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TMI Blog2023 (8) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... Certificate dated 01.05.1995 furnished by the officials of the State Fisheries Department at Visakhapatnam. Merely because the contents thereof were not to its liking, the insurance company could not have ignored the same and swept it under the carpet. More so, as such certification was being made by impartial and independent bodies of significant stature and that, perhaps, was precisely the reason why the insurance company had attached such importance to it in its norms - Having undertaken to indemnify an insured against possible loss in specified situations, an insurance company is expected to make good on its promise in a bonafide and fair manner and not just care for and cater to its own profits. In effect, the action of the insurance company in refusing to act upon the Death Certificate dated 01.05.1995 issued by the Directorate of Fisheries, Visakhapatnam, cannot be countenanced. Admittedly, the appellant would be entitled to the lowest of the aforestated three valuations, viz., ₹ 75,87,750/-. As the respondent company would have already paid the appellant the amount quantified by the NCDRC in the impugned order, viz., ₹ 30,69,486.80, the appellant would be en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated as two fortnights, irrespective of the number of days in the month. The policy further stipulated that a loss due to any peril covered thereunder would be treated as a total loss if the loss percentage at any particular stage was equal to or exceeded 80% of the total population of the prawns in the pond and no claim would be admissible under the policy if the loss percentage in a pond due to any of the covered perils was below 80%. A separate table was appended to the policy, indicating the maximum liability, in terms of percentages of the sum insured, during the ten fortnights covered by the insurance policy. 3. While so, there was a major outbreak of a bacterial disease called White Spot Disease along the east coast of Andhra Pradesh, which led to mass mortality of prawns in the area, including the appellant s farm. This led to invocation of the insurance policy by the appellant. However, upon submission of a claim thereunder by the appellant and after two separate surveys were conducted at its own behest, the respondent insurance company repudiated the appellant s claim in its entirety, under letter dated 15.07.1997. According to the insurance company, there was a brea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tious decision in that regard. 6. It is on the strength of this remand order that the NCDRC again undertook the exercise of quantification of the amount to be paid to the claimants and the interest to be awarded to them, leading to the order impugned presently by the appellant. Insofar as the appellant is concerned, the NCDRC took note of the survey report dated 01.09.1995 procured by the insurance company from M/s. Frank Fair Investigators, Rajahmundry, wherein it was confirmed that it was a case of severe loss due to disease. The NCDRC also took note of the Death Certificate dated 01.05.1995 issued by the Regional Deputy Director of Fisheries, Andhra Pradesh, Visakhapatnam, and the Inspector of the Fisheries Branch, Visakhapatnam, which certified that the total weight of dead prawns was 50,585 kgs.; that the average body weight of the dead prawns was 17.78 grams each; and that the total value of the prawns at the time of death, in terms of incurred expenses, was ₹.94,97,952/-. The cause of death of the prawns was noted in this certificate as White Spot Disease . As regards the second survey report dated 22.09.1995 procured by the insurance company from the team compri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377;.75,98,361/-; Unit Cost Method - ₹.75,87,750/-; and Fortnightly Valuation Method ₹.79,20,000/-. The respondent insurance company, however, disputes the same. Thus, the issue primarily boils down to quantifying the insurance amount payable to the appellant, in terms of the aforestated three methodologies. 10. As noted hereinbefore, the NCDRC deemed it fit to place reliance on a part of the report dated 22.09.1995 of the three surveyors, despite rejecting several observations made therein as baseless value judgments and surmises. In such a situation, the average body weight of each prawn assessed by those valuers was equally suspect. It may also be noted that the earlier report dated 01.09.1995 of M/s. Frank Fair Investigators had estimated the average body weight of the dead prawns/salvaged prawns to be between 10 grams to 12 grams each. This report also recorded that Professor M.Rama Seshaiah from the Department of Marine Living Resources had visited the appellant s prawn farm on 02.12.1994 and had observed, when the cast nets were hauled in 6 to 8 ponds, that the salvaged prawns/dead prawns were not more than 12 grams in weight each. Similarly, Dr. G. Sudha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /MPEDA. 12. Be it noted, in General Assurance Society Limited Vs. Chandumull Jain and another [AIR 1966 SC 1644], a Constitution Bench had observed, in the context of the insured, that uberrima fides, i.e., good faith, is the requirement in a contract of insurance. More recently, in Jacob Punnen and another Vs. United India Insurance Company Limited [(2022) 3 SCC 655], this Court affirmed and reiterated the edict laid down earlier in Modern Insulators Limited Vs. Oriental Insurance Company Limited [(2000) 2 SCC 734], that it is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties; that good faith forbids either party from non-disclosure of the facts which the party knows; and that the insured has a duty to disclose and similarly it is the duty of the insurance company to disclose all material facts within their knowledge since the obligation of good faith applies to both equally. This obligation and duty would rest on both parties not only at the inception of the contract of insurance but throughout its existence and even thereafter. 13. Applying this standard presently, it may be noted that despite the second surveyors ..... X X X X Extracts X X X X X X X X Extracts X X X X
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