursion of sea water into the boat which caused the sinking of the boat is one of the perils of the sea covering the Marine Hull Policy. Therefore, the plaintiff prayed that the suit may be decreed for an amount of Rs. 1,15,000/-covered under the Hull Policy with interest at 12 1/2% p. a. till the date of realisation'.
3. The appellant-New India Assurance Company Limited who is a defendant inthe suit filed written statement with the following allegations:
'It is stated that no doubt the plaintiff is the owner of the boat and it was insured by the defendant. Under the Marine Hull Policy, the plaintiff is entitled to the policy amount if the boat had met with sea perils namely if any accident caused to the boat. The allegation that the defendant accepted the policy by undertaking the risk from 28.2.1979 to 30.12.1979 as per the letter dated 28.2.1979 and that the said letter establishes that there is no wear and tear in normal course to the engine or accessories is not true. The letter is an acceptance from the defendant for extension of the insurance risk covered for the said boat, while going in the Orissa Coast and West Bengal Coast. The plaintiff is not entitled to allot the said boat to another person and when the third party was operating the boat, the defendant is not liable to pay the policy amount if any accident occurred. The plaintiff is put to strict proof that on 27.3.1979 while the boat was returning, sunk in the sea at Chintapallibasti at a depth of 20 fathoms due to fortuitous incursion of sea water into the boat through the stern tube as a result of the accidental breakage of propeller shaft. The allegations in the plaint do not make out a case for recovery of the insurance amount. Even if the mere breakage of the propeller shaft is true, it would not entitle the plaintiff to recover amounts by filing a suit. It is not averred in the plaint that due to sea peril the propeller shaft was broken. As soon as the defendant was informed about the incident by third party by name Mohan Deva Varma, he deputed a Surveyor on 31.3.1979 and the Surveyor in his report opined that the boat might not have drowned due to sea peril. Therefore, the defendant repudiated the claim. The plaintiff was aware of the fact that there is a manufacturing defect in the propeller shaft and that is why immediately after the repudiation of the claim, the plaintiff did not file the suit. The plaintiff is not entitled to interest either under the policy or under general law. Therefore, it prayed for the dismissal of the suit with costs'.
4. On the respective pleadings of the parties, following issues were settled:
(1) Whether the plaintiff is entitled to the suit amount under the Insurance Policy, dated 21.12.1978?
(2) Whether the plaintiff is entitled to the interest at 121/2 % ?
(3) To what relief the plaintiff is entitled?
5. Before the trial Court, PW1 and DW1 were examined and Exs.A1 to A10 were marked.
6. On appreciation of both oral and documentary evidence, the trial Court decreed the suit for Rs. 1,15,000/- with interest at 12% per annum from 29.3.1979 up to the date of decree and at 6% per annum from the date of decree till the date of realisation with costs. Aggrieved by the said judgment and decree, the Insurance Company had preferred the present appeal.
7. Sri S.Ravi, learned Counsel representing the appellant/defendant had contended that the trial Court had granted the decree in favour of the respondent/ plaintiff society more on the ground of sympathy in the absence of any legally acceptable evidence. The learned Counsel also had further contended that inasmuch as the material evidence is lacking and the risk was not covered by the terms of the policy at all, the trial Court should have dismissed the suit. The learned Counsel further commented that the respondent/ plaintiff had not let in any evidence to prove and establish that the breaking of the propeller shaft was in consequence of accident and the learned trial Judge having accepted the same, at paragraph 13 of the judgment, had totally erred in decreeing the suit. The learned Counsel commented that the trial Court having observed that the plaintiff-Co-operative society and its officershad not taken any interest in getting the witness to prove the circumstances under which the Hull was broken, should have dismissed the suit, but, surprisingly, after observing so, had decreed the suit. The learned Counsel further contended that the liability of the Insurance Company could be made only if there was an accident or a peril attributable to the conditions of weather in the sea or an accident of navigation, but for those conditions, which would not have resulted in a loss. The learned Counsel further commented that at any rate, the respondent/plaintiff had miserably failed in establishing any one of the ingredients for sustaining an action for the claim and in view of the same the appeal has to be allowed straightaway. The learned Counsel also had placed strong reliance on the definition of the Maritime Perils under Section 2(e) of the Marine Insurance Act, 1963 and also a decision of the Privy Council reported in Grant Smith and Company and Mc Donell Limited., AIR 1919 PC 85.
8. On the contrary, Sri S. Narasimha Rao, the learned Counsel representing the respondent/plaintiff-Society had contended that in view of Section 2(e) of the Marine Insurance Act, 1963 and also the definition of perils of the sea as specified in the Law Lexicon and in view of the policy, the terms of the policy under Sections 55 and 56 of the Marine Insurance Act, 1963, the claim made by the respondent/plaintiff is definitely sustainable and the trial Court had arrived at the correct conclusion in decreeing the suit. The learned Counsel further contended that it is no doubt true that none concerned with the actual incident had been examined and the learned Counsel also had brought to my notice that inasmuch as the material witness was away at voyage, an application was moved before the trial Court to reopen the evidence for the purpose of adducing further evidence and that opportunity was not given to therespondent/ plaintiff. The learned Counsel also had taken me through the findings, which had been recorded by the trial Court and had submitted that a very fact that certain observations had been made by the trial Court, which are in a way adverse to the respondent/plaintiff, by that itself, it cannot be said that the judgment and decree of the trial Court are not sustainable.
9. Heard the learned Counsel and also perused the oral and documentary evidence available in record.
10. The points which arise for consideration in this appeal are as hereunder:
(1) Whether the respondent/plaintiff is entitled to the suit amount under the Insurance Policy dated 21.12.1978.
(2) Whether the decree and judgment made by the trial Court are in accordance with law.
(3) If so, to what relief the parties are entitled to.
Points 1 and 2: In view of the fact that these points are rather virtually one and the same, for the purpose of convenience, these points can be discussed together.
11. As already referred to supra, the evidence of PW1 and DW1 is available on record and apart from this oral evidence, Exs.A1 to A10 were marked. Ex.A1 is the Marine Hull Policy bearing No. 82741242/ 97. Ex.A2 is the letter addressed to the Assistant Branch Manager, New India Assurance Company Limited, Kakinada. Ex.A3 is dated 29.7.1981, a letter addressed to the Divisional Manager, New India Insurance Company Limited, Visakhapatnam. Ex.A4 is the letter addressed to the Managing Director, Andhra Fishermen Central Co-operative Society Limited, Kakinada by mechanic office of the Deputy Director of Fisheries, Kakinada through theDeputy Director of Fisheries (FTO), Kakinada. Ex.A5 is the office copy of the notice got issued by plaintiff's Advocate to defendant. Ex.A6 is the reply notice. Ex.A7 is the letter written by P.S.R.Ch. K.M.D. Varma, allotee to Managing Director of F.C.C.S. Limited, Kakinada-2. Ex.A8 is the statement of driver Vadrevu Matharaja given to A.F.C.C.S. Mechanised Boats Manager, Kakinada. Ex.A9 is the statement of Luscars of Shakar-9 given to A.F.C.S. Managing Boats Manager, Kakinada. Ex.A1 is the letter written by defendant to plaintiff. PW1, the clerk who was examined on behalf of the plaintiff Co-operative Society had deposed about the ownership of Sahakar Boat No. 9 and the other details relating to the insurance made by the appellant/ defendant in the year 1978 under Marine Hull Policy and it was insured for a sum of Rs. 1,15,000/- and the period covered was from 31-12-1978 to 30-12-1979. It was insured against total loss, constructive loss, salvage charges and partial losses and other losses, which were mentioned in the Hull Policy. PW1 also deposed that on 27.3.1979 while the boat was coming from Asthrangi in Orissa State to Kakinada and by the time it reached Chintala Basti, the propeller shaft was broken and the water came into the boat and ultimately the boat was sunk. Immediately, the said fact was informed under letter Ex.A2, dated 29.3.1979 to the Assistant Branch Manager, New India Assurance Company, Kakinada. Later on, the report given by Varma and the statement of the driver and the lascars who travelled on the ill-fated boat under Exs.A7 to A9 respectively were submitted to the defendant. The plaintiff also got appointed a mechanic when the surveyor of the defendant expressed that the shaft was broken due to tear and wear.
12. The trial Court in detail had discussed about the evidence of PW1 and also the opinion given by the mechanic at length at paragraphs 7 and 8 and PW1 alsodeposed apart from these details about the exchange of notices and how the Insurance Company intended to escape from its liability and under what circumstances the respondent/plaintiff-society ultimately had thought of instituting the present suit.
13. The evidence of DW1, the Branch Manager is to the effect that the plaintiff sent a notice stating that the propeller shaft of the boat was broken. DW1 also admitted the policy Ex.A1. But, however, DW1 deposed that this policy does not cover wear and tear of the boat and any insurance claim in that regard. DW1 also deposed that the seabed was not damaged due to sea perils or cyclone or due to other accident to the boat. This was caused due to the negligence of the plaintiff. DW1 also deposed that the defendant had sent a reply notice to the plaintiff-Ex.A6 and the defendant also appointed a Surveyor by name Erikson and Richardson Company, (Andhra) and the Surveyor opined that the shaft was broken due to wear and tear and this fact was also mentioned in Ex.A6. In cross-examination, DW1 deposed that he does not know any one inspected the boat before Ex.A1. Ex.A1 is only a renewal of the previous policy and if necessary, they will depute a surveyor to inspect the boat even during the process of application for insurance and for this, there will be an inspection report in their record. DW1 also admitted that Ex.A1 policy is valued and accepted by them. DW1 also deposed that the surveyor was deputed on 28.1.1979 and he does not remember as to when their Surveyor actually reached the spot. But this witness was unable to depose about the details relating to the nature of accident. It is no doubt true that the trial Court had observed that the evidence adduced on behalf of both the parties is highly unsatisfactory but in the light of the fact that the surveyor and the other concerned had not been examined, an adverse inference had been drawn and after discussing several aspectsof the evidence of DW1 at paragraphs 15 to 16, the trial Court had arrived at a conclusion that the respondent/plaintiff is entitled to a decree.
14. In a judgment reported in Grant Smith and Company and Mc Donell Limited (supra), strong reliance was placed to explain the meaning of perils of a sea and marine risk. It was held as follows:
'It is then urged that the policy was only intended to cover the risks by voyage from Seattle to Victoria and any other journeys by sea which, in the course of their use of the dock, the appellants thought fit to make. Their Lordships do not accept this view of the covenant. It must be read in connection with the subject-matter of the lease and the terms in which it is framed. The subject-matter of the lease was undoubtedly a dock, which it was contemplated by both parties was to be used in the Victoria dock, which it was contemplated by both parties was to be used in the Victoria harbour, and thought it might have been possible that it could have been taken elsewhere yet the terms of the covenant which provide that the insurance shall be kept on foot throughout the whole period of the lease and not merely effected from voyage to voyage in their Lordships opinion negative the view that it was only against risk in its journeyings by sea that the insurance was to be taken out. There is no statement in the covenant as to the form of policy that is to be used; it must therefore, be assumed to be an ordinary policy applicable to such a structure both in course of transit and in course of use. It was to insure against 'marine risk' which cannot be better described than as against 'the hazards of the sea'.
15. In the Law Lexicon at page 966, while dealing with the perils of the sea it was stated as hereunder:
Perils of the sea: They are strictly the natural accidents peculiar to the water, but the law has extended this phrase to comprehend events not attributable to natural causes, ascaptures by pirates, and losses by collision, where no blame is attachable to either ship, or at all events to the injured ship.
'Dangers of perils of the sea' such as will excuse a carrier from liability, are those accidents peculiar to navigation that are of an extraordinary character, and arise from irresistible forces of overwhelming power, which cannot be guarded against by the ordinary exercise of human skill and prudence.
'Perils of the Sea' is a phrase having the same meaning in the Bills of Lading and Charter Parties, as in Hamilton v. Pandorf, 12 App.Ca.527.
'PERILS OF THE SEA'. Arnold defines the phrase as meaning, in policies, all kinds of marine casualties, such as shipwreck, foundering, stranding, and every species of damage to the ship or goods at sea by the violent and immediate action of the winds and waves, not comprehended in the ordinary wear and tear of the voyage or directly referable to the acts and negligence of the assures as it proximate cause. In contracts of sea carriage, the words 'perils of the sea' have been defined as 'sea damage occurring at sea and nobody is at fault'. (Lopes L.J., quoted in Hamilton v. Pandorf (1887), 12 App.Cas.518,526, but this definition is not exhaustive, for damage colliding with the carrying ship is a peril of the sea and in a marine policy it has been defined as 'all perils losses, and misfortunes of a marine character or of a character incident to a ship as such'. (Lord Bramwell in Thames and Mersey M.I.C. v.Hamilton, (1887) 122 App.Cas. 492) The expression has the same meaning in a contract of sea carriage as it has in a marine policy; but in the case of a contract of carriage the Court looks to what has been termed the remote as distinguished from the proximate cause of damage, whereas in the case of a policy the proximate cause can alone be regarded. (Lord Watson, Hamilton v. Pandorf, 12App.Cas.518).
The following statement indicates the limitations of the phrase. 'The term doesnot cover every accident or casualty which may happen... on the sea. It must be a peril of the sea. Again, it is well settled that it is not every loss or damage of which the sea is the immediate cause that is covered by these words. They do not protect, for example against that natural and inevitable action of the winds and waves which results in what may be described as wear and tear. There must be some casualty, something which could not be foreseen, as one of the necessary incidents of the adventure. The purpose of the policy (or contract) is to secure an indemnity against accidents which may happen, not against events which must happen. Not only losses which are occasioned by extraordinary violence of the winds or waves are losses by perils of the sea.... If a vessel strikes upon a sunken rock in the fine weather and sinks, this is a loss by perils of the seas. And a loss by foundering owing to a vessel coming into collision with another vessel, even when the collision results from the negligence of that other vessel, falls within the same category. The Nantho, (1887), 12 App. Cas. 503; Abbott, Shipping, Carvger, Sea Carriage, Scrutton, Charter-Parties)
'The phrase 'Perils of the Sea', whether understood in its most limited sense as importing a loss by natural accidents peculiar to that element, or whether understood in its more extended sense as including inevitable accidents occurring upon that element, must still in either case be understood to include such losses only to the goods on board as are of an extraordinary nature or arise from some irresistible force, or from inevitable accident or some overwhelming power which cannot be guarded against by the ordinary exertions of human skill and prudence. Hence it is that if the loss occurs by a Peril of the Sea which might have been avoided by the exercise of any reasonable skill or diligence at the time when it occurred, it is not deemed to be, in the sense of the phrase, such a loss by the Perils of the Sea as will exempt the carrier from liability, but rather a loss by the gross negligence of the party'. (Story on Bailments, Section 512 a.)
16. Section 2(e) of the Marine Insurance Act, 1963 reads as follows:
'maritime perils' means the perils consequent on, or incidental to, the navigation of the sea, that is to say, perils of the sea, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints and detainments of princes and peoples, jettisons, barratry and any other perils which are either of the like kind or may be designated by the policy.'
17. Section 55 of the said Act deals with included and excluded loss and the provision reads as follows:
Included and excluded losses:
(1) Subject to the provisions of this Act, and unless the policy otherwise provides, the insurer is liable for any loss proximately caused by a peril insured against, but, subject as aforesaid, he is not liable for any loss which is not proximately caused by a peril insured against.
(2) In particular-(a) the insurer is not liable for any loss attributable to the wilful misconduct of the assured, but, unless the policy otherwise provides, he is liable for any loss proximately caused by a peri! insured against, even though the loss would not have happened but for the misconduct or negligence of the master of crew;
(b) unless the policy otherwise provides, the insurer on ship or goods is not liable for any loss proximately caused by delay, although the delay be caused by a peril insured against;
(c) unless the policy otherwise provides, the insurer is not liable for ordinary wear and tear, ordinary leakage and breakage, inherent vice or nature of the subject-matter insured, or for any loss proximately caused by rats or vermin, or for any injury to machinery not proximately caused by maritime perils'.
18. On the strength of the oral and documentary evidence available on record, there cannot be any dispute that the appellant/defendant had accepted the seaworthiness and Ex.A1 also is not in dispute between the parties. The fact that the boat was returning from Orissa also is not in dispute. The real dispute is that the respondent/plaintiff contending that this was purely accidental, which had resulted because of some unknown reason falling within the meaning of the perils of the sea and hence, the respondent/plaintiff-Society is entitled to the policy amount. Whereas the appellant/Insurance Company contending, otherwise that it will not fall under the said expression, so as to fall under the policy as such. Ex.A1, the policy itself clearly specifies that the insurance claim will cover the total loss (actual or constructive) of the vessel including total loss directly caused by bursting of boilers, breakage of shafts or any latent defect in the machinery or hull. It is not in dispute that the boat was sunk due to the breakage of shaft, which had resulted in wider bursting into the boat and most probably, it was a latent defect which might have occurred due to metal fatigue and at any stretch of imagination, this would have been visualised by the respondent/plaintiff during the voyage. Especially when the boat was given a certificate of seaworthiness and in such circumstances, I am of the considered opinion that the stand taken by the appellant/ Insurance Company that this risk will not fall under the expression of maritime perils within the meaning of Marine Insurance Act, 1963 cannot be accepted. At any rate, in view of the reasons recorded by the trial Court in detail for arriving at a conclusion that this accident will fall within the terms and conditions of the policy Ex.A1. I am not inclined to arrive at a different conclusion. It is no doubt true that the respondent/plaintiff could have adduced further evidence, but, however, in the light of the fact that Ex.A1 is available onrecord and it is not in dispute, the other oral evidence which could have been let in, might have further strengthened the case, but that itself cannot be a ground to negative the relief to the respondent/plaintiff and hence, taking all the facts and circumstances of the case into consideration, the trial Court had recorded cogent and convincing reasons while granting a decree and I do not find any compelling reasons to take a different opinion and hence, all the findings recorded by the trial Court are hereby affirmed.
19. In the result, the appeal is devoid of merit and accordingly the same is dismissed. But in view of the peculiar circumstances of the case, since both the parties fought the litigation on the interpretation of the terms and conditions specified in Ex.A1, this Court is not inclined to make any order as to costs.