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P. Kunjuraman Vs. the United India Fire and General Insurance Company Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectInsurance;Motor Vehicles
CourtKerala High Court
Decided On
Judge
Reported in2(1986)ACC53
AppellantP. Kunjuraman
RespondentThe United India Fire and General Insurance Company Ltd. and ors.
Cases ReferredWestern Asn. Co. of Foronte v. Poole
Excerpt:
.....the advent of speadier engines like 'leyland, ruston and meadows' this type of a low revolution engine like 'lister engines' are not being used now in the fishing boats and therefore their spares are hardly available. (1) foot-rusts and foundation both badly rusted. (2) crank case paint work partly flaked off is places and badly rusted. (3) cast iron cylinder liners (sleeves) four in number fixed inside the crank case badly conceded. (4) fly wheel badly rusty, lying in a pool of water oh the port side of the crank case. in any event, his observations made nearly three years after the accident, cannot be the sole or safe basis to conclude that the crank case had cracked and that the engine had been extensively damaged. 17. counsel for the appellant complained that the court below had..........rs. 25,000/-for the engine and machinery. the insurance covered was for total and/or constructive total loss as per institute standard t.l.d. clauses (hull). this clause precludes recovery of any partial loss. it is agreed that that is the combined effect of the clause and the operation of the provisions of section 56(4) of the marine insurance act 1963, (hereinafter referred to as the 'act').3. sections 56 and 57 of the act (which correspond to sections having the same numbers in the marine insurance act, 1906 of the united kingdom) define the terms 'partial loss', 'actual total loss' and 'constructive total loss'. arnould's law of marine insurance and average deals with these concepts in paragraph 1134 of chapter 28 of volume ii of the book, sixteenth edition. it is stated therein:an.....
Judgment:

K. Sukumaran, J.

1. This appeal by the plaintiff arises from a suit to enforce a claim based on insurance policy. Most of the contentions raised in the court below do not survive for decision in the appeal. It is therefore necessary only to refer to the skeleton facts necessary for the consideration and decision of the limited issues arising in the appeal.

2. The plaintiif owned a fishing vessel. On 1-1-1974, it was involved in a fire accident. The vessel was issued with the 2nd defendant which has now merged with the 1st defendant-Company. The policy was taken for a total amount of Rs. 50,000/- Rs. 25,000/- for the Hull and Rs. 25,000/-for the engine and machinery. The insurance covered was for total and/or constructive total loss as per Institute Standard T.L.D. Clauses (Hull). This clause precludes recovery of any partial loss. It is agreed that that is the combined effect of the clause and the operation of the provisions of Section 56(4) of the Marine Insurance Act 1963, (hereinafter referred to as the 'Act').

3. Sections 56 and 57 of the Act (which correspond to sections having the same numbers in the Marine Insurance Act, 1906 of the United Kingdom) define the terms 'partial loss', 'actual total loss' and 'constructive total loss'. Arnould's Law of Marine Insurance and Average deals with these concepts in paragraph 1134 of Chapter 28 of Volume II of the book, Sixteenth Edition. It is stated therein:

An actual total loss was also formerly called an absolute total loss. The meaning of the expression actual total loss is reasonably clear on the fact of it. The meaning of constructive total loss is less clear...it covers a state of affairs intermediate between an actual total loss and a partial loss where, for example, an actual total loss appears to be inevitable, or could only be prevented at incommensurate expense.

4. Arnould's own statement about 'constructive total loss' was:

A constructive total loss in Insurance Law is that which entitled the assured to claim the whole amount of the insurance, on giving due notice of abandonment.

5. The statement was quoted with approval by Righam, J. in Western Asn. Co. of Foronte v. Poole (1903) 1 K.B. 376. The actual total loss is a total loss in law and in fact. A constructive total loss is a total loss in law but not in fact. It gets converted, by a properly notified abandonment into a total loss in fact, to entitle the assured to claim against his insurers. A constructive total loss exists when the subject-matter insured is not in fact totality lost, but is likely to become so, from the improbability, impracticability or expense of repair or recovery. The doctrine is peculiar to marine insurance...(See Arnould's Law of Marine Insurance and Average, Page 954). These principles have to be borne in mind while considering the claim of the appellant in this appeal.

6. The court below found that in respect of the Hull there was constructive total loss and accordingly decreed the related claim. However, as regards the engine and machinery, it hold that there was only a partial loss. In that view of the matter, the claim relating to the engine and machinery was rejected. The main challenge in the appeal relates to that claim.

7. The burden to establish a total loss, actual or constructive, was certainly on the plaintiff. He attempted substantiation of his claim by producing quotations (Exts. A-2, A-4, A-45 and A-47) from the workshops engaged in the repair of marine vessels and boats. A commission was taken out to inspect the engine and to submit a report about the damage caused to the same. PW 8 is the Commissioner. Exts. C-1 and C-1(a) are his reports. On the side of the defence, DW 3 surveyor who conducted a survey and prepared Ext. B-7 report dated 31-3-1974 was examined to show that the cost of repair for restoring the engine to its normal working condition was only Rs. 2,610/-.

8. The court below noted that the quotations Exts. A-4 and A-45 were only for Rs. 20,050/- and Rs. 7,050/- respectively. The workshop owners who had submitted the quotations for the reconstruction of the engine had not inspected the engine parts in their dismantled condition. Their estimates were therefore found to be unreliable, as they had not reckoned the actual extent of the damage suffered on account of the fire. We are in agreement with the above reasoning of the court below.

9. The court below also acted correctly in discarding Exts. C-1 and C-1(a) reports and the evidence of the Commissioner. The Commissioner (PW 8) inspected the engine only on 31-5-1977, more than three years after the fire incident which occurred on 1-1-1974, the plaintiff continuing to have the custody of the vessel in the meanwhile. There was evidence to show that the plaintiff had failed to take reasonable care in respect of the vessel after its submension in the salt waters. The boat remained submerged for about 10 days, causing substantial rusting of the engine parts. PW 8, confessedly, does not have a certificate as a loss accessor as provided under the Act. He is neither a marine engineer nor a mechanical engineer. The M.D.T. certificate which he had was a 'non-engineering' one.

10. The certificate also is essentially conjectural in nature. The relevant portion of the report reads:

On the engine : Regarding damages to the engine there are evidences that the fire started in the vicinity of the fare part of the engine hatch and that it was raging with the fury for quite some time until it was quenched by sea water in which process the vessel ultimately capsized and sank in front of the jetty where the vessel was made fast. Upon enquiry at the vardeye witnesses of the accident stated that the flames almost consumed a 30 feet tall coconut tree standing in front of the jetty and also seriously damaged another fishing vessel lying close-by.

There is, therefore, BO denying the fact that the engine was intensely heated in the raging fire and was suddenly cooled by immersion in sea water. The process of heating and sudden cooling must have caused cracks in the walls of the crank case rendering it unserviceable. The extent and location of the suspected damage could have been precisely established had the engine been in its assembled condition. The leaking damage to the cylinder heads also has to be traced to this cause.

Rust damage to the various spares can be attributed to immersion in sea water and subsequent exposure to atmospheric conditions.

It appears with the advent of speadier engines like 'Leyland, Ruston and Meadows' this type of a low revolution engine like 'Lister engines' are not being used now in the fishing boats and therefore their spares are hardly available.

In the light of the above, it is my personal opinion that the engine cannot be restored to its Original pre-accident condition without incurring expenses much is excess of what was worth initially.

(emphasis supplied)

11. The damage to the engine and the accessories had been listed earlier in the following terms:

B. Damage to engine and accessories:

Description of Engine.

(a) Lister-(Land type converted) Marine Diesel engine, water cooled, 4 cylinder, 40 Horse Power complete with reduction gear mechanism.

(1) foot-rusts and foundation both badly rusted.

(2) Crank case paint work partly flaked off is places and badly rusted.

(3) Cast iron cylinder liners (sleeves) four in number fixed inside the crank case badly conceded.

(4) Fly wheel badly rusty, lying in a pool of water OH the port side of the crank case.

12. A statement that the process of heating and sudden cooling 'must have caused cracks in the walls of the crank case', is too vague and indefinite to be accepted and acted upon for a firm finding regarding the existence and extent of damages to the engine and machinery. Equally unsatisfactory and unacceptable is the 'personal opinion' of the Commissioner that 'the engine cannot be restored to its pre-accident condition without incurring expenses much in excess of what was worth initially.' The report lacks the essentials of supporting date and materials necessary for the determination of the question whether there is a total loss either actual or constructive in relation to the engine and machinery.

13. As noted earlier PW 8, is the person whose evidence cannot be recognised as of probative value under the scheme of the Act. The court is entitled to insist upon acceptable evidence from competent persons before a decree is granted. There is now no dearth of qualified marine engineers or mechanical engineers. The plaintiff should have availed of the services of such qualified or competent persons to establish his claim. Even treating Exts. C-1 and C-1(a) as reports of a person familiar with the vessels and their engines, the reports are essentially based on surmises, and prepared after considerable lapse of time. These factors destroy the evidentiary value of the reports.

14. In sharp contrast is the report of the Surveyor DW 3. He conducted the survey soon after the incident. He got the engine dismantled before examining the machine. The result of his investigation is contained in C-1(1) to (11) of Ext. B-7. Based on that, he gave his conclusion that the engine had not suffer any fife damage. He did not notice signs of fire in the engine room space. As noted earlier, he had estimated the expenditure required for reconditioning the engine to its original condition before the fire, at a comparatively small sum of Rs. 2,610/-. His evidence could not be successfully assailed in the course of the cross-examination,

15. Counsel for the appellant, in the course of his arguments, stressed on the fact that PW 8 had conducted the carbide test is relation to the engine and that DW 3 omitted to have any such test to find out whether there were cracks in the cylinder. DW 3 gave a cogent explanation for his conduct. He did not conduct the carbide test for the cylinder as he felt it unnecessary, in the light of his visual examination. He had opened the crank case. According to him, the insured had removed the fuel valve and poured oil through that pocket apparently 'as a protective measure for the engine.' In the report of PW 8, there are no details relating to the carbide test he claims to have conducted. In any event, his observations made nearly three years after the accident, cannot be the sole or safe basis to conclude that the crank case had cracked and that the engine had been extensively damaged. It is, also to be noted that even according to the report of the Fire Force Officers, the category of fire was a small one (vide Ext. A-1).

16. In the light of the above discussion, we do not find any ground whatever to interfere with the finding of the court below on this question. The main ground in the appeal therefore fails.

17. Counsel for the appellant complained that the court below had granted interest for the amount decreed from the date of suit only till the; date of decree. There is substance in the complaint. The court was not justified in limiting the award of interest only up to the date of decree We would therefore modify that portion of the decree, by granting interest from the date of suit till the date of realisation.

18. Subject to the above variation, the decree of the Court below is affirmed and the appeal is dismissed. We direct the parties to bear their respective costs.


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