National Consumer Disputes Redressal
Bellard Motors Pvt.Ltd. vs The New India Assurance Co.Ltd. on 5 December, 2011
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO.3453 OF 2007 (from the order dated 7.6.07 in Appeal No.1344/06 of the State Commission, Karnataka) Bellard Motors Pvt. Ltd. Petitioner Versus New India Assurance Co. Ltd. Respondent BEFORE:- HONBLE MR. JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS. VINEETA RAI, MEMBER For the Petitioner : Mr.S.K. Sharma, Advocate For the Respondent : Mr.Mohan Babu, Advocate Pronounced on 5th December, 2011 ORDER
PER VINEETA RAI, MEMBER This revision petition has been filed by Bellard Motors Pvt. Ltd.
(hereinafter referred to as the Petitioner) being aggrieved by the order of the State Consumer Disputes Redressal Commission, Karnataka (hereinafter referred to as the State Commission) in Appeal No.1344/2006 wherein the New Indian Assurance Company Ltd. was the Respondent.
The Petitioner in his complaint before the District Forum had stated that he deals in sales and services of motorcars and had obtained a Motor Trade (Road Risk) Policy in respect of his Elantra Car bearing No.KA 25 TC 1 for the period 29.06.2004 to 28.06.2005 for Rs.9,10,000/- for which he paid the yearly premium of Rs.11,537/-. On receipt of the premium and the concerned documents, Respondent/Company issued a policy schedule containing 4 pages. However, no detailed policy document was ever issued to him.
On 16.08.2004 at about 1430 Hrs., the insured car met with an accident near Sindagi by-pass cross, Bijapur causing major damages to the vehicle. Petitioner immediately informed the Respondent/Company and filed a claim for Rs.2,85,000/- under the above policy. However, Respondent/Company did not settle the claim and finally repudiated it on the ground that as per the terms of the policy under IMT 41 only an accident which occurs within a radius of 80 Kilometers from the office of the Petitioner which is located in Hubli, would be covered and since in the instant case, the accident occurred beyond 235 kilometers from the office of the Petitioner the claim was repudiated. Since, according to the Petitioner, he was not informed about the said condition at any stage by the Respondent/Company, he filed a complaint before the District Forum requesting that Respondent/Company be directed to pay the Petitioner, Rs.2,85,045/- with interest @ 15% per annum from September, 2004 till payment, Rs.50,000/- towards loss, harassment, agony and costs.
Respondent/Company denied the above contentions of the Petitioner and stated that in the cover-note of the insurance policy itself, it is clearly mentioned that the insurance would be subject to IMT endorsement printed therein specifically 21, 41, 20, 60, 24. As per IMT-41 since, the accident occurred beyond the range of 80 kilometers from the office of the Petitioner, Respondent/Company was not liable to settle the claim.
The District Forum after hearing both parties allowed the complaint by concluding that Respondent/Company issued the policy without disclosing its terms and conditions and even though the policy schedule mentions IMT-41 but what IMT-41 implies was not made known to the Petitioner at the time of issuance of the policy. Based on the survey report in respect of the damage caused to the vehicle which was Rs.1,72,990/-, the District Forum directed the Respondent to pay Rs.1,73,000/- to the Petitioner with interest @ 9% per annum from the date of complaint till realization, Rs.5,000/- as compensation for loss and mental agony and Rs.100/- as litigation cost.
Aggrieved by this order, Respondent/Company filed an appeal before the State Commission which allowed the same and set aside the order of the District Forum by making the following observations:
The counsel for the complainant has produced the copy of the policy issued by the Insurance Company. This is not disputed by the OP also. In the first page of the policy the geographical area is mentioned as INDIA at page 3 of the policy. It is stated as follows:
IMT Endorsement numbers printed herewith attached hereto 21, 41, 28, 60, 24..
IMT-41 has been produced for our perusal which reads as follows:
It is hereby declared and agreed that notwithstanding anything contained herein to the contrary that in respect of any new vehicle and/or chassis bearing a trade certificate number specified in the schedule of the policy, the geographical area for the purpose of this policy shall be defined hereunder and not as stated in the schedule thereto.
Under this IMT, the geographical area is limited to 80 kms from the place of business.
It is not in dispute that the accident occurred is beyond 80 Kms. The contention of the learned counsel appearing for the complainant is that the said IMT-41 has not been supplied along with the insurance policy and therefore the same is not binding on the complainant. When the policy disclosed with the words subject to IMT endorsement Printed herein/attached hereto 21, 41, 28, 60 and 24, then it is the duty on the part of the complainant to demand the said IMTs if the policy does not contain the said IMTs.
In the instant case, it is not the case of the compliant that though he demanded the same, the same was not supplied to him. Further, the complainant is not a new man to this trade.
It that is so, necessarily we are of the view that IMT 41 has been enclosed to the policy and handed over the same to the complainant but the same has not been produced before the DF.
Therefore, the DF believing the statement of the complainant has allowed the complaint of the complainant.
Hence, the present revision petition.
Counsel for both parties made oral submissions. Learned Counsel for Petitioner at the disputed the order of the State Commission on three grounds. Firstly, that as concluded by the District Forum, the terms and conditions of the policy were not made available to the Petitioner and in the absence of this, Respondent/Company could not later repudiate the claim on the grounds that the policy only covered accidents which occurred within a radius of 80 kilometers from the place of work. Counsel for Petitioner cited the ruling of the Apex Court in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd. (2000) 2 SCC 734 wherein the Honble Supreme Court held as follows:
It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and the good faith forbids either party from non-disclosure of the facts which the parties know. The insured has a duty to disclose and similarly it is the duty of the insurance company and its agents to disclose all material facts in their knowledge since the obligation of good faith applies to both equally.
Respondent also did not produce any evidence to indicate that he had informed the Petitioner about the terms and conditions of the policy including IMT-41. Secondly, learned Counsel for Petitioner submitted that once the Respondent/Company had accepted the premium and appointed a surveyor to assess the loss, it was not justified in repudiating the claim. Thirdly, in the first page of the policy supplied to the Petitioner, the geographical area mentioned in respect of the insurance policy was India and, therefore, rejecting the insurance claim on the ground that there were geographical limitations under IMT-41 is not tenable.
Counsel for Petitioner cited the judgment of the Apex Court in B.V.Nagraju Vs. Oriental Insurance Company 1996 ACJ 1178 wherein the Honble Supreme Court had inter alia held that insurer should not eschew the liability altogether in case the breach is so fundamental as to warrant it. Therefore, the Respondent/Insurance Company was not justified in repudiating the claim of the Petitioner and it could have settled the same on a non-standard basis.
Counsel for Respondent on the other hand brought to our notice that in the first page of the policy itself, which it is not disputed was given to the Petitioner, it is clearly stated that the present case is covered under IMT-41 wherein the geographical area for the purposes of this policy had been defined and limited to 80 kilometers from the plae of business. Therefore, the contention of the Counsel for Petitioner that the geographical coverage of the policy was for the entire country is not correct. Further, Petitioner cannot take the plea that he was not aware of the Indian Motor Tariff Rules which is a statutory document, moreso, since Petitioner is a deal of motor vehicle.
The State Commission has rightly concluded that there was no deficiency in service on the part of Respondent/Insurance Company in repudiating the claim.
We have heard the learned Counsel for both parties and have gone through the evidence on record. We note that it is a fact and not disputed that in the cover-note of the policy which was available with the Petitioner, it is clearly indicated that geographical coverage of the policy would be in terms of IMT-41. We agree with the Counsel for Respondent that since IMT-41 is a legal document, under the well established principle Ignorantia juris non excusat, Petitioner cannot take the plea of ignorance of the same on the grounds that it was not explained to him. Therefore, even if the Petitioner was not aware of the terms and conditions of the policy because these were not fully supplied to him, he cannot seek his defence on the grounds that he was unaware of the relevant legal provisions of the law.
The judgement cited by the learned Counsel for Petitioner is, therefore, not relevant in this case. We are also of the view that the judgement cited by the Counsel for Petitioner in B.V.Nagraju (supra) will be of little help to him because the facts and circumstances of that case were different and pertained to overloading of the vehicle which could not be established as a prime cause of an accident that subsequently took place. On the other hand, there are rulings of the Apex Court in United India Insurance Co.Ltd. Vs. M/s. Harchand Rai Chandan Lal I (2003) CPJ 393 and Vikram Greentech(I) Ltd. & Anr. Vs. New India Assurance Co. Ltd. II (2009) CPJ 34 (SC) wherein the Honble Supreme Court has inter alia held that the terms of an insurance policy have to be strictly construed to determine the extent of liability of and insurer and the court while construing the terms of policy is not expected to venture into extra liberalism that may result in re-writing the contract or substituting the terms which were not intended by the parties.
For the above reasons, we are not inclined to intervene in the well-reasoned order of the State commission and uphold the same.
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(ASHOK BHAN J.) PRESIDENT Sd/-
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(VINEETA RAI) MEMBER /sks/