State Consumer Disputes Redressal Commission
United India Insurance Company Ltd. vs ) Smt. Mumtaz Begum on 2 July, 2012
F BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD. FA 1305 of 2010 against C.C. 78/2009, Dist. Forum, Adilabad Between: 1) United India Insurance Company Ltd. Divisional Office No. 7 United Towers, Basheerbagh Hyderabad Rep. by its Deputy Manager 2) The Branch Manager United India Insurance Company Ltd. Nirmal Branch Rep. by its Deputy Manager Motor (OD) Hub, Ramkote Hyderabad. *** Appellants/ Ops 2 & 3 And 1) Smt. Mumtaz Begum W/o. Mohd. Rizwan Ali R/o. 1-2-100/84, Madina Colony Nirmal-504 106 Adilabad Dist. *** Respondent/ Complainant 2) K. Trimurthy Raju S/o. Rajaram Raghuram R/o. Plot No. 42 NCL Enclavepet Baheerabad, Medchal Road Secunderabad. 3) Mohan, Surveyor United India Insurance Company Beside Syndicate Bank Nizamabad. *** Respondents/ Ops 1 & 4 Counsel for the Petitioner: M/s. V. Krishna Rao Counsel for the Respondent: M/s. V. Gourisankara Rao. CORAM: HONBLE SRI JUSTICE D.APPA RAO, PRESIDENT. SMT .M.SHREESHA, MEMBER. & SRI S. BHUJANGA RAO, MEMBER MONDAY, THE SECOND DAY OF JULY TWO THOUSAND TWELVE ORAL ORDER:
(Per Honble Sri Justice D.Appa Rao, President.) ***
1) This is an appeal preferred by the opposite party Nos. 2 & 3 insurance company against the order of the Dist. Forum directing it to pay Rs.1,50,000/- .
2) The case of the complainant in brief is that she got her Maxi Cab insured with the appellant insurance company for a sum of Rs. 2,40,000/-
covering the period from 5.5.2008 to 4.5.2009. While so, the vehicle met with an accident on 8.2.2008. A case in crime No. 136/2008 u/s 304 (A) & 337 IPC was registered. Intimation of accident was given to Op3 and Op4 manager and surveyor of the insurance company respectively, on which inspection was made, photographs were taken. She submitted bills towards repairing charges as per their directions. Damage to an extent of Rs. 2,16,572/- was caused, which the insurance company was bound to pay with interest @ 18% p.a., together with compensation and costs.
3) The insurance company resisted the case. While putting the complainant to proof of each and every allegation made in the complaint it alleged that the complainant was not entitled to the amount. The capacity of the Maxi Cab was 6 + 1 in total 7 persons. However, at the time of accident, more than 14 persons were travelling in contravention of M.V. Act as well as terms of the policy. The driver was not having valid and effective driving license. Therefore the compensation claimed was highly excessive and arbitrary and prayed for dismissal of the complaint with costs.
4) The complainant in proof of her case filed her affidavit evidence and got Exs. A1 to A29 marked while the insurance company got Ex. B1 charge sheet marked.
5) The Dist. Forum after considering the evidence placed on record opined that the complainant was entitled to Rs. 1,50,000/-.
6) Aggrieved by the said order the insurance company preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective.
It ought to have seen that the complainants vehicle was overloaded at the time of accident and that the driver could not control the vehicle and caused the accident. The driver was not having valid and effective driving license. At any rate the Dist. Forum awarded Rs.
1,50,000/- without any basis, and therefore prayed that the appeal be allowed.
7) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
8) During the course of appeal the appellant insurance company filed report of the surveyor , and the same was received subject to proof and relevancy and marked as Ex. B2.
9) It is an undisputed fact that the complainant owner of the Maxi Cab insured with the appellant insurance company for a sum of Rs. 2,40,000/- commencing from 5.5.2008 to 4.5.2009 vide Ex. A4. It is also not in dispute that it met with an accident on 8.6.2008, and the same was registered as a case in 136/2008 u/s 304 (A) & 337 IPC evidenced under Ex. A1 FIR when it was collided with lorry. The driver was having valid and effective driving license vide Ex. A2 & A3. In the insurance policy Ex. A4 the seating capacity was mentioned as 6 while in the registration certificate Ex. A5 at coloumn No. 19 seating capacity - it was mentioned as
7. Immediately after the accident the said fact was intimated to the insurance company which in turn appointed a surveyor Mr. S. Mohan Reddy who visited the place of accident, noted various damages. He made original estimate at Rs. 94,970/-. He assessed the net loss at Rs. 50,000/-. In the coloumn - for insurers information he made a mention:
The vehicle was carrying more than the stipulated capacity of passengers as against seven in all.As per police FIR No. 136/2008
dt. 8.2.2008 two persons died on spot and ten other persons were injured in the above accident along with driver. As the vehicle was carrying more than the stipulated capacity of passengers there is violation of M.V. Act, and breach of conditions of the insurance policy. Hence the liability to the insured is discretion of the insurers.
10) At the outset we may state that the driver was having transport license evidenced under Ex.
A3 The only contention raised in this regard is that the insurance company is not liable to pay the amount as there is violation of terms of the policy viz., as against permissible seating of 7 persons the vehicle was carrying 14 persons, and therefore violation of terms of the policy.
The complainant filed various bills besides estimates amounting to Rs. 2,16,572/-.
11) In the light of repudiation on the ground that the vehicle was carrying passengers in excess the question is whether the insurance company could repudiate the claim on the said ground. In fact as long back as in 1996 in B.V. Nagaraju v. M/s. Oriental Insurance Co. Ltd. Divisional Office, Hassan, reported in II (1996) CPJ 18 (SC)=I (1997) ACC 123 (SC)=1996 (4) SCC 647 the Honble Supreme Court held that Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle without the knowledge of the 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.
12) The Honble Supreme Court in Amalendu Sahoo Vs. Oriental Insurance Company Ltd. reported in II (2010) CPJ 9 (SC) excerpted the guidelines issued by insurance company for settling the claim on non-standard basis.
S.No. Description Percentage of settlement
(i) Under declaration of licensed Carrying capacity Deduct 3 years difference in premium from the amount of claim or deduct 25% of claim amount whichever is higher.
(ii) Overloading of vehicles beyond licensed carrying capacity Pay claims not exceeding 75% of admissible claim.
(iii) Any other breach of warranty/condition of policy including limitation as to use.
Pay up to 75% of admissible claim.
13) In view of the above guidelines the insurance company was not justified in repudiating the claim in its entirety. It could have settled the claim on non-standard basis as stated above. The complainant claimed Rs. 2,16,572/- and filed Exs. A17 to A29. The surveyor despite the fact that he was having those documents, did not consider them. He assessed the loss in his own way though originally he estimated at Rs. 94,970/- slashed it to Rs. 50,000/- granting 25% depreciation to certain parts while more than 50% to other components. The surveyor ought to have verified the bills filed by the complainant vis--vis his estimate and then could have arrived the amount. The estimate was based on his own yardstick without any basis. He did not file any material to show the prices of various parts that were existing in the market. The Dist. Forum after considering the claim of the complainant at Rs. 2,16,572/- allowed the bills for Rs. 1,50,000/- and rejected the bills under Ex. A28 & A29 holding that they were bogus and cannot be relied, more so, they were all on a white paper without containing the signature of the issuing authority. Since the complainant did not prefer any appeal while accepting the opinion expressed by the Dist. Forum, we are also of the opinion that claim could be arrived after taking the value of damage at Rs. 1,50,000/-. By following the decision of Honble Supreme Court in Amalendu Sahoos case 25% could be deducted from the above said amount viz., Rs. 1,50,000 - Rs. 37,500 = Rs. 1,12,500 which we feel reasonable and modest.
14) In the result the appeal is allowed in part modifying the order of the Dist. Forum. Consequently the insurance company is directed to pay Rs. 1,12,500/- with interest @ 9% p.a., from the date of order of the Dist. Forum viz., 24.6.2010 till the date of payment together with costs of Rs. 5,000/-. Time for compliance four weeks.
1) _______________________________ PRESIDENT
2) ________________________________ MEMBER
3) ________________________________ MEMBER 02/07/2012 *pnr UP LOAD O.K.