National Consumer Disputes Redressal
Oriental Insurance Co. Ltd. vs B A Nagesh on 18 August, 2010
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI Revision Petition No. 2656 of 2006 (From the order dated 31.05.2006 in Appeal/ Complaint No. 1607 of 2004 of the Karnataka State Consumer Disputes Redressal Commission, Bangalore ) Oriental Insurance Company Ltd., 414, 2nd and 3rd Floor Sri Venkateshwara Nilaya Gandhi Nagar, B M Road Hassan 573 201 Through its Regional Manager ........ Petitioner Vs. B A Nagesh S/o of Shri B B Annegowda Coffee Planter, Ballupet Sakleshpur Taluk Hassan ..... Respondent BEFORE: HONBLE MR ANUPAM DASGUPTA PRESIDING MEMER HONBLE MRS VINEETA RAI MEMBER For the Petitioner Mr Atul Nanda and Mr Gaurav Gupta, Advocates For the Respondent NEMO Pronounced on 18th August 2010 ORDER
PER VINEETA RAI, MEMBER Oriental Insurance Company Petitioner in this case has filed a revision petition under section 21 (b) of the C P Act, 1986, against the order dated 31.05.2006 of the Karnataka State Consumer Disputes Redressal Commission, Bangalore, in Appeal No. 1607 of 2004, filed by one B A Nagesh (Respondent before us), challenging the order of the District Forum, Hassan.
Brief facts of the case according to the Petitioner are as follows:
Respondent owned a mini lorry van which was insured with the Petitioner as a commercial vehicle under a comprehensive insurance policy covering the period 27.03.2001 to 26.04.2002. The said vehicle met with an accident on 18.02.2002 by hitting a tree on the left side of the road. There were about 30-40 passengers in the vehicle at that time many of whom sustained severe injuries and later two of them, including the driver of the vehicle, died in the Hospital. One of the passengers, B H Basavaraju lodged an FIR with Sankaleshpura Police Station giving the names, addresses and details of 19 persons travelling in the vehicle. Respondent filed an insurance claim for Rs.3,02,912/- with the Petitioner company towards loss and repair charges of the damaged vehicle. The claim was repudiated by the Petitioner on the grounds that there had been a clear breach of the terms and conditions of the policy, since the said vehicle had been insured as a commercial vehicle and as per the terms and conditions of the relevant insurance policy only four persons were allowed to travel in such a vehicle. On the other hand, at the time of the accident the vehicle was over loaded with unauthorized passengers, which was the direct cause of the accident. The FIR inter alia stated the details of the accident, names and numbers of passengers who were travelling in the vehicle, the nature of injuries, etc. Further, there was no delay on the part of the Petitioner so far as processing the claim for the insurance was concerned. Spot inspection of the vehicle was arranged on the next, day i.e., 19.02.2002 and the Petitioner wrote several letters calling upon the Respondent to submit the written claim which was finally received on 01.04.2002 without the supporting documentation including the vehicle permit and fitness certificate. Thus, there was no deficiency in service on the part of the Petitioner.
The Respondent, on the other hand, has given a totally different version of the accident. According to him, the injured persons were hit by his lorry which was coming at a high speed before it hit a tree, implying thereby that the injured persons were not the passengers in the lorry but were pedestrians walking on the road. He has, therefore, denied that there was any breach by him of the terms of the conditions of the Insurance Policy. Respondent has produced the charge-sheet filed by the police which fully supports his version of the events. Respondent has claimed that as a result of this accident, his vehicle was heavily damaged and he had to spend Rs. 3,02,192/- on its repairs. Although he informed the Insurance Company regarding the accident and produced all the relevant documents in connection with the repair expenses to the vehicle, the Petitioner did not settle the claim and later on repudiated it on grounds of breach of policy terms and conditions.
Aggrieved by this action, Respondent filed a complaint before the District Forum on grounds of deficiency in service. The District Forum believed the Petitioners version which had been corroborated by the FIR and held that the lorry was, in fact, carrying a large number of passengers in clear contravention of the terms and conditions of the Insurance Policy which clearly states, Goods carrying commercial vehicle. 4 persons allowed to travel.
The District Forum, in its order, has also cited two judgments of the National Commission viz., in The New India Assurance Co. Ltd vs A Nazar II (1995) CPJ 14 (NC) and New India Assurance Co. Ltd. vs A Mohamad Yasin III (1995) CPJ 50 (NC) wherein it is ruled that if a transport vehicle is used for carrying unauthorized passengers beyond the prescribed limit, repudiation of the claim by the Insurance Company will not amount to dereliction/ deficiency of service. Thus, on the basis of credible evidence produced by the Petitioner and above decisions of the National Commission, the District Forum dismissed the complaint.
Aggrieved with this decision of the District Forum, the Respondent herein filed an appeal before the State Commission. The State Commission in its impugned order has confined itself to the question of the Petitioners liability assuming that the vehicle in question was indeed carrying passengers contrary to the terms and conditions of the Insurance Policy. The State Commission has not, for instance, gone into the question of the conflicting facts and circumstances of the accident as indicated in the two separate versions of the Petitioner and the Respondent, and has placed reliance on a judgment of the Supreme Court (citation not given) to set aside the order of the District Forum. The relevant portion of the order of the State Commission is reproduced:
The case of the Insurance Company is that the vehicle was carrying 13 passengers at the time of the accident contrary to the terms and condition of the policy and therefore the Insurance Company is not liable to pay any compensation.
Assuming the vehicle in question was carrying passengers contrary to the terms and conditions of the policy, as per the decision of the Supreme Court the Insurance Company ought to have treated the claim as non-standard and should have paid 75% of the loss suffered by the complainant. But in the instant case, the District Forum has dismissed the complaint which is contrary to the law laid down by the Supreme Court.
Aggrieved by the order of the State Commission, the Petitioner Insurance Company - has filed this revision petition before us.
We have heard the learned Counsel for the Petitioner. None was present on behalf of the Respondent, despite due service of notice on the Counsel for the Respondent.
Learned Counsel for the Petitioner has submitted before us that the order of the State Commission directing the Insurance Company to treat the claim on non-standard basis and to pay 75% of the loss suffered by the complainant is not supported by any judgment of the Supreme Court. On the other hand, settlement of the claim on non-standard basis is done by public sector insurance companies on the basis of guidelines where such claims can be settled because of specific circumstances - for example, avoiding litigation of minor nature, where a breach is of technical nature or is entirely beyond the control and knowledge of the insured, etc. Learned Counsel for the petitioner has also stated that due credence must be given to the First Information Report, which was the first and factual account of the accident as it happened. Moreover, the Petitioner has already challenged the veracity of the subsequent charge-sheet, by filing a writ petition in the High Court of Karnataka on the grounds of its being based on a fraudulent and concocted version of the incident and have sought re-investigation of the entire matter. This case is sub-judice.
We have carefully considered the submissions made by the learned Counsel for the Petitioner and have gone through the relevant documents/ written submissions of both the parties on record. In the first instance, we feel that the State Commission should have given a speaking order discussing the judgment of the Supreme Court on which it has relied and its applicability to the present case, instead of merely mentioning it without even giving the necessary citation. On the other hand, as per the judgment of the National Commission in New India Assurance Co. Ltd vs A Mohamad Yasin (14.08.1995) it was ruled that a settlement offer on non-standard basis cannot be the foundation for a direction against the insurance company for settlement of the claim or holding the insurance company guilty of any deficiency in service within the meaning of Consumer Protection Act. (para 4 of the order). Secondly, the National Commission, in its order dated 29th October 2007, in G Kothainachiar vs The Branch Manager, United India Insurance Co. Ltd., and Others has taken note of the policy framed by the General Insurance Corporation of India with regard to settlement of non-standard claims in case of breach of policy of terms and warranties and has confirmed that such settlements would essentially inter alia cover claims were the breaches are of a technical or minor and not serious breaches.
In this case, as discussed in detail by the District Forum, there is strong and convincing evidence produced by the Petitioner of serious breach of the terms and conditions of the insurance policy by the Respondent, leading to justifiable repudiation of his insurance claim by the Petitioner. The District Forum has in this context, rightly taken note of the judgments of the National Commission and concluded that under these circumstances, the Petitioner cannot be held responsible for any deficiency in service.
In sum, looking at all the facts before us and for the reasons stated in the preceding paragraphs, we have no option but to set aside the order of the State Commission and confirm the findings of the District Forum. The revision petition is accordingly allowed, with no order as to costs.
Sd/-
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[ Anupam Dasgupta ] Presiding Member Sd/-
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[ Vineeta Rai ] Member Satish