AMAR SINGH SAINJTA vs National Insurance Co.Ltd

THE facts set out by the complainant in his complaint under Section 20 of the Consumer Protection Act, 1986 "hereinafter referred to an Act" are that the complainant was the owner of Mitsubishi (Light Commercial Vehicle) bearing registration No. HIS 9217. THE complainant got the said vehicle insured with the respondent-Company for a sum of Rs. 2,20,000/-for the period 28.7.1989 to 27.7.1990. During the period, while the vehicle was validly insured, the said vehicle met with an unfortunate accident on 13.7.1990 due to some mechanical fault. THE driver as a result thereof could not control the vehicle and it rolled off the road and tumbled down the hillside. In such accident, the complainant lost his son, the driver and the conductor, alongwith other relation of his, who was travelling in the said vehicle as goods owner.

THE complainant was subscribing to the insurance policy issued by the respondent-Company and is covered under the Act as a consumer. THE F.I.R. lodged in respect of aforesaid accident and claim has also been filed with the respondent-Company for the damage occurred to the said vehicle after obtaining a certificate from the technical person on the site of accident. THE complainant after obtaining a certificate from the technical person on the accident site got the vehicle towed away to Manimajra. He paid away a sum of Rs. 3,000/- as fare for towing the accidented vehicle from the site of accident to Manimajra and also a sum of Rs. 700/- to a Chowkidar, who guarded the accidented vehicle at the site of accident. The complainant purchased spare parts for carrying out the necessary repairs to the tune of Rs. 68,020.90p and the receipts thereof were handed over by him to Shri Gurdeep, Surveyor of respondent-Company alongwith labour/repair charges amounting to Rs. 38,000/- meaning thereby that the complainant had incurred an expenditure of Rs. 1,09,720.90p towards repairs of the accidented vehicle at Manimajra.

The complainant is an old man and despite having preferred his claim and having supplied the necessary bills etc. in original to the respondent M/s. National Insurance Co. Ltd., "hereinafter referred to as Company", the Company has failed to settle the claim of the complainant and to discharge its contractual liability. The complainant has also suffered on account of interest on the amount of money spent by way of raising loans at a very high rate of interest. Non-settlement of claim by the respondent-Company has resulted harassment, mental torture and mental agony to the complainant. The Company is under contractual duty to settle the claim and pay the amount immediately.

THE respondent-Insurance Company in reply has repudiated the claim of the complain ant merely on the ground that the complainant is a wrong doer himself and had allowed unauthorised occupant to board the truck in question which amounted to the breach of the terms and conditions of the insurance policy. However, it has been admitted by the respondent-Company that the vehicle of the complainant was insured with the Company and it had met with an accident on 13.7.1990. It has been reiterated in the reply that the vehicle was being plied with unauthorised occupants sitting in the truck in question at the time of accident and as such the complainant has caused material breach of the terms and conditions of the insurance policy. We have heard the learned Counsels for the parties. Mr. Y.S. Thakur, Counsel for the complainant strenuously submitted that in fact no unauthorised person was sitting at the time of accident and there is no violation of the insurance policy, and that the Company has no business to repudiate valid claim which amounts to ''deficiency in service''. On the other hand, Mr. Deepak Bhasin learned Counsel for the respondent-Company has strenuously urged that there is no ''deficiency in service and there is no dispute that one person who was owner of goods was travelling in the said vehicle and was not insured and carrying that person in the vehicle is clear violation of the insurance policy, as the insurance policy clearly provide the limitations and its use to third limitation of the insurance policy has been provided as such : "Use of carrying passengers in the vehicle except employees (other than the driver) not exceeding six in number under the purview of Workmen''s Compensation Act, 1923." Under such circumstances, the respondent is fully justified in repudiating the claim of the complainant.

THE undisputed facts which emerged from the pleadings and the arguments of the learned Counsels are that a person who was owner of the goods was also travelling in the vehicle in question at the time of accident and who was not insured and technically according to the aforesaid Clause-3 of limitation of use of the insurance policy, there is a violation of the terms and conditions of the insurance policy. THE question arises for consideration is whether alleged breach of carrying the owner of the goods in the goods vehicle in violation of contractual terms and conditions of the insurance policy, entitles the insurance policy to repudiate the claim of the complainant. In a case New Assurance Company v. A. Nazar, II (1995) CPJ 14 (NC)=First Appeal No. 491 of 1992 decided on 12.1.1994 the National Commission has held that if there is any violation of terms and conditions of the insurance policy by the complainant whether such violation is major or minor, the Insurance Company cannot be held guilty of ''deficiency in service'' while repudiated its liability in terms of the insurance policy. The National Commission also in the case of Sh. Gopal Dutt and Jai Singh v. The New India Assurance Co. Ltd., in the First Appeal No. 4 of 1992 dated 13th October, 1992, held that against 43 passengers which was the maximum passengers carrying capacity permitted for the vehicle, the vehicle was actually carrying 127 passengers at the time of occurrence of accident, and as such there was violation of the terms and conditions of the insurance policy and the Insurance Company was clearly absolved of the contractual liability under the policy. However, the view expressed by the National Commission is contrary to the latest view expressed by the Hon''ble Supreme Court in a case of B.V. Nagaraju v. M/s. Oriental Insurance Company Ltd., Divisional Office, Hassan in Civil Appeal No. 6296 dated 20.5.1996, reported in II (1996) CPJ 28 (SC)=JT 1996 (6) SC 32 and hence the view taken by the National Commission cannot be accepted. In the said case, the goods carrier vehicle at the time of accident was carrying more human beings than permitted in terms of insurance policy. The Supreme Court has observed as follows in para 7 of the judgment: "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 policy on occurring of an accident, how could those added persons be said to have contributed to the causing of it in the poser, keeping apart the load it was carrying. Here it is no-body''s case that the driver of the insured vehicle was responsible for the accident. In fact, it was not disputed that the on coming vehicle had collided head on against the insured ve hide which resulted in the damage. Merely by lifting a person or two or even three, by the driver or cleaner of the vehicle without the knowledge of the owner cannot be said to be such 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 Sikand''s case this Court paved the way 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 dependents 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. The theory which needs no support is supported by Carter''s "Breach of Contract" vide paragraph 251. To quote: Notwithstanding the general ability of contracting parties to agree to exclusion clauses which operate to define obligations there exists a rule, usually referred to as the "main purpose rule" which may limit the application of wide exclusion clauses defining a promiser''s contractual obligations. For example, in Glynn v. Margetson & Co., 1893 AC 351, 357 Lord Hulsbury, L.C. stated. It seems to me that in construing this document, which is a contract of carriage between the parties, one must in the first instance look at the whole instrument and not at one part of it only. Looking at the whole instrument, and seeing what one must regard ...... as its main purpose, one must reject words, indeed whole provisions, if they are inconsistent with what one assumes to be the main purpose of the contract, Although this rule played a role in the development of the doctrine of fundamental breach, the continued validity of the rule was acknowledged when the doctrine was rejected by the House of Lords in Suissee Attantique Societed'' Armament Maritime S.A. v. N.V. Rotterdamsche Kolen Centrale, 1967 1 AC 361. Accordingly, wide exclusion clauses will be read down to the extent to which they are inconsistent with the main purpose, or object the contract".

THE present case is fully covered by the judgment of the Supreme Court as in this case Clause-3 of the limitation of use of the insurance policy also provide use for carrying 6 persons in number besides a driver. THEre was only one unauthorised person the owner of the goods at the time of accident. It is no-body''s case that the driver of the insured vehicle was responsible for the accident. Merely by lifting a person or two or even three by the driver or 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 by carrying one unauthorised person cannot be considered to have increased any risk from the point of view of the Company on occurring of an accident and was not so fundamental in nature so as to put an end to the contract, particularly when the insurance policy itself provides for that vehicle is permitted to carry six passengers excluding the driver. THErefore, we are of the view that the aforesaid exclusion of Clause-3 of limitation of use of the insurance policy must be read down so as to serve main purpose of the policy i.e., indemnify the damage caused to the vehicle which we hereby do.

IN the light of what is discussed above, we direct the respondent M/s. National INsurance Company Ltd., to settle the claim of the complainant forthwith not later than two weeks from today. The complainant shall also be entitled to the interest @ 18% per annum from the date of the accident i.e., 13.7.1990, till the date of payment. The amount of Rs. 2,000/- is also awarded as a costs to the complainant against the respondent. Complaint allowed with costs.