State Consumer Disputes Redressal Commission
New India Assurance Company Limited vs Baldev Singh on 16 May, 2017
2ND ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.75 of 2017
Date of institution : 03.02.2017
Reserved on : 10.05.2017
Date of decision : 16.05.2017
New India Assurance Company Limited, 87, MG Road, Mumbai
and NIA Co., Bathinda, now through its Regional Manager, SCO
No.36-37, Sector 17-A, Chandigarh.
....Appellants/Opposite Parties
Versus
Baldev Singh S/o Sh. Nachattar Singh, R/o Village Burj Sema,
Tehsil & District Bathinda.
....Respondent/Complainant
First Appeal against the order dated
08.12.2016 of the District Consumer
Disputes Redressal Forum, Bathinda.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr. Harcharan Singh Guram, Member.
Present:-
For the appellants : Sh. Vinod Chaudhari, Advocate For the respondent : None.
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT The instant appeal has been filed by the appellants/opposite parties against the order dated 08.12.2016 passed by District Consumer Disputes Redressal Forum, Bathinda (in short, "the District Forum"), whereby the complaint filed by the respondent/complainant, under Section 12 of the Consumer First Appeal No.75 of 2017 2 Protection Act, 1986 (in short, "the Act"), was partly accepted, with ₹10,000/- as costs and compensation, and the opposite parties were directed to pay ₹7,00,000/- (IDV of the vehicle) to the complainant, along with interest at the rate of 9% per annum from the date of repudiation of claim i.e. 02.06.2015 till realization. The opposite parties were given liberty to get signed required documents regarding transfer of ownership of the vehicle in question from the complainant and the complainant was also made bound to do the same.
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Forum.
3. Brief facts, as averred in the complaint, are that the complainant is owner of vehicle Tata 2515, bearing Engine No.60C62464017, Chassis No.426031CTZ205260, having registration No. RJ-07-GA-1029. The complainant got the said vehicle insured with opposite parties, vide insurance policy No. 36060031130100004378, on payment of requisite premium of ₹25,673/-, which was valid from 25.02.2014 to 24.02.2015. IDV of the vehicle was fixed as ₹ 7,00,000/-, as per insurance cover note. The complainant was plying said vehicle for transportation of goods, for earning livelihood for himself/his family. He is having valid 'Goods Carrier Permit' issued by Additional Secretary, RTA, Sri Ganga Nagar; which is valid from 21.06.2013 to 20.06.2018. Unfortunately, the vehicle met with an accident on 24.04.2014 at First Appeal No.75 of 2017 3 about 5.30 A.M. near Sangat on Bathinda-Dabwali Road and FIR No. 38 dated 24.04.2014 u/s 304-A, 279, 337, 338, 427 IPC was lodged with Police Station, Sangat. The vehicle in question was extensively damaged in the accident and intimation was given to the opposite party No. 2 at Bathinda. The complainant lodged the claim and furnished all the requisite documents to opposite party No. 2. It appointed surveyor, who after visiting spot and taking photographs of accidental vehicle, prepared his detailed report regarding loss occurred to the vehicle and assured the complainant to get the claim honoured at the earliest. However, the opposite parties, vide letter dated 02.06.2015, repudiated the claim, on the ground that temporary route permit of the vehicle was issued on 24.04.2014 after accident and quarterly road tax for Punjab for the period 01.04.2014 to 20.06.2014 was also deposited with DTO, Bathinda on 24.04.2014 at 8.30 A.M. i.e. after accident. Moreover, vehicle was not having valid permit, as per requirement of Section 66 of Motor Vehicles Act. The repudiation of the claim is totally wrong, illegal, null and void, as the vehicle was having valid registration certificate and valid insurance certificate at the time of accident. The complainant was also having valid goods Carrier Permit. As per the terms and conditions of the insurance policy, there was no reference of any route permit. Non- payment of road tax has nothing to do with the claim of the complainant, as there was valid insurance on the date of accident. The complainant requested opposite party No. 2 several First Appeal No.75 of 2017 4 times to make payment of insurance claim, but to no effect. The act and conduct of the opposite parties amounted to deficiency in service and unfair trade practice on their part; as a result of which the complainant suffered mental agony and harassment. Accordingly, he approached the District Forum, seeking the following directions to the opposite parties:
i) to pay the claim amount to the tune of ₹7,00,000/-;
ii) to pay ₹50,000/- as compensation for mental agony, harassment etc.; and
iii) to pay ₹11,000/- as litigation expenses.
4. Upon notice, the opposite parties appeared before the District Forum and filed reply to the complaint, raising legal objections that complaint is false, frivolous and vexatious to the knowledge of the complainant. The complainant is not consumer, as defined under the Act. That complainant has violated the terms and conditions of the policy. He has no locus standi or cause of action to file the complaint. That complaint is not maintainable in the present form. There is no deficiency in service or unfair trade practice on the part of the opposite parties. The vehicle was being plied for commercial purpose, to earn huge profits and, thus, the dispute does not fall within the ambit of Act. The opposite parties are entitled to special costs of ₹10,000/- from the complainant u/s 26 of the Act. That complainant has concealed material facts and documents. The true facts are that on receipt of intimation regarding the accident, which allegedly took place on 24.04.2014 First Appeal No.75 of 2017 5 at about 5.30 A.M. near Sangat on Bathinda-Dabwali Road, the opposite parties deputed its surveyor for spot inspection and to assess the loss, who submitted his report. Thereafter, while processing the claim and perusing the relevant documents submitted by the complainant, it transpired that insured has submitted temporary route permit for the period from 24.04.2014 to 23.05.2014. On verification, it was revealed that said temporary route permit was issued on 24.04.2014 during office hours which starts at 10.00 A.M., whereas accident already took place on 24.04.2014 at about 5.30 A.M. Moreover, quarterly road tax for Punjab for the period 01.04.2014 to 30.06.2014 was deposited with DTO, Bathinda on 24.04.2014 at 8.30 A.M. i.e. after the accident. Thus, at the time of accident, vehicle in question was not having valid permit, as per section 66 of the Motor Vehicles Act. The claim of the complainant was repudiated, as per terms and conditions of the policy, after thorough investigation and the complainant was intimated about the same, vide registered letter dated 02.06.2015. On merits, similar pleas, as raised in legal objections were reiterated and denying all other allegations of the complaint, it was prayed that the same be dismissed with special costs.
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, First Appeal No.75 of 2017 6 partly accepted the complaint, vide impugned order. Hence, this appeal.
6. We have heard learned counsel for the appellants, as none has appeared on behalf of the respondent, and have carefully gone through the records of the case.
7. Learned counsel for the appellants/opposite parties vehemently contended that the District Forum erred in law in not appreciating the facts and evidence on record. At the time of accident, the vehicle in question was being driven in gross violation of the conditions of the insurance policy as well as Motor Vehicles Act, 1988. It was having a route permit for the State of Rajasthan and temporary permit for Punjab, which was effective from 24.04.2014 to 23.05.2014 and the same was issued after the accident, which occurred on 24.04.2014 at 5.30 A.M. Even the requisite fee was deposited for taking the route permit after the accident. The District Forum lost sight of all these facts and passed a wrong and illegal order, which is liable to be set aside.
8. We have given thoughtful consideration to the contentions raised by the learned counsel for the appellants/opposite parties.
9. Admittedly, the vehicle in question was insured with the opposite parties, vide policy cover note Ex.C-14, for the period 25.02.2014 to 24.02.2015 for ₹7,00,000/-. It met with an accident on 24.04.2014 and was damaged. The claim lodged by the complainant was repudiated by the opposite parties, vide letter First Appeal No.75 of 2017 7 02.06.2015 Ex.C-2, on the grounds that temporary route permit of the vehicle was issued on 24.04.2014 during office hours, which start at 10.00 A.M., whereas the accident occurred prior to it i.e. on 24.04.2014 at 5.30 A.M. Moreover, quarterly road tax for Punjab for the period 01.04.2014 to 30.06.2014 was deposited at Bathinda DTO on 24.04.2014 at 8.30 A.M. i.e. after the accident, the vehicle was not having valid permit, as per requirement of Section 66 of Motor Vehicles Act.
10. The only question to be decided in the present case is, whether the insurance company could repudiate the claim on the ground that at the time of accident, the vehicle in question did not possess any valid route permit?
11. The answer to this question is "No", because now it is well settled provision of law that for the violations of the provisions of the Motor Vehicles Act, the claim cannot be repudiated by the insurance company. The Hon'ble Supreme Court of India in case Amalendu Sahoo v. Oriental Insurance Co. Ltd., 2010 (1) CPC 653 (SC), considered the same question and held in Paras No. 12 to 15 as follows:-
"12. Reference in this case may be made to the decision of National Commission rendered in the case of United India Insurance Company Limited v. Gian Singh reported in 2006 CTJ 221 (CP) (NCDRC). In that decision of the National Consumer Disputes Redressal Commission (NCDRC) it has been held that in a case of violation of condition of the policy as to the nature of use of the vehicle, the claim ought to be First Appeal No.75 of 2017 8 settled on a non-standard basis. The said decision of the National Commission has been referred to by this Court in the case of National Insurance Company Limited v. Nitin Khandelwal reported in 2008 (7) SCALE 351. In paragraph 13 of the judgment, in the case of Nitin Khandelwal (supra) this Court 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.
13. In the case of Nitin Khandelwal (supra) the State Commission allowed 75% of the claim of the claimant on non-standard basis. The said order was upheld by the National Commission and this Court refused to interfere with the decision of the National Commission.
14. In this connection reference may be made to 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). In that case also the question was, whether the insurance company can repudiate the claims in a case where the vehicle carrying passengers and the driver did not have a proper driving licence and met with an accident. While granting claim on non-standard basis the National Commission set out in its judgment 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
First Appeal No.75 of 2017 9
(i) Under declaration of Deduct 3 years'
licensed carrying difference in
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 of Pay upto 75% of
warranty/condition of admissible claim.
policy including
limitation as to use
15. From a perusal of the aforesaid guidelines it is clear that one of the cases where 75% claim of the admissible claim was settled was where condition of policy including limitation as to use was breached."
12. Hon'ble National Commission in case National Insurance Company Limited v. Jaswant Singh, 2013 (2) CPC- 297 (NC), relying upon the above authority of the Hon'ble Supreme Court, held that permit for plying of vehicle has no connection with the cause of accident and the claim is payable on non-standard basis to the extent of 75% with interest.
13. In a recent case National Insurance Company Limited v. Jogesh Roy & Anr. 2017 (2) CPR 252 (NC), Hon'ble National Commission held that the claim could not have been repudiated on the ground that the vehicle did not possess a permit on the date it met with an accident.
First Appeal No.75 of 2017 10
14. Hon'ble National Commission in case United India Insurance Co. Ltd. v. Diwan Chand Revision Petition No.2341 of 2014, decided on 16.07.2014, while relying upon the decision of the Hon'ble Supreme Court in Amalendu Sahoo's case (supra), upheld the order of the State Commission, vide which 75% of the assessed amount of claim was allowed to be paid by the insurance company to the complainant. In that case, the claim was repudiated by the insurance company, on the ground that route permit had not been submitted by the insured.
15. Even in case National Insurance Company Ltd. v. Jaswant Singh I (2013) CPJ 389 (NC), Hon'ble National Commission held that the cause of accident has nothing to do with the vehicle being brought in State of Punjab, for which there was no permit, and allowed the claim on non-standard basis to the extent of 75%.
16. The ratio of law laid down in the above noted authorities is that in case of violation of provisions of the Motor Vehicles Act, the claim can be allowed on non-standard basis to the extent of 75%.
17. The perusal of the impugned order shows that the District Forum has awarded full IDV i.e. ₹7,00,000/-, which is contrary to the law laid down above. As per insurance policy Ex.C14, the IDV of the vehicle is ₹7,00,000/-. Applying the ratio of the aforesaid law, the complainant is entitled to 75% of the IDV of ₹7,00,000/-. The District Forum committed an illegality by First Appeal No.75 of 2017 11 awarding full IDV to the complainant and the impugned order to this extent is required to be modified.
18. In view of above discussion, the appeal is partly allowed and the impugned order is modified to the effect that the complainant is entitled to ₹5,25,000/- (75% of the IDV of the vehicle i.e. ₹7,00,000/-). Except this modification, the remaining part of the impugned order is upheld.
19. The appellants had deposited a sum of ₹25,000/- at the time of filing of the appeal. They further deposited ₹5,00,000/-, vide receipt No.07.03.2017, in compliance of the order dated 07.02.2017. 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 them. The complainant may approach the District Forum for the release of the above amounts and the District Forum may pass the appropriate order in this regard.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (HARCHARAN SINGH GURAM) MEMBER May 16, 2017.
(Gurmeet S)