LexM/S. SEA LARK FISHERIES versus UNITED INDIA INSURANCE CO. AND ANR.
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A B 0 [2008) 2 S.C.R. 346 MIS. SEA LARK FISHERIES II. UNITED INDIA INSURANCE CO. AND ANR. (Civil Appeal No. 803 of 2008) JANUARY30, 2008 [S.B. SINHA AND HARJIT SINGH BEDI, JJ.] Contract: Contract of insurance - Marine insurance - Insurance of C sea vessel - Non-disclosure of material facts - Held: Insurance policy repudiable - Marine Insurance Act, 1963 - ss.19,20,21and41(3)- Tamil Nadu Minor Ports Harbour Craft Rules, 1953- rr. 31 and 32. D Appellant owned a sea vessel. It obtained loan from the bank. At the time of sanction of the loan, the bank obtained insurance policy in respect of the said vessel by handing over the signed proposal form to DW1, the agent of Respondent No.1-insurance company, who filled E up the particulars himself and issued the policy. The sea vessel sunk. Claim made in that behalf, having been repudiated by Respondent No.1, a civil suit was filed by Appellant and the bank before the High Court. Respondent No.1 in its written statement contended that F the vessel was not seaworthy. The suit was decreed by a Single Judge of the High Court inter alia holding that though in the proposal form, DW1 left several material columns blank, the bank could not be held responsible for the same. On appeal, the Division Bench of High Court G set aside the order passed by the Single Judge. In appeal to this Court, a question arose as to whether there had been a material suppression of facts to Respondent No.1-insurance company which rendered the insurance policy repudiable. H 346 - • 7' , ~ ,, ; ~ ~ ' ' , -f MIS. SEA LARK FISHERIES v. UNITED INDIA 347 INSURANCE CO. AND ANR. <. 't Dismissing the appeal, the Court A HELD: 1.1. S.19 of the Marine Insurance Act, 1963 states that insurance is uberrimae fidei. S. 20 provides for disclosures by the assured. The question as to whether a particular circumstance which is not disclosed is B' material or not is essentially a question of fact. What facts need to be disclosed and what need not, have clearly >-· been laid down in sub-sections (2) and (3) of s. 20 - respectively. S.21 of the Act provides for the disclosure .> by an agent effecting the insurance. The Bank having c acted as an agent, thus, had a responsibility to disclose all material facts. [Para 15] [352-D, E] 1.2. The terms of the contract of insurance being governed by the provisions of a statute, non-disclosure of such material facts would render the policy repudiable. D ' Even according to DW-1, necessary particulars were not furnished to him by the plaintiffs. How DW-1 could act upon the purported oral representation of the •.-4 Jli officers of the Bank is beyond anybody's comprehension. No reliance can, thus, be placed on his evidence. E [Para 16] [352-F, G; 354-D, E] 1.3. Rule 31 of the Tamil Nadu Minor Ports Harbour Craft Rules, 1953 mandates posting of a Master or Serang and one Engineer or Engine Driver in every mechanically propelled vessel, when used. The driver is required to possess a certificate of training iss1,1ed by the Department F of Fisheries. Rule 32 prescribes the method of obtaiffing a certificate of competency as Master or Serang. Not only did the proposal for insurance not contain the said details but also no evidence in that behalf was brought on G records. [Para 10] [351-B, C, D] ·~ l,.I. 1.4. Where there has been a suppression of fact, acceptance of the policy by an officer of the insurance • company would not be binding on it. The Division Bench of the High Court, having regard to the statutory H 348 SUPREME COURT REPORTS [2008] 2 S.C.R A provisions, has rightly held that the plaintiffs suppressed _.y ~ the material fact. [Para 17] (354-E, F] . 2. A marine insurance policy requires an implied warranty of seaworthiness as is evident from Sub-section B (3) of Section 41 of the Act which governs the terms of a contract of insurance. May be the notice repudiating the claim did not contain any details in regard to the purported misrepresentation of material facts but the same was not ~ decisive. It was for the plaintiffs not only to plead but also .(. - establish that the vessel in question was seaworthy. There c is no averment even in the plaint that the vehicle was seaworthy. In view of the statutory rules, there is no other option but to hold that the vessel was not seaworthy. [Paras 13, 14, 17) (351-F, G, H; 352-A, C; 354-F] D CIVILAPPELLATE JURISDICTION: Civil Ap
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