Published on: 20 August 2023 at 12:20 IST
Court: Supreme Court
Citation: Hind offshore V. IFFCO, Tokio General Insurance (2023)
Honourable Supreme Court of India has held that the Insurance Company has a Right to Decline the Insurance Claim on the basis that the non-disclosure of the material facts such as suffered damage, expiration of warranty etc. It is held that if statutory compliance is not complied with, then the Insurance Company is discharged from liability as from the date of breach of warranty but without prejudice to any liability incurred before that date.
22. From a perusal of the above judgment, it is clear that the mere knowledge on the part of the insurer that there was a breach of warranty would not amount to a waiver in the absence of an express representation to that effect. As noted in the instant case, though during the subsistence of the insurance policy for the earlier term there was a claim lodged towards damage to the main engine of the port and crank shaft, based on the recommendation of the surveyor substantial amount had been paid, on account, to the appellant since such advancement of the amount was towards the replacement of the engine crank shaft.
Except for the knowledge of the insurer that in view of the waiting period prescribed by the manufacturers for supply of the engine crank shaft for replacement, repairs were carried out and a voyage would be undertaken for urgent delivery of the cargo during the subsistence of the earlier policy period, there is nothing on record to indicate that prior to the issue of the instant insurance policy for the period 09.11.2006 to 08.11.2007 or during subsistence the replacement of the engine had been waived. In that circumstance, when the respondent insurance company relied upon the Class Certification to issue the policy there was no express or implied waiver.
The appellant has not established that the defects were brought to the notice of the Classification Society and thereafter the certificate had been obtained. In such a situation when it is subsequently noticed that these defects were not intimated and the warranty class had not been complied, the Classification Certificate would automatically become invalid.
In fact, in the instant case, the fact that the replacement of the engine crank shaft had not been made had come to the knowledge of the insurer only when the final surveyor report was submitted on 19.02.2007 after the policy had already been issued on 09.11.2006 and the accident had occurred on 03.12.2006. As such there is no waiver on the part of the respondent insurer in this case.
Drafted By Abhijit Mishra
