State Consumer Disputes Redressal Commission
Oriental Insurance Company Ltd. vs Gurjeet Singh on 8 August, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
First Appeal No.484 of 2016
Date of institution : 24.06.2016
Reserved on : 25.07.2017
Date of decision : 08.08.2017
1.The Oriental Insurance Company Ltd., Registered and Head Office A-25/27, Asaf Ali Road, New Delhi-110 002 through its authorized signatory.
2. The Oriental Insurance Company Ltd., Near Grain Market, Talwandi Road, Zira, through its Branch Manager. Now both through their authorized signatory B.S. Ahuja, Dy. Manager, The Oriental Insurance Co. Ltd., R.O. SCO No.109- 111, Sector 17-D, Chandigarh.
.......Appellants-Opposite Parties Versus Gurjeet Singh, aged 31 years, son of Sukhdev Singh, resident of Village Tumbar Bhan, Tehsil and District Ferozepur.
........Respondent-Complainant First Appeal against the order dated 23.02.2016 of the District Consumer Disputes Redressal Forum, Ferozepur.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President Present:-
For the appellants : Shri J.P. Nahar, Advocate. For the respondent : Shri Raman Goklaney, Advocate. JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
The instant appeal has been filed by the appellants/opposite parties against the order dated 23.2.2016 passed by District Consumer Disputes Redressal Forum, Ferozepur (in short, "the First Appeal No.484 of 2016 2 District Forum"), whereby the complaint filed by Gurjeet Singh, respondent/complainant, under Section 12 of the Consumer Protection Act, 1986 (in short, "the C.P. Act"), was allowed and the appellants/opposite parties were directed to pay to him 75% of ₹3,12,610/- on non-standard basis along with interest @ 9% per annum from the date of accident i.e. 1.9.2014 till realization along with compensation of ₹10,000/- for mental harassment and suffering and litigation expenses of ₹5,000/-.
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Forum.
Facts of the complaint:
3. Brief facts, as averred in the complaint, are that the complainant is a registered owner of vehicle bearing No.PB-04-L-
0223 and got insured the same with opposite party No.2, vide Policy No.233703/31/2014/1779 dated 31.1.2014 for the period from 2.2.2014 to midnight of 1.2.2015. During the subsistence of the insurance policy on 1.9.2014 there was a Parkash Divas of Sri Guru Granth Sahib and the complainant along with his friends and relatives were going to Sri Darbar Sahib, Amritsar for Darshan. Due to heavy rain said vehicle fell into a Khai near Village Behak Pachharian and badly damaged. DDR No.15 was lodged with the Police Station Sadar, Zira. Information was given to opposite party No.2 about the same, who appointed a Surveyor. The Surveyor inspected the spot and the vehicle and demanded documents from the complainant. After receiving the documents opposite party No.2 assured the complainant that the claim amount will be disbursed to First Appeal No.484 of 2016 3 him. However, the claim of the complainant was repudiated wrongly and illegally, vide letter dated 21.9.2015 on the ground that the vehicle was carrying passengers going for pilgrimage to Sri Darbar Sahib, Amritsar. Alleging deficiency in service on the part of the opposite parties, the complainant filed the present complaint before the District Forum for issuance of directions to them to pay ₹3,12,610/- along with interest at the rate of 18% per annum along with compensation and litigation expenses.
Defence of the opposite party:
4. In joint reply opposite parties took preliminary objections that there is no deficiency in service on their part. The complaint is false, frivolous and vexatious. The complainant has not come to the District Forum with clean hands. The vehicle was admittedly carrying passengers at the time of alleged accident. The insurance policy stipulates that there is a limitation as to use of the goods carrying vehicles and it reads as under:-
"Use only for carriage of goods. The policy does not cover (3) use for carrying passengers in the vehicles except employees etc."
The complainant has no cause of action. Complicated questions of law and facts are involved in the present complaint. On merits, it has been averred that after receiving the information about the accident survey and investigation were conducted by the opposite parties. The claim has rightly been repudiated being not tenable under the policy due to violation of the terms and conditions of the insurance First Appeal No.484 of 2016 4 policy. Denying all other allegations made in the complaint a prayer for dismissal of the complaint was made.
Finding of the District Forum:
5. Both the sides produced evidence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf, allowed the complaint, vide impugned order. Hence, this appeal. The opposite parties also produced survey report dated 20.12.2014 as Ex.OP1&2/10 by leading additional evidence before us.
6. I have heard learned counsel for both the sides and have carefully gone through the records of the case.
Contentions of the Parties:
7. It was vehemently argued by the learned counsel for the opposite parties that the goods carrying vehicle was taking Sangat for pilgrimage to Sri Darbar Sahib and the use of goods vehicle carrying passengers is unauthorized use. As per the terms and conditions of the Policy goods carrying vehicle was to be used only for carrying goods. There is a specific bar on the first page of the policy under the heading "Limitation to Use" (3) Use for carrying passengers in the vehicle except employees (other than the driver) not exceeding the number permitted in the registration document and coming under the purview of the Workmen's Compensation Act, 1923. As per the insurance policy the seating capacity is only 2+1 but the scores of persons were travelling in the vehicle. Therefore, the District Forum has wrongly and illegally held that the claim is payable at 75% of ₹3,12,610/- on non-standard basis by relying on First Appeal No.484 of 2016 5 the judgment of Amalendu Sahu mentioned in para no.8 of the impugned judgment. It was further argued that the vehicle was surveyed by the IRDA licensed surveyor at ₹1,31,814/-, vide report dated 20.12.2014, Ex.OP1&2/10, and therefore, even on non-
standard basis the District Forum could have awarded 75% of ₹1,31,814/- and not of ₹3,12,610/-. He relied upon judgment of Hon'ble National Commission reported in II(2015) CPJ 28 (NC) (NEW INDIA ASSURANCE CO. LTD. v. ISHWAR SINGH RATHORE) in which Tata Truck was carrying 34/36 passengers at the time of accident, though as per policy and registration certificate only three persons were allowed to sit in the vehicle. Therefore, repudiation was held justified.
8. Per contra, it was vehemently argued by the learned counsel for the complainant that the accident has not taken place due to the persons travelling in the vehicle as on that day it was raining heavily and the vehicle slipped into the ditch due to slippery road resulting into injuries to one passenger. It was further argued that neither the report of the Surveyor indicates how many passengers were there in the vehicle at the time of accident nor this is the stand of the opposite parties in the written reply. Otherwise also three passengers are permitted being employees employed with the truck. There is no nexus between the taking place of accident and the carrying of passengers in the vehicle. The judgment relied upon by the learned counsel for the appellants/opposite parties in Ishwar Singh Rathore's case (supra) is not applicable to the facts of the present case as in that case there were 34/36 passengers and in the First Appeal No.484 of 2016 6 present case there is nothing on the record to prove as to how many persons were travelling at the time of accident. As the damage did not occur due to carrying of passengers, so on this ground claim cannot be repudiated. He relied upon following judgments:-
i) 1996 (2) CPJ 28 (B.V. Nagaraju v. M/s Oriental Insurance Co. Ltd.);
ii) 2006(2) CPJ 144 (New India Assurance Co. Ltd. v.
Narayan Prasad Appaprasad Pathak); and
iii) 2008(4) CPJ 1 (National Insurance Co. Ltd. v. Nitin Khandelwal).
It was further argued that the District Forum has correctly passed the impugned order after appreciating the facts and the evidence on record. There is no ground for upsetting the same and the same is liable to be upheld.
Consideration of Contentions:
9. I have given my thoughtful consideration to the contentions raised by the learned counsel for both the sides.
10. Admittedly the vehicle was a goods carrying vehicle and was carrying some passengers at the time of accident. The claim is not with regard to the injuries to the passengers. It is only with regard to the damage to the vehicle in question. The vehicle slipped from the road in a ditch as on the date of accident there was heavy rain. The vehicle was badly damaged but only one passenger received injuries. It has not come on record how many persons were travelling in the vehicle at the time of accident. The opposite parties did not take this plea either in the repudiation letter or in the written First Appeal No.484 of 2016 7 reply or during the course of arguments before District Forum or before me. When there was no specific stand that how many persons were in the vehicle in question at the time of accident, it cannot be inferred that the accident has been caused due to carrying of passengers in the same. Be that as it may, fact remains that the accident has taken place due to sharp-curve and the road being slippery due to heavy rains; as a result of which the vehicle fell into ditch.
11. In B.V. Nagaraju's case (supra) there were 9 passengers travelling at the time of accident in the vehicle, which was also a Tata Truck and the following questions were posed before the Hon'ble Supreme Court:-
i) Whether the alleged breach of carrying humans in a goods vehicle more than the number permitted in terms of the insurance policy, is so fundamental a breach so as to afford ground to the insurer to eschew liability altogether?
ii) Whether the terms of the policy of insurance need be construed strictly or be read down to advance the main purpose of the contract as viewed by this Court in Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan and others, 1987 (2) SCC 654?
It has been observed by the Hon'ble Supreme Court in para no.7 & 8 as under:-
7. It is plain from the terms of the Insurance Policy that the insured vehicle was entitled to carry 6 workmen, excluding the First Appeal No.484 of 2016 8 driver. If those 6 workmen when travelling in the vehicle, are assumed not to have increased any risk from the point of view of the Insurance Company of occurring of an accident, how could those added persons be said to have contributed to the causing of it is the poser, keeping apart the load it was carrying. Here, it is nobody's case that the driver of the insured vehicle was responsible for the accident. In fact, it was not disputed that the oncoming vehicle had collided head-on against the insured vehicle, which resulted in the damage.
Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of owner, cannot be said to be such a fundamental breach that the owners should in all events, be denied indemnification. The misuse of the vehicle was somewhat irregular though, but not so fundamental in nature so as to put an end to the contract, unless some factors existed which, by themselves, had gone to contribute to the causing of the accident. In the instant case, however, we find no such contributory factor. In Skandia's case this Court paved the way towards reading down the contractual Clause by observing as follows:-
".....When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependants on the one hand and the equally plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by him by way of business activity, there is First Appeal No.484 of 2016 9 hardly any choice. The Court cannot but opt for the former view. Even if one were to made a strictly doctrinaire approach, the very same conclusion would emerge in obeisance to the doctrine of 'reading down' the exclusion clause in the light of the 'main purpose' of the provision so that the 'exclusion clause' highlighted earlier. The effort must be to harmonise the two instead of allowing the exclusion clause to snipe successfully at the main purpose. The theory which needs no support is supported by Carter's "Breach of Contract" vide paragraph 251. To quote:
Notwithstanding the general ability of contracting parties to agree to exclusion clauses which operated to define obligations there exists a rule, usually referred to as the "main purpose rule", which may limit the application of wide exclusion clauses defining a promise's contractual obligations. For example, in Glynn v. Margetson and Co., 1893 AC 351, 357, Lord Halsbury, L.C. stated: It seems to me that in construing this document, which is a contract of carriage between the parties, one must in the first instance look at the whole instrument and not at one part of it only. Looking at the whole instrument and seeing what one must regard... as its main purpose, one must reject words, indeed whole provisions, if they are inconsistent with what one assumes to be the main purpose of the contract.First Appeal No.484 of 2016 10
Although this rule played a role in the development of the doctrine of fundamental breach, the continued validity of the rule was acknowledged when the doctrine was rejected by the House of Lords in Suissee Altantique Societe d' Armement Maritime S.A. v. N.V. Rotterdamsche Kolen Centrale, [1997 1 AC 361]. Accordingly wide exclusion clauses will be read down to the extent to which they are inconsistent with the main purpose, or object of the contract."
8. The National Commission went for the strict construction of the exclusion clause. The reasoning that the extra passengers being carried in the goods vehicle could not have contributed, in any manner, to the occurring of the accident, was barely noticed and rejected sans any plausible account; even when the claim confining the damage to the vehicle only was limited in nature. We thus, are of the view that in accord with the Skandia's case, the aforesaid exclusion term of the insurance policy must be read down so as to serve the main purpose of the policy that is indemnify the damage caused to the vehicle, which we hereby do."
12. Hon'ble National Commission relying on this very judgment of Hon'ble Supreme Court in Narayan Prasad Appaprasad Pathak's case (supra) in which taxi-cab was authorized to carry 12+1 passengers whereas at the time of meeting the accident, it was carrying 26 passengers, has allowed the insurance claim on non- standard basis. So far as the judgment of Hon'ble National First Appeal No.484 of 2016 11 Commission in Ishwar Singh Rathore's case (supra) is concerned, there were 34/36 passengers travelling at the time of the accident. In the present case nothing has been brought on record how many passengers were there at the time of accident. So the facts of that judgment of Hon'ble National Commission are quite different from the facts of the present case. Moreover, it appears that the aforesaid judgment of Hon'ble Supreme Court in B.V. Nagaraju's case (supra) has not been brought to the notice of the Hon'ble National Commission.
13. So far as the plea of learned counsel for the appellants/opposite parties that even on non-standard basis the District Forum could have awarded 75% of ₹1,31,814/- (the loss assessed by the Surveyor) and not 75% of ₹3,12,610/- is concerned, admittedly the IDV of the vehicle at the time of insurance was ₹13,00,000/-. The complainant has placed on record the estimates of repairs from different repairers Ex.C-6 to Ex.C-10, the total of which comes to ₹3,12,610/-. The Surveyor in his survey report has taken into consideration these estimates but he has not mentioned as to how the amounts have been decreased disproportionately. No reasons for the same have been recorded.
14. Hon'ble National Commission in 2016(2) CLT 137 (National Insurance Co. Ltd. v. Rama Nanda) has held that if the Surveyor does not agree with the estimates given by the complainant, then he should unless go by the cost of the repair, if any, fixed by the manufacturer, obtain estimate of repairs from some other workshop and it is only the basis of such a quotation/estimate that he can First Appeal No.484 of 2016 12 reject the estimate obtained by the insured. It has been further held therein that alternatively the surveyor can make enquiry from some other workshops and note down the particulars of the workshop along with the charges quoted by it. In such a case, the repairer should ask the insured to get the vehicle repaired at the workshop which has provided a lower estimate of repair to the Surveyor. The assessment made by the Surveyor becomes wholly arbitrary and cannot be accepted. In the present case also the Surveyor has miserably failed to establish on record that he ever approached the other repairers to get the estimate of the repairs and assessed the loss at his own without explaining any reasons. Therefore, the District Forum rightly ordered the opposite parties to pay 75% of ₹3,12,610/- on non-standard basis to the complainant along with interest at the rate of 9% per annum. Compensation of ₹10,000/- and litigation expenses of ₹5,000/- are also rightly awarded by the District Forum.
15. In view of my above discussion, I do not find any merit in this appeal and the same is hereby dismissed. Costs are made easy.
16. The appellants had deposited a sum of ₹25,000/- at the time of filing of the appeal on 24.6.2016. They deposited another sum of ₹1,19,963/- on 12.9.2016 in compliance of the order dated 8.7.2016. Both these amounts, along with interest which has accrued thereon, if any, shall be remitted by the registry to the District Forum, after the expiry of 45 days of the sending of certified copy of the order to the parties. The complainant may approach the District Forum for the First Appeal No.484 of 2016 13 release of the above amount and the District Forum may pass the appropriate order in this regard.
16. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT August 08, 2017 Bansal