The Oriental Insurance Co. Ltd. v. Mariamma James and Burty Babu

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **MONDAY, THE 25TH DAY OF JUNE 2012/4TH ASHADHA 1934** **AS.No. 878 of 1996 ( )** **---------------------OS.308/1993 OF ADDITIONAL SUB COURT, KOCHI.** **..................** ## **APPELLANTS/DEFENDANTS:** **-------------------------------------------** **1. THE ORIENTAL INSURANCE CO. LTD., REGISTERED OFFICE, ORIENTAL HOUSE, P.B. NO.7037,A-25/27, ASAF ALI ROAD, NEW DELHI-110 002.** **2. THE SENIOR DIVISIONAL MANAGER, THE ORIENTAL INSURANCE CO. LTD., DIVISIONAL OFFICE-II, RUKIYABHAGH BUILDING, RAVIPURAM, COCHIN-16.** **3. THE BRANCH MANAGER, THE ORIENTAL INSURANCE CO. LTD., BRANCH OFFICE, ANAVATHIL, MATTANCHERRY, KOCHI-2.** **(APPELLANTS 1 AND 2 ARE REPRESENTED BY THE 3RD APPELLANT WHO IS THE POWER OF ATTORNEY HOLDER).** **BY SRI.P.N.K.ACHAN, SENIOR ADVOCATE. ADV. SRI.K.MOHANAKANNAN.** ## **RESPONDENTS/PLAINTIFFS:** **------------------------------------------** **1. MRS.MARIAMMA JAMES, W/O.J. JAMES, JAYA NIVAS, PUTHUKAD WARD, CHAVARA VILLAGE, KARUNAGAPPALLY TALUK, KOLLAM DISTRICT AT PRESENT RESIDING AT HOUSE NO.18, CHENGAMATH, AYYAPPANKAVU, CHERANELLUR VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT.** **2. MRS.BURTY BABU, W/O.G. BABU, NAREEKATHU VEEDU, PALLURUTHY, KADEBHAGOM DESOM, RAMESWARAM VILLAGE, KOCHI TALUK.** **BY ADVS. SRI.JOSEPH A.VADAKEL, SRI.GEORGE K.VARGHESE.** **THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 12-06-2012, THE COURT ON 25/06/2012 DELIVERED THE FOLLOWING:** **rs.** ## **Thottathil B Radhakrishnan & K. Vinod Chandran, JJ** **---------------------------------------------------A.S No. 878 of 1996 ---------------------------------------------------Dated this the 25[th] day of June, 2012** ## **J U D G M E N T** ## K. Vinod Chandran, J The defendants/Insurer are the appellants herein and the plaintiffs/insured are the respondents. The suit was filed for realisation of an insurance claim; which claim had been repudiated by the insurer. 2. The plaintiffs contended that their fishing vessel MFV 'Christmas' which was insured with the defendants for Rs.1,80,000/- , sank on 19.3.1991, off the Neendakara coast. The plaintiffs having lodged their claim with the insurer, was denied the same on the ground that the vessel had no valid license under the Kerala Marine Fishing Regulation Act, 1980. It was the specific case of the plaintiffs that the policy having not contained such a clause compelling holding of a valid license; the repudiation was illegal. 3. That the loss was caused on account of a peril being the A.S 878/1996 : 2 : sinking of the vessel is not disputed. Nor is it disputed that the peril was one which was insured against, by a valid policy of insurance. The only issue for adjudication is as to whether the insured violated the policy conditions, when the vessel set sail; by throwing to the winds an implied warranty. The court below having found the issue of limitation raised by the defendant against them entered upon the merits of the claim and found the issue of implied warranty in favour of the insurer/defendant on the strength of Ext.A1 policy as also S.43 of the Marine Insurance Act, 1963. It was held that the warranty clearly mandated that the vessel should carry on only lawful adventures. However, on the question of the violation of the said implied warranty the court below found that the fishing operations engaged in by the vessel, just before it sank was at a distance of 25km away from the seashore. 3. The lower court examined the various provisions of the Kerala Marine Fishing Regulations Act, 1980 as also SRO.1496/84 (G.O.P)136/84/PW, F&PD. Dated 30.11.1984. “Specified area” as defined under the Act was found to be the area in the sea along the entire coast line of the State, but not beyond the territorial waters. A.S 878/1996 : 3 : Section 3(1) of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 was relied upon to find the territorial waters to be the line every point of which is at a distance of 12 nautical miles from the nearest point of the appropriate baseline. The territorial waters of India thus extending up to only 12 nautical miles equal to 22.2 kms; the vessel was found to have been carrying on its operation of fishing beyond the territorial waters. 4. On the said findings it was held that the vessel cannot be said to have been carrying on operations/adventures which are unlawful for the reason of the absence of a licence under the Kerala Marine Fishing Regulations Act. The said Act mandated the license only for carrying on fishing operations within the specified area; meaning within the coastline was the finding of the court below. The repudiation by the insurer/defendant was hence found to be wrong in so far as the owners as the masters of the insured vessel have not violated any express or implied conditions of policy. The suit was hence decreed directing the appellants to pay the plaintiffs an amount of Rs.1,80,000/- with interest at the rate of 12% per annum from the date of suit to the date of decree and A.S 878/1996 : 4 : thereafter at the rate of 6% per annum till realisation. 5. We have heard the learned senior counsel Sri. PNK Achan for the appellant and Sri. George K Varghese for the respondents. The court below on the basis of Ext.A1 insurance policy as also on the strength of Section 43 of the Marine Insurance Act rightly found that there is an implied warranty that any adventure undertaken; to come within the cover of insurance, should be a lawful one. The question would be as to whether the absence of license under the Kerala Marine Fishing Regulations Act, 1980 would make the adventure undertaken by the subject vessel to be unlawful; especially as found by the court below since the adventure was undertaken beyond the territorial waters. 6. But for the assertion by PW1, who had not been in the vessel at the time of the peril and PW2 who had been rescued from the sinking vessel, there is nothing on record to show that the vessel was fishing beyond the territorial waters and sank in, what is described as, international waters. It is pertinent that the crew of the vessel were rescued without any casualty by another fishing vessel. True the insurance company has not specifically disputed the fact of the peril having occurred in the international waters. A.S 878/1996 : 5 : Be that as it may, can it be contended that the mandate of holding the license under the Kerala Marine Fishing Regulations Act would not be applicable to the vessel intending to fish only in the international waters? There can be no doubt raised as to the simple fact that to reach the international waters a vessel would necessarily have to sail through the territorial waters. Could any fishing vessel attempt such adventure, without a valid license under the Kerala Marine Fishing Regulations Act, only for the reason of intention of fishing in the international waters and are the authorities under the Act to assume and accept such intention on the mere saying so? 7. We have looked at the Kerala Marine Fishing Regulations Act, 1980 to put our anxieties at rest. The Act has been enacted to regulate fishing in the sea along the coastline of the State. The “specified area” is defined in Section 2(h)as the area in the sea along the entire coastline of the State, but beyond the territorial waters as specified by the notification. We have noticed the notification on that ground earlier. Section 4 confers the power on the Government to regulate, restrict or prohibit certain matters withing the specified area. Section 5 prohibits the contravention A.S 878/1996 : 6 : of any order made under Section 4 and also provides that such order shall not prevent the passing of fishing vessels through such area for the purpose of fishing in another area or for any other purpose. The license for a fishing vessel is also provided for under Section 6. But, again the grant of license is for using such fishing vessels for fishing in any specified area. The use of specified area in the definition clause which mandates a notification and in Section 4 which postulates an order definitely would create some confusion and raises an apprehension as to whether the specified area and the order referred to in Section4 is the same as that defined under Section2(h). But, we are clear in our mind that the mischief sought to be prevented by the prescription of licence is to regulate fishing within the coastline of the State as declared by the preamble. The anomaly noticed above is necessarily to be harmonised with the object sought to be achieved. It cannot be gainsaid that any fishing vessel can sail through territorial waters without a license on the brusque explanation of intention to fish in international waters. Interpretation as has been held by the Supreme Court in **RBI v. Peerless General Finance and Investment Co.Ltd (1987(1)SCC 424** ) depends on the text and A.S 878/1996 : 7 : the context, the former being the texture and the latter providing colour. Courts cannot set aside the “contextual glasses of the statute maker” in the process of interpretation. We, however, do not venture into an interpretative exercise going by the terms of the policy in the instant case. 8. We look at Annexure A1 Policy in the “Sheet attached to and forming part of Policy No. MH/69/91” expressly speaking of a warranty in the following lines:- “6. Warranted vessel's employment is limited to the coast of Karnataka, Kerala and West and south Coast of Tamil Nadu up to and including Gulf of Manar. _”_ Limiting the employment of vessel to the coast of Karnataka Kerala and West and South coast of Tamil Nadu including Gulf of Manar cannot at all be said to have taken into account fishing in international waters. The Insurance cover can only be for operations carried on within the specified area as defined in Kerala Marine Fishing Regulations Act which includes such area in the sea along the entire coastline of the State. The specific admitted case of the plaintiff is that the fishing operations were carried off the coast at Neendakara and the same was beyond the territorial A.S 878/1996 : 8 : waters. The fishing operations carried on in the international waters even if found to be not requiring the license under the Act; cannot be said to be covered by the insurance policy. The insurance policy covered only fishing operations within the coastline as mentioned in condition 6 and it is obvious that such operations covered by the policy required license under the Kerala Marine Fishing Regulations Act,1980. In the said circumstances, we are unable to agree with the trial court and as a consequence, we allow the appeal of the defendants/ insurer and consequently the suit is dismissed. ## Sd/- ## **Thottathil B Radhakrishnan (Judge)** Sd/- ## **K. Vinod Chandran (Judge)** jma // True copy //