National Consumer Disputes Redressal
The Oriental Insurance Co. Ltd.,Mr. ... vs Kerala Aviation Training Centre & ... on 31 January, 2006
National Consumer Disputes Redressal Commission National Consumer Disputes Redressal Commission New Delhi FIRST APPEAL Nos. 454 to 456 OF 2002 (From the order dated 3.10.2002 in OP No. 43-44 & 85 of 1998 of the State Commission, Kerala) The Oriental Insurance Co. Ltd. Appellant Versus Kerala Aviation Training Centre & Ors. Respondents FIRST APPEAL No. 460 OF 2002 (From the order dated 3.10.2002 in OP No. 43-44 & 85 of 1998 of the State Commission, Kerala) K.S.Radhakrishnan & Anr. Appellants Versus The Oriental Insurance Co. Ltd. & Anr. Respondents FIRST APPEAL No. 461 OF 2002 (From the order dated 3.10.2002 in OP No. 43-44 & 85 of 1998 of the State Commission, Kerala) Sudha Rajkumar & Ors. Appellants Versus The Oriental Insurance Co. Ltd. Respondent FIRST APPEAL No. 493 OF 2002 (From the order dated 3.10.2002 in OP No. 43-44 & 85 of 1998 of the State Commission, Kerala) Kerala Aviation Training Centre Appellant Versus The Oriental Insurance Co. Ltd. Respondent BEFORE: HONBLE MR. JUSTICE M.B.SHAH, PRESIDENT. MRS. RAJYALAKSHMI RAO, MEMBER. For the Insurance Co. : Mr. Vishnu Mehra, Advocate For the Kerala Aviation Training Centre: Mr.Ramesh Babu, Advocate. For the Others : Mr. P.Vinod Kumar, Advocate. Date: 31st JANUARY, 2006 O R D E R M.B.SHAH, J. PRESIDENT I. Brief Facts: Air Craft, Cesna FA-152, a two seater, took off at 16.25 hrs. with Captain Raj Kumar as Pilot and Mr. Satish Radhakrishnan as Co-Pilot, for a demonstration flight on 22.2.1997 for the Fly in 1997 Convention which was organised jointly by the Government Flying Training School (GFTS), Bangalore, and the Agni Aerosports Adventures Pvt. Ltd., and immediately thereafter hit the ground and burst into flames. The occupants of the air craft, namely, Capt. Raj Kumar, Pilot and Mr. Satish Radha Krishnan, Co-Pilot succumbed to injuries. It is also pointed out that Kerala Aviation Training Centre (hereinafter referred to as the KATC) had taken an insurance policy, namely, The Aircraft Hull/Liabilities Policy. The Insurance Company repudiated the claims preferred by the KATC and the legal heirs of the deceased Pilot and the Co-Pilot for reimbursement/compensation, on the sole ground that the aircraft was used for aerobatic exercises. Hence, the Complainants filed complaints before the State Consumer Disputes Redressal Commission, Kerala, against the Oriental Insurance Company Ltd. Since the incident in all these complaints is the same, these complaints were dealt with by the State Commission by a common order and judgment dated 3.10.2002. The State Commission directed the Insurance Company in: (i) O.P. No. 43 of 1998 which was filed by the heirs of the deceased Pilot, Rajkumar, to pay to the heirs of the deceased, Raj Kumar, a sum of Rs.6 lakhs with interest at the rate of 9% p.a. from 18.2.1998 till the payment or recovery; (ii) O.P. 44 of 1998 which was filed by the heirs of Satish Radhakrishnan, the deceased Co-Pilot to pay to the heirs of the deceased Satish Radhakrishnan a sum of Rs.6 lakhs with interest at the rate of 9% p.a. from 18.2.1998. (iii) O.P. No. 85 of 1998 which was filed by the KATC to pay Rs.8,80,000/- with interest at the rate of 9% p.a. from 18.2.1998 to the Complainant, KATC; In addition to the above amounts, the Insurance Company was also directed to pay costs, in all the cases, assessed at Rs.3,000/- to each of the Complainants. Against that common judgment and order of the State Commission dated 3.10.2002, the following Appeals are filed by the Insurance Company and by the Complainants before this Commission: (i) F.A. Nos. 454-456 of 2002 are filed by the Oriental Insurance Company Ltd. against the Complainants praying for dismissal of the complaints: And, (i). F.A. No. 460 of 2002 is filed by the heirs of the deceased, Satish Radhakrishnan against the Insurance Company; and, (ii) F.A. No. 461 of 2002 is filed by the heirs of the deceased, Rajkumar against the Insurance Company; (iii) F.A. No. 493 of 2002 is filed by the KATC is filed against the Insurance Company praying for enhancement of the compensation. II. CONTENTIONS OF THE COMPLAINANT: Loss of Licence - Insurance coverage: At the outset, we deal with the contention of the Complainants with regard to the reimbursement for loss of licence as per the Loss of Licence Insurance Coverage. In our view, a bare reading of the insurance policy reveals that reimbursement under this policy is for loss of licence due to bodily injury during or after the period of insurance and compensation for such bodily injury is provided by Term Nos. 1, 2, 3, 4, and 5. In all these cases, except Item No.5, there is a specific mention of incapacity causing permanent total disablement or incapacity causing temporary total disablement. Item No.5 deals with insured being required to attend any court of enquiry which in the opinion of the Insurance Company might give rise to a claim under the insurance policy. Thereafter, the definition clause provides as under: Definitions: Incapacity: Any incapacity causing the permanent total disablement or temporary total disablement of the person insured. Permanent total Disablement: Any disablement due to personal injury or to illness, disease or disability including natural deterioration of the person insured which entirely prevents him from attending to the occupation and which appears beyond reasonable doubt to be of a permanent nature. In case of death, there is no question of permanent disability or incapacity. There is no insurance coverage for loss of licence due to death. In this view of the matter, the State Commission rightly held that the Insurance Company is not liable to pay any amount for loss of licence. Next it is contended that the Complainants are not consumers. In our view, this submission is without any basis. Admittedly, the KATC had taken the policy for the benefit of the Pilots; and, in case of fatal accident, for the benefit of their heirs. It has also taken an insurance policy for covering any loss or damage in respect of the aircraft. In this set of circumstances, the State Commission rightly arrived at the conclusion that the Complainants, i.e. the KATC and the legal heirs both the pilot and the co-pilot, are consumers. III. SUBMISSIONS OF INSURANCE COMPANY: Now, we would deal with the relevant contentions raised by the learned Counsel for the Insurance Company. (a) The learned Counsel for the Insurance Company submitted that Insurance company is not liable to pay any compensation or reimburse the Complainants because of the exclusion clause provided in the policy. It is contended that the KATC took the insurance coverage for the period between 14.12.1996 and 13.12.1997 in respect of their air craft Cesna 152 for a declared value of Rs.25 lakhs. In column No.6, of the proposal form, which deals with the purpose for which the air craft will be used - the reply given was, Flying Training; in Column 15 of the proposal which provides details of the Pilot who will fly the air craft - it was stated that Raj Kumar (36 years) and Anil Prakash (32 years). Learned Counsel referred to and emphasised the exclusion clause which is as under: General exclusions (applicable to all sections of the policy): The Company shall not be liable to indemnify under any Section of this policy any direct or indirect loss / damage of or liability of expenses however caused: .1. Whilst the Aircraft is being used for any illegal purpose or for any purpose or purposes other than those stated in the Schedule. .2. Whilst the Aircraft is being piloted by any person other than as stated in the Schedule except that the Aircraft may be operated on the ground by any person competent for that purpose. .3. Due to or arising out of or directly or indirectly connected with the use of the Aircraft for racing, record attempts, speed trials, any form of competitive flying, aerobatics, aerial seeding or fertilization or crop dusting or spraying, patrol, fire fighting, hunting, shooting, heeding, fish spotting or any other form of flying involving abnormal hazards unless covered by a special endorsement. (b) Learned Counsel, Mr.Mehra, further relied upon the report of Director General of Civil Aviation, (D.G.C.A.) and contended that it was a statutory body which investigates into the cause of action. In the said report, it has been mentioned as under: Circumstances leading to the accident: The aircraft took off from Jakkur for a demonstration flight, within the designated area of the Air Show. After getting airborne, the Pilot initially carried out a loop manoeuvre which was completed uneventfully. In continuation the Pilot initiated another aerobatic manoeuvre (wing over) without gaining much altitude by pulling up the aircraft initially and steeply turned it to left during which the aircraft made steep dive with a lot of left bank. Due to insufficient height during the manoeuvre, the aircraft crashed into the ground. 3.1 Findings: 6. The Airshow organizers had no experience in arranging such events in the past. No written procedures on operation of aircraft during the show were laid down and circulated to the participants before conducting the show. 9. The pilot initiated another aerobatic manoeuvre (wing over) without gaining much altitude by pulling up the aircraft initially and steeply turning it to left during which the aircraft made steep dive with a lot of left bank. 3.2. Probable cause of accident: While executing an aerobatic manoeuvre at low height the Pilot failed to recover due to which the aircraft impacted the ground resulting in fatal injuries to both the Pilots on board. (c). On the basis of exclusion clauses and the aforesaid report the learned Counsel further contended that: (i) as the aircraft was executing aerobatic manoeuvre at low height it crashed and therefore it would be flying in breach of the policy conditions, and, therefore, the Insurance Company is not liable to reimburse under the policy; (ii) in view of the report by the D.G.C.A. the State Commission ought to have rejected the complaints and it erred in holding that the said report is not a substantive piece of evidence, by observing that Witness, R.W.-2 did not issue any public notice before holding the inquiry. (iii) Capt. Satish Radhakrishnan was flying the aircraft as Co-Pilot and was not sitting in the aircraft in the capacity of a passenger. The policy is for the two named Pilots, namely, Mr. Raj Kumar and Mr. Anil Prakash. Therefore, the complaint filed by the heirs of Satish Radhakrishnan was not maintainable; (iv). Capt. Raj Kumar who was flying the aircraft as Pilot cannot be treated as a passenger, and, therefore, the liability of the Insurance Company should be confined only to the insurance coverage for a Pilot. He relied upon the decision rendered by the Apex Court in AIR 1966 SC 1644 and Polymat India (P) Ltd. & Anr. Vs. National Insurance Company Ltd., (2005) 9 SCC 174 and contended that in interpreting the terms of insurance policy it is the duty of the Court to interpret the words in which the contract is expressed by the parties and it is not for the Court to make a new contract however reasonable it may be; and, (v). there is no liability of the Insurance Company under the hull of the aircraft which was flying in breach of the policy, as the aircraft was used for competitive flying and not for flying for training. IV. Proposal Form: For deciding the contentions, we would first refer to the proposal form submitted by the K.A.T.C. for the insurance policy, which is sought to be relied upon by the learned Counsel for the parties. In the proposal form submitted by the KATC, it has been specifically mentioned in Column 3 that the proposers business or occupation was flying purpose and in Column no.6, the purposes for which the aircraft will be used is mentioned as Flying Training; in Cloumn No. 5 the total value of the aircraft is mentioned as Rs.8,80,000/-; and in Column No.15 the details of Pilots who will fly the aircraft is mentioned as Raj Kumar and Anil Prakash. Their flying experience, licence number, etc. were also mentioned. The insurance coverage, as per the policy, issued after the accident, is as under: A. Section-I - Loss Or Damage to the Aircraft: Whether cover required : Comprehensive If so, risks to be covered (State Flight, Taxying, Ground, Moored as the case may be) B. Section-II - Third Party Liability: Whether cover required : Yes If so, limit of indemnity : Rs. 2,50,000/- (Any one accident) C. Section-III -- Passenger Liability: Passenger Liability: Whether cover required : Yes Limit of Liability per passenger : Rs.5 lacs Whether cover required on Legal : Yes, Admitted liability Liability basis or Admitted Liability ( Voluntary settlement) basis Baggage liability: Whether cover required : Yes Limit of indemnity per passenger : Rs.1,00,000/- This policy provided cover for those sections against which a premium is shown in Part-I of this Schedule: The Schedule This Policy provided cover only for those sections against which a premium is shown in Part-I of this Schedule Part-I Policy No. 441201/0/0/AVN/9/005/RB The Insured: Kerala Aviation Training Centre, Trivandrum Airport, Pettah ( PO), Trivandrum. Period of insurance : From : 14.12.96 To : 13.12.97 Annual Premium Section-I: Hull All Risk Policy Section-II :T.P. Liability Section-III: Passenger liability MD/SRCC/Sabotage cover Add : 5% ST Rs.35,200 Rs. 500 Rs.12,500 Rs. 1,320 Rs.49,520 Rs. 2,476 Rs.51,996 Date of proposal 23.11.97 Part-II DESCRIPTION OF AIRCRAFT Engine Value Air France Make, Type & Sl. No. (1) Year of const-ruction (2) Passenger Seating Capacity Registration/Identification Marks (5) Number & type (6) Aircraft with standard instruments & equipment (7) Value of exta equipment & accessories fitted to the aircraft (8) Total agreed value (9) Licenced (3) Declared for the purpose of this is insu-rance (4) CESSNA 152 LYCOMING _______ KENSAS 1986 2 2 VT KAB CESSNA 152 8,80,000 ( ) Risk Covered FLIGHT Insert Flight, Taxing, Moored, Ground applicable for each aircraft Part III 1. Pilots 2. Purpose for which the Aircraft will be used (insert Private Pleasuer, Pleasure, Business, Commercial, Rental as applicable). 3. Geographical limits within which the Aircraft will be flown. M/s Raj Kumar & Anil Prakahs FLYING TRAINING INDIA Part IV Limits and Deductibles (A) Policy Section (B) Amounts to be deducted (c) Limits of indemnity from which must be deducted the amount in column(s) I. Loss of or damage to Aircraft listed in Part-II of this Schedule Rs.75,000/- on each and every claim excluding IL/CTL. As per Part-II Rs.8,80,000/- II. Liability to Third Parties Bodily Injury Property Damage Nil Bodily Injury II Rs.2,50,000/- each Property Damage I I. Liability to Passengers Bodily injury NIL Baggage NIL Bodily injury Rs.5,00,000 each person Rs.5,00,000 each accdt. Basis of Indemnity: (Insert legal liability or admitted liability as the case may be) Baggage Rs._______ each person Rs.______ each accdt. The policy provided cover for those sections against which a premium is shown in Part-I of this Schedule: Section-I Hull all risk Rs.35,200 Section-II T.P. Liability (Third Party) Rs. 500 Section-III Passenger Liability Rs.12,500 MD/SRCC/Sabotage cover Rs. 1,320 Rs.49,520 Add : 5% ST Rs. 2,476 Total Rs.51,996 The proposal form reflects the requirements of the Insurance Company and not the requirements of the coverage sought by the insured. It is not disputed that the aircraft is having only two seats. The insurance coverage is for two passengers and there is no separate coverage for the Pilots. The question would be whether Pilots can be stated to be passengers in the aircraft. It is the contention of Mr.Mehra that as there is no separate coverage for the Pilots there is no question of giving insurance coverage to them. If there were any passengers then the coverage of insurance for them would be Rs.5 lakhs. As against this, the learned Counsel for the Complainant submitted that: (a). the repudiation of the claim is solely on the general exclusion clause of the policy, i.e. aircraft was used for acrobatics. As it was known to the officers of the Insurance Company that the aircraft could not be used for passengers, therefore, they have not repudiated the claim on the ground that the insurance coverage was only for passengers. Therefore, it is not open to the Insurance Company to rely upon the exclusion clause by contending that there were no passengers in the aircraft; (b). the Aircraft is a two seater used for training purpose only. Hence, there was no question for the aircraft to be used for any passenger and the policy was given knowing full well that the Aircraft was to be used only for training purpose by qualified pilot; (c). after accepting the premium, the Insurance Company had not given the insurance policy. Otherwise, it could have been easily pointed out that the terms and conditions which are applicable to the aircraft meant for general usage, are not applicable to the aircraft which is to be used for training purpose having two seats for two persons, i.e. for Pilot and Co-Pilot. The Insurance Company was aware of this aspect and, therefore, the claim was not repudiated on the said ground. The Insurance Company accepted the premium for covering pilots/trainees as two persons/passengers to occupy the aircraft. Learned Counsel for the Complainants have relied upon the decision in the case of United India Co. Ltd. Vs. Pushpalaya Printers (2004) 3 SCC 694 which has referred to the decision in General Assurance Society Ltd. Vs. Chandumull Jain, AIR 1966 SC 1644, and contended that in the event of ambiguity the contract is to be construed as contra proferentem, i.e. against the Insurance Company. It is, therefore, contended that in the present case the policy was for covering the pilot, and, therefore, it shold be construed accordingly. To that extent the exclusion clause is against the public policy and that is required to be ignored. V. For appreciating aforesaid contentions, we would refer to the aforequoted schedule to the insurance policy. The Schedule to the Policy specifically provides that: (i). the insurance policy was taken for aircraft which was to be used only for Flying Training; (ii). the Aircraft is a two seater; (iii). if Pilot/trainee is to be excluded there cannot be two persons/passengers sitting in the aircraft; and, (iv). aircraft was meant only for training purpose, and, there is no question of covering any passengers under the policy; (v). The cross-examination of the Assistant Development Manager examined by the Insurance Company establishes that (there was no) crew policy was taken by the K.A.T.C. In this view of the matter, we have to accept the contention raised by the learned Counsel for the Complainant that the policy was meant for Pilots and not for passengers, otherwise the whole purpose of taking insurance coverage would be frustrated. However, learned Counsel Mr.Mehra submitted that the terms of Insurance policy are to be read as they are, and, therefore, the words used therein cannot be changed. We accept that in the matter of contract the words used therein are required to be interpreted as they are. However, knowing fully well, if the insurance policy is given for an aircraft which was used only for training of Pilot, and, thereafter to contend that the coverage is not there for Pilot or trainee pilot would be totally unjustifiable and tantamount to fraud, may be unintentional. In any case, the policy is totally vague. This would be clear from the fact that even though no passengers were to be allowed in the aircraft it seeks to cover passengers risk. In the schedule it is further mentioned that it would cover legal liability or admitted liability, as the case may be. If it is a legal liability, then the KATC had admitted to compensate the heirs of the Appellant. This reveals vagueness and every stage at the time of issuing the policy. Further, if the policy was immediately issued after receipt of the premium, the officers of the KATC might have gone through the terms and conditions of the policy and would have pointed out that the insurance coverage required was for Pilot and the Trainee Pilot as the aircraft was not to be used for passengers. However, the Insurance Company contended that admittedly this was a wrongly issued policy, and, therefore, the terms and conditions which were mentioned in the previous policy would be applicable. In our view, this contention is also without any substance, because it is quite possible that for some years the officers of the KATC might not have looked into the terms and conditions of the policy, because the evidence discloses that the officers of the KATC require the policy for crew, i.e. for Pilot and Co-Pilot. This evidence we would discuss hereinafter. Further, in case of ambiguity, in the terms of the policy, they are required to be interpreted in favour of the insured. The law on this subject is settled. (i) Even in cases where two reasonable interpretations of the terms of the policy are possible, the Court in the case of Shashi Gupta (Smt) Vs. Life Insurance Corporation & Anr., (1995) Suppl. 1 SCC 754, held that . we would accept the one which favours the policy-holder, as the same advances the purpose for which the policy is taken and would be in consonance with the object to be achieved for getting the lives assured. This has been relied in Life Insurance Corporation of India Vs. Raj Kumar Rajgarhia & Anr., (1999) 3 SCC 465. (ii) Skandia Insurance Co. Ltd. Vs. Kokilaben Chandravadan &Ors. (1987) 2 SCC 654: In the above case the Apex Court observed : It is the statutory provision defining the conditions of exemption which is being interpreted. These must therefore be interpreted in the spirit in which the same have been enacted accompanied by an anxiety to ensure that the protection is not nullified by the backward looking interpretation which serves to defeat the provision rather than to fulfil its life-aim. To do otherwise would amount to nullifying the benevolent provision by reading it with a non-benevolent eye and with a mind not turned to the purpose and philosophy of the legislation without being informed of the true goals sought to be achieved. .In fact it appears that the former view is more plausible apart from the fact that it is more desirable. When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependants 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 the main purpose of the provision so that the exclusion clause does not cross swords with the main purpose highlighted earlier. The effort must be to harmonize the two instead of allowing the exclusion clause to snipe successfully at the main purpose. VI. Now, we would refer to the evidence of Mrs.V. Rema Devi, Assistant Divisional Manager, Oriental Insurance Company Ltd., Ulloor, Trivendrum, who has stated that the KATC had asked for seat insurance policy. She has added that after discussion they were (KATC) informed that no such policy was available. And, instead of that the personal accident aircraft crew policy can be given covering the instructor and student. .. The proposal form was given on 14th March and she has also produced the correspondence relating to the proposal form and issuance of the policy. It is relevant to refer to some questions and answers in the cross-examination.: Q. I put it to you that a premium of Rs.2,310/- for availing personal accident crew to policy which is covered under Ext.P-2 was paid because you had called or directed to pay by Ext. P-26 letter dated 22.11.1996. A. Premium when it was given was receipt and details regarding the names of the persons to be insured was called for to issue the personal accident aircraft crew policy. Q. Ext. P-29 is asking the KATC to receive the seat insurance policy. Am I correct? A. Yes. The aforesaid admission clearly reveals that the policy was given not for the passengers but on the basis of the seats in the aircraft. She has also stated : Q. According to you how many persons could travel in Cessna 152 A. As per the survey report and DGCA report perused by me CESSNA is a two seat aircraft and that is in it cannot carry two persons. .
Q. Have you got separate proforma for two seaters and multi seaters?
A. No. Q. KATC is insuring then air craft from 1987?
A. Of course may be.
Q. Have you at any point of time made enquiries regarding the seating capacity?
A. No. Q. I put to you that in every policy was issued after having convinced about the entries in the proposal.
A. As stated earlier the proposal are accepted in good faith as the insured is better aware of the nature of thing they are insuring. There is no reason for us to doubt the proposal.
..
Q. Anyhow, you have been collecting retaining premium from 1988 onwards.
A. As I have told you the premium is collected on the sum insured suggested by the KATC. So an importation of the number of passengers need not be correct.
Q. Will you collect premium from the consumers without covering risk?
A. No. .
Q. How many policies you had issued against this particular aircraft Cessena 152.
A. Only one.
Q. You had issued no other policy pertaining to this particular aircraft.
A. No. Q. Have you issued Aircraft Seat Insurance policy to this CESSNA 152?
A. There is no policy called aircraft seat insurance policy. The insured KATC had proposed to cover and that we could issue personal accident aircraft crew policy. On submission of proposal.
Q. Have you neither issued any aircraft seat insurance policy nor received any premium, am I right?
A. The insured had deposited some premium when the proposal cover for seat insurance policy was no such policy existed we had asked them to submit proposal forms named personal accident aircraft crew policy covering the instructors. The premium were to be adjusted for issuing the personal accident aircraft crew policy.
Q. According to you proposal and premium voluntarily come from the insured and you had accepted.
R. No. As the case of seat insurance policy because there was no such policy in existence we advised them to submit proposal forms to cover the instructors under PA aircraft policy.
.
Q. You had also issued loss of licence policy to the pilot Rajkumar of CESSNA 152.
A. A loss of licence policy for Captain Raj Kumar was issued it was current at the time of accident.
Q. What was the premium collected for that policy?
A. Rs.6,880/-
and service tax at Rs.344/- payable to the Government Ext. P-9 is the receipt for the premium collected for the loss of licence policy of Capt. Rajkumar. The Captain sum assured against that policy was Rs.3,93,120/-. I had collected premium for Aircraft Policy. Aircraft seat insurance policy and loss of licence policy. We had collected premium for loss of licence policy and Aircraft hull policy and for the proposed PA aircraft crew policy.
Q. So you are denying the receipt of aircraft seat insurance policy as per Ext.P-6?
A. No. Ext. P-6 shows premium that were to be accounted in the aircraft crew policy.
From the aforesaid cross-examination it is clear that
(i).
KATC had paid premium of Rs.2,310/- for availing personal accident crew policy;
(ii). Ex.P-29 reveals that KATC was demanding the seat insurance policy;
(iii). It is admitted that the aircraft was a two seat aircraft and it cannot carry any passengers;
(iv). There is no separate proforma of the insurance policy for two seaters and multi-seaters;
(v). the witness had admitted that the premium is collected on the sum insured suggested by the KATC and importation of the number of passengers need not be correct;
(vi). Only one policy was issued by the insurance company against the aircraft Sessna-152;
(vii). The premium collected was to be adjusted for issuing the personal accident crew policy; and
(viii). The insurance company advised the KATC to submit proposal form to cover the instructors under personal accident aircraft policy.
Exclusion clause:
The Insurance Company next contended that in view of the exclusion clause which provides that in case of accident due to manoeuvring aerobatic exercises the Insurance Company would not be liable.
This submission is also without any substance. The aircraft was admittedly required to be used for giving training and training would requires such exercise. There is no exclusion that training would not include such exercises.
Learned Counsel for the Insurance Company further contended that the report given by the D.G.C.A. establishes that aerobatic or manoeuvre of the aircraft had resulted in the accident. The learned Counsel for the Insurance Company submitted that the final report of the DGCA has probative value and is required to be accepted as it is. If that is accepted, it establishes that there was aerobatic manoeuvre at low level by the pilots, and therefore, the Insurance Company, in view of the exclusion clause, is not liable to reimburse the Complainants. It has been pointed out that RW-2, DGCA had concluded that probable cause of accident was that while executing the aerobatic manoeuvre at low level the pilot failed to recover due to which the aircraft impacted the ground resulting in fatal injuries to the pilots.
Requirements of Exclusion Clause:
Firstly, it is also a settled law that it is for the Insurance Company to establish the facts beyond doubt which would reveal that the terms and conditions of the exclusion clause are applicable. The report relied upon by the Insurance Company only mentions with regard to probable cause of accident. There is nothing on record to justify the said conclusion. It is possible that because of technical fault the accident might have occurred.
Secondly, the said report is in contravention of Rule 17(1)(iv) of the Aircraft rules, 1937, which provide that before investigating, public notice is required to be given and the persons who has witnessed the occurrence or had knowledge about the same were not examined. If that was done, the inquiry could have revealed the true cause of the accident.
In this connection, the State Commission observed that (i) no eye witness is examined on the side of the Opposite Party; (ii) a video tape produced by RW-3, and according to RW-2 the same was taken by an amature videographer whose name was not mentioned and he was also not examined to prove the same. In the cross-examination RW-2s reply to the question as to what was wing-over, is it is a type of manoeuvre. When he was asked to explain the same, his answer was that he would have to verify, and, then added that he does not have a flying licence. From this, the State Commission concluded that, the expertise of the witness was such that he does not know what is meant by wing over. The State Commission also observed that the Insurance Company did not examine the Chief Aircraft Maintenance Engineer, Office of the Principal Government Flying Training Centre, and the Principal, Govt. Flying Training Centre, Jakkur, though they were present and have witnessed the incident on 17.12.2001.
Further, the Complainants have led the evidence of the Chief Flying Instructor, Madras, and a retired Wing commander and Aerosports Specialist for National Adventure Foundation as expert witnesses.
PW-4 is the Chief Flying Instructor, Madras, an expert, who has witnessed the occurrence. He was competent to speak about the occurrence. He has stated that after about 15 minutes of the taking off the aircraft it was doing the loop, after which the aircraft flew to the western side of the airfield and flew on an easternly direction trying to position the aircraft for a second manoeuvre which nobody knew what was in pilots mind, and after a few seconds he saw the aircraft coming down vertically, and this was what he saw (witnessed), and then the aircraft was destroyed. According to him wing over manoeuvre means the positioning of the aircraft. He has stated that the positioning of the aircraft is not connected with manoeuvre. He has also stated that positioning of the aircraft could be done only after completion of the loop. The State Commission also observed that the literatures on which reliance was placed by the Opposite Party was not put to the expert witnesses. The State Commission also observed that when the expert was in the box and at the time of giving evidence his attention should have been invited to the said commentary upon which reliance was sought.
According to PW-5, a retired wing Commander and Aerosports Specialist for National Adventure Foundation, an expert witness, wing over is considered as a lazy manoeuvre for positioning the aircraft in a desired direction. The State Commission observes that the literature relied upon by the learned Counsel was not put to this witness also. It further held that : Therefore, ignoring the said evidence of PW-4 and PW-5, one cannot rest a finding merely on the basis of the commentaries particularly when the attention of experts was not drawn to the said commentaries. From the above, not only the evidence adduced on the side of the Opposite Party cannot prove the exclusion under Clause 6 of the policy, the evidence on the side of the Complainant would support the case of the Complainant that the peril cannot fall within the exclusion clause.
From the aforesaid discussion, it is apparent that the Insurance Company has failed to establish that the aircraft was used for aerobatic, so as to satisfy the requirement of the exclusion clause. On the contrary, the evidence on record brought by the Complainant supports its say. In this view of the matter, the State Commission rightly arrived at the conclusion that the report submitted by the DGCA cannot be the basis for holding that the exclusion clause would be applicable in the present case. The author of the report was not an eye witness. As against this, the persons who were experts in the field, were present at the site and they have stated that while taking over position wing over was done and therefore, the aircraft crashed. Reasons were not known. Therefore, in our view, it cannot be held that Pilots were manoeuvering the aerobatic exercise.
In this view of the matter, the appeals filed by the Insurance Company are required to be dismissed.
Quantum:
It has rightly been discussed by the State Commission that the liability of the Insurance Company is Rs.5 lakhs as passenger liability and Rs.1 lakh towards seat liability. And, therefore, the heirs of the deceased are not entitled to recover more than Rs.6 lakhs from the Insurance Company. The award of compensation is on the basis of the liability limit as per the insurance policy. Hence, the impugned order does not call for any interference at the instance of the Complainants. In this view of the matter, the appeals for enhancement of the compensation are required to be dismissed.
In the result, the appeals filed by the Complainants as well as the Insurance Company are dismissed. There shall be no order as to costs.
J. (M.B.SHAH) PRESIDENT ..
(RAJYALAKSHMI RAO) MEMBER