State Consumer Disputes Redressal Commission
The New India Assurance Company Ltd. vs Jot Singh on 9 July, 2020
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
1.First Appeal No.41 of 2018 Date of institution : 23.01.2018 Reserved on : 08.07.2020 Date of decision : 09.07.2020 The New India Assurance Company Limited, Divisional Office, 2090, The Mall, Bathinda through its Assistant Manager (Legal), SCO No.36-37, Sector 17-A, Chandigarh.
.......Appellant-Opposite Party Versus Jot Singh s/o Nirmal Singh r/o Street No.2, Paras Ram Nagar, New Aroma Palace, Bathinda.
........Respondent-Complainant
2. First Appeal No.74 of 2018 Date of institution : 13.02.2018 Reserved on : 08.07.2020 Date of decision : 09.07.2020 Jot Singh son of Shri Nirmal Singh, resident of Street No.2, Paras Ram Nagar, Near Aroma Palace, Bathinda.
......Appellant-Complainant Versus
1. The New India Assurance Company Limited, Divisional Office, 2090, The Mall, Bathinda, through its Divisional Manager.
2. Cholamandlam Investment and Finance Company Ltd. (Formally Cholamandlam BDS Finance Ltd.) having its registered office at Dera, House No.2, NSC Bose Road, Parris Chennai and having its Branch Office at Jindal Complex, Near First Appeal No.41 of 2018 2 Hanuman Chowk, Opposite Madan Hospital, G.T. Road, Bathinda, Police Station Civil Lines, Bathinda, through its Power of Attorney holder and process Incharge Legal Coordination, Mr. Sameer Ahmed.
.....Respondents-Opposite Parties First Appeals against the order dated 5.12.2017 of the District Consumer Disputes Redressal Forum, Bathinda.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Argued by:- (In FA No.41 of 2018) For the appellants : Shri Sandeep Bhardwaj, Advocate for Shri B.S. Taunque, Advocate.
For the respondent : None.
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
Both the above mentioned First Appeals are being decided by this common order as the same have arisen out of the same impugned order dated 5.12.2017 passed by the District Consumer Disputes Redressal Forum, Bathinda (in short, "District Forum"), vide which the complaint filed by Jot Singh, respondent-complainant, under Section 12 of the Consumer Protection Act, 1986 (in short, "C.P. Act") was partly accepted with ₹10,000/- as costs and compensation against opposite party No.1-Insurance Company and dismissed against opposite party No.2-Finance Company. The appellant-opposite party No.1 was directed to pay ₹5,25,000/- (75% First Appeal No.41 of 2018 3 of IDV of ₹7 lakh) with interest @ 9% per annum from the date of repudiation of claim till payment and it was given liberty to get signed the required documents regarding transfer of ownership of vehicle in question from the complainant. Aggrieved with the same FA No.41 of 2018 has been filed by appellant-opposite party No.1 for setting aside the impugned order, whereas FA No.74 of 2018 has been filed by the respondent-complainant for modification of the impugned order by awarding full value of the IDV to the tune of ₹7,00,000/- along with ₹1,00,000/- as compensation on account of mental agony and harassment and a sum of ₹22,000/- on account of litigation charges. Facts are taken from FA No.41 of 2018 for the sake of convenience.
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Forum.
Facts of the complaint:
3. Brief facts, as averred in the complaint, are that the complainant was owner of canter bearing registration No.PB-03V-
0757. It was registered in his name. He was plying the vehicle in question for carriage of the goods to earn the livelihood of his family. He was having a valid All India Route Permit for carriage of goods, vide permit No.PB-03/022014/33618/NP/RTA/BTI, which was valid w.e.f. 31.5.2011 to 30.5.2016. It is further averred that the complainant got his vehicle insured with opposite party No.1-
Insurance Company, vide insurance policy No.36060131120100006363, which was valid w.e.f. 23.3.2013 to First Appeal No.41 of 2018 4 22.3.2014. He deposited the requisite premium with opposite party No.1-Insurance Company. The total I.D.V of the vehicle was ₹7 lakh. It is further averred that on 26.1.2014, the driver of the vehicle; namely, Naresh Kumar S/o Chiman Lal had taken the canter to Delhi for unloading the wooden logs. After unloading the wooden logs at the destination, he was scheduled to return back from Delhi to Bathinda on 27.1.2014 after loading some goods from Delhi Punjab Goods Carrier Transport Near Zahhira Flyover. The driver reached near the flyover on 27.1.2014 at about 10:30 P.M for loading the goods. He was told that during night, the vehicle will not be loaded and it will be loaded on the next morning. As such, he parked the vehicle by the side of the road on Rohtak-Zakira road. After having meal, he was lying asleep inside the cabin of the canter. At about 3:45 A.M, three unknown persons boarded the cabin of the canter and after giving merciless beatings to the driver, took the canter alongwith driver after kidnapping him. After sometime, they dropped the driver and took away the canter. They also took purse of the driver containing ₹15,000/- in cash, driving licence and other documents including the documents of the canter. It is further averred that on the basis of statement of the driver, Naresh Kumar, F.I.R No.63 dated 28.1.2014 was registered against unknown persons under Sections 365/392/34 I.P.C with P.S. Moti Nagar, West Delhi. The complainant intimated opposite party No.1-Insurance Company about the occurrence and snatching of his vehicle. He lodged the insurance claim with opposite party No.1-Insurance First Appeal No.41 of 2018 5 Company, vide claim No.3606013110190000391 and supplied all the requisite documents and requested them to honour his claim. It is further averred that the vehicle in question could not be traced by the police till the date of filing of the complaint. He also procured the untraced report from the S.H.O. of P.S, Moti Nagar on 6.10.2014 and submitted the same to opposite party No.1-Insurance Company. He also supplied the copy of the final report form under Section 173 Cr.P.C, but opposite party No.1 failed to honour his claim. After putting off the matter on one pretext or the other, opposite party No.1-Insurance Company repudiated the lawful claim of the complainant, vide letter dated 15.7.2014 on the ground of non- validity of permit as on the date of snatching. It is further averred that the repudiation letter dated 15.7.2014 is totally wrong, illegal, null and void, ineffective and inoperative and is against the rights of the complainant and it is based upon false facts in order to avoid liability by opposite party No.1-Insurance Company. The vehicle in question was having a valid permit of carriage of goods in all India vide permit No.PB-03/022014/33618/NP/RTA/BTI, which was valid w.e.f. 31.5.2011 to 30.5.2016. The complainant also obtained the verification for the permit from the office of Registration Authority, Bathinda, vide letter dated 13.7.2015. He also supplied the copy of the verification to opposite party No.1-Insurance Company with the request to honour the insurance claim, but it flatly refused to his request. Alleging deficiency in service on the part of opposite party No.1-Insurance Company the consumer complaint was filed before First Appeal No.41 of 2018 6 the District Forum for issuance of directions to it to pay ₹7 lakh as insurance claim along with ₹1 lakh as compensation and ₹22,000/-, as litigation costs.
Defence of Opposite Party No.1:
4. Upon notice, opposite party No.1-Insurance Company contested the complaint by filing the written version raising legal objections to the effect that the complaint has been filed by the complainant only to injure its goodwill and reputation. The complaint is false, frivolous and vexatious to the knowledge of the complainant.
Opposite party No.1 is entitled to special costs from the complainant under Section 26 of the C.P. Act. Intricate questions of law and facts are involved in the complaint, which require voluminous documents and evidence for determination and it is not possible in the summary procedure under the C.P. Act. The appropriate remedy, if any, lies only in the Civil Court. The complainant concealed the material facts and documents from the District Forum. He is not entitled to any relief. On receiving the intimation regarding theft, which allegedly took place on 28.1.2014 at Delhi, opposite party No.1-Insurance Company deputed the Investigator, who submitted his report. Thereafter the complainant was asked to submit the relevant documents required for processing and settlement of claim, but he has failed to submit the relevant documents. Ultimately, opposite party No.1 closed the claim file of the complainant. The intimation was given to the complainant vide registered letter dated 27.10.2014. Thereafter the complainant moved an application dated First Appeal No.41 of 2018 7 5.1.2015 with the request to re-open his claim file. Earlier he could not submit the relevant documents as these were not in his possession. Accordingly, his claim file was re-opened. On submission of relevant papers, his claim was processed and while perusing the relevant documents submitted by him, it transpired that he has submitted All India Route Permit No.PB-
03/022014/33618/NP/RTA/BTI valid up to 30.5.2016. Opposite party No.1 got the said permit verified from the office of issuing authority. They have clearly stated that the said permit was issued on 14.2.2014 and it was valid upto 30.5.2014, which clearly shows that as on the date of loss i.e. 28.1.2014, the said permit was not valid and as on the date of loss, insured was not having valid permit for Delhi. Accordingly, his claim was repudiated on the basis of non- validity of permit as on the date of loss. The intimation of the same was given to the complainant, vide registered letter dated 15.7.2015. The complainant is not a 'consumer as defined under the C.P. Act. He has violated the terms and conditions of the policy. He is not entitled to any claim. He has no locus-standi or cause-of-action to file the complaint. The complaint is not maintainable. There is no deficiency in service or unfair trade practice on the part of opposite party No.1. It is reiterated that the insured vehicle was plied for the commercial purpose i.e. to earn the huge profits. As such, the dispute does not fall within the ambit of C.P. Act. The complaint is liable to be dismissed on this ground alone. On merits, it is admitted being matter of record that the complainant is registered owner of First Appeal No.41 of 2018 8 vehicle in question. It is further reiterated that the insured vehicle was being plied by the insured for the commercial purpose to earn the huge profits. It is denied that the route permit was valid at the time of loss or is valid from 31.5.2011 to 30.5.2016. Denying all other averments made in the complaint and denying any deficiency in service on the part of opposite party No.1-Insurance Company a prayer for dismissal of the complaint was made.
5. Originally the complainant had filed consumer complaint only against opposite party No.1-Insurance Company. But during the pendency of the consumer complaint, opposite party No.2-Finance Company moved an application for impleading it as a party on the ground that it had financed the vehicle in question. The application moved by opposite party No.2-Finance Company was dismissed, vide order dated 19.7.2016. Opposite party No.2-Finance Company filed Revision Petition No.36 of 2016 against that order, which was allowed by this Commission, vide order dated 9.1.2017 and opposite party No.2-Finance Company was allowed to be impleaded as a party in the consumer complaint. Shri Amit Kumar, Sr. Officer, Legal of opposite party No.2-Company suffered a statement on 27.2.2017 that opposite party No.2-Finance Company did not want to file written version as its dues were cleared by the complainant, vide Draft No.088850 dated 23.2.2017 of Dena Bank, Bathinda. Evidence of the Parties:
6. In support of his claim, the complainant has tendered into evidence his affidavits dated 4.9.2015 and 17.11.2015 as Ex.C1 and First Appeal No.41 of 2018 9 Ex.C2, photocopy of R.C. as Ex.C3; photocopy of permit as Ex.C4; photocopy of policy schedule as Ex.C5; photocopy of F.I.R. as Ex.C6; photocopy of final report form as Ex.C7; photocopy of untraceable report as Ex.C8; photocopy of fresh untraced report as Ex.C9; photocopies of letters as Ex.C10 and Ex.C11; photocopy of national permit as Ex.C12. On the application of the complainant, Clerk of Secretary, RTA Office, Bathinda was summoned with record. He deposed that national permit, Ex.C12, was issued on 14.2.2014 and was valid upto 30.5.2014. It was further deposed by him that national permit is issued for 5 years subject to validity of national permit authorization. He has also proved the report on application, Ex.C11. Shri Vivek Rattan, Clerk of the office of Secretary, RTA Office, Bathinda suffered another statement on 20.11.2017 to the effect that he had brought the record of national permit relating to vehicle No.PB-03V-0757, Ex.C-12, which was issued on 14.2.2014 and was valid upto 30.5.2014. In his cross- examination he admitted that the permit was not valid on 28.1.2014.
7. To rebut the claim of the complainant, opposite party No.1- Insurance Company tendered into evidence affidavit of Ashwani Kumar dated 16.10.2015 as Ex.OP1/1; photocopies of letters, as Ex.OP1/2 to Ex.OP1/5 and Ex.OP1/15; photocopy of circular as Ex.OP1/6; photocopies of letters as Ex.OP1/7 and Ex.OP1/8; photocopies of verification of permit as Ex.OP1/9 to Ex.OP1/11; photocopy of route permit as Ex.OP1/12; photocopy of investigation report as Ex.OP1/13; photocopy of verification of R.C. as Ex.OP1/14; First Appeal No.41 of 2018 10 photocopies of insurance policy as Ex.OP1/16 and Ex.OP1/17; photocopy of collection receipt as Ex.OP1/18. Finding of the District Forum:
8. After going through the evidence tendered by both the parties and after hearing the learned counsel for them, the District Forum partly accepted the complaint in the above mentioned terms, vide impugned order. Hence FA No.41 of 2018 has been filed by appellant-opposite party No.1 for setting aside the impugned order, whereas FA No.74 of 2018 has been filed by the respondent- complainant for modification of the impugned order by awarding full value of the IDV to the tune of ₹7,00,000/- along with ₹1,00,000/-, as compensation, on account of mental agony and harassment and a sum of ₹22,000/- on account of litigation charges.
9. I have heard learned proxy counsel for appellant-opposite party No.1 as none appeared on behalf of the respondent- complainant and have carefully gone through the records of the case. I have also gone through the written arguments submitted by the leaned counsel for appellant-opposite party No.1. Contentions of appellant-opposite party No.1:
10. The sum and substance of oral as well as written arguments of the counsel for appellant-opposite party No.1 is that the insurance is contract, which is binding between the parties. The vehicle in question was forcibly taken away by three unknown persons along with its Driver from Delhi on 28.1.2014 at about 3:45 A.M. However, after sometime they dropped the driver and took away the canter. First Appeal No.41 of 2018 11 They also took the purse of the driver containing ₹15,000/-, in cash, driving licence and other documents relating to the canter. It was further argued that there was no valid route permit for plying the vehicle in question in Delhi, which is a clear-cut violation of Section 66 of the Motor Vehicles Act, 1988 and constitutes a fundamental breach of the terms and conditions of the policy. Therefore, the claim was rightly repudiated on the basis of non-validity of permit as on the date of loss, vide repudiation letter dated 15.7.2014. Such a claim is not payable even on non-standard basis. Reference was made to the following judgments:-
i) "Manoj Banerjee v. Oriental Insurance Company Limited and others" reported in 2013(1) CLT 634 (NC).
ii) "Puneet Kumar v. National Insurance Company Limited" reported in III(2016) CPJ 62 (NC) decided on 11.2.2016;
iii) "Sidhhanth Yadav v. Oriental Insurance Company Ltd." reported in 2015 (3) CLT 467 (NC); and
iv) "M.S. Middle High School v. HDFC ERGO General Insurance Company Ltd." in SLP No.31406/2017 decided on 22.11.2017.
It was prayed that the present appeal be allowed and the impugned order passed by the District Forum be set aside.
11. The contention of the complainant in the cross-appeal is that Permit was valid upto 30.5.2016 as per documents Annexure C-4 and Annexure C-11.
First Appeal No.41 of 2018 12Consideration of Contentions:
12. I have given my thoughtful consideration to contentions raised before me by the learned proxy counsel for the appellant-opposite party No.1 oral as well as written. I have also gone through the pleadings of the complainant in cross-appeal.
13. During the pendency of FA No.74 of 2018, Clerk of the office of Secretary, RTA, Bathinda was summoned, who came present on 25.7.2018 and made a statement that the Route Permit of the vehicle in question was valid from 31.5.2011 to 30.5.2016 but authorization was valid from 14.2.2014 to 30.5.2014. However, as on 28.1.2014 there was no authorization from Ministry of Road, Transport and Highways.
14. The policy in question is Ex.OP-1/16, which is a Commercial Vehicle Package Policy, wherein limitation as to use has been given, which reads as under:-
"Limitation as to use The Policy covers use only under a permit within the meaning of the Motor Vehicle Act, 1988 or such a carriage falling under Sub-section 3 of Section 66 of the Motor Vehicles Act, 1988."
No doubt that under the Motor Vehicles Act, 1988, for a commercial vehicle, route permit was necessary, therefore, there is violation of the terms and conditions of the policy, however, whether only on this account the entire claim of the complainant can be rejected in toto? In this regard reference can be made to the judgment of the Hon'ble Supreme Court in "Amalendu Sahoo vs. Oriental Insurance Co. First Appeal No.41 of 2018 13 Ltd.", 2010(3) CLT 1, in which the Hon'ble Supreme Court has referred to the judgment of the Hon'ble National Commission in "New India Assurance Company Limited v. Narayan Prasad Appaprasad Pathak" (2006) CPJ 144 (NC) wherein it was observed that while granting claim on non-standard basis, the National Commission set out the guidelines about settling all such non- standard claims. The said guidelines are set out below:-
Sr. No. Description Percentage of
settlement
(i) Under declaration of Deduct 3 years'
licensed carrying difference in premium
capacity from the amount of
claim or deduct 25% of
claim amount,
whichever is higher.
(ii) Overloading of vehicles Pay claims not
beyond licensed exceeding 75% of
carrying capacity admissible claim.
(iii) Any other breach of Pay upto 75% of
warranty/condition of admissible claim.
policy including limitation
as to use
The claim was allowed to the extent of 75% by the Hon'ble Supreme Court by observing in para no.16 as under:-
"16. In the instant case the entire stand of the insurance company is that claimant has used the vehicle for hire and in the course of that there has been an accident. Following the aforesaid guidelines, this Court is of the opinion that the insurance company cannot repudiate the claim in toto."
Therefore, for breach of condition of policy including limitation as to use, the claim is to be settled on non-standard basis upto 75%. First Appeal No.41 of 2018 14 Reference can be made to another judgment of the Hon'ble Supreme Court in "B.V. Nagaraju versus M/s Oriental Insurance Co. Ltd., Hassan" 1996(3) RCR (Civil) 304. In that case, the vehicle carried passengers more than permitted in the policy. It was observed that the use of the vehicle may be irregular in that manner but no so fundamental a breach of contract so as to disentitle the insured from being indemnified for the damage caused to the vehicle. The terms of the policy of insurance are not to be construed so strictly and are to be read down to advance the main purpose of the contract. Reference can also be made to another judgment of Hon'ble National Commission in "Oriental Insurance Company Ltd. and Anr. Versus Sanjeev Kumar" II(2009) CPJ 135 (NC). In that case, the passenger car was being used as taxi. The claim was settled @ 75% on non-standard basis. Reference can also be made to another judgment of Hon'ble National Commission in "The Manager ICICI Lombard General Insurance Co. Ltd. and others versus Gafur Alamgeer Sayyad" 2014(2) CPR 130, in which also private car was being used on hire basis. It was observed by the District Forum that there was no vital nexus between the accident and deviation of purpose in its use and claim was allowed at 75%. The order passed by the District Forum was challenged, which was upheld by the State Commission. Further the order passed by the State Commission has been affirmed by the Hon'ble National Commission. Reference can also be made to another judgment of Hon'ble National Commission in "United India Insurance Company First Appeal No.41 of 2018 15 Ltd. Versus Gaj Pal Singh Rawat" reported in 2010(1) CLT 14. In that case, it was observed that in the absence of nexus between the licence of driver and accident, the insurer would be liable to allow claim on non-standard basis. Even this Commission in the judgment in "Jaswant Singh versus National Insurance Company Ltd." III (2008) CPJ 472 allowed the complaint in the case of absence of route permit after observing that it was not so fundamental, who had attributed to cause of accident, after relying upon the judgment of Hon'ble Supreme Court in "National Insurance Co. Ltd. v. Challa Bharathamma" 2004 ACJ 2094 (SC). In that case also, the vehicle did not have a route permit. The main grouse of the opposite parties was violation of policy terms and conditions including limitation as to use. In that case, Insurance Company itself has issued the instructions to settle the claim at 75% of the admissible claim. Apart from route permit, the accident was not denied. Therefore, the claim could be settled upto 75% of the admissible claim.
15. The District Forum also relied upon the latest judgment of Hon'ble National Commission in the impugned order in "National Insurance Company Limited v. Jogesh Roy & Anr." 2017(2) CPR 252 (NC), in which it has been held that the claim could not be repudiated on the ground that the vehicle did not possess permit on the date it met with accident. The District Forum has also rightly relied upon the judgment of Hon'ble Supreme Court in Amalendu Sahoo's case (supra) and the judgment of Hon'ble National Commission in "National Insurance Company Limited v. Jaswant First Appeal No.41 of 2018 16 Singh" 2013(2) CPC 297 (NC). The judgments relied upon by the learned proxy counsel for appellant-opposite party No.1 of Hon'ble National Commission are prior to the judgment in Jogesh Roy's case (supra) and, as such, cannot be made applicable to the present case. So far as the judgment of Hon'ble Supreme Court in M.S. Middle High School's case (supra) is concerned, the facts of that judgment were different than the facts of the present case.
16. No doubt that policy terms and conditions are relevant at the time of settling the claim but it is to be seen what is the nexus between the snatching of the vehicle and the policy terms and conditions violated. The snatching could take place even if the vehicle had route permit, therefore, the route permit and the snatching does not have any nexus. In that case, the claim could be settled on non-standard basis.
17. In view of my above discussion and the law discussed above, I do not find any infirmity or perversity in the impugned order passed by the District Forum. There is no merit in the present appeal and the same is hereby dismissed; however, with no order as to costs.
18. The appellant/opposite party No.1 had deposited a sum of ₹25,000/- at the time of filing of the appeal. It deposited another sum of ₹2,75,000/-, vide receipt dated 4.4.2018 in compliance of the order dated 23.3.2018. Both these sums, along with interest which has accrued thereon, if any, be remitted by the registry to the District Forum forthwith. The complainant may approach the District Forum for the release of the above amount and the District Forum may pass First Appeal No.41 of 2018 17 the appropriate order in this regard after the expiry of limitation period in accordance with law.
First Appeal No.74 of 2018:
19. This appeal has been filed by the complainant for modification of the impugned order and award of full value of the IDV to the tune of ₹7,00,000/- along with compensation of ₹1,00,000/- on account of mental agony and harassment and ₹22,000/- on account of litigation charges.
20. For the reasons recorded in FA No.41 of 2018 above, there is no merit in the present appeal and the same is also dismissed with no order as to costs.
21. The appeals could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT July 09, 2020 Bansal