Delhi District Court
Manjit Kumar vs National Insurance Co on 4 November, 2024
CS (Comm.) No.710/2023: Manjit Kumar V/s National Insurance Co. Ltd.:
DOD: 04.11.2024
IN THE COURT OF VINOD YADAV:
DISTRICT JUDGE (COMMERCIAL COURT)-02:
NORTH-WEST DISTRICT: ROHINI COURTS: NEW DELHI
CNR No.DLNW01-008758-2023
Civil Suit (Comm.) No.710/2023
In the matter of:
Manjit Kumar,
S/o Shri Om Prakash,
House No.K-74, Vijay Vihar,
Phase-1, Sector-4, Rohini, North-West,
New Delhi-110085.
.....Plaintiff
(Through Shri Amit Kumar Maihan, Advocate)
Versus
M/s National Insurance Company Limited,
General Claim Hub, (DRO-1), 369200,
Scope Minar, Core-3, 2nd Floor,
Laxmi Nagar, New Delhi-110092.
.....Defendant
(Through Shri R.K Gupta, Advocate)
Date of Institution of Suit : 22.09.2023
Date of hearing arguments on application U/o XIII-A CPC : 22.10.2024
Date of judgment : 04.11.2024
Decreed U/o XIII-A CPC: Page 1 of 12
CS (Comm.) No.710/2023: Manjit Kumar V/s National Insurance Co. Ltd.:
DOD: 04.11.2024
SUIT FOR RECOVERY FOR AN AMOUNT OF Rs.4,07,558.00 (Rupees Four
Lakhs Seven Thousand Five Hundred Fifty Eight Only) AGAINST THE
DEFENDANT FOR WRONGLFULLY WITHHOLDING THE AMOUNT
04.11.2024
SUMMARY JUDGMENT
1. The facts of the case in brief as borne out from the record are
that plaintiff is the registered owner of vehicle bearing registration No.DL-
6CQ-5744 (Maruti Eeco Car) (hereinafter referred to as the "said vehicle").
2. Defendant is one of the leading public sector insurance
companies, offering a wide range of insurance services to its customers.
3. The "said vehicle" was lying insured with defendant under
Comprehensive Policy bearing No.360400/31/19/10000784, valid for the
period from 01.06.2019 to 31.05.2020 in the name of plaintiff with an
"Insured Declared Value (IDV)" of Rs.2,75,000/-.
4. (i) It is the case of plaintiff that the "said vehicle" was stolen on
10.01.2020 from in front of Kapoor Jewellers, Shop No.13, CSC-3,
Pocket-5, Sector-2, Rohini, Delhi. The plaintiff, therefore, got FIR
No.001139, dated 10.01.2020, under Section 379 IPC registered with e-
Police Station (South Rohini, Delhi).
(ii) On the same day, i.e on 10.01.2020, plaintiff informed the
defendant insurance company about the theft of "said vehicle" and
lodged/registered a claim with it vide Claim No.ODH-71707/360400
Decreed U/o XIII-A CPC: Page 2 of 12
CS (Comm.) No.710/2023: Manjit Kumar V/s National Insurance Co. Ltd.:
DOD: 04.11.2024
5. Despite best efforts, the "said vehicle" could not be traced by
the police. The investigating authority/police accordingly filed untrace
report in the matter, which was accepted by learned ACMM-01 (North-
West), Rohini District Courts vide order dated 03.03.2020.
6. (i) In the meantime, plaintiff kept on pursuing his claim with the
defendant, however, to his utter shock and surprise, his claim was
repudiated/rejected by the defendant insurance company vide letter dated
20.07.2020 on the ground that "said vehicle" was being used as
commercial vehicle (for hire and rewards), even though the same was
registered as private vehicle, thereby violating the provisions of Section
53, 1(b) of Motor Vehicles Act, 1988 (hereinafter referred to as the "Act").
(ii) Aggrieved by the repudiation of his insurance claim by the
defendant insurance company vide letter dated 20.07.2020, plaintiff
approached the Insurance Ombudsman vide Complaint Ref. No.DEL-G-
048-2122-0186. The said complaint of plaintiff was rejected by the
Insurance Ombudsman vide Award dated 17.11.2021, inter alia observing
therein that investigation conducted by the insurer/defendant had revealed
that the insured vehicle was being used for taxi/hire purposes and as such,
the insurers were justified in repudiating the claim, as per the policy terms
and conditions.
7. It is claimed by the plaintiff that the defendant has
repudiated/rejected his claim on false grounds, thereby renegading from its
contractual obligation. As such, the plaintiff has filed the instant suit, inter
Decreed U/o XIII-A CPC: Page 3 of 12
CS (Comm.) No.710/2023: Manjit Kumar V/s National Insurance Co. Ltd.:
DOD: 04.11.2024
alia praying for decree in the sum of Rs.4,07,558/- (Rs.3,86,929/- +
interest @ Rs.1,22,558/-) alongwith pendentelite and future interest against
the defendant.
8. (i) After getting served with the summons, defendant filed
written statement in the matter inter alia admitting the insurance policy in
question; factum of theft of "said vehicle"; lodging of e-FIR and claim by
the plaintiff on the same day; as well as acceptance of Untrace Report by
the concerned Court vide its order dated 03.03.2020.
(ii) It was stated that pursuant to receipt of intimation regarding
theft of "said vehicle", defendant appointed independent agency namely
M/s D. Kapur & Associates as "investigator", who submitted his report
dated 30.01.2020, wherein it was disclosed that the "said vehicle" at the
relevant time was being used as commercial vehicle, whereas the same was
insured as a private vehicle.
(iii) It is averred that on the basis of report of investigator dated
30.01.2020, the claim of plaintiff was repudiated/rejected vide letter dated
20.07.2020 on the ground that the "said vehicle" was being used as
commercial vehicle (for hire and rewards), even though the same was
registered as private vehicle. As such, it is claimed that at the time of
alleged loss, "said vehicle" was being used in contravention of
LIMITATION As to USE clause of the insurance policy as well as Section
53 of the "Act".
Decreed U/o XIII-A CPC: Page 4 of 12
CS (Comm.) No.710/2023: Manjit Kumar V/s National Insurance Co. Ltd.:
DOD: 04.11.2024
9. Plaintiff filed replication, inter alia denying the averments
made in the written statement and reiterating the ones made in the plaint.
It is claimed that plaintiff was never supplied with any clause "Limitation
As to Use" or any terms and conditions with the insurance policy in
question. It is averred that the reliance by defendant upon Section 53 of
the "Act" while repudiating his claim is factually wrong and legally
baseless.
10. I have gone through the repudiation letter dated 20.07.2020,
issued by the defendant; approval of the repudiation letter by the O/o
Insurance Ombudsman as well as other documents filed alongwith the
plaint.
11. The application U/s XIII-A CPC has been filed by the
plaintiff, inter alia contending that the insurance policy; fact of theft of
"said vehicle"; application of the plaintiff for claim and submission of
documents has not been disputed by the defendant and it/defendant has
taken a legal defence only which is to the effect that from the report of
investigator it appeared to the defendant that the plaintiff was using the
"said vehicle" for hire in violation of the insurance policy in question.
12. Both the parties have taken me through the documents and
during the course of arguments it transpired that this case can be disposed
off on the basis of law laid down by Hon'ble Supreme Court of India in
case reported as, "Civil Appeal No.2703/2010", titled as, "Amalendu
Decreed U/o XIII-A CPC: Page 5 of 12
CS (Comm.) No.710/2023: Manjit Kumar V/s National Insurance Co. Ltd.:
DOD: 04.11.2024
Sahoo V/s Oriental Insurance Company Limited" (DOD: 25.03.2010) as
well as decision rendered by National Consumer Disputes Redressal
Commission, New Delhi in case reported as, "Revision Petition
No.2426/2017", titled as, "Bajaj Allianz General Insurance Company
Limited V/s M/s Kay Enterprises" (DOD: 26.03.2024).
13. In case of Amalendu Sahoo (supra), the claim of the claimant
was repudiated by the insurance company on the ground that at the time of
accident, somebody else was driving the said vehicle and a presumption
was raised by insurance company that the vehicle was being used for hire.
The Hon'ble Supreme Court after considering the facts of the case in
entirety decided the matter inter alia observing as under:
xxxxx
11. What is disputed by the insurance company is
that the vehicle was not used for personal use but was
used by way of being hired, though no payment for
hiring charges was proved. However, according to the
insurance company, by using the vehicle on hire, the
appellant had violated the terms of the insurance
policy and on that basis the insurance company was
within its right to repudiate the claim.
12. Reference in this case may be made to the
decision of National Commission rendered in the case
of United India Insurance Company Limited V/s Gian
Singh, reported in 2006 CTJ221 (CP) (NCDRC). In
that decision of the National Consumer Disputes
Redressal Commission (NCDRC) it has been held that
in a case of violation of condition of the policy as to
the nature of use of the vehicle, the claim ought to be
settled on a non-standard basis. The said decision of
the National Commission has been referred to by this
Decreed U/o XIII-A CPC: Page 6 of 12
CS (Comm.) No.710/2023: Manjit Kumar V/s National Insurance Co. Ltd.:
DOD: 04.11.2024
Court in the case of National Insurance Company
Limited v. Nitin Khandelwal reported in 2008 (7)
SCALE 351. In paragraph 13 of the judgment, in the
case of Nitin Khandelwal (supra) this Court held:-
"..The appellant Insurance Company is liable to
indemnify the owner of the vehicle when the insurer
has obtained comprehensive policy for the loss caused
to the insurer. The respondent submitted that even
assuming that there was a breach of condition of the insurance policy, the appellant Insurance Company ought to have settled the claim on non-standard basis."
13. In the case of Nitin Khandelwal (supra) the State Commission allowed 75% of the claim of the claimant on non-standard basis. The said order was upheld by the National Commission and this Court refused to interfere with the decision of the National Commission.
14. In this connection reference may be made to a decision of National Commission in the case of New India Assurance Company Limited v. Narayan Prasad Appaprasad Pathak reported in (2006) CPJ 144 (NC). 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:-
Sr.No. Description Percentage of settlement
(i) Under declaration of licensed Deduct 3 years' difference in premium carrying capacity from the amount of claim or deduct Decreed U/o XIII-A CPC: Page 7 of 12 CS (Comm.) No.710/2023: Manjit Kumar V/s National Insurance Co. Ltd.:
DOD: 04.11.2024 25% of the claim amount, whichever is higher.
(ii) Overloading of vehicles beyond Pay claims not exceeding 75% of the licensed carrying capacity admissible claim.
(iii) Any other breach of warranty/ Pay upto 75% of the admissible claim.
condition of policy including limitation as to use
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 condition of policy including limitation as to use was breached.
16. In the instant case the entire stand of the insurance company is that 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.
xxxxx
14. The law laid down by Hon'ble Supreme Court in case of "Amalendu Sahoo" (supra) was followed by the National Consumer Disputes Redressal Commission (NCDRC) in case reported as, "Revision Petition No.2426/2017", titled as, "Bajaj Allianz General Insurance Company Limited V/s M/s Kay Enterprises" (DOD: 26.03.2024), wherein the Hon'ble NCDRC has been pleased to lay down as under:
xxxxx
12. Now, from his side, Ld. Counsel for the Petitioner has relied upon a decision of this Commission, dismissing "RA No. 240 of 2016 in RP No. 2234 of 2015- New India Assurance Co. Ltd. Vs. Parshotam Kumar" in which the ratio of the decision of the Decreed U/o XIII-A CPC: Page 8 of 12 CS (Comm.) No.710/2023: Manjit Kumar V/s National Insurance Co. Ltd.:
DOD: 04.11.2024 Hon'ble Supreme Court in "Amalendu Sahoo" (supra) was distinguished by holding that the insured vehicle in the said case was found carrying a load which was almost 70% in excess of the permissible limit, on account of which the accident had taken place due to such over loading itself, on account of which the Complainant was not entitled to any Insurance claim.
13. In addition, the Petitioner side has also cited a decision of this Commission in "RP No.3369 of 2010-
Bhagirathi Bishnoi Vs. New India Assurance Co. Ltd.", in which it was noted that according to the revised guidelines, the Insurance Company is not liable to pay any compensation if the over loading was in excess of 75%. The actual overloading in the said case having been found to be to the extent of 90.46% of the sanctioned capacity, the Revision Petition filed at the instance of Complainant/ insured was dismissed.
14. In the present case, however, it is seen that while the load capacity of the vehicle in question was 16MT, the permissible laden weight, is shown to be 25MT in its relevant National Permit for Goods Carriage No. 6318/PB-11/NP/2011. Further, it is seen that the total gross weight as found by the concerned Weight Establishment (J K Dharam Kanda) was 40830 kg i.e. 40.83 MT, which is therefore well below 75% of the total laden weight permissible.
15. Consequently, the Complainant/Respondent is found entitled to an amount not exceeding 75% of the admissible claim. The actual over-loading in the given case was to an extent of 15.83 MT over and above the permissible laden weight of 25MT, which is 63.32% excess of the permissible load capacity. The entitlement of the Respondent/Complainant is therefore liable to be proportionately reduced to that Decreed U/o XIII-A CPC: Page 9 of 12 CS (Comm.) No.710/2023: Manjit Kumar V/s National Insurance Co. Ltd.:
DOD: 04.11.2024 extent.
16. Consequently, this Revision Petition is allowed after modifying the impugned Order of the Ld. State Commission by directing that instead of 75% of the "Insured amount", the Petitioner/Insurance Company is liable to pay the Respondent's claim on a non- standard basis by deducting an amount equitable to 63.32% from such insured amount, which shall be paid from the date of repudiation alongwith interest @ 8% p.a. till its actual realisation.
xxxxx
15. If the facts of the present case are considered on the touchstone of the law laid down in the aforesaid judgments, then it becomes evident that there is no requirement of going for trial in this matter, as the aforesaid law duly considers the entitlement of plaintiff and non-defendability thereof by the defendant.
16. After considering the facts and circumstances of the case in totality, I am of the considered opinion that there is no real prospect of defendant succeeding in proving its defence because of the aforesaid discussion. No useful purpose would be served by allowing the proceedings to meander mindlessly in Court and to clog the justice delivery system. Therefore, in my opinion, present is a fit case where the Summary Judgment in terms of Order XIII-A of the CPC, as applicable to commercial disputes of a specified value, deserves to be passed in favour of the plaintiff and against the defendant. Reference in this regard may be made to the judgment in case reported as, "2019 SCC OnLine Del 10764", Decreed U/o XIII-A CPC: Page 10 of 12 CS (Comm.) No.710/2023: Manjit Kumar V/s National Insurance Co. Ltd.:
DOD: 04.11.2024 titled as, "Su-Kam Power Systems Ltd. V/s Kunwer Sachdev", wherein the Hon' ble High Court of Delhi has been pleased to observe as under:
xxxxx "90. To reiterate, the intent behind incorporating the summary judgment procedure in the Commercial Court Act, 2015 is to ensure disposal of commercial disputes in a time-bound manner. In fact, the applicability of Order XIIIA, CPC to commercial disputes, demonstrates that the trial is no longer the default procedure/norm.
91. Rule 3 of Order XIIIA, CPC, as applicable to commercial disputes, empowers the Court to grant a summary judgement against the defendant where the Court considers that the defendant has no real prospects of successfully defending the claim and there is no other compelling reason why the claim should not be disposed of before recording of oral evidence. The expression "real" directs the Court to examine whether there is a "realistic" as opposed to "fanciful" prospects of success. This Court is of the view that the expression "no genuine issue requiring a trial" in Ontario Rules of Civil Procedure and "no other compelling reason.....for trial" in Commercial Courts Act can be read mutatis mutandis.
Consequently, Order XIIIA, CPC would be attracted if the Court, while hearing such an application, can make the necessary finding of fact, apply the law to the facts and the same is a proportionate, more expeditious and less expensive means of achieving a fair and just result.
92. Accordingly, unlike ordinary suits, Courts need not hold trial in commercial suits, even if there are disputed questions of fact as held by the Canadian Supreme Court in Robert Hryniak (supra), in the Decreed U/o XIII-A CPC: Page 11 of 12 CS (Comm.) No.710/2023: Manjit Kumar V/s National Insurance Co. Ltd.:
DOD: 04.11.2024 event, the Court comes to the conclusion that the defendant lacks a real prospect of successfully defending the claim."
xxxxx
17. In view of the above discussion, the application filed by plaintiff U/o XIII-A is allowed. Consequently, the suit of the plaintiff is decreed under Order XIII-A CPC as under:
(i) A decree in the sum of Rs.2,06,250/- (Rupees Two Lakhs Six Thousand Two Hundred Fifty Only) (which is 75% of the IDV value of said vehicle Rs.2,75,000/-, as declared in the insurance policy in question) alongwith interest @ 9% per annum w.e.f the date of theft of "said vehicle", i.e 10.01.2020 till realization thereof is passed in favour of plaintiff and against the defendant.
(ii) Plaintiff is also entitled to costs and pleader's fee quantified as Rs.22,000/-.
18. Decree Sheet be drawn accordingly.
19. File be consigned to Record Room after completion of necessary formalities. Digitally signed by VINOD VINOD YADAV YADAV Date:
2024.11.04 17:03:17 +0530 Dictated & Announced in the (Vinod Yadav) open Court on 04.11.2024 District Judge (Commercial Court)-02 North-West/Rohini Courts Decreed U/o XIII-A CPC: Page 12 of 12