National Consumer Disputes Redressal
Kesarben vs United India Insurance Co. Ltd. on 29 September, 2000
ORDER
J.K. Mehra, J. Member
1. This Revision petition arises out of a decision of the Gujarat State Consumer Disputes Redressal Commission, accepting the appeal of t he United India Insurance Co.Ltd. and reversing the order of the District Consumer Disputes Redressal Forum, Ahmedabad City. Some of the salient facts of the case are that the deceased-husband of the Complainant was the owner of the jeep car bearing registration No. G.U.F.82 Which was insured with the Respondent before us. The said car was driven either by the Respondent or the driver, named Fataji Bhikhaji Thakore (hereinafter referred to as the driver). The driver was engaged by the deceased to drive this vehicle and the driver left Ahmedabad on September 19, 1990, but did not return the car. The deceased after waiting fro the driver toe return for a few days lodged a complaint with the Naranpura Police Station. Later on, a dead body was found near village, Ghamasana, which was identified to be dead body of the driver of the said car. It appears that someone had murdered the driver and stolen the car. The claim, in teh circumstances, was brought against the Respondent for the sum insured. The relevant documents were also produced. Because, the insured did not settle the claim and in the meantime the deceased suffered a heart-attack and died on August 15,1991, as the claim was not being settled by the Respondent the complaint was filed before the District Forum at Ahmedabad, seeking recovery of the total compensation of Rs.1.35 lakhs. The only plea taken by the insurer before the District Forum and the State Commission was that car was not supposed to be used for hire or reward. It may be noted that evidence was not produced before the District Forum in the manner it is required under law. No one appeared before the District Forum from the Appellant. The said brother of the deceased was also not examined. In this case, the report (of the Claims Minimisation Bureau) has also remained unproved since the Investigator has not been produced and there is not way in which the veracity of his report could be tested or decided. By it would not be correct to assume that there could have been some passengers being carried in the said jeep at the time of the accident as pleaded on behalf of the Insurance Company. There is nothing on record to show that on the fateful day the driver carried any passengers in the car. Even the amount which was given to him for diesel appears to have been already been accounted for by the driver. Even if it is assumed that the brother of the deceased had sometime been plying his brother's vehicle on certain occasions, no evidence has been Produced to establish that this was being done on regular basis with the full knowledge and connivance of the deceased and if such were the facts then the State Commission should have looked into the guidelines for settlement of the non-standard claims which, inter alia, provided:
GUIDELINES FOR SETTLEMENT OF NO-STANDARD CLAIMS
1.Whether a breach of warranty or policy condition (hereafter referred to as breach) arises and where such breach is of a technical nature or is evidently beyond the control or knowledge of the insured or is considered after rectifying the policy and collecting additional premium where due. In settling the claim, deduction may be made from the assessed claim amount equivalent to the extra premium due for three years or three times the additional premium due for voyage which would have been charged had correct information been available originally.
2. Where the breach is material to the loss or where an act of the insured or his agent has contributed to such a breach in such cases if the insured has acted with the best of intentions and has not consciously committed the breach or where the legal question of liability is in doubt, payment may be considered on merits of each case, upto a maximum of 75% of the assessed amount of loss.
Where the breach is material to the loss and the amount determined to be payable upto the maximum of 75% of the assessed amount of loss is found to be higher than what would be payable had the claim been dealt with as one where the breach is of a technical nature, the compromise settlement should be made only for the lower amount".
PROCEDURE a. Additional premium for the unexpired period of the risk for rectifying the breach should be collected separately on pro-rate basis and credited to premium account.
b. The amount equivalent to 3 years difference in premium or three times the additional premium due for the voyage or 25% of the assessed loss as per guidelines be deducted from the claim amount as assessed by the surveyor and the net amount of the claim paid to the claimant be debited to the claim paid account. Please note that unless additional premium for rectification of the policy for the unexpired period as per (a) above is paid by the insured, the claim cheque need not be released."
2. The question of liability of the insurer is dealt with by Hon'ble Supreme Court in more than one decisions. The Hon'ble Supreme Court in the case of Skandia Insurance Co. Ltd. Vs.Kokilaben Chandravandan & Ors. (1987)2 SCC 654 observed as under:
''.....When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependents on the one hand and the equally plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by him, by way of business activity, there is hardly any choice. The Court cannot but opt for the former view. Even if one were to make a strictly doctrinaire approach, the very same conclusion would emerge in obeisance to the doctrine of `reading down' the exclusion clause in the light of 'main purpose' of the provision so that the `exclusion clause' highlighted earlier. The effort must be to harmonize the two instead of allowing the exclusion clause to snipe successfully at the main purpose. The theory which needs no support is supported by Carter's Breach of Contract" vide paragraph 251. To quote:
"Notwithstanding the general ability of contacting parties to agree to exclusion clauses which operate to define obligations there exists a rule, usually referred to as the "main purpose rule", which may limit the application of wide exclusion clauses defining a promisor's contractual obligations. For example, in Glynnn Vs. Margetson & Co., 1839 AC 351, 357, Lord Halsbury, L.C. stated : It seems to me that in construing this document, which is a contract of carriage between the parties, one must in the first instance look at the whole instrument and not at one part of it only. Looking at the whole instrument, and seeing what one must regard.....as its main purpose, one must reject words, indeed whole provisions, if they are inconsistent with what one assumes to be the main purpose of the contract. Although this rule played a role in the development of the doctrine of fundamental breach, the continued validity of the rule was acknowledged when the doctrine was rejected by the House of Lords in suissee Atlantique Societe d'Armement Maritime S.A. Vs. N.V.Rotterdamsche Kolen Central, 1967 1 AC 361. Accordingly, wide exclusion clauses will be read down to the extent to which they are inconsistent with the main purpose, or object of the contract".
3. To the same effect is another decision by Hon'ble Supreme Court in the case of B.V.Nagaraju Vs. M/s. Oriental Insurance Co. Ltd. (1996) 2 CPJ 18 (SC).
4. In this case reliance has been placed only on the report which has remained unproved and no affidavit of the person, who has investigated the case on behalf of the insurance company has been produced. In such circumstances, it cannot be accepted that the facts alleged by the insurer are proved on record. A reference in this behalf is made to a decision of this Commission in United India Insurance Co. Ltd. Vs. Dashrathlal Jethabai Patel (1996) 2 CPJ 77.
5. The types of calims which can be settle as non-standard under the guidelines are set out hereunder:
"Non-Standard Claims Following types of claims shall be considered as non-standard and shall be settled as indicated below after recording the reasons :
Sr.No. Description Percentage of settlement
i) Under declaration of Deduct 3 years difference in
Licensed carrying capacity premium from the amount of claim
or deduce 25% of claim amount
whichever is higher.
ii) Overloading of vehicles Pay claims not exceeding 75% of
beyond licensed carrying admissible claim capacity.
iii) Any other breach of Pay upto 75% of admissible claim.
Warranty/condition of
Policy including limitation
As to use.
For breach of warranty/conditions which do not involve any saving in premiums or any additional exposure to the insurers such claims be considered as Standard Claims eg. Route Permit"
6. This Commission had also dealt with the settlement of certain claims as non-standard claims in the case of Poly Mat India Pvt. Ltd. and Anr. Vs. National Insurance Co. Ltd. and others reported as 2000 CCJ 64. There, in that case, the plea was as to whether a particular claim was covered by the policy when a part of the factory fell outside the factory shed. After examining the facts, this Commission has come to the conclusion that it could be settled as a non-standard claim at 75%.
7. In the case of Ashok gangadhar Maratha Vs. Oriental Insurance Co. Ltd. reported in (1999) 4 LRI 1049 what was required to be proved was the use of the vehicle at the given moment. In the present case, there is no evidence whatsoever on record about the use to which the vehicle was put at the time of its disappearance. In any event, there is nothing on record to show that the vehicle was at the material time being plied as a taxi with the consent of the owner.
8. In the light of the above discussion, we feel that the State Commission was not justified in upsetting the decision of the District Forum. Accordingly, the impugned order is set aside, but keeping in view the aforesaid discussion, it is directed that the claim of the Petitioner be settled by the insurer at 75%, i.e., 75% of Rs.80,000/- i.e. Rs.60,000. Keeping in view such long delay in affording relief to the original owner, we are not inclined to disturb the award of Rs.5,000/- as compensation and Rs.1,000/- as costs. We are, however, not inclined to retain the rate of interest at 18%. We think that the ends of justice will be met if the rate of interest is fixed at 12% per annum simple. Ordered accordingly. However, in view of the peculiar facts and circumstances of this case, there will be no order as to costs in this Revision Petition. The revision petition is disposed of in the above terms.