Divisional Manager, Oriental Insurance Co. Ltd. vs S. Kannan

THIS appeal is directed against the order dated 3rd day of August, 1998 in O.P. No. 132/1997 on the file of the District Consumer Disputes Redressal Forum, Tiruchirapalli.

THE appellant is the opposite party while the respondent is the complainant. Short facts may be related in order to understand the crux of the issue arising for consideration in this action.

The complainant is the registered owner of the lorry bearing No. TN-45-Y-8697. The vehicle was insured with the opposite party Insurance Company for a period of one year between 24.3.1995 and 23.3.1996. The vehicle was met with an accident on 13.8.1995 at about 8.30 a.m. when it was proceeding near Karambiyam within the jurisdiction of Kunam Police Station, Trichy District. The lorry, it is said, was driven by a person having an effective driving licence. The accident had been reported to the opposite party Insurance Company. The opposite party Insurance Company in turn deputed its Surveyor for the assessment of the damage caused to the vehicle met with an accident. The complainant also submitted a claim form with the opposite party. The opposite party Insurance Company in turn rejected the claim by their letter dated 11.3.1996 treating the claim as "No Claim" on the ground that at the time of the accident, the lorry carried 51 persons as passengers. Again the complainant sent a letter dated 19.11.1996 to the opposite party inviting their attention to the judgment of the Supreme Court reported in 1996 AIR 2054. The opposite party Insurance Company even after the receipt of the letter on 20.11.1996 did not care to send a reply.

IN such a backdrop and setting, the complainant knocked at the doors of the Forum below contending that the act of the opposite party INsurance Company in repudiating the claim would tantamount to deficiency in service and for certain reliefs as prayed for in the complaint. The opposite party in turn would contend that though the lorry was insured with them, yet the claim as made by the complainant has to be necessarily treated as No Claim inasmuch as the violation of the policy condition in the sense of carrying passengers more than the permissible limit. Even otherwise, the claim as made by the complainant quantified in a sum of Rs. 47,789.07 is not grantable. The complaint as such is liable to be dismissed.

THE Forum below after taking into consideration the materials placed on record, recorded a finding that there was deficiency in service on the part of the opposite party in repudiating the claim on the ground that the lorry in question carried passengers more than the permissible limit, which is a gross violation in the terms and conditions of the policy according to the opposite party Insurance Company. It is on the basis of the findings, the Forum below directed the opposite party to pay to the complainant a sum of Rs. 39,200/- towards the cost of repairs of the vehicle met with an accident with interest at 12% per annum on and from 21.11.1996 till realisation. THE Forum below also awarded compensation quantified in a sum of Rs. 5,000/- towards mental agony and anguish suffered by the complainant apart from awarding costs quantified in a sum of Rs. 500/-. Aggrieved by the order as above, the opposite party Insurance Company resorted to the present action by engaging a Counsel of their choice, namely learned Counsel M/s. M.B. Gopalan, N. Vijayaraghavan and M.B. Raghavan. On service of process, the respondent/complainant also entered appearance through a Counsel of his choice namely learned Counsel M/s. K. Srinivasan, R. Deva Prasad and R. Uma Maheswari.

WE heard the arguments of learned Counsel Mr. M.K. Srinivasan representing learned Counsel appearing for the appellant/opposite party and learned Counsel Mr. R. Deva Prasad appearing for the respondent/complainant.

FROM the pith and submission of respective learned Counsel appearing for the parties, the points as below emerged for consideration : (1) Whether the finding that the act of the opposite party Insurance Company in repudiating the claim as made by the complainant would tantamount to deficiency in service is sustainable in law on the facts and in the circumstances of the case ? (2) Whether the grant of compensation towards mental agony and anguish by the Forum below is sustainable in law when especially it had granted interest @ 12% per annum on the amount due and payable by the opposite party Insurance Company towards the cost of the repairs of the vehicle met with an accident ?

We shall now enter into the arena of discussion as relatable to the Point Nos. 1 and 2.

Point Nos. 1 and 2 : No doubt true it is that the vehicle in question is a goods vehicle. There is no dispute that the goods vehicle insured with the opposite party, during the coverture of the insurance, met with an accident sustaining extensive damages to the vehicle. It is also not in dispute that the vehicle at the time of the accident carried passengers more than the permissible limit in the sense of carrying 51 passengers. The carrying of passengers more than the permissible limit is, of course, a violation of the condition of the policy issued. It is the contention of the opposite party Insurance Company that the claim made by the complainant in such circumstances had to be necessarily treated as "No Claim". This sort of a contention as projected by the opposite party Insurance Company had been rejected by the Forum below on the rationale or dictum emerging from the Supreme Court of India in the case of B.V. Nagaraju v. M/s. Oriental Insurance Co. Ltd., Division Office, Hassan, II (1996) CPJ 18 (SC). We may refer to the facts of the said case in an incisive fashion so as to understand the dictum evolved by the Supreme Court. In that case, the vehicle was a goods vehicle. The vehicle was carrying extra passengers in the sense of carrying more than the permitted passengers. There was an exclusion clause in the policy of insurance. Under the exclusion clause, if extra passengers are carried in the goods vehicle at the time of accident, the liability of the Insurance Company will get excluded. This sort of a clause in the insurance policy was strictly construed by the National Commission and the claim had been repudiated. Consequently the aggrieved complainant agitated the matter further before the Supreme Court. What the Supreme Court said in such a context is getting reflected at paragraph 8 of its order at page 21 and it reads as under : "8. 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 confining 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, indemnify the damage caused to the vehicle, which we hereby do."

THE dictum as laid down by the Supreme Court is applicable in all fours to the facts of the instant case. In this view of the matter, the findings as recorded by the Forum below that the act of the opposite party Insurance Company in repudiating the claim on the facts and in the circumstances of the case would tantamount to deficiency in service cannot at all be found fault with. There is no dispute with regard to the quantum of damages as awarded by the Forum below. The Forum below afterall awarded a sum of Rs. 39,200/- as against the claim of Rs. 47,789.07 made by the complainant. The Forum below took into consideration the Survey Report, Ex. B5, filed by the Surveyor appointed by the opposite party Insurance Company and the Report of the Motor Vehicles Inspector marked as Ex. B6, in arriving at such quantum of damages. A perusal of the Ex. B5, Survey Report, would indicate in crystal clear terms that the net amount payable to the insured is Rs. 35,400/-. The Report of the Motor Vehicles Inspector under Ex. B6 indicates the requirement of a further sum of payment of Rs. 3,800/- to the complainant for the renewal of the radiator core. Adding the sum of Rs. 3,800/- to Rs. 35,400/-, the net amount payable to the insured, the total cost, is Rs. 39,200/-. Therefore, the award as made towards the cost of repairs cannot at all be found fault with. The Forum below issued a direction to the Insurance Company to effect payment of this sum to the complainant with interest @ 12% per annum on and from 21.11.1996 till realisation. The significance to the date 21.11.1996, is traceable to this : The complainant issued a letter to the opposite party Insurance Company on 19.11.1996 marked as Ex. A6 pointing out the dictum of the Supreme Court in the case of B.V. Nagaraju (supra). The letter so sent had been received by the opposite party Insurance Company, the next day, that is, on 20.11.1996 as evidenced by the acknowledgement card under Ex. A7. The date of commencement of interest had thus been fixed the date next to the date of receipt of the letter sent by the complainant to the opposite party Insurance Company. Such a finding cannot at all be found fault with.

THE Forum below despite grant of interest @ 12% per annum on Rs. 39,200/- representing the cost of repairs to the vehicle, also granted compensation quantified in a sum of Rs. 5,000/- for mental agony and anguish suffered by the complainant. This sort of grant of compensation towards mental agony and anguish in addition to the interest as awarded by the Forum below is not permissible in law. THE superior Courts of jurisdiction laid down the dictum that either one of two things is maintainable; either interest or compensation for mental agony and anguish. In this view of the matter, the quantum of compensation awarded at Rs. 5,000/- towards mental agony and anguish said to have been suffered by the complainant is deleted. The Forum below afterall awarded costs quantified in a sum of Rs. 500/-, which, we feel, is reasonable on the facts and in the circumstances of the case calling for no interference. The appeal is thus disposed of. We, however, make no order as to costs on the facts and in the circumstances of the case. We, however, make it crystal clear that the order of ours as above is required to be complied with by the opposite party Insurance Company within a period of one month from the date of receipt of our order, or otherwise, it would be perfectly open to the complainant to invoke jurisdiction of Section 27 of the Consumer Protection Act, 1986 (for short, "the Act, 1986"). Appeal disposed of.