National Consumer Disputes Redressal
Oriental Insurance Co. Ltd. vs Laxmegowda on 11 September, 2017
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 1739 OF 2006 (Against the Order dated 04/05/2006 in Appeal No. 748/2004 of the State Commission NCDRC) 1. ORIENTAL INSURANCE CO. LTD. 15 HANSALAYA BUILDING BARA KHAMBA ROAD NEW DELHI 110001 ...........Petitioner(s) Versus 1. LAXMEGOWDA S/o Late Krishne Gowda,
Laxmi Tiffen Centre,
Gorur Road,
Senthepet Hassan - 573 201 Karnataka ...........Respondent(s)
BEFORE: HON'BLE MR. DR. B.C. GUPTA,PRESIDING MEMBER HON'BLE MR. DR. S.M. KANTIKAR,MEMBER
For the Petitioner : For the Respondent :
Dated : 11 Sep 2017 ORDER
APPEARED AT THE TIME OF ARGUMENTS
For the Petitioner
:
Mr. Arun Kumar Srivastava, Advocate
with Mr. Inderjeet Singh, Advocate
For the Respondent
:
Ms. Shivani Srivastava, Advocate
PRONOUNCED ON : 11th SEPTEMBER 2017
O R D E R
PER DR. B.C. GUPTA, MEMBER This revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986 against the impugned order dated 05.04.2006, passed by the Karnataka State Consumer Disputes Redressal Commission (hereinafter referred to as 'the State Commission') in First Appeal No. 748/2004, "The Oriental Insurance Company Ltd. vs. Lakshimegowda," vide which, while partly allowing the said appeal, the order dated 26.03.2004 in complaint No. 180/2003, passed by the District Forum Hassan, was modified.
2. The facts of the case are that the complainant is the owner of a vehicle, bearing registration No. KA-13-4266, which was insured with the petitioner/opposite party (OP), The Oriental Insurance Company, valid up to 16.12.2002. The said vehicle met with an accident on 04.09.2002 by dashing against a road-side tree and was damaged. The matter was reported to the local police vide CR 117/1002. On intimation, the insurance company appointed a surveyor to assess the loss, but they repudiated the claim on the ground that the vehicle was carrying passengers at the time of accident, even though it was registered as a goods-carrying vehicle. The consumer complaint in question was then filed before the District Forum, which allowed the same vide their order dated 26.03.2004 and directed the OP Insurance Company to pay a sum of ₹2,26,808/- to the complainant, being the amount of repair charges paid by him for damage to the vehicle. The District Forum held that although the vehicle was carrying 14-15 passengers at the time of accident as stated in the FIR, but this factor did not lead to violation of the terms and conditions of the policy in question. Being aggrieved against the order of the District Forum, the OP Insurance Company challenged the same by way of appeal, bearing No. FA 748/2004 before the State Commission. The State Commission partly allowed the appeal and directed the insurance company to pay a sum of ₹1,37,000/- to the complainant alongwith interest @9% p.a. from the date of accident till realisation. The State Commission stated in their order that the surveyor had assessed the loss at ₹1,36,613/- and hence, they were directing the payment of a round figure of ₹1,37,000/-. Being aggrieved against the said order of the State Commission, the OP Insurance Company has filed the instant revision petition before this Commission, seeking directions to set aside the order passed by the State Commission on the ground that the complainant had violated the terms and conditions of the policy and hence, there was no deficiency in service on the part of the insurance company.
3. During hearing before us, the learned counsel for the OP Insurance Company stated that the policy had been taken for a goods-carrying commercial vehicle, as was clear from a copy of the policy already placed on record. However, as brought out in the report of the Investigator, 14 persons were travelling in the said vehicle at the time of the accident. There was obviously the violation of the terms and conditions of the policy and hence, the claim had been rightly repudiated by the insurance company. The learned counsel has drawn attention in support of his arguments to an order made by the Hon'ble Apex Court in "The Oriental Insurance Company vs. Sony Cheriyan" [II (1999) CPJ 13 SC], saying that the insurer was not liable to compensate the insured for the loss suffered, if there had been a violation of the terms and conditions of the policy. The learned counsel has drawn attention to another judgment passed by the Hon'ble Apex Court in "The Oriental Insurance Company versus Devi Reddy Konda Reddy & Ors. [2003 (2) SCC 339]", saying that when persons were found travelling in a goods-carriage, the insurer had no liability to pay the claim. The learned counsel for the petitioner, however, stated during arguments that the insurance company had earlier agreed to pay a sum of ₹1,36,612/- as assessed by the surveyor. The Insurance Company was prepared to pay this amount even now, but without interest to the complainant.
4. Per contra, the learned counsel for the respondent argued that the order passed by the State Commission was based on a correct appreciation of the facts and circumstances on record and should be upheld. He has drawn attention in support of his arguments to an order passed by the Hon'ble Apex Court in "Lakhmi Chand vs. Reliance General Insurance Co. [(2016) 3 SCC 100]", saying that when passengers were found travelling in a goods-carrying vehicle, this did not amount to a fundamental breach of the terms and conditions of the policy and hence, the insurance company was liable to pay the claim.
5. We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.
6. The main issue that merits consideration in the matter is whether the insurance company is liable to pay the claim to the insured in terms of the policy in question, keeping in view the fact that 14 passengers were found travelling in a goods-carrying commercial vehicle at the time of the accident. As stated by the petitioner, a contract of insurance is a contract of good faith and the insurer should not be liable to pay any amount, if there had been a breach of the terms and conditions of the policy. However, the matter has been considered in detail by the Hon'ble Apex Court in "Lakhmi Chand vs. Reliance General Insurance Co." (supra) and it has been brought out that the insurer was liable to pay the claim, unless there was a fundamental breach of the terms and conditions of the policy in question. The Hon'ble Apex Court while pronouncing their judgment in this case, relied upon an earlier judgment passed by them in "B.V. Nagaraju vs. The Oriental Insurance Company Ltd." [(1996) 4 SCC 647]. In the case "Lakhmi Chand vs. Reliance General Insurance Co." (supra), the District Forum had allowed compensation to the complainant on 'non-standard' basis and directed the insurance company to settle the same upto 75% of the amount spent for affecting repairs to the damaged vehicle. The said order of the District Forum was set aside in appeal before the State Commission. The order of the State Commission was upheld by the National Commission as well, but in appeal before the Hon'ble Apex Court, the order of the District Forum was restored. It is evident, therefore, that relying upon this order, the complainant is entitled to get the claim on 'non-standard' basis only.
7. Vide impugned order, the State Commission have directed payment of the amount assessed by the surveyor to the complainant, although the District Forum vide their order had directed to pay higher amount for the said damage. The order of the State Commission has not been challenged by the complainant by means of any revision petition etc. meaning thereby that the complainant accepted the said order. However, following the law laid down by the Hon'ble Apex Court in "Lakhmi Chand vs. Reliance General Insurance Co." (supra), it is held that the complainant shall be entitled to get only 75% of the amount assessed by the surveyor. This revision petition is, therefore, partly allowed and the order of the State Commission is modified to say that the OP Insurance Company shall be liable to pay 75% of the amount of ₹1,36,613/- to the complainant. However, the direction to pay interest @9% p.a. from the date of accident till realisation is upheld. The appeal is disposed off accordingly.
...................... DR. B.C. GUPTA PRESIDING MEMBER ...................... DR. S.M. KANTIKAR MEMBER