State Consumer Disputes Redressal Commission
The New India Insurance Co. Ltd. vs Prandhar Agrawal on 30 October, 2008
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION
PANDARI, RAIPUR
Appeal No.214/07
Date of institution 25.04.07
Date of Order 30/10/08
The New India Assurance Co. Ltd.
Through : Divisional Manager,
Divisional Office, Madina Building,
Kutcheri Chowk, Raipur
Dist. RAIPUR (C.G.) ... Appellant.
Vs.
Prandhar Agrawal,
S/o. Lt. Shri A.N. Agrawal,
R/o. Arang,
Dist. RAIPUR (C.G.) ... Respondent.
COUNSEL FOR THE PARTIES : -
Shri P.K. Paul, for Appellant.
Shri N.K. Thakur & Ku. Reena Singh, for respondent.
PRESENT : -
HON'BLE SMT. VEENA MISRA, MEMBER
HON'BLE SHRI V.K. PATIL, MEMBER
ORDER
PER: - HON'BLE SMT. VEENA MISRA, MEMBER This appeal under section 15 of the Consumer Protection Act, 1986 is directed against the order dated 15.03.07 passed in complaint case No.270/05 by District Consumer Disputes Redressal Forum, Raigarh (hereinafter called the "District Forum" for short) whereby the complaint was allowed and the insurer was directed to make payment to the complainant on non-standard basis.
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2. Brief facts necessary for disposal of this appeal are that the vehicle in the name of the complainant bearing registration No. CG 06 ZA 0137 was insured with the OP for the period from 27.04.03 to 26.04.04 and during subsistence of insurance the aforesaid vehicle met with an accident on 02.06.03. The insurer was informed and subsequently claim form was issued. As per averments of the complaint the complainant submitted duly filled claim form togetherwith various documents. The surveyor appointed by the OP / appellant conducted survey and assessed the damage to the tune of Rs.60,000/-. It was further averred in the complaint that as per instructions of the surveyor the complainant got the vehicle repaired and submitted various bills with the OP but the claim was repudiated by the insurer. It was averred in the complaint that even if there was breach of some conditions of policy the claim was to be settled on non- standard basis as per clause - 10 of Procedural Manual of Motor Claims. The claim was repudiated by the insurer on the ground that the complainant has failed to furnish route permit. Hence, in view of clause - 10 of the Procedural Manual, non-payment by the insurer amounted to deficiency in service.
3. The OP resisted the complaint and averred that the claim is to be decided as per terms of the policy and in case there is any breach of // 3 // terms of the policy the claim is not payable. It was further averred that as per Motor Vehicle Act permit and fitness etc. are necessary and in case the insured fails to produce permit or fitness certificate the terms of the policy are violated hence, the claim was not payable. The insurer admitted that the surveyor had assessed the loss but it was averred that since the permit and fitness certificate were necessary as per Act, but despite repeated requests neither permit nor fitness certificate were presented before the insurer, the claim was repudiated, hence there was no deficiency in service on part of the insurer.
4. As noted earlier the District Forum has allowed the claim on non-standard basis relying on National Insurance Co. Ltd. v. Surinder Singh Khurana I (2006) CPJ 43 (NC) and Rajnath Tandon v. United India Insurance Co. Ltd; Appeal No.285/05 order dated 27.02.06 decided by this Commission.
5. Final arguments heard, record perused.
6. Learned counsel for the appellant submitted that the order passed by the District Forum deserves to be set aside as in absence of permit and fitness certificate the District Forum has directed to settle the claim on non-standard basis. He further submitted that for // 4 // commercial vehicles, section 66 and 56 of Motor Vehicles Act stipulates obtaining of permit and fitness certificate and in absence of the same the claim cannot be paid to the complainant. Learned counsel for the appellant further submitted that despite repeated reminders the complainant failed to present relevant documents before the insurer and also failed to get the vehicle repaired and to intimate the insurer for getting the vehicle re-inspected. Consequently, vide letter dated 02.04.05 the claim was repudiated and act of the insurer did not amount to deficiency in service. Learned counsel prayed that the order of the District Forum may be set aside and this appeal may be allowed. Appellant's counsel relied on Santosh v. National Insurance Co. Ltd. II (2008) 171 (NC); National Insurance Co. Ltd. v. Challa Bharathamma and ors. 2004 ACJ 2094; United India Insurance Co. Ltd. v. Sangeeta Sinha II (2008) CPJ 271; United India Insurance Co. Ltd. v. M/s. Harchand Rai Chandan Lal 2005 (1) CPR 64 (SC); Sardari & ors. v. Sushil Kumar & ors. II (2008) CPJ 21 (SC); National Insurance Co. Ltd. & anr. v. Anil Girulkar II (2008) CPJ 19; and Aeroflot Soviet Airlines v. The United India Insurance Co. Ltd. 2006 (3) CPR 122 (NC).
7. On the other hand learned counsel for the respondent submitted that the order passed by the District Forum is a speaking order duly assigning the reasons for coming to the conclusion, hence does not call for any interference. Learned counsel for the respondent filed copy of // 5 // Procedural Manual of Motor Claims and submitted that the procedure for deciding claim is described in the Manual and clause - 10 relates to settling non-standard claims. He further submitted that it is clearly mentioned in sub-clause - iii of clause - 10 that in case of any other breach of warranty / condition of policy including limitation as to use claim is to be settled upto 75% of admissible claim. He also drew our attention to the words printed below the sub-clause - iii to the effect that breach such as that of Route Permit is to be considered as Standard claim. Learned counsel for the respondent submitted that though in view of the aforesaid provision complainant's claim ought to have been considered as standard claim, if it was not done atleast the claim ought to have been settled on non-standard basis as has been directed by the District Forum. Hence the appeal may be dismissed.
8. It is noted that the case of the complainant was that even in absence of permit he was entitled to settlement of claim by the insurer as per Guidelines issued for settlement of claim. Out of the cases relied by learned counsel for the appellant Santosh's case (supra); Challa Bharthamma's case (supra) & Sangita Sinha's case (supra) relate to permit, whereas the other cases relate to different facts, hence the same are not relevant in the matter. In Santosh's case (supra) it was held that from copy of the covering note it appears that it covers use of the vehicle // 6 // only under a permit within the meaning of Motor Vehicles Act, 1988 and indisputably the permit granted to the petitioner was for carrying goods and not the passengers. Hence, it was held that there was breach of policy conditions hence the claim was rightly repudiated by the insurer. In Challa Bharathamma's case (supra) it was held that the insured did not obtain permit to ply the vehicle hence the insurance company is not liable. Sangita Sinha's case (supra) was also decided by this Commission relying on the decision of Challa Bharathamma's case (supra). It is noted that in none of the aforesaid cases relied by the appellant Guidelines for settlement of claim were referred to or considered.
9. On the other hand learned counsel for the respondent has placed Procedural Manual of Motor Claims on record wherein Guidelines for deciding claim on non-standard basis are provided under clause - 10 of the Guidelines. Clause - 10 is reproduced hereinbelow: -
"10. NON STANDARD CLAIMS Following types of claims shall be considered as non-standard and shall be settled as indicated below after recording the reasons :
Sr.No. Description Percentage of settlement
i. Under declaration of Deduct 3 years difference in
licensed carrying premium from the amount of
capacity claim or deduce 25% of
claim amount, whichever is
higher.
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ii. Overloading of Pay claims not exceeding
vehicles beyond 75% of admissible
claim.
licensed carrying
capacity
iii. Any other breach of Pay upto 75% of admissible
warranty / condition claim.
of policy including
limitation as to use.
For breach of warranties/conditions which do not involve any saving in premiums or any additional exposure to the Insurers, such claims be considered as Standard Claims e.g. Route Permit."
It appears from the aforesaid Guidelines that for such breach of warranty or condition which do not involve any saving in premiums or any additional exposure to the insurers, such claims be considered as Standard Claims e.g. Route Permit has been specifically mentioned.
10.Learned counsel for the respondent has relied on several cases decided by National Commission on this point. He referred to New India Assurance Co. Ltd. v. Surinder Singh Khurana I (2006) CPJ 43 NC wherein it was held that violation of Motor Vehicles Act could be termed as breach of warranty only and claim should be settled on non-standard basis. It was further held that not caring to settle the claim as per Guidelines issued by G.I.C. itself shall amount to deficiency in services on the part of the insurer. In another case relied by the respondent Shiv Kumari v. New India Assurance Co. Ltd. II (2007) 196 (NC) it was held that the claims are to be settled as per Guidelines // 8 // issued by the G.I.C. It was further held that G.I.C. Guidelines are clear that when the condition of the policy is violated in terms of "limitation of its use", the claim has to be settled on 75% basis. In Rajnath Tandon v. United India Insurance Co. Ltd. this Commission also had expressed the view relying on New India Assurance Co. Ltd. v. Surinder Singh Khurana's case and held that the complainant's claim should be decided on non-standard basis as per Procedural Manual of Motor Claims.
11. Learned counsel for the respondent has also filed photocopy of order passed by National Commission in Revision Petition No.2393/03; 02/04; 824/06 wherein the bench consisting of Hon'ble President togetherwith two other Hon'ble Members heard the matter. In the common order dated 13.09.07 passed in aforesaid Revision Petitions the question considered was that in case of breach of the policy condition as to limitation of use of the vehicle, whether the insured is entitled to reimbursement on the basis of policy adopted by the insurance companies of settling such claims on non-standard basis ? Hon'ble National Commission was of the view that the policy of the insurance companies, on the basis of the guidelines, is required to be followed and adhered to. In such cases, claims are required to be settled on non-standard basis. The order has been passed in detail // 9 // considering all aspects of the matter, hence we are of the view that the order passed in aforesaid Revision cases applies on all fours to the appeal under consideration as in the instant appeal the matter involves as to whether the repudiation by the insurance company due to absence of permit was proper ?
12. In another case G. Kothainachiar v. Branch Manager, Untied India Insurance Co. Ltd. and ors. order dated 29.10.07 Hon'ble National Commission has held that in case the vehicle was being plied without fitness certificate it was in violation of the Motor Vehicles Act, 1988. Therefore the question would be whether the insurance company can repudiate the claim on the alleged ground of breach of some other provisions of the Motor Vehicles Act or some other Act ? Hon'ble National Commission has held that the insurance company cannot repudiate the claim when there was no breach of terms of the policy, because the insurance is a matter of contract between the parties, as has been held by the Apex Court also in several cases that between the insured and the insurer - parties are governed by the terms of policy and bound by the conditions enumerated in the policy and the insurer is not liable to the insured if there is violation of any policy condition. It was held that in case there was fundamental or material breach of policy condition repudiation is justified. It was further held in the // 1 0 // order that the policy is framed by the GIC with regard to settlement of non-standard claims in case where there is breach of policy terms / warranties and same has to be adhered to while deciding the claim.
13. In view of the observations made hereinabove and the fact that clause - 10 of the Guidelines, provides for settlement of non-standard claim and under sub-clause - iii it is mentioned that any other breach of warranty / condition of policy including limitation as to use, payment upto 75% of admissible claim has to be made. On perusal of cover note it appears that condition of obtaining permit is mentioned under 'limitation as to use'. Hence, as per Guidelines the claim was to be settled on non-standard basis and by not doing so the insurer has committed deficiency in service. Hence the order passed by the District Forum appears to be just and proper and the same is affirmed. This appeal being devoid of merits is dismissed.
(Smt. Veena Misra) (V.K. Patil)
Member Member