State Consumer Disputes Redressal Commission
M/S Cosmo Pharmacals Ltd. vs M/S Future General Insurance Company ... on 6 March, 2014
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No. 1476 of 2010
Date of institution : 19.08.2010
Date of decision : 06.03.2014
M/s Cosmo Pharmacals, B-1, 1446/10 B, Hambran Road, Y-Block
Crossing, Ludhiana, Tehsil and District Ludhiana, through its partner,
Shri Punit Jain.
......Appellant-Complainant
Versus
1. M/s Future General India Insurance Company Limited, 001,
Trade Plaza, 414, Vir Sabarkar Marg, Prabha Devi, Mumbai-
400 025 through its Chairman/M.D./Manager Grievances
Department.
2. M/s Future General India Insurance Company Limited, Sandhu
Tower, IInd Floor, near Anzal Plaza, Gurdev Nagar, Ludhiana,
through its Branch Manager.
......Respondents- Opposite Parties
First Appeal against the order dated
13.7.2010 of the District Consumer
Disputes Redressal Forum, Ludhiana.
Quorum:-
Hon'ble Mr. Justice Gurdev Singh, President.
Shri Baldev Singh Sekhon, Member.
Mrs. Surinder Pal Kaur, Member.
Present:-
For the appellant : Shri C.L. Verma, Advocate. For the respondents: Shri Rahul Sharma, Advocate. JUSTICE GURDEV SINGH, PRESIDENT :
The complainant firm M/s Cosmo Pharmacals purchased one vehicle make Tata ACE for which registration No.PB-10-CR-0903 First Appeal No.1476 of 2010. 2 was allotted and the same was got insured with the respondents/opposite parties by declaring the insurance value as Rs.2,63,786/- and the cover note issued by them was valid from 27.5.2009 to 26.5.2010. On 2.10.2009 this vehicle met with an accident in which the front portion thereof was damaged. Intimation about the accident and the loss to the vehicle was given to the opposite parties, who deputed Sandeep Puri, Surveyor and Loss Assessor, to assess the loss caused to the vehicle. The claim was submitted to the opposite parties, along with the documents, but the same was declared as "no claim", vide letter dated 8.12.2009.
Feeling aggrieved the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986 (in short, "the Act"), before the District Consumer Disputes Redressal Forum, Ludhiana (in short, "District Forum"). He alleged therein that the accident took place when a stray cow came in front thereof and Gabbar Singh, Driver, could not control the same. That driver on account of fear that the new vehicle had been damaged in the accident escaped after making a call to the partner of the complainant-firm. When that partner came to the spot, he found that there was traffic jam on account of the accident and the people started putting pressure upon him to remove the vehicle from the spot. Accordingly he towed this vehicle to the workshop of Dada Motors at Jalandhar Bye Pass, Ludhiana, for repairs. Every effort was made to locate the driver but he could not be located. It was only after the expiry of one and a half month that he was traced and when the reason of the accident was disclosed, DDR No.17 dated 17.11.2009 was got lodged by that First Appeal No.1476 of 2010. 3 driver in PS-Division No.5, Ludhiana and intimation was also given to the opposite parties. The Surveyor and the Loss Assessor so appointed by the opposite parties visited the said workshop and took the photographs of the damaged vehicle and assured that he would assess the loss and the Insurance Company shall pay the amount of repairs to be incurred by him. He was asked to deposit some amount with the workshop and he accordingly deposited Rs.10,000/- on account of part payment towards repairs charges. However, the workshop authorities told him that they would start repairs only after getting full amount from the Insurance Company. He furnished all the documents as per the directions of the Surveyor to the Insurance Company. He submitted an estimate to the tune of Rs.1,30,000/- approximately to the Surveyor. He visited the Surveyor and the opposite parties a number of times but they put off the matter on one lame excuse or the other. At the time the vehicle was purchased, the registration charges etc. were received from him by the dealer/financer for preparing the registration certificate. He had been approaching them to enquire about the registration of the vehicle and in the meantime the accident took place. Therefore, the claim cannot be disallowed on the ground that the vehicle was not having registration number. It was not possible for him to give the facts of the accident to the policy without the same having been disclosed by the driver and that resulted in the late intimation to the police and the opposite parties. He got repaired the vehicle from his own pocket and submitted the bill of Rs.1,16,226/-, which was never reimbursed by the opposite parties. During the period the vehicle First Appeal No.1476 of 2010. 4 remained in the workshop, he had been hiring other vehicle for doing his duty and incurred expenses of Rs.20,000/- in respect thereof. On account of the failure of the opposite parties to pay the insurance amount, he suffered mental tension, harassment, loss of time and loss of money, for which he is entitled to a compensation of Rs.10,000/-. He made a prayer in the complaint to direct the opposite parties to pay Rs.1,46,228/- on account of deficiency in service on their part.
2. The complaint was contested by the opposite parties, who filed joint reply. They admitted therein that the insurance policy was obtained from them after making the payment of premium and that after intimation about the loss to the vehicle was given, they appointed the Surveyor and Loss Assessor and that ultimately the claim of the complainant was disallowed as "no claim". While denying the other allegations made in the complaint, they pleaded that as per one of the conditions of the insurance policy, the notice was required to be given to them immediately upon the occurring of any accident, loss or damage and that condition was never complied with by the complainant. In addition to that the complainant was also required to give intimation about the accident to the police immediately but he failed to do so. The alleged accident took place on 2.10.2009 whereas the police was informed on 17.11.2009 and the information was given to them on 1.12.2009. Even the estimate of repairs was prepared on 3.12.2009. The temporary registration of the vehicle had already expired on 29.6.2009 and the same was being driven without any registration number and fitness certificate. First Appeal No.1476 of 2010. 5 The complainant, thus, committed the violation of the provisions of law and the terms and conditions of the insurance policy. He was called upon, vide letter dated 3.12.2009 to provide the documents and the information, detailed in the letter, which were required for processing and settling the claim but he failed to provide those documents and information. He only furnished partial information and incomplete documents and after scrutinizing the same, his claim was repudiated as "no claim" and the grounds thereof were mentioned in the letter dated 8.12.2009. The Assessor so appointed by them after inspecting the vehicle and collecting the documents prepared the report dated 17.12.2009 assessing the loss to the tune of Rs.88,000/-. There was no deficiency in service or negligence on their part in repudiating the claim of the complainant. He has not come to the court with clean hands and has concealed the material facts. He is estopped by his own act and conduct from filing the complaint. The complainant is not a 'consumer' as defined under the Act as this firm is a commercial organization and the vehicle in question was commercial vehicle and was being used for commercial purpose for earning profits. The complaint is not maintainable. They prayed for the dismissal thereof.
3. 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 dismissed the complaint, vide order dated 13.7.2010. Aggrieved by that order, the complainant has preferred the present appeal.
First Appeal No.1476 of 2010. 6
4. We have heard the learned counsel for both the sides and have carefully gone through the records of the case.
5. It was submitted by the learned counsel for the complainant that the complainant successfully proved on the record the circumstances, as a result of which he was prevented from lodging any complaint with the police regarding the accident or giving intimation thereof to the opposite parties. It stands proved from that evidence that Gabbar Singh, who was driving the vehicle, had escaped from the spot and he could be traced only one and a half month after making strenuous efforts. It was in the exclusive knowledge of that driver as to how the accident took place and when he was traced, the report was got lodged with the police and intimation was also given to the opposite parties. Therefore, the rightful claim of the complainant could not have been repudiated on the ground that there was delay in giving intimation regarding the accident. He further submitted that the non-registration of the vehicle with the registering authority can amount to violation of the provisions of the Motor Vehicles Act, 1988 but in the absence of any terms and conditions to that effect in the insurance policy it cannot be said that there was any violation on the part of the complainant. It is now well settled that violation of the provisions of the Motor Vehicles Act, 1988, cannot be said to be the violation of the terms and conditions of the insurance policy. Even if it is believed that there was no fitness certificate of the vehicle, even then the claim of the complainant should have been allowed on 'non-standard basis' to the extent of 75%. The opposite parties were not justified in First Appeal No.1476 of 2010. 7 repudiating the claim as "no claim". No doubt, the Surveyor assessed the loss to the vehicle at Rs.88,000/-, vide his report Ex.R1 but from the evidence produced by the complainant, it stands proved that he paid Rs.1,16,226/- to Dada Motors for repairs of the vehicle, vide Invoice Ex.C-7. Therefore, he was entitled to that amount as the insurance amount under the policy. The opposite parties are guilty of negligence in repudiating the rightful claim of the complainant on flimsy grounds and that amounts to deficiency in service on their part, for which the complainant is entitled to the compensation as claimed in the complaint. He prayed that the appeal be allowed, order of the District Forum be set aside and the above said directions be issued to the opposite parties.
6. On the other hand, it was submitted by the learned counsel for the opposite parties that there was violation of the fundamental terms and conditions of the insurance policy as the complainant did not give any intimation to the opposite parties/Insurance Company immediately after the accident. There was no registration number and fitness certificate of the vehicle at the time of the accident, which is not only a violation of the provisions of the Motor Vehicles Act, 1988, but also the violation of the terms and conditions of the policy. The claim of the complainant was rightly repudiated on these grounds and there is no ground for upsetting the well reasoned findings recorded by the District Forum in favour of the opposite parties.
7. Admittedly, the vehicle was purchased and insurance cover was obtained by the complainant-firm on 27.5.2009. There was no First Appeal No.1476 of 2010. 8 permanent registration number on the date of accident, which took place on 2.10.2009. The temporary registration number was valid for one month and by not getting the permanent registration number, the complainant committed the violation of the provisions of the Motor Vehicles Act, 1988. Admittedly, the vehicle was a pick-up van and was supposed to have a fitness certificate. No such fitness certificate was ever proved on the record by the complainant, which also violated the provisions of the Motor Vehicles Act, 1988.
8. The opposite parties proved on record the Certificate of Insurance-cum-Policy Schedule as Ex.R-16. The Standard Form for commercial vehicle policy is proved on the record as Ex.R-17. These documents contain a number of clauses but none of the clause lays down that the registration of the vehicle was mandatory for payment of the claims under the insurance policy. The District Forum while dealing with this point referred to the following judgments:-
i) Paramjeet Kaur v. New India Assurance Co. Ltd.
[III(2009) CPJ 329 (Uttarakhand Commission,
Dehradun)];
ii) United India Insurance Co. Ltd. & Ors. v.
G.Kodhainachair [I(2005) CPJ 86 (Tamil Nadu
Commission, Chennai)];
iii) United India Insurance Co. Ltd. v. A.V. Arasu [I(2006)
CPJ 266 (Tamil Nadu Commission, Chennai);
First Appeal No.1476 of 2010. 9
iv) Aeroplot Soviet Airlines v. United India Insurance Co.
Ltd. [IV(2006) CPJ 62 (National Commission, New Delhi).
9. In Aeroplot Soviet Airlines' case (supra) Hon'ble National Commission after discussing Section 39 of the Motor Vehicles Act, 1988, which deals with the necessity for registration and Section 56, which deals with the certificate of fitness of transport vehicle, came to the conclusion that these two Sections make it abundantly clear that the vehicle could not have been driven in any public place unless the provisions of Chapter-14 of the Motor Vehicles Act, 1988, were observed.
10. In Paramjeet Kaur's case (supra) Uttarakhand State Commission by relying upon the judgment of the Hon'ble National Commission in Aeroplot Soviet Airlines' case (supra) came to the conclusion that where the provisions of the Motor Vehicles Act, 1988, are violated, the insured loses his rights to have any sort of claims, which may be available to him in the form of social protection.
11. Similarly in G. Kodhainachair's case (supra), the question cropped up before Tamil Nadu State Commission as to whether the insurance claim in respect of the vehicle, which was not registered under the Motor Vehicles Act, 1988, and for which there was no fitness certificate under that Act can be allowed? It was held therein that the complainant had not got the vehicle registered nor was having any fitness certificate. It was held that the complainant having taken a hazard knowing well that he sought not to have put First Appeal No.1476 of 2010. 10 the vehicle on road without the fitness certificate has thus taken a chance and it is too late in the day for him now to turn around and say that the repudiation is improper. The accident had occurred while the vehicle was put to use in contravention of the provisions of the Motor Vehicles Act, 1988, and in breach of conditions of permit and, therefore, the complainant cannot succeed in maintaining the claim much less to make a profit out of his own error of omissions and commissions. In A.V. Arasu's case (supra) it was held by the Tamil Nadu State Commission that where the vehicle is being plied in contravention of the Motor Vehicles Act, 1988, without fitness certificate, the repudiation of the claim by the Insurance Company on that ground was justified.
12. However, on the same point, it was held by the Hon'ble National Commission in HDFC Chubb General Insurance Co. Ltd. v. Ila Gupta & Ors.[2007(1) CPC 432 (NC)] as under:-
" As far as getting a Permanent Registration Number is concerned, admittedly, for want of a good Registration Number, more time was taken and the respondent got it registered later. In the present case, non registration of the vehicle did not lead to this accident. It was just a damage arising out of a car falling into the pothole. It is not the case of the petitioner that they were not aware of the car being registered under the Temporary Registration Number while the policy was issued. An amount of Rs.81,476/- was paid as a premium for getting the First Appeal No.1476 of 2010. 11 car comprehensively insured. As it was very much within the knowledge of the petitioner Insurance Company that the policy could not continue to be valid due to non-provision of the Permanent Registration Number, they should have cancelled the policy in order to make the respondent take another policy or revalidate the same according to the policy conditions or whatever that was required to be done. This has not been done by the petitioner Insurance Company.
The premium amount is not a meagre amount and the services that should have been rendered by the petitioner are not sufficient enough for the respondent to bring it within his knowledge that there is a lapse on his part. If they were so strict about the said conditions, knowing fully well that the Temporary Registration Number has not been made permanent, they should have brought it into the knowledge of the respondent and cancelled the policy within a reasonable time, which has not been done. Taking hefty premium of Rs.81,476/- from the respondent and thereafter repudiating the claim on flimsy grounds is not justifiable."
13. This very point also came up for consideration before the Hon'ble National Commission in Revision Petition No.1503 of 2004 decided on 29th of October 2007 (G. Kothainachiar v. The Branch First Appeal No.1476 of 2010. 12 Manager, United India Insurance Co. Ltd.). A clear distinction was made in that case about the violation of the provisions of the Motor Vehicles Act, 1988, and the violation of the terms and conditions of the insurance policy. It was held therein that the liability of the Insurance Company is twofold; i) statutory liability as provided under the Motor Vehicles Act, and (ii) liability to the insured as per the terms of the contract. The Insurance Company cannot repudiate the claim when there is no breach of the terms of the policy because the insurance is a matter of contract between the parties and the parties are governed by the terms of the contract itself. While recording that finding reference was made to the decision of the Hon'ble Apex Court rendered in Oriental Insurance Co. Ltd. v. Sony Cheriyan [(1999) 6 SCC 451 (p. 455) wherein it was observed as under:-
"17. The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy. That being so, the insured has also to act strictly in accordance with the statutory limitations or terms of the policy expressly set out therein."First Appeal No.1476 of 2010. 13
14. Reliance was also placed on another judgment of Hon'ble Apex Court in New India Assurance Co. Ltd., Shimla vs. Kamla & Ors. [(2001) 4 SCC 342 at page 350 wherein it was observed as under:-
"25. The insurer and the insured are bound by the conditions enumerated in the policy and the insurer is not liable to be insured if there is violation of any policy condition. But the insurer who is made statutorily liable to pay compensation to third parties on account of the certificate of insurance issued shall be entitled to recover from the insured the amount paid to the third parties, if there was any breach of policy conditions on account of the vehicle being driven without a valid driving licence."
Ultimately, it was held that the Insurance Company can repudiate the claim of the insured when there is breach of the policy condition/conditions; and, the breach was fundamental or material so as to vitiate the insurance contract.
15. The question arises, whether the non-obtaining of the Permanent Registration Number or the Fitness Certificate in any way contributed towards the accident? It is the case of neither parties that the accident had taken place on account of some defect in the vehicle which could have rendered the fitness certificate to be material. When such is the position and when there was no term in the insurance policy that the breach of the provisions of the Motor Vehicles Act, 1988, was also to be made a ground for repudiation, First Appeal No.1476 of 2010. 14 the opposite parties were not justified in repudiating the claim of the complainant on the ground that there was no Registration Certificate or Fitness Certificate. Even if it was so, the claim was to be allowed on Non-Standard Basis to the extent of 75% of the assessed amount of loss.
16. It is a fact that the intimation regarding the accident was given to the opposite parties almost after two months of the accident. The complainant tried to plead and prove on record that there was sufficient cause for the delay as the driver had escaped from the spot and the facts leading to the accident were in his exclusive knowledge and when he was traced, the DDR was got lodged and intimation was given to the opposite parties. The detailed facts might not have been in the knowledge of the complainant but it was very easy for it to intimate the loss to the vehicle. As per the above said insurance policy Ex.R-16 and the Fundamental Conditions Ex.R17, notice was required to be given in writing to the Insurance Company immediately upon the occurrence of any accidental loss or damage. In NEW INDIA ASSURANCE CO. LTD. v. DHARAM SINGH & ANR. [III(2006) CPJ 240 (NC)], there was delay in lodging the FIR and sending the claim intimation to the insurer. It was held therein that it was clear violation of the policy conditions and the Insurance Company was justified in repudiating the claim on that ground and such repudiation does not amount to any deficiency in service on the part of the Insurance Company. Similarly in NATIONAL INSURANCE CO. LTD. & ANR. v. YODEVA SYNTHETIC PRIVATE LTD. [IV(2006) CPJ 210 (NC)] there was First Appeal No.1476 of 2010. 15 over three and a half months delay in giving intimation regarding the episode of theft to the Insurance Company and it repudiated the claim of the insured on that ground. It was held by the Hon'ble National Commission that the delay deprived the insurer to appoint the surveyor in time or to carry out inspection on the spot and the claim was rightly repudiated by it and the same does not amount to any negligent or deficiency in service on its part.
17. There is a purpose behind such a condition of intimating the factum of accident and loss to the Insurance Company immediately. On the one hand, it provides an opportunity to the Insurance Company to ascertain the facts regarding the accident and assess the loss to the vehicle by appointing Investigator and the Surveyor. On the other hand, it rules out the possibility of concoction of the version by the insured by the passage of time. There was not a short but inordinate delay in the present case in giving intimation to the opposite parties regarding the damage/loss to the vehicle. In view of the breach of the material condition of the insurance policy, the opposite parties were justified in repudiating the claim of the complainant. The claim was rightly repudiated on that ground and the finding recorded by the District Forum to that effect against the complainant is upheld.
18. From our above discussion, we conclude that there is no merit in this appeal and the same is hereby dismissed. However, no order is made as to costs.
19. The arguments in this case were heard on 25.2.2014 and the order was reserved. Now, the order be communicated to the parties. First Appeal No.1476 of 2010. 16
20. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE GURDEV SINGH) PRESIDENT (BALDEV SINGH SEKHON) MEMBER (MRS. SURINDER PAL KAUR) March 06, 2014 MEMBER Bansal