B.M. RAJASHEKARAIAH vs Oriental Insurance Co. Ltd.

-THE complainant purchased a goods vehicle bearing No. CNU 3159 TATA 1987 Model which was comprehensively insured with respondent w.e.f. 5.6.1990 to 4.6.1991 vide Policy No. 363291. THE vehicle met with an accident on 5.4.1991 at about 4.30 p.m. near Naikanderhalli within the limit of Doddaballapur Rural Police Station. THE vehicle was damaged heavily and 4 employees who were in the vehicle sustained injuries.

SURVEYOR appointed by respondent assessed the loss to the extent of Rs. 75,910. However, on the basis of depreciation that amount was reduced to Rs. 36,750. The report was submitted on 20.7.1991 to the opposite party. Complainant received a letter dated 20.2.1993 wherein his claim was repudiated by respondent on the ground of having violated the conditions of the policy by carrying unauthorised passengers in the lorry at the time of accident. Complainant sent a legal notice but opposite party failed to settle the claim. Hence, complaint was filed before District Forum praying for Rs. 75,910 as assessed by the surveyor with an interest @ 18% p.a. w.e.f. 5.4.1991. Respondents in their reply contended that the vehicle was used for carrying passengers and fare was collected from them. Further the irregularity was committed by the owner himself and not by any employee in the course of employment. Respondent also raised the plea of limitation. District Forum vide its order dated 2.3.1994 partly allowed the complaint and directed the Insurance Company to pay a sum of Rs. 31,000 with interest thereon.

That judgment was challenged by the Insurance Company by filing Appeal No. 166/94 before the State Commission. The complainant also preferred Appeal No. 209 of 1994 for enhancement of the compensation. Both the appeals were disposed of by common judgment and order dated 13.5.1996. The State Commission allowed the appeal filed by the Insurance Company by holding that at the time of accident, there were 4 to 5 persons travelling in the said vehicle and that it was not established that the said persons were labourers in the vehicle. The State Commission, therefore, set aside the order passed by the District Forum. That judgment is challenged by the complainant by filing this Revision Petition.

IN our view, the impugned order passed by the State Commission is on the face of it erroneous and is contrary to the decisions rendered by this Commission as well as by the Apex Court. INstead of referring to various other judgments, we straightaway refer to the decision rendered by the Apex Court in B.V. Nagaraju v. Oriental INsurance Co. Ltd., II (1996) CPJ 28 (SC)=I (1997) ACC 123 (SC)=1996 ACJ 1178 (SC), wherein after referring to earlier decision in Skandia INsurance Co. Ltd. v. Kokilaben Chandravadan, I (1987) ACC 413 (SC)=1987 ACJ 411 (SC), the Court held thus : "The National Commission went for the strict construction of the exclusion clause. The reasoning that the extra passengers being carried in the goods vehicle could not have contributed in any manner, to the occurring of the accident, was barely noticed and rejected sans any plausible account, even when the claim confirming the damage to the vehicle only was limited in nature. We, thus, are of the view that in accord with the Skandia''s case, the aforesaid exclusion term of the insurance policy must be read down so as to serve the main purpose of the policy, that is, to indemnify the damage caused to the vehicle, which we hereby do." The Apex Court in National Insurance Co. Ltd. v. Swaran Singh & Ors., I (2004) ACC 1 (SC)=I (2004) SLT 345=2004 (1) ACJ 1 has referred to the aforesaid decision and has approved the same. Hence, it cannot be said that carrying of 4/5 passengers in a lorry was the cause of accident.

THE next question is with regard to quantum of compensation payable to the insured. Learned Amicus Curiae submitted that there was no reason to reduce the amount of loss suffered by the complainant by approximately 50%. In our view, it would not be possible for us to arrive at the conclusion that deduction made by the surveyor on the ground of depreciation was unjustified. For that there is no evidence on record. THE surveyor has assessed net liability of the Insurance Company at Rs. 36,750. It appears that there was some mistake in mentioning the figure by the District Forum. Hence, to that extent, the order passed by the District Forum requires to be modified. In the result, Revision Petition is allowed. Impugned order of the State Commission is set aside. Respondent Insurance Company is directed to pay Rs. 36,750 with 10% interest from 20.7.19991. Insurance Company to pay cost of Rs. 2,500 which shall be payable to the Amicus Curiae. Revision Petition allowed.