National Consumer Disputes Redressal
M/S Giridharilal R. Agarwal vs New India Assurance Co. Ltd. on 23 July, 2003
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2258 OF 2000 (From the order dated 26.07.2000 in Appeal No.1640/98 of the State Commission, Maharashtra) M/s Giridharilal R. Agarwal Petitioner Vs. New India Assurance Co. Ltd. Respondents BEFORE: HONBLE MR. JUSTICE D.P. WADHWA, PRESIDENT MRS. RAJYALAKSHMI RAO, MEMBER MR. B.K. TAIMNI, MEMBER. HONBLE MR. JUSTICE K.S. GUPTA, MEMBER Carrier truck of the complainant carrying cotton met with an accident insurance claim denied on the ground of illegal transportation of cotton on the truck from Maharashtra to Madhya Pradeh Maharashtra Raw Cotton Act 1971 no prohibition in the insurance policy for denial of claim if transportation of goods in contravention of any law provisions of Motor Vehicle Act, 1988 referred to award of damages as per the report of the surveyor with interest. For the Petitioner : NEMO For the Respondent : Mr. K.L. Nandwani and Mr. Sameer Nandwani, Advocates O R D E R
DATED THE 23RD JULY, 2003 JUSTICE D.P. WADHWA, J.(PRESIDENT).
It is the complainant who is petitioner before us. Nobody appeared for him when the matter was called for. However, there is communication received from him that the matter could be disposed of on the basis of the documents already on record and written submissions. Earlier Mr. S.M. Bari, Advocate has been appearing for the petitioner but he was also not present.
We have heard Mr. K.L. Nandwani, Advocate, Counsel for the respondent Insurance company.
On the ground of illegal transportation of cotton from Maharashtra to Madhya Pradesh insurance claim of the petitioner complainant was denied. During the period of insurance, the truck of the complainant met with an accident in a place within the State of Madhya Pradesh. When the appellant approached the Insurance Company for his claim for the damage suffered, it was repudiated. His claim made in the complaint before the District Forum was rejected and his appeal was dismissed by the State Commission. It was held by the State Commission that the transport of raw cotton from Maharashtra to Madhya Pradesh was illegal and that petitioner had failed to establish that the loose cotton was loaded in the truck outside the limit of Maharashtra State which was an illegal act under Maharashtra Raw cotton Act 1971. In short it was held that cotton was being illegally smuggled from Maharashtra to Madhya Pradesh in contravention of the Maharashtra Law.
We have been referred to Insurance Policy. The policy itself does not contain any prohibition that claim will not be settled if the transportation of goods from the vehicle is in contravention of any law. The only stipulation is that the vehicle will be used only for carriage of goods within the meaning of the Motor Vehicle Act, 1988. It is not the case of the Insurance Company that goods were not carried in the truck within the meaning of the said Act.
However, contention of Mr.Nandwani is that Sections 66 (necessity for permits), 79(grant of goods carriage permit) and 84(general conditions attaching to all permits) of that Act have been contravened. These Sections fall in the Chapter-V relating to Control of Transport Vehicles. Transport vehicle has been defined in Clause(47) of Section(2) of the Motor Vehicle Act to mean a public service vehicle, a goods carriage, an educational institution bus or a private service vehicle. The goods carriage has been defined in Clause (14) thereto which means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods.
We may also refer to the definition of permit as contained in Clause (31) of Section 2 of The Motor Vehicles Act to mean a permit issued by a State or Regional Transport Authority or an authority prescribed in this behalf under this Act authorising the use of a motor vehicle as a transport vehicle. Goods have also been defined in Clause (13) of Section 2 thereof where goods includes livestock, and anything (other than equipment ordinarily used with the vehicle) carried by a vehicle except living persons, but does not include luggage or personal effects carried in a motor car or in a trailer attached to a motor car or the personal luggage of passengers travelling in the vehicle.
We may refer now to the relevant provisions of Chapter-V of the Motor Vehicles Act. Section 66 prohibits the owner of the motor vehicle to use any vehicle as a transport vehicle in any public place.
Section 77 provides for application for goods carriage permit and requirements of this Section are :-
(a) the area or the route or routes to which the application relates ;
(b) the type and capacity of the vehicle ;
(c) the nature of the goods it is proposed to carry ;
(d) the arrangements intended to be made for the housing, maintenance and repair of the vehicle and for the storage and safe custody of the goods ;
(e) such particulars as the Regional Transport Authority may require with respect to any business as a carrier of goods for hire or reward carried on by the applicant at any time before the making or the application, and of the rates charged by the applicant ;
(f) particulars of any agreement, or arrangement, affecting in any material respect the provision within the region of the Regional Transport Authority of facilities for the transport of goods for hire or reward, entered into by the applicant with any other person by whom such facilities are provided, whether within or without the region ;
(g) any other particulars which may be prescribed.
Under Section 79, the Regional Transport Authority can impose conditions, which can be attached to the permit. These are specified in sub-section (2) of Section 79 and read as under :-
(i) that the vehicle shall be used only in a specified area, or on a specified route or routes ;
(ii) that the gross vehicle weight of any vehicle used shall not exceed a specified maximum ;
(iii) that goods of a specified nature shall not be carried ;
(iv) that goods shall be carried at specified rates ;
(v) that specified arrangement shall be made for the housing, maintenance and repair of the vehicle and the storage and safe custody of the goods carried ;
(vi) that the holder of the permit shall furnish to the Regional Transport Authority such periodical returns, statistics and other information as the State Government may, from time to time, prescribe ;
(vii) that the Regional Transport Authority may, after giving notice of not less than one month, -
(a) vary the conditions of the permit ;
(b) attach to the permit further conditions ;
(viii) that the conditions of the permit shall not be departed from, save with the approval of the Regional Transport Authority ;
(ix) any other conditions which may be prescribed.
Section 84 provides for General conditions attaching to all permits and these are :-
(a) that the vehicle to which the permit relates carried valid certificate of fitness issued under Section 56 and is at all times so maintained as to comply with the requirements of this Act and the rules made thereunder ;
(b) that the vehicle to which the permit relates is not driven at a speed exceeding the speed permitted under this Act ;
(c) that any prohibition or restriction imposed any fares or freight fixed by notification made under Section 67 are observed in connection with the vehicle to which the permit relates ;
(d) that the vehicle to which the permit relates is not driven in contravention of the provisions of Section 5 or Section 113 ;
(e) that the provisions of this Act limiting the hours of work of drivers are observed in connection with any vehicle or vehicles to which the permit relates ;
(f) that the provisions of Chapter X, XI, and XII so far as they apply to the holder of the permit are observed ; and
(g) that the name and address of the operator shall be painted or otherwise firmly affixed to every vehicle to which the permit relates on the exterior of the body of that vehicle on both sides thereof in a colour or colours vividly contrasting to the colour of the vehicle centred as high as practicable below the window line in bold letters.
No other provision applicable to present case has been referred to us.
We may now refer to the relevant terms of the certificate of insurance which provides for limitations as to use of The Motor Vehicles Act. These are :-
Use only for carriage of goods within the meaning of the Motor Vehicles Act, 1988.(1)
Use for organised racing pace-making reliability trial or speed testing.(2)
Use whilst drawing a trailer except the towing (other than for reward) of any one disabled mechanically propelled vehicle.(3)
Use of carrying passengers in the vehicle except employees (other than the driver) not exceeding six number coming under the purview of Workmens Compensation Act 1923.
In any of these provisions, we are unable to find a clause which says that permit would be invalid in case the motor vehicle is carrying contraband goods or is engaged in smuggling or illegal activities.
Can the insurance contract become invalid and un-enforceable if the insurer is using the truck for illegal activities. No doubt that the contract of carriage between the owner of the truck and the owner of the goods would be void if the goods are being carried in contravention of any provision of law. The question that arises is could such a provision of law between the owner of the vehicle and the owner of the goods be incorporated in the Insurance Contract between the insured and the insurer? We cannot read this into the provisions of Motor Vehicle Act and the limitations to the use of the goods vehicle as provided in the terms of insurance contract. If we widen the scope of the contract of insurance as contended by Mr. Nandwani, it will make the contract of insurance void. It is difficult to appreciate how insurer is concerned with what type of goods are being carried so long there is no contravention of the terms of the permit issued and the terms of the insurance policy. It may happen that motor vehicle carrying stolen goods meets with an accident and police seizes stolen articles, can the claim of the insurance be denied in such circumstance. The owner of the motor vehicle may not know what goods are being carried and yet he will be denied his claim of insurance under the policy. If we uphold the contention of the insurance company the insured perhaps may have to wait till the criminal trial is over and owner of stolen goods acquitted. That cannot be so.
We cannot possibly accept the stand of the insurance company in the present case and we possibly cannot give the insurer another handle to repudiate an otherwise valid claim under the policy of the insurance.
Thus considering whole aspect of the matter, we are of the view that both the State Commission and the Distt. Forum were wrong in their approach in denying the claim of the petitioner complainant. The surveyor appointed by the Insurance Company had assessed the loss at Rs.19,080/-. We, therefore, set aside the impugned order of the State Commission and Distt. Forum and allow the complaint and direct respondent insurance company to pay a sum of Rs.19,080/- to the petitioner complainant with interest @ 12% from 1.2.1993 till payment. Petitioner will also be entitled to cost which we assess at Rs.5,000/-.
J (D.P. WADHWA) PRESIDENT .
(B.K. TAIMNI) MEMBER .J (K.S. GUPTA) MEMBER