National Consumer Disputes Redressal
Iffci Tokio Gic Ltd. vs Anil on 3 January, 2022
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 843 OF 2016 (Against the Order dated 08/12/2015 in Appeal No. 1598/2014 of the State Commission Madhya Pradesh) 1. IFFCI TOKIO GIC LTD. THROUGH MANAGER, COMMERCE HOUSE, FIRST FLOOR, RACE COURSE ROAD, INDORE MADHYA PRADESH ...........Petitioner(s) Versus 1. ANIL S/O SH. RAM SWAROOP JAIN, ADD: 64-C, VAIBHAV NAGAR, INDORE MADHYA PRADESH ...........Respondent(s)
BEFORE: HON'BLE MR. DINESH SINGH,PRESIDING MEMBER HON'BLE MR. JUSTICE KARUNA NAND BAJPAYEE,MEMBER
For the Petitioner : Ms. Utkarsha Kohli, Advocate with
Ms. Namita Wali, Advocate For the Respondent : NEMO
Dated : 03 Jan 2022 ORDER
1. This revision petition has been filed under section 21(b) of the Act 1986 in challenge to the Order dated 08.12.2015 of the State Commission in appeal no. 1598 of 2014 arising out of the Order dated 08.07.2014 of the District Commission in complaint no. 1037 of 2011.
2. We have heard the learned counsel for the insurance co. (the petitioner herein) and have perused the record.
No one appears for the complainant (the respondent herein).
3. The matter relates to repudiation of an insurance claim on the insured vehicle meeting with an accident. The premium had been paid, the policy was valid, the accident had in fact actually taken place, the surveyor appointed by the insurance company had assessed the net loss at Rs.1,96,850/-. However the insured vehicle was being used for hire, in violation of the policy conditions. The two fora below have returned concurrent findings in favour of the complainant (the respondent herein), ordering the insurance co. (the petitioner herein) to pay the claim on non-standard basis i.e. at 75% of the loss assessed by its surveyor.
4. The vehicle was insured as a private vehicle. An investigator appointed by the insurance co. found that it was being used for transporting employees of Doordarshan i.e. for hire which was in violation of the policy conditions.
The District Commission ordered the insurance co. to settle the claim on non-standard basis. The insurance co. preferred appeal before the State Commission. The State Commission, citing Amalendu Sahoo vs. Oriental Insurance Co. Ltd., II (2010) CPJ 9 (SC), dismissed the appeal observing that it found no infirmity in the District Commission directing the insurance co. to settle the claim on non-standard basis.
5. The following extract of the State Commission's Order captures the crux of the case:
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"3. The appellant Insurance Company states that the vehicle was registered and insured as a private vehicle, but on investigation by Shri D S Bhasin, it was found that it was being used commercially to carry employees of the Doordarshan Department. The surveyor assessed the loss at Rs.1,96,850/-, but as the vehicle was being used in violation of the policy conditions, the claim was repudiated."
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"7. The law on the point of commercial use of a vehicle is now too well settled. The Hon'ble Apex Court in Amlendu Sahoo vs. Oriental Insurance Co. Ltd. , II (1010) CPJ 9 (SC), has held that in cases of breach of policy conditions, the claim should be settled on a non-standard basis."
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6. Paras 1 and 14 to 18 of the Amalendu Sahoo judgment quoted in the State Commission's Order are reproduced below for reference:-
"1. Leave granted. This appeal has been filed challenging the judgment and order dated 13-10-2008 of the National Consumer Disputes Redressal Commission (hereinafter "the National Commission") which upheld the concurrent finding of the District and the State Consumer Forums that the car at the time of the accident was being driven on hire and was outside the scope of the insurance policy.
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14. In this connection reference may be made to a decision of the National Commission in New India Assurance Co. Ltd. v. Narayan Prasad Appaprasad Pathak. In that case also the question was, whether the Insurance Company can repudiate the claims in a case where the vehicle carrying passengers and the driver did not have a proper driving licence and met with an accident. While granting claim on non-standard basis the National Commission set out in its judgment the guidelines issued by the Insurance Company about settling all such non-standard claims. The said guidelines are set out below:
Sl. No. Description Percentage of settlement
(i) Under declaration of licensed carrying capacity Deduct 3 years' difference in premium from the amount of claim or deduct 25% of claim amount, whichever is higher
(ii) Overloading of vehicles beyond licensed carrying capacity Pay claims not exceeding 75% of admissible claim.
(iii) Any other breach of warranty / condition of policy including limitation as to use.
Pay up to 75% of admissible claim.
15. From a perusal of the aforesaid guidelines it is clear that one of the cases where 75% claim of the admissible claim was settled was where the condition of policy including limitation as to use was breached.
16. In the instant case the entire stand of the Insurance Company is that the claimant has used the vehicle for hire and in the course of that there has been an accident. Following the aforesaid guidelines, this Court is of the opinion that the Insurance Company cannot repudiate the claim in toto.
17. For the reasons stated, we cannot affirm the order of the fora below. We direct the respondent Insurance Company to pay a consolidated sum of Rs.2,50,000 even though compensation claimed is Rs.5,00,000. In the facts and circumstances of this case, the said sum is to be paid to the appellant by the Insurance Company without any interest within a period of six weeks from date. However, if the Insurance Company delays the aforesaid payment beyond six weeks, then this amount will carry an interest of 9% from the date of the expiry of the period of six weeks till the date of actual payment.
18. The appeal is thus allowed to the extent indicated above."
7. Clearly, Hon'ble Supreme Court has laid down that in a case in which the insured vehicle was being used for hire in violation of the policy condition, the claim cannot be repudiated in toto but should be settled upto 75% of the admissible claim on non-standard basis.
The State Commission in passing its impugned Order has followed this principle.
8. Learned counsel for the insurance co. makes an argument that the Hon'ble Supreme Court's judgment in the Amalendu Sahoo case is applicable only on public sector insurance companies and not on private sector insurance companies. She makes a submission that the public sector undertakings operate inter alia for public benefit but private sector operates only for profit. She also tries to draw a difference between government contracts and private contracts.
9. We are not at all convinced with the submission advanced on behalf of insurance co. that since it is a private sector insurance company Hon'ble Supreme Court's judgment in the Amalendu Sahoo case is not applicable on it. Pertinently, the Act 1986, for better protection of the interests of consumers, does not differentiate between public sector service providers and private sector service providers. Concomitantly, Hon'ble Supreme Court in its judgment does not in any way, implicitly or explicitly, make a distinction between public sector and private sector insurance companies. Additionally, it is for Hon'ble Supreme Court to clarify if it wishes a distinction between public sector and private sector insurance companies. Self-evidently, the principle is intended to ensure the ends of equity and justice, and as such, in matter like the one at hand, to make an inter se distinction between sets of public sector and private sector service providers sounds illogical and self-defeating, the principle approved by Hon'ble Supreme Court by its very nature is meant to serve the larger public good and is of universal applicability. Attempting to create a laboured distinction between public sector and private sector in respect of the applicability of Hon'ble Supreme Court's judgment given in the Amalendu Sahoo case appears quite misplaced and certainly not well-conceived. Further, the judgment was passed in 2010, and we are now in 2022. There was sufficient time and opportunity for the insurance co. herein to move Hon'ble Supreme Court for whatever purpose it wanted to and in whichever manner available to it under the law. In so far as this Commission is concerned, in the obtaining facts and position, in the context of consumer justice, we make no distinction on the applicability of Hon'ble Supreme Court's judgment between public sector and private insurance companies, both being service providers, similarly placed, to be similarly treated, and to be similarly made liable in the event of being found guilty for deficiency in service or unfair trade practice or restrictive trade practice for which remedy is provided for under the Act 1986 (now the Act 2019). In cases where the vehicle was being used for hire in violation of the policy conditions, as in the instant matter, the insurance company concerned, be it in the public sector or in the private sector, cannot repudiate the claim in toto but has to settle it as non-standard claim in conformity with the principle approved and laid down by Hon'ble Supreme Court in the Amalendu Sahoo case, private insurance companies are not excepted,
10. We are not making a more elaborate critique since in the course of the arguments learned counsel submits that the insurance co. will comply with the Order of the District Commission as upheld and affirmed by the State Commission within four weeks from today and that it wishes to withdraw its revision petition. Her submission is recorded. The insurance co. shall be bound by the submission made by its counsel.
11. The petition is disposed of with direction to the petitioner insurance co. to comply with the Order dated 08.07.2014 of the District Commission within four weeks from today without fail.
12. The Registry is requested to send a copy each of this Order to the parties in the petition and to their learned counsel as well as to the District Commission immediately. The stenographer is also requested to upload this Order on the website of this Commission immediately.
...................... DINESH SINGH PRESIDING MEMBER ......................J KARUNA NAND BAJPAYEE MEMBER