State Consumer Disputes Redressal Commission
The New India Ass. Co Ltd vs Sureshkumar M Thakkar on 31 August, 2023
Details DD MM YY
Date of Judgment 31 08 2023
Date of filing 04 03 2020
Duration 27 05 03
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION
GUJARAT STATE, AHMEDABAD.
Court No. 4
First Appeal No.238/20
The New India Assurance Co. Ltd.
Ashirwad Complex, Plot No.334,
Ward No. 12-B, Gandhidham-Kachchh,
Having its regional office
At Popular House, Ashram Road,
Ahmedabad-380009. ...Appellant
Vs
Sureshkumar Manilal Thakkar
Aged adult, Business Truck
Driving & Transportation,
Residing at 3-4, Shivkrupa Building,
New Station Road,
Bhuj-Kutchchh ...Respondents
CORAM: Hon'ble Mr. R. N. Mehta, Presiding Member
Hon'ble Ms. P. R. Shah, Member APPEARANCE: A. O. Chudgar, Ld. Adv. for the appellant Jenish N Rupareliya, Ld. Adv. for the respondent.
Order by Hon'ble Ms. P. R. Shah, Member.
1. The present appeal is filed by the appellant being aggrieved by and dissatisfied with the order passed by the Ld. District Consumer Disputes Redressal Commission of Bhuj-Kutch dated 27.01.2020 in complaint no.272/2017.
2. When the matter was called out Ld. Adv. A. O. Chudgar for the appellant was present and none present for the respondent. Impugned judgment
3. The Ld. District Commission partly allowed the complaint and directed the opponent to pay to the complainant from the date of Akshay A-238-20 Page 1 of 9 the complaint Rs.10,76,400/- at 9% interest, and Rs.2,500/- for litigation cost and Rs.2,500/- for mental harassment.
4. Facts of the case The complainant was the owner of trailer No.GJ-12-AZ-4285 and insured with the policy of the opponent's insurance company by commercial vehicle policy no.21160031160100030281 for the period from 19.01.2017 to 18.01.2018. The trailer met with an accident on 15.02.2017 and police complaint was filed on the same day. The insured had informed the appellant insurance company regarding the accident and the insurance company had appointed surveyor for the spot survey. He has submitted his report to insurance company on 17.02.2017. The insured had submitted the claim form on 02.03.2017 with necessary documents. After considering the documents submitted by the insured, the insurance company had repudiated the claim of the complainant on 16.10.2017 on the ground that, there was breach of terms and conditions of the policy, as two unauthorized passengers were travelling in the goods vehicle. Alleging unfair trade practice and deficiency in service, the insured had filed the complaint before the Ld. District Commission.
Arguments of the appellant/original opponent
5. The Ld. Adv. for the appellant contends that the order of the Ld. District Commission is contrary to law, against the provision of statute and principle of natural justice. It is contended that the Ld. District Commission has erred in directing the payment of Rs10,76,400/- even though the surveyor has assessed the net payable amount at Rs.8,59,873/-. It is further contended that the Ld. District Commission has failed to consider that there was a breach of terms and conditions of the policy, as it was a goods vehicle which had carrying capacity of only 1 person i.e. the driver and that there were 2 additional gratuitous passengers at the time of the accident. The Ld. Adv. submits that even if non-standard Akshay A-238-20 Page 2 of 9 claim at 75% has to be granted then it would come to Rs.6,44,904/- (75% of Rs.8,59,873/-). The Ld. Adv. therefore has prayed to quash and set aside the order of the Ld. District Commission.
Merits of the case
6. The undisputed facts of the case are that the complainant's vehicle was insured with the appellant insurance company and during the existence of the policy, the complainant's vehicle met with an accident and the appellant had deputed the surveyor to assess the loss. The sole ground of repudiation of complainant's claim is that at the time of accident, there were three persons travelling in the insured vehicle as against permissible capacity of one person. The relevant excerpts from the repudiation letter at page 72-73 are reproduced below:
"Further on receipt of the claim, this office carried out survey through M/s. A S Rathod, Surveyors & Loss Assessor of Ahmedabad, who submitted the final survey report dated 18.04.2017 conforming the loss to the insured vehicle to the tune of Rs. 10,76,400/- against the estimate of Rs. 26,47,504/-& final assessment Rs. 9,87,330/-. The surveyor also considered the re- inspection report of Mr.Nikunj Nayak, Surveyor, Valuer& Loss Assessor of Gandhidham dated 16.05.2017. The surveyor noted the vehicle was loaded with S-Coal 27000 KG as per road challan No. 4016 dated 15.02.2017 & 3 persons traveling in the vehicle at the time of accident of which 2 person reported died & 1 person reported injured.
The papers annexed with claim form & report including the photographs, Police Papers etc., which have been carefully examined. On close scrutiny, it is found that the FIR is registered with Anjar Police Station as CR-1 No. 20/2017 dated 16.02.2017 Under Section 279, 337 & 304(A) of Indian Penal Code R/w Section 177, 184, 134 of M.V. Act by Sachin Bipinchandra Majethiya against the driver of Truck No. GJ-12-AV-6252, the police drew Panchnama of place & confirm damage to the vehicle & traveling of 3 persons & death of ShriRajubhai & ShriJitendra Bindal in the accident. The policy issued by this office provides sitting capacity of 1 person - including driver. The travelling of more person in the vehicle & death thereto is not covered under the policy issue as above said."Akshay A-238-20 Page 3 of 9
7. The major issues that need adjudication are that: (1) Was there a fundamental breach of policy condition by the insured as the vehicle carried more passengers than allowed and (2) What is the quantum of loss that the complainant is entitled to?
8. The complainant denied that there was more than 1 passenger in the vehicle at the time of accident. This contention of the complainant was countered by the appellant by relying on the surveyor's report, FIR and Panchnama wherein it is stated that there were 3 passengers in the vehicle. The complainant could not rebut this ground taken by the appellant with any cogent evidence.
9. From the facts of the case it emerges that the complainant's vehicle had met with an accident when a truck came from the wrong side and hit it. The complainant's vehicle was badly damaged in the accident. That there was loss is not in dispute. It is also not denied that the complainant's vehicle was insured by the appellant at the time of the accident. That there were 3 passengers in the vehicle is established by the FIR, the Panchnama and the surveyor's report. However, it is not established by the appellant insurer that how the extra passengers have contributed in any manner to the said accident. The appellant has not led any evidence to prove that having 2 extra passengers in the goods vehicle has increased its liability towards own damage. According to our view although having 2 passengers more than allowed as per policy terms and conditions, is a breach of policy but not a fundamental breach where the appellant can deny its liability in toto. According to our opinion the appellant has taken a hyper technical view by denying the claim completely.
10. The Hon'ble Apex Court in B.V. Nagaraju Vs M/S. Oriental Insurance Co. Ltd 1996 SCC (5) 71 held :
"the question of importance arising therein is 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? Ancillary to the question is the poser : whether the terms Akshay A-238-20 Page 4 of 9 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. vs. Kokilaben Chandravadan & Ors. [1987 2 SCC 654]?
"Learned counsel for the appellant, in support of this appeal, strongly relied on Skandia's case [supra], making a servant appeal that the terms of the policy afore referred to, should be read down to carry out the main purposes of the policy as the presence of 9 persons [when upto 6 were permissible], irrespective of their being employees or not, had not contributed in any manner to the occurring of the accident as also whenthe claim did not relate to any injuries to those 9 persons (who were owners of the goods loaded) or any loss incurred by them; the claim pristinely relating to the damage caused to the vehicle insured, which could not have been denied in the facts and the circumstances. Strong reliance, in support, was sought from the reasoning of the State Commissioner which had in so many words said:
"....Even for the sake of argument, that 9 persons travelling in the vehicle were passengers, it cannot be a ground for Insurance Company to repudiate the contract as the fact of their being passengers or collies does not make any difference to the risk involved. These persons were in no way concerned with the cause of the accident nor have they contributed to the risk in respect of the loss caused to the vehicle. The complainant has not claimed any compensation in respect of his liability to the persons travelling in the vehicle."
It is plain from the terms of the Insurance Policy that the insured vehicle was entitled to carry 6 workmen, excluding the 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 on 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 not 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 persons 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 owner 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 Akshay A-238-20 Page 5 of 9 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 hardly any choice. The Court cannot but opt for the former view. Even if one were to make 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 harmonize the two instead of allowing the exclusion clause to snipe successfully at the main purpose..
11. The Apex Court in National Insurance Company Limited v.
Nitin Khandelwal reported in 2008 (7) SCALE 351 held:
"..The appellant Insurance Company is liable to indemnify the owner of the vehicle when the insurer has obtained comprehensive policy for the loss caused to the insurer. The respondent submitted that even assuming that there was a breach of condition of the insurance policy, the appellant Insurance Company ought to have settled the claim on non- standard basis."
A decision of National Commission in the case of New India Assurance Company Limited v. Narayan Prasad Appaprasad Pathak reported in (2006) CPJ 144 (NC while granting claim on non-standard basis set out the guidelines issued by the insurance company about settling all such non-standard claims. The said guidelines are set out below:-
Sr. No. Description Percentage of Settlement
(i) Under declaration Deduct 3 years' of licensed difference in carrying capacity premium from the amount of claim or deduct 25% of claim amount, whichever is higher.
(ii) Overloading of Pay claims not
vehicles beyond exceeding 75% of
licensed carrying admissible claim.
capacity
(iii) Any other breach Pay upto 75% of
Akshay A-238-20 Page 6 of 9
of warranty/ admissible claim.
condition of
policy including
limitation as to
use
12. The ratio laid down in the above judgement is ,when the claim does not relate to any injuries to the extra passengers, or any loss incurred by them, and the claim relates to the damage caused to the vehicle insured, and the extra passengers did not make any difference to the risk involved, nor were they concerned with the cause of the accident, nor have they contributed to the risk in respect of the loss caused to the vehicle then the insurance company cannot totally deny indemnification to the insured. This case fits squarely with the facts of the case on hand.
13. Keeping in view, the ratio laid down in the above judgments that when the loss is genuine and when it is not a fundamental breach of a policy condition, then it can be considered to allow upto 75% of the admissible claim.
In the instant case, breach of policy condition is only on the ground that the insured's goods vehicle had 2 more passengers then allowed. This does not disentitle the complainant from the full claim and cannot be the reason for the appellant to fully reject and otherwise genuine claim of the insured.
14. The other issue for adjudication is the amount of loss awarded by the Ld. District Commission. The Ld. District Commission has awarded Rs.10,76,400/- as loss/damage to the complainant as per the surveyor's Summary of assessment at page 54. This is an error on the part of the Ld. District commission. The Ld. District commission has failed to consider that this report was given by the surveyor on 28.04.2017 after the revised Bill scrutiny at page 56 was submitted by the surveyor on 11.03.17. The report clearly states that ...
Akshay A-238-20 Page 7 of 9.."The insured was insisting on TOTAL LOSS. One extra visit was paid with consultation of Sr. Divisional manager on the 28/03/2017. Because of our experience we were able to assess the loss for less than 50% of IDV against the estimate of Rs 26,47,504/-The estimate was prepared was on the higher side"...
Thus this summary of assessment report was given by the surveyor only because the insured was insisting for total loss. But according to the survey report, the vehicle was not eligible to be considered for total loss. Therefore, the amount of Rs 10,76,400/- mentioned in this report cannot be taken as final into consideration. According to the revised Bill scrutiny dt. 11.03.17, submitted by the surveyor, the net payable amount of the claim, after considering depreciation and salvage amounts to Rs 8,59,873/-.
15. We are in agreement with this net payable amount as loss to vehicle arrived at by the surveyor in the revised bill. The complainant has not brought any cogent evidence to refute this amount
16. We have gone through the arguments and evidence on record, perused the impugned judgment, the appeal memo, heard the Ld. Adv. for the appellant and are of the view that by rejecting the full claim of the complainant, there is a deficiency in service on the part of the opponent. In view of the guidelines given by the Hon'ble Supreme Court in Amalendu Sahu Vs Oriental Insurance Co. Ltd. in Civil Appeal no.2703 of 2010, we deem it proper to allow 75% of Rs.8,59,873/- (net loss payable amount calculated by the surveyor) which comes to Rs.6,44,905/- (rounded) will meet with end of justice. The Ld. District Commission has erred in allowing the award of Rs.10,76,400/- and therefore, to that extent the order of the Ld. District Commission is required to be modified. In the interest of justice, we pass the following order.
Akshay A-238-20 Page 8 of 9ORDER
1. The appeal no.238/20 is hereby partly allowed.
2. The order of the Ld. District Commission, Bhuj-Kutchh dated 27.01.2020in complaint no. 272/2017 is modified as under:
The appellant is directed to pay to the complainant an amount of Rs.6,44,905/-(rounded) (Rupees Six Lakh Forty Four Thousand Nine Hundred Five) towards loss to insured vehicle.
3. The rest of the order of the Ld. District Commission, Bhuj-Kutchh dated 27.01.2020 in complaint no. 272/2017 is hereby confirmed.
4. No order as to cost.
5. Registry is directed to verify the amount deposited by the applicant in appeal no.238/20 and in MA no. 149/20 and if found deposited, refund the same with interest, if any, accrued there on the deposit to the appellant by RTGS after following due procedure and verification. For this purpose the appellant has to file an application with details to the account branch of this commission.
6. Registry is directed to send certified copy of this judgment to the parties free of cost.
7. Registry is further directed to send copy of this judgment to the District Commission, Bhuj-Kutchh through E-mail in PDF format for taking necessary action.
Pronounced in open court today on 31.08.2023.
P. R. Shah R. N. Mehta
Member Presiding Member
Akshay A-238-20 Page 9 of 9