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TMI Blog2025 (4) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... a newly built barge 'Srijoy II' (hereinafter "the Vessel") and sought to undertake its maiden voyage from Mumbai to Kolkata. 3.2 In pursuance of the same, the Appellant applied for a 'single voyage permit' to the Director General of Shipping (hereinafter "DGS"), wherein the Vessel was expected to sail from Mumbai on 30.04.2013 and arrive at Kolkata on 15.05.2013. The DGS directed the Indian Register of Shipping (hereinafter "IRS") to carry out a detailed inspection. 3.3 The Appellant sought to insure its voyage and the Vessel, and submitted its insurance proposal to the Respondent. Thereafter, an insurance contract was entered into between the parties for the period between 16.05.2013 to 15.06.2013 (hereinafter "the Insurance Contract"). The Insurance Contract contained a special condition that the "voyage should commence & complete before monsoon sets in". Further, it contained Special Warranties, inter alia that the "Vessel to depart in local weather condition not exceeding Beaufort Scale No. 4...". 3.4 The IRS granted clearance to the Appellant to undertake its voyage in accordance with MS Circular No. 03 of 2008. Thereafter, the DGS issued a "No objection" with respect to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erentem or simply put 'Contra Proferentum' against the Respondent as the phrase is ambiguous on account of extrinsic evidence of surrounding circumstances (Reliance placed on General Assurance Society Ltd. v. Chandumull Jain & Anr. (1966) 3 SCR 500; Industrial Promotion and Investment Corporation of Orissa Ltd. v. New India Assurance Company Ltd. & Anr. (2016) 15 SCC 315; Dawsons Ltd. v. Bonnin [1992] 2 A.C. 413. 4.5 The Appellant has also submitted that the Respondent failed its duty to conduct reasonable due diligence as it provided the policy knowing the circumstances. 4.6 That if the special condition is treated as a condition precedent, it would result in absurd consequences as any claim made would fall foul of the special condition (Reliance placed on Ramji Karamsi v. The Unique Motor and General Insurance Co. Ltd. AIR 1951 Bom 347. 5. Submissions by the Respondent 5.1 Mr. Devadatt Kamat, learned Sr. Counsel for the Respondent has placed strong reliance on the Impugned Order as a well-reasoned, valid and legal order which ought not to be interfered with. 5.2 That the Appellant has breached the special condition by setting sail after monsoon had set in. Clause 3.1.2 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to alter course & speed or to enter port of refuge/shelter in case of adverse weather sea conditions/weather warings emergency/navigational hazard. The relevant national & international regulations regarding lights, ags & shapes should be complied with." 9. Further, Clause 3 of the Insurance Contract provides: "3. CLASSIFICATION 3.1 It is the duty of the Assured, Owners and Managers at the inception of and throughout the period of this insurance to ensure that 3.1.1 the vessel is classed with a Classification Society agreed by the Underwriters and that her class within that Society is maintained, 3.1.2 any recommendations requirements or restrictions imposed by the vessel's Classification Society which relate to the vessel's seaworthiness or to her maintenance in a seaworthy condition are complied with by the dates required by that Society. 3.2 In the event of any breach of the duties set out in Clause 3.1 above, unless the Underwriters agree to the contrary in writing, they will be discharged from liability under this insurance as from the date of the breach provided that if the vessel is at sea at such date the Underwriters' discharge from liability is deferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the facts of that case. The relevant portion is extracted below: "10. We proceed to deal with the submission made by counsel for the Appellant regarding the rule of contra proferentem. The Common Law rule of construction "verba chartarum fortius accipiuntur contra proferentem" means that ambiguity in the wording of the policy is to be resolved against the party who prepared it. MacGillivray on Insurance Law deals with the rule of contra proferentem as follows: "The contra proferentem rule of construction arises only where there is a wording employed by those drafting the clause which leaves the court unable to decide by ordinary principles of interpretation which of two meanings is the right one. One must not use the rule to create the ambiguity - one must find the ambiguity first. The words should receive their ordinary and natural meaning unless that is displaced by a real ambiguity either appearing on the face of the policy or, possibly, by extrinsic evidence of surrounding circumstances." 11. Colinvaux's Law of Insurance propounds the contra proferentem rule as under: "Quite apart from contradictory clauses in policies, ambiguities are common in them and it is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Will the vessel be laid up during the South West or North East Monsoon? If so, please state (a) where she will be laid up; and (b) period for which she will laid up", the Appellant has answered "At Kolkata Harbour". It is then to be concluded that during the foul season, the Vessel will be laid up and not undertake the voyage. Accordingly, it is submitted that the doctrine of uberrima fides has been compromised on account of the Appellant's conduct. 17. In response, Mr. Ahmadi has stated that in the proposal form it is mentioned that "the insurance is required to undertake delivery voyage from Ghodbunder Jetty to Kolkata harbour" and the insurance period is from 16.05.2013 to 15.06.2013. 18. There is no doubt that the policy was taken for a period of one month (16.05.2013 to 15.06.2013) to cover the voyage from Mumbai to Kolkata. Further, as per the DGS Circular, foul weather commences on 1st May itself on the East Coast. The Respondent's contention that they had no knowledge of the voyage and that they believed that the Vessel would be laid up at the Kolkata harbour during the foul season is unacceptable and is to be rejected. The Appellant had mentioned in the form that the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted and proved his claim by 31-5-1943, which he ought to have done if his claim was to be a good claim, having regard to this term of the policy. A more absurd result could not possibly be conceived. It could never be intended by any men in their senses that when the risk of the policy was to run right up to 4-6-1943, and the loss which occurred on or before that date would be considered by the insurance company, the insurance company would be relieved of all liability because on a strict interpretation of this term which is relied upon by them and submitted by them to be a condition precedent, the assured could in no event make the claim before 31-5-1943. I decline to entertain any further discussion on this point..." 20. In view of our findings, the Respondent is not entitled to repudiate the claim of the Appellant on the ground of breach of the special condition. We are cognisant of the fact that the Respondent has raised several other objections, including allegations of forgery and breach of other conditions, which may affect the sum awarded. However, the same would have to be looked into on its own merits and proved before the NCDRC. 21. Accordingly, the appeal is all ..... 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