State Consumer Disputes Redressal Commission
New India Assurance Company Limited vs M/S Vij Agro Exports on 14 July, 2017
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.74 of 2017
Date of Institution : 02.02.2017
Order reserved on: 12.07.2017
Date of Decision : 14.07.2017
The New India Assurance Co. Ltd., Divisional Office, Near Uddam
Singh Chowk, Ferozepur City through its Manager Tarsem
Chand, New India Assurance Co. Ltd., SCO No.36-37, Sector
17A, Chandigarh.
.....Appellant/Opposite party
Versus
M/s Vij Agro, Exports Pvt. Ltd., Mallanwala Road, Village
Bahadur Wala, Ferozepur through its Partner Tarsem Vij son of
Shri Kashmiri Lal Vij.
.....Respondent /complainant
Appeal against order dated
25.11.2016 passed by the District
Consumer Disputes Redressal
Forum, Ferozepur.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member.
Smt. Surinder Pal Kaur, Member Present:-
For the appellants : Sh. Vinod Gupta, Advocate For the respondent : Sh. Vinod Khunger, Advocate ............................................
J.S. KLAR, PRESIDING JUDICIAL MEMBER :-
Challenge in this appeal by appellant is to order dated 25.11.2016 of District Consumer Disputes Redressal Forum Ferozepur, directing the appellant to pay amount of F.A. No. 74 of 2017 2 Rs.6,02,965.50/- being 75% of Rs.8,03,954/- loss assessed along with interest @ 9% per annum from date 05.04.2016 till its realization and further to pay Rs.3000/- as composite amount of compensation and litigation expenses. The appellant of this appeal is opposite party No.1 in complaint before District Forum Ferozepur and respondent of this appeal is complainant therein and they be referred, as such, hereinafter for the sake of convenience.
2. Shortly stated, the facts of the complaint filed under Section 12 of Consumer Protection Act 1986 (in short 'Act') by complainant against OPs is that it is one of the partners of the firm. Shri Tarsem Vij is one of its partner, who is competent to file the instant complaint. Complainant-firm obtained Marine Cargo open policy from OP No.1 for Rs.9.5 crore, which was valid from 23.12.2014 to 22.12.2015. The limit per location is Rs.30 lacs, as set out in the policy. The complainant paid premium for this policy to OP No.1 at the time of its purchase. The complainant loaded 600 bags of rice of Rs.19,00,979/- from the premises of rice mill for sending them to Delhi by truck bearing registration No.PB-46M-0571. A copy of builty No.421 dated 26.12.2014 is attached on the record. Complainant submitted copy of Marine Declaration form regarding dispatch of rice from Ferozepur to Delhi on the declaration Form No.509680 dated 26.12.2014 of OP No.1 at 10:15pm, showing that value of the rice loaded was Rs.19,00,979/- on that day. The goods could be F.A. No. 74 of 2017 3 dispatched, vide single carrying limit of Rs. 30 lacs per location. There was no limit of weight of goods detailed in the policy. Unfortunately, the truck loaded with rice overturned near Talwandi Bhai, rice was mixed with diesel to the tune of Rs.12 lacs and damage to rice took place to that extent in its capsizing of truck. Delhi-Amritsar Road Carrier issued certificate to this effect on 10.04.2015 stating the value of rice as Rs.10 lacs, although damage occurred to rice was of Rs.12 lac. The complainant gave information to OP No.1 about this loss. Surveyor was appointed by OP for assessing the loss, who visited the spot as well. The assessed value report of the value by surveyor is with OP No.1. The OP rejected the claim of complainant vide letter dated 15.09.2015 on frivolous grounds. Complainant has filed complaint against the OP praying that OP be directed to pay the loss of Rs.12,26,417/- including advance freight of Rs.35,394/- and 10% interest from the date of lodging claim till actual payment. Complainant further prayed for Rs.2,00,000/- as compensation for mental harassment and Rs.11,000/- as cost of litigation.
3. Upon notice, OP No.1 and 2 filed joint written reply raising legal objections that complaint is false, frivolous and vexatious. Complex questions of law and facts are involved in this case, which cannot be adjudicated in summary procedure by Consumer Forum. Complaint is alleged to be non-maintainable by the OPs. It was further averred that the claim of the complainant was repudiated on account of breach of the F.A. No. 74 of 2017 4 provisions of Motor Vehicles Act, as truck was overloaded at the time of capsizing. The loading capacity of the truck was 160 quintal, but the truck was carrying 298.38 quintal of rice, which was clear cut violation of provisions of Motor Vehicle Act. Overloading is strictly prohibited under the Motor Vehicle Act and Rules framed thereunder. It was further pleaded by OP that exclusion clauses of insurance policy in Clause 4.1, 4.3 and 5.1 are applicable in this case. Clause 4.1 deals with loss, damage or expenses attributable to willful misconduct of assured, Clause 4.3 deals with loss, damage or expenses caused by insufficiency or unsuitability of packing or preparation of the subject matter assured and Clause 5.1 thereof deals with, that in no case shall this insurable cover loss, damage or expenses arising from unfitness of vehicles, vessel, craft, conveyance, container or a lift van for the safe carriage of the subject matter insured. On merits, it was averred by OPs that as per documents supplied by complainant on 26.12.2014, 600 Bags of Basmati Rice Steam weighing 298.38 quintal worth Rs.19,00,279/- were sent to business premises to Delhi through above truck. It was denied by OPs for want of knowledge, as to whether the truck belonged to Delhi Amritsar Road Carrier. Builty number is also admitted by the OPs along with Marine Declaration Form Submission. This fact was denied that goods carrying limit of Rs.30 lac per location could be dispatched, meaning thereby, the goods of Rs.30 lac could not be dispatched in one truck. The OPs further pleaded F.A. No. 74 of 2017 5 that surveyor assessed the loss to the tune of Rs.8,03,954/- and not Rs.12 lacs, as pleaded by complainant. Hence, OPs prayed for dismissal of the complaint.
4. The complainant tendered in evidence his affidavit as Ex.C-1 along with documents Ex.C-2 to C-11 and closed the evidence. As against it, OPs tendered in evidence affidavit of Sh. D.D. Aggarwal Divisional Manager, the New India Assurance Company Limited, Divisional Office Ferozepur City as Ex.OP1-2/1 along with documents Ex.OP1-2/2 and closed the evidence. On conclusion of evidence and arguments, District Forum Ferozepur, accepted the complaint of complainant, vide order dated 25.11.2016 directing the appellant to pay amount of Rs.6,02,965.50/- on non-standard basis being 75% of Rs.8,03,954/- loss assessed along with interest @ 9% per annum from the date 05.04.2016 till realization and further to pay Rs.3000/- as composite amount of compensation and litigation expenses. Aggrieved by above order of the District Forum Ferozepur, OP No.1 now appellant preferred this appeal against the same.
5. We have heard learned counsel for parties at considerable length and have also gone through the record of the case. Sh. Vinod Gupta, counsel for appellant contended that loading capacity of Rs.160 quintal, but the actual load in the truck was 298.38 quintal of rice, which amounted to clear cut violation of the policy and the provision of law and overloading was the F.A. No. 74 of 2017 6 direct and proximate cause of accident in this case. It was further argued that as per circular dated 03.01.2013, where it was clearly mentioned that wherever there is excessive overloading of 20%, which apparently strains the vehicle to function properly, the claim shall be repudiated. The submission of counsel for appellant is that the order of District Forum is erroneous. On the other hand, counsel for respondent in this appeal submitted that District Forum correctly settled the claim to non-standard basis, on the basis of authorities of the Apex Court, as cited in the judgment. It was contended that when the violation is not fundamental in nature and there is violation of the policy terms and conditions, the claim should be settled on non-standard basis. The guidelines for insurance companies for setting a claim on non- standard basis by GIC General Insurance Company are reproduced as under, as detailed in the order of the District Forum:-
Sr. Description Percentage of Settlement
No.
(i) Under declaration of Deduct 3 years difference in
licensed carrying premium from the deduct 25%
capacity. of claim amount, whichever is
higher.
(ii) Overloading of vehicles Pay claims not exceeding
beyond licensed carrying
75% of admissible claim.
capacity.
(iii) Any other breach of Pay upto 75% of admissible warranty/condition of amount.
policy including limitation as to use.
F.A. No. 74 of 2017 7It is detailed in the above guidelines issued by GIC that overloading of vehicle and the licensed carrying capacity is to be settled at 75% of admissible claim. The counsel for appellant relied upon one letter dated 03.01.2013, this letter was not produced on the record before the District Forum, which has been produced before us in appeal. We find that this letter is typed letter, it is addressed by S. Ramabhadran, General Manager. On the other hand, National Commission held in New India Assurance Co. Ltd. Vs. Narayan Prasad Apparprasad Pathak reported in 2006(2) Consumer Protection Cases 33-34 that vehicle at the time of accident was carrying passengers, more than permitted by rules, whole amount of insurance cannot be granted. Claim is liable to be settled on non-standard basis i.e. 75% of the total amount of loss. As per this authority of the National Commission, the claim is liable to be settled on non- standard basis in the case of overloading of the vehicle. Apex Court has also held in Amalendu Sahoo Vs. Oriental Insurance Co. Ltd. reported in 2010(1) CPC 653 that when there is violation of policy, insured should pay 75% of total amount as non-standard basis. Apex Court has also held in National Insurance Co. Ltd. Vs. Nitin Khandelwal reported in 2008(3) CPC 559-560 that where there is violation of condition of policy as to the nature of the use of vehicle, the law is, thus, settled that when there is violation of the policy, the claim is liable to be settled on non-standard basis.
F.A. No. 74 of 2017 8
6. The surveyor-Dinesh K. Goyal assessed the loss of Rs. 8,03,954/- vide report Ex. OP1-2/2 on the record. The report of the surveyor also carries weightage, because Surveyor is appointed independently under Insurance Act and his appointment is approved by Insurance Regulatory Development Authority, which is a statutory body. As per law laid down in the above authorities, the appellant cannot derive any benefit from this unexhibited letter dated 03.01.2013, sought to be brought to our notice. It is the contract entered into between the parties, which has to be followed strictly by them.
7. The insured amount was Rs. 9.5 crore lac and the limit for location is Rs.30 lacs. The claim of the complainant cannot be repudiated in toto by the OPs. It is liable to be settled on non-standard basis on account of breach of the policy on point of overloading, which is not held to be fundamental breach in nature by the Apex Court in the above authorities. The law laid down by Apex Court and National Commission has binding force on us. Consequently, we are in agreement with the findings of District Forum, because if surveyor-Dinesh Kumar Goyal, found the case of the complainant to be genuine one, the same has to be acted upon by us. The order of the District Forum is, thus, affirmed in this appeal being without any flaw or foible. As a corollary of our above discussion, there is no merit in the appeal and the same is hereby dismissed.
F.A. No. 74 of 2017 9
8. The appellant had deposited the amounts of Rs.25,000/- with this Commission at the time of filing the appeal and Rs.4,69,897/- subsequently. Both these amounts with interest, which accrued thereupon, if any, be remitted by the registry to the respondent/complainant by way of a crossed cheque/demand draft after the expiry of 45 days, subject to stay order, if any. Remaining amount if any due shall be paid to complainant by OP within 45 days from the date of receipt of certified copy of the order.
9. Arguments in this case were heard on 12.07.2017 and the order was reserved. The certified copies of order be communicated to the parties, as per rules.
10. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (Surinder Pal Kaur) MEMBER July 14 , 2017 DB