State Consumer Disputes Redressal Commission
Shriram General Insurnace Co. Ltd vs Saddam Hussian on 26 July, 2023
1 A/895/2019
Date of Filing : 12.06.2019
Date of Disposal : 26.07.2023
BEFORE THE KARNATAKA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, BENGALURU (PRINCIPAL BENCH)
DATED THIS THE 26th DAY OF JULY 2023
PRESENT
HON'BLE Mr.JUSTICE HULUVADI G RAMESH : PRESIDENT
Mr. K.B.SANGANNANAVAR : JUDICIAL MEMBER
Appeal No.895/2019
Shriram General Insurance Co. Ltd.,
Head Office, E-8, EPIP,
RICO Industrial Area,
Sitapur, Jaipur-302022. . ..Appellant/s
(By Adv.Sri.B.C.Shivanne Gowda)
VS
1.
Saddam Hussian
S/o Babumiyan,
Aged about 36 Years,
R/at Malkhed, Sedam Tq.,
Kalaburagi Dist. ...Respondent/s
ORDER
HON'BLE Mr.JUSTICE HULUVADI G RAMESH : PRESIDENT
1. This is an appeal filed U/s.15 of CPA 1986 by OP/Appellant aggrieved by the order dtd.10.04.2019 passed in CC/36/2018 on the file of Kalburgi District Forum. (Parties to the appeal henceforth are referred to their rank assigned to them by the Commission below).
2 A/895/2019
2. The Commission examined grounds of appeal, impugned order, appeal papers and heard.
3. The undisputed facts are: The Complainant is the owner of the lorry/goods vehicle bearing no.KA32/B7871 and was insured with OP company; the said lorry met with an accident during the insured period; at the time of accident the lorry was carrying 30-40 persons; the said accident has taken place on account of rash and negligent driving of driver of offending vehicle as per the case/FIR registered before jurisdictional police and the charge sheet filed by the Investigating officer. The dispute arose when the claim repudiated by the OP holding, at the relevant time of accident, there were 40 persons were travelling in the insured goods vehicle as against to the seating capacity of the vehicle, which amounts to violating of terms and conditions of the policy, in other words, breach of contract. Upon enquiry, the Forum below recorded affirmative findings on the point of deficiency in service and directed OP insurance company to pay entire repair charges of Rs.3,16,800/- along with interest at 9% p.a. with cost and compensation of Rs.15,000/-. It is this order, being assailed in this appeal on the same grounds urged before the Forum below.
3 A/895/2019
4. Learned counsel for Appellant/insurer submits that, insured violated terms and conditions of the policy, since at the time of accident, he was carrying 30-40 passengers than permitted seating capacity in the goods carrying vehicle. He further submits that, since the Complainant/insured allowed passengers in the goods lorry at the time of accident is a fundamental violation of the policy terms, and such aspect not at all appreciated by the Commission below and committed grave error in allowing complaint, which liable to be set aside.
5. Upon examination of the impugned order, we found, the Forum below relied on two decisions of Hon‟ble Supreme Court reported in (2016) 3 SCC 100 in the case of Lakhmi Chand vs. Reliance General Insurance, and (1996) 4 SCC 647 in the case of B.V.Nagaraju vs. Oriental Insurance Co., Ltd., In the said decisions, it is held that, mere factum of carrying more passengers than permitted seating capacity in the goods carrying vehicle by the insured does not amount to a fundamental breach of the terms and conditions of the policy, unless and until, it is proved to have contributed to the cause of the accident.
6. The ratios laid down in the said decisions were further relied on by Hon‟ble Apex Court in Civil Appeal no.21552/2017 in the 4 A/895/2019 case between Manjeet Singh v. National Insurance Company Limited and another, wherein at para 5 it is held as:
"........ The violation of the condition should be such a fundamental breach so that the claimant cannot claim any amount whatsoever. As far as the violation in carrying passengers is concerned, this has consistently been held not to be a fundamental breach and, in this behalf, we may make reference to the judgments of this Court in the case of National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297, National Insurance Co. Ltd. v. Nitin Khamndelwal, (2008) 11 SCC 259, Lakhmi Chand v. Reliance General Insurance (2016) 3 SCC 100 and B.V.Nagaraju v. Oriental Insurance Co. Ltd., (1996) 4 SCC 647."
In para-07 it is held -
"........ His driver gave a lift to some passengers. Carrying such passengers may be a breach of the policy, but it cannot be said to be such a fundamental breach as to bring the insurance policy to an end and to terminate the insurance policy. The driver, on a cold wintery night, gave lift to some persons standing on the road. It was a humanitarian gesture. It cannot be said to be such a breach that it nullifies the policy. No doubt, these passengers turned against the driver and stole the truck, but this, the driver could not have foreseen. In the cases
5 A/895/2019 cited above, such claims where there is breach of policy, have been treated to be non-standard claims and have been directed to be settled at 75%.
7. Further in the case of Lakhmi Chand vs Reliance General Insurance, cited supra in para-12 and 13 it is held as:
"12. The National Commission upheld the order of dismissal of the complaint of the appellant passed by the State Commission. The National Commission, however, did not consider the judgment of this Court in B.V. Nagaraju v. Oriental Insurance Co. Ltd. In that case, the insurance company had taken the defence that the vehicle in question was carrying more passengers that the permitted capacity in terms of the policy at the time of the accident. The said plea of the insurance company was rejected. This Court held that the mere factum of carrying more passengers than the permitted searing capacity in the goods-carrying vehicle by the insured does not amount to a fundamental breach of the terms and conditions of the policy so as to allow the insurer to eschew its liability towards the damage caused to the vehicle.
"13. This Court in the said case has held as under:
(B.V. Nagaraju case, SCC pp.647g - 648a) It is plain from the terms of the insurance policy that the insured vehicle was entitled to carry six workmen, excluding the driver. If those six workmen when travelling in the vehicle, are assumed not to have 6 A/895/2019 increased any risk from the point of view of the insurance company on occurring of an accident, how could those added persons be said to have contributed to the causing of it is the pose, keeping apart the load it was carrying. In the present case the driver of the vehicle was not responsible for the accident. Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of the owner, cannot be said to be such a fundamental breach that the owner should, in all events, be denied indemnification. The misuse of the vehicle was somewhat irregular though, but not so fundamental in nature so as to put an end to the contract. Unless some factors existed which, by themselves, had gone to contribute to the causing of the accident."
Further in the end of para-15 held -
"........Whether such a burden had been discharged, would depend upon the facts and circumstances of each case. Even when the insurer is able to prove breach on the part of the insured concerning a policy condition, the insurer would not be allowed to avoid its liability towards the insured unless the said breach of condition is so fundamental as to be found to have contributed to the cause of the accident."
8. In view of the above cited decisions and the ratio laid down, in our view, on facts of the case in this appeal, insurer failed to 7 A/895/2019 discharge burden of proof that accident in question was occurred due to carrying of 30-40 persons. When insurer failed to establish that accident in question was occurred only due to carrying passengers in the said lorry, denial of the claim amounts to rendering deficiency of service on the part of insurer. In other words, breach as to carrying more passengers was not shown as the cause of the accident, then repudiation of claim by the insurer is not admissible, and to find such view, it would be appropriate to refer para-14 of the judgment in the case of Lakhmi Chand cited supra, wherein it is held:
"14. Further, in National Insurance Co. Ltd v Swaran Singh a three-Judge Bench of this Court has held as under: (SCC pp. 325 & 330-31, paras 49, 52 and 69) "49. Such a breach on the part of the insured must be established by the insurer to show that not only the insured used or caused or permitted to be used the vehicle in breach of the Act but also that the damage he suffered flowed from the breach."
9. In view of the above ratio, in our view, Forum below rightly accepted the case of the Complainant/insured and rightly appreciated the facts and law in right perception in the light of the ratios laid down by the Hon‟ble Apex Court and recorded sound reasonings while allowing the complaint of the 8 A/895/2019 Complainant and such reasons does not call for an interference of this Commission. It is found from the enquiry that Complainant/insured has got assessed the loss of damages through „Same Show Works, Gulbarga‟ and claimed Rs.3,16,800/- towards repairs and replacement of spare parts to get the vehicle road worthy. However, only 75% of the said claim amount i.e. Rs.2,37,600/- could be granted in the light of the decision reported in the case of Manjeet Singh v. National Insurance Company Limited, cited above.
10. Further in respect of survey report is concerned, the Appellant/insurer appointed the surveyor who assessed the value of the loss at Rs.80,000/-. However, could see, the Commission below recorded sound reasons in para 13 of the order as to why report of „Same Show Works, Gulbarga‟ could be accepted as against the report of insurer‟s surveyor by relying on the decision reported in IV (2009) CPJ 46 (SC), wherein it is held Surveyor‟s report is not the last and final word, but such report may be basis or foundation for settlement of claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured.
11. In such view of the matter, we proceed to dispose of the appeal and modified the impugned order in the following terms:
9 A/895/2019 OP/insurer is directed to pay Rs.2,37,600/- to the Complainant/insured along with interest at 09% p.a. from the date of repudiation till realization and do pay Rs.10,000/- towards mental agony and Rs.5,000/- towards cost of the proceedings within 60 days from the date of receipt of this order, failing which, the amount shall carry interest at 12% p.a. from the date of repudiation till realization.
12. The amount in deposit is directed to be transferred to the District Commission for needful.
13. Notify copy of this Order to the District Commission and parties.
Judicial Member President *NS*