State Consumer Disputes Redressal Commission
M/S.National Insurance Co. Ltd And ... vs Mohammed Mastan Ali And Others ... on 11 August, 2008
BEFORE THE A BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION- HYDERABAD. FA.NO.1893 OF 2005 AGAINST C.D.NO.547 OF 2005 District Forum-I, Hyderabad . Between- 1. M/s.National Insurance Co. Ltd., Rep. by its Branch Manager 2nd floor, 16-11-477/6/1m Dilsukhnagar, Hyderabad. 2. M/s.National Insurance Co. Ltd., Hyderabad Divisional Office No.IV Twin cities Complex, M.J.Market Hyderabad. Appellants/ Opp. parties 1 and 2 And Mohammed Mastan Ali, S/o.Mohd.Jaffar Ali Aged about 32 years, Indian Occ-Self Employee, R/o.H.No.8-2-608/27 Road No.10, Banjara Hills, Hyderabad. Respondent/ Complainant Counsel for the Appellants - M/s.P.Phalguna Rao Counsel for the Respondent-Mr.S.Subrahmanya Reddy FA.NO.177 OF 2006 AGAINST C.D.NO.547 OF 2005 District Forum-I, Hyderabad . Between- Mohammed Mastan Ali, S/o.Mohd.Jaffar Ali Aged about 32 years, Indian Occ-Self Employee, R/o.H.No.8-2-608/27 Road No.10, Banjara Hills, Hyderabad. Appellant/ Complainant AND 1. M/s.National Insurance Co. Ltd., Rep. by its Branch Manager 2nd floor, 16-11-477/6/1m Dilsukhnagar, Hyderabad. 2. M/s.National Insurance Co. Ltd., Hyderabad Divisional Office No.IV Twin cities Complex, M.J.Market Hyderabad. Respondents/ Opp.parties Counsel for the Appellant - Mr.S.S.Reddy Counsel for the Respondents-M/s.M.Jeevan Reddy QUORUM-THE HONBLE SRI JUSTICE D.APPA RAO, PRESIDENT AND SMT.M.SHREESHA, MEMBER
MONDAY, THE ELEVENTH DAY OF AUGUST, TWO THOUSAND EIGHT.
Oral Order -
(Per Smt.M.Shreesha, Honble Member)
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Aggrieved by the order in C.D.No.547/2005 on the file of District Forum-I, Hyderabad, opposite parties 1 and 2 preferred F.A.No.1893/2005 and the complainant preferred F.A.No.177/2006. Since both the appeals arise out of a similar order, they are being disposed of by a common order.
The brief facts as set out in the complaint are that the complainant is a self employee, who owned a tanker bearing No.AP-12-T 7347 TATA and running the same for transportation of diesel of Government Oil Companies to eke out his livelihood. He obtained an insurance policy bearing No.551702/31/04/6300632 from opposite party No.1 for Rs.3,03,750/- for a period of one year from 12-6-2004 to 11-6-2005 by paying a premium of Rs.12,062/-. He also obtained another insurance policy bearing No.551702/46/04/9700007 for a sum of Rs.3,50,000/- for the stock being carried in the vehicle under the traditional business policy by paying a premium of Rs.5,710/- towards premium for a period of one year w.e.f. 12-6-2004 to 11-6-2005. The opposite parties have to indemnify the loss occurred to the running stock in the tanker and also reimburse the value of the said stock lost due to accident during transportation. The complainant submitted that while the tanker was carrying diesel oil, it met with an accident on 2-3-2005 around 12.30 a.m. at the distance of 1 km from Kalwakurthy as a result of which the diesel spilled on the ground and there was heavy loss and extensive damage caused to the vehicle.
The complainant informed the said fact to the opposite parties on 2-3-2005 and requested to depute spot surveyor or valuer for stock and vehicle inspection. A criminal complaint was also registered vide F.I.R. bearing 32/2005 dated 2-3-2005 at P.S.Kalwakurthy. Opposite parties deputed surveyors, Mr.K.S.N.Murthy, Dr.Krishna Murthy and Srinivas Rao for assessing the loss to stock and damage caused to the vehicle, who inspected on 3-3-2005 and on subsequent dates and assessed the loss caused to the vehicle and stock and submitted their reports. The complainant submitted that since the entire stock of diesel was spilled on the ground, there is no possibility to salvage the stock and as such the entire stock of diesel worth Rs.3,41,962.25 has been lost in the said accident and since the vehicle met with an accident, the complainant entrusted the vehicle to M/s.Afsar Mechanical Works for carrying out repairs, who gave a quotation for Rs.3,40,150/- for carrying the repairs on 7-3-2005 and the complainant incurred the said expenditure for carrying the repairs to the vehicle and also sustained a loss of the stock to the worth of Rs.3,41,962.25/- and claimed Rs.6,45,712.25 under both the policies.
As there was delay in settling the claim, the complainant addressed a letter to the opposite parties but there was no response. Therefore, he addressed a registered letter to settle the claim and inspite of several letters, there was no response. The complainant received a reply dt.10-5-2000 from the surveyor, Mr.Krishn Murthy that the claim documents have been sent to the insurance company for processing the claim during the second week of April, 2005. The complainant submitted that opposite parties repudiated the claim under both the policies by way of two letters dated 16-5-2005 on the ground that the driver, Chunnumia, who was driving the vehicle at the time of accident had no valid driving license for carrying hazardous goods.
The complainant submitted that the driver had a license for driving heavy vehicle and that the repudiation of the claim by opposite party is unfair. Hence the complaint for a direction to the opposite parties to pay Rs.3,03,750/- payable under policy bearing No.551702/31//04/6300632 and pay a sum of Rs.3,41,962.25 ps. under policy bearing No.551702/46/04/9700007 with 24 percent interest, compensation of Rs.3 lakhs and costs of Rs.2,000/-.
Opposite parties filed counter and admitted the issuance of insurance policies to the complainant. They denied the occurrence of the accident at the outskirts of Kalwakurthy and submitted that they are not aware of criminal complaint given by the complainant to the police who issued an F.I.R. They submitted that it is false to say that the car was coming in the opposite direction and the driver of the lorry turned the vehicle in order to avoid the accident.
They submitted that they appointed an investigator and state that it is not true that the entire stock of diesel was spilled on the ground and that there was no possibility to salvage the stock.
They further denied that the tanker involved in accident was entrusted to Mr.Afsar Mechanical works for carrying out repairs and that the mechanic gave a quotation for Rs.3,40,150/- for carrying out repairs. They submitted that the driver of the tanker, Chunnumia, is not having valid driving license to drive the insured vehicle which was carrying hazardous goods which is against Rule 9 of Central Motor Vehicle Rules, 1989 and the said violation is not mere violation of the conditions of the policy, but a statutory violation and any claim against the statute cannot be entertained by them.
They also submitted that the driver of the vehicle was not having license to drive any hazardous material and he must take training and drive such vehicle at any institute of recognition by the state or central government. Opposite parties submitted that the facility to get training is available under the name and style of M/s/Hire Pvt. Ltd., Cherlapally, Ranga Reddy District notified as per G.O.Rt.No.1017 dated 20-11-2004 and the complainant did not take care to observe the same and therefore the claim of the complainant is not maintainable as per the conditions of Carriers Legal Liability and therefore both the policies are rightly repudiated by them.
Opposite parties submitted that the certificate issued by HPCL has no validity and the letter issued by HPCL is dated 15-4-2004 and as on that date M/s. Hire Pvt. Ltd., Cherlapally, Ranga Reddy District was notified under G.O.Rt.No.1017 dt.20-11-2004 is the training institute for running the training classes for drivers transporting hazargouds goods. They further submitted that the driver is not having any hazardous validity badge number 32282 and submitted that there is no deficiency of service and prayed for dismissal of the complaint.
Based on the evidence adduced i.e. Exs.A1 to A36 and B1 to B6 and the pleadings put forward, the District Forum partly allowed the complaint directing opposite parties to pay Rs.1,23,650/- together with interest at 12 percent p.a. from the date of repudiation of the claim till the date of filing of complaint and at 9 percent p.a. from the date of filing of complaint till realization together with costs of Rs.2,000/-.
Aggrieved by the said order, opposite parties preferred F.A.No.1893/2005 and the complainant preferred F.A.No.177/2006.
The learned counsel for the appellants/opposite parties in F.A.No.1893/2005 submitted that the driver of the complainant vehicle was not having valid driving license to run such type of hazardous goods vehicle at the time of accident.
The driver of the vehicle does not have the endorsement from any Training Institute recognized by the Government and has violated Rule 9 of the Central Motor Vehicle Rules 1989 and the said violation is not a mere violation of the condition of the policy and it is a statutory violation. He also submitted that the facility of getting training to drive Hazardous vehicle is available with M/s.Hire Pvt. Ltd., Cherlapally, R.R. District which is notified as per G.O.Rt.No.1017 dated 20-11-2004 and the complainant did not take care to observe the same. He further submitted that the District Forum while accepting the contention of opposite parties that the driver of the insured vehicle has not obtained any endorsement on the license to drive hazardous vehicle and the accident occurred on account of negligence on the part of the driver and as such the complainant is not entitled for the insurance claim under Ex.A2 policy with regard to oil, grossly erred in directing the opposite parties to pay an amount of Rs.1,23,650/- assessed by the surveyor under Ex.A1 policy towards damages to the vehicle He further submitted that since it upheld the decision of the opposite parties in rejecting the claim of the complainant with regard to loss of oil which was carried on the same vehicle on the ground that the driver was not having valid license, ought to have upheld the decision of the appellants in rejecting the claim of the complainant towards the damage of the said vehicle caused in the same accident as he does not possess valid driving license or endorsement.
The learned counsel for the appellant/complainant in F.A.No.177/2006 submitted that the driver of the tanker was holding proper and valid driving license to transport petroleum items as per the certification of Ministry of Commerce and Industry, Government of India and placed reliance on Ex.A26 issue by the Asst. Secretary, Road Transport Authority, Ranga Reddy District and should have come to the conclusion that there is no recognized institute near Hyderabad for training drivers for transporting hazardous and should have held that the license held by the driver is valid. He also submitted that District Forum should have placed reliance on Ex.A25, certificate issued by Hindustan Petroleum Corporation Ltd., and come to the conclusion that there is no recognized Hazardous Goods Transport Training Institution in and around Hyderabad and that the said corporation had therefore made it compulsory for their contract trucks to have an endorsement to that effect.
He also submitted that Ex.B5 letter issued by Krishna District Lorries Owners Association, specifically stated that it is running training classes for drivers transporting hazardous goods from 2-11-2005 onwards and submitted that the Asst.Secretary, Road Transport Authority, Ranga Reddy District by his certificate under Ex.A26 certified that upto May, 2005, there was no recognized Training Certificate for training drivers transporting hazardous goods. He submitted that the District Forum should have taken into consideration Exs.A26 and B5 and come to the conclusion that as on the date of accident i.e. 2-3-2005 there was no facility available for training drivers transporting hazardous goods and come to the conclusion that the license held by the driver of the vehicle as proper and valid. He submitted that the hazardous goods i.e. diesel being transported was not the cause for accident and there is no nexus between the cause of accident and obtaining hazardous goods transporting license. He submitted that the District Forum also erred in awarding only a sum of Rs.1,23,650/- to the appellant towards damage to the tanker ignoring the actual repair charges of Rs.3,40,625/- incurred as per Exs.A29 to A35 bills filed by him apart from Ex.A9 quotation for repairs. He submitted that the order of District Forum is vitiated in as much it gave a finding that only Ex.A9 quotation was filed and no bills were filed in proof of repairs carried out and ignored the bills filed for repair of the tanker under Exs.A29 to A35 and also erred in not awarding compensation for the consignment of diesel which was totally lost in the accident. He also submitted that the opposite parties only filed the survey reports relating to damage to tanker and failed to produce the two survey reports relating to the loss of the goods, which itself amounts to deficiency of service and hence prayed to allow the appeal.
We have perused the material on record. The facts not in dispute are that the complainant had taken two insurance policies from the opposite parties for a period of one year from 12-6-2004 to 11-6-2005 by paying a premium of Rs.12,062/- and Rs.5,710/- respectively towards premium to indemnify the loss to the tanker and also to the running stock in the tanker. It is the complainants case that while the tanker was carrying diesel oil, it met with an accident on on 2-3-2005 around 12.30 a.m. at a distance of 1 km from Kalwakurthy and consequently the diesel spilt on the ground and there was heavy loss and also extensive damage caused to the vehicle. The complainant informed the said fact to the opposite parties on the same day and requested them to send spot surveyor for inspection. A criminal complaint was also registered vide F.I.R. bearing 32/2005 on the same day. Opposite parties deputed surveyors, Mr.K.S.N.Murthy, Dr.Krishna Murthy and Srinivas Rao for assessing the loss to stock and damage caused to the vehicle, who inspected the said spot on 3-3-2005 and subsequent dates. It is the complainants case that the entire stock of diesel worth Rs.3,41,962.25 has been lost in the said accident and the vehicle also was extensively repaired by M/s.Afsar Mechanical Works, who gave a quotation for Rs.3,40,150/- for carrying out the repairs. On 15-5-2005, opposite parties repudiated the claim of the complainant on the ground that the driver, Chunnumia, who was driving the vehicle at the time of accident had no valid driving license for carrying hazardous goods. It is the complainants case that the driver had a valid license for driving heavy goods vehicles and that the District Forum ought to have relied on Ex.A26 wherein it was certified by the Assistant Secretary of R.T.A., Ranga Reddy Division that there is no recognized institute for giving training to transport hazardous goods near Hyderabad as per his knowledge.
It is the case of opposite parties that their repudiation is justified since the driver, Chunnumia, is not having valid driving license for carrying hazardous goods and this is a statutory violation and is against Rule 9 of Central Motor Vehicle Rules, 1989. They further contended that the facility to get training is available in the name and style of M/s.Hire Private Limited, Cherlapally, Ranga Reddy District, which is notified as per G.O.Rt.No.1017 dated 20-11-2004 and that the complainant did not care to observe the same.
We observe from the record that the charge sheet, panchanama together with F.I.R. clearly state tht there was an accident and that the tanker was destroyed and the diesel also floated on the ground causing loss of Rs. 3,41,962.25/- therefore, the complaint was able to establish that the accident had damaged the tanker and also that there was loss because of diesel spilling on the ground. The District Forum while allowing the damages to the tanker on the basis of F.I.R., the charge sheet and the surveyors report has disallowed the loss of the diesel. Ex.A26 clearly states as follows-
TO WHOMSOEVER IT MAY CONCERN
-This is to certify that there is no recognized Institute for Hazardous goods, around or near Hyderabad as per my knowledge.
This certificate issued on personal request.-
We have also perused Ex.A25, which is a certificate issued by HINDUSTRAN PETROLEUM CORPORATION LIMITED which states as follows-
TO WHOMSOEVER IT MAY CONCERN
-This s to inform that there are no Hazardous goods training Recognize institute, around Hyderabad as per our information, we have not made compulsory our contract trucks to have the Endorsement in drivers license-.
It is also not in dispute that the very carrying of diesel, which is the subject hazardous good, was not the cause of the accident. We see no reason as to why the District Forum while allowing the claim for repairs of the vehicle has disallowed the loss sustained by the complainant by the diesel which was spilt.
We rely on the judgement of the National Commission in R.P.No.2529/2008 dated 30-6-2008 which is against the order dated 22-11-2007 of the State Commission of Andhra Pradesh in which it was held by the State Commission, that the driver was holding a license to drive light motor vehicle and did not have an endorsement authorizing him to drive transport vehicle.
The National Commission in R.P.No.2529/2008 observed as follows-
-The Guidelines for Settlement of Non-standard claims and the Formula for the same is as under-
GUIDELINES FOR SETTLEMENT OF NON STANDARD CLAIMS
1. Whether a breach of warranty of 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, a 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 contribute 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 percent 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 percent 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-.
It is further laid down that-
-The types of claims which can be settled 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-
S.No. Description Percentage of settlement.
i) Under declaration of Deduct 3 years difference in premium licensed carrying from the amount of claim or deduce capacity. 25 percent of the claim amount whichever is higher.
ii) Overloading of vehicles Pay claims not exceeding 75 percent beyond licensed carrying of admissible claim.
Capacity.
iii)Any other breach of Pay upto 75 percent of admissible Warranty/condition of claim Policy during limitation as to use-
Considering the aforesaid Guidelines, the petitioner is directed to deposit 75 percent of the amount awarded by the State Commission with interest-.
We also rely on the decision of the apex court reported in 2003 (5) SUPREME 71 in GHANCHI PUBINA SALIMBHAI v. METUBHA DIWANSINGH SOLANKI and ORS. in which the court observed as follows-
For the purpose of argument, we may also proceed on the basis that the driver of the car did not have a valid driving licence.
Question then is-
can the Insurance Company repudiate a claim made by the owner of the vehicle which is duly insured with the company, solely on the ground the driver of the vehicle who had nothing to do with the accident did not hold a valid licence-
Answer to this question, in our opinion, should be in the negative. Section 149 of the Motor Vehicles Act, 1988 on which reliance was placed by the State Commission, in our opinion, does not come to the aid of the Insurance company in repudiating a claim where driver of the vehicle has not contributed in any manner to the accident.
Section 149(2)(a)(ii) of the Motor Vehicles Act empowers the Insurance Company to repudiate a claim wherein the vehicle in question is damaged due to an accident to which driver of the vehicle who does not hold a valid driving licence is responsible in any manner. It does not empower the Insurance Company to repudiate a claim for damages which has occurred due to acts to which the driver has not, in any manner, contributed i.e. damages incurred due to reasons other than the act of the driver.
In the instant case admittedly there is no endorsement for carrying hazardous goods permission on the license of the driver. However, it is also not the case of the opposite parties that the carrying of diesel perse, which is a hazardous goods by itself, was the cause of the accident. The District Forum while awarding damages to the vehicle as per the surveyors report has not awarded the loss suffered by the complainant on account of the spilt diesel which was covered under policy No.551702/46/04/9700007. Taking into consideration, the non standard claim procedure, Where the breach is material to the loss or where an act of the insured or his agent has contribute 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, up to a maximum of 75 percent of the assessed amount of loss we are of the view that 75 percent of the claim i.e. Rs.2,56,471/- can be awarded. However, with respect to the damage caused to the vehicle, the District Forum has rightly awarded based on the survey report and we see no reason to interfere with that aspect of the order.
In the result F.A.No.1893/2005 is dismissed and the complainants appeal F.A.No.177/2006 is allowed in part directing the opposite parties to pay 75 percent of the claim amount i.e. Rs.2,56,471/- together with interest at 9 percent p.a. from the date of repudiation till the date of realization together with costs of Rs.2,000/-. Time for compliance four weeks.
PRESIDENT. LADY MEMBER.
Dated 11-8-2008.