Jaswant Singh vs National Insurance Company Ltd

-THIS is an appeal by the complainant against the order of the District Consumer Disputes Redressal Forum, Amritsar dated February 19, 2007 by which his complaint has been dismissed.

BRIEF facts are that the complainant Jaswant Singh was the owner of a mini truck and got the same insured with the respondent National Insurance Company Ltd. for a period of one year commencing 10. 12. 2004. On 17. 4. 2005 the insured vehicle was being driven by Sukhwinder Singh @ Sony, driver of the complainant. After loading goods from Trimurti Goods Transport Company it was coming from Panipat to Amritsar. When the truck reached in the godown of Trimurti Goods Transport Company, Golden Avenue, G. T. Road, Amritsar for unloading the goods and while it was in stationary condition, there was allegedly some short-circuiting in the said truck or some burning article had fallen on the truck, due to which the truck caught fire and it was totally damaged. Fire Brigade was immediately called to control the fire but it could not save the truck. Municipal Corporation Fire Services, Amritsar issued a certificate to the complainant that the truck had caught fire. On the same day, DDR No. 35 was lodged with Police Station A Division, Amritsar and intimation was also sent to the Insurance Company on the same day. The Insurance Company deputed a Surveyor from Jalandhar to assess the loss. According to the complainant, the Surveyor had assessed the loss to the tune of Rs. 4,38,500. The report was submitted by the Surveyor to the Insurance Company on 23. 6. 2005. The Insurance Company repudiated the claim on the ground that the truck did not have the permit to ply it on Panipat-Amritsar route. A complaint was filed by the complainant, which has been dismissed by the District Forum primarily on the ground that there was no route permit to ply the vehicle in question in the State of Punjab and, as per the circular of the Insurance Company dated 17. 11. 2005, the Insurance Company had rightly repudiated the claim of the complainant. At the outset we may observe that so far as the circular of the Insurance Company is concerned, that came much later than the date on which the accident took place. The accident took place on 17. 4. 2005 whereas the circular is dated 17. 11. 2005. Be that as it may, learned Counsel for the Insurance Company cited a judgment of the Apex Court, which is reported as National Insurance Co. Ltd. v. Challa Bharathamma and Ors. , V (2004) SLT 825=iii (2004) ACC 292 (SC)=2004 ACJ 2094 (SC), which is a two-Judge Bench. In that case, the facts were that an auto-rickshaw met with an accident resulting in death of two persons whereas third person had sustained injuries. The insured had not obtained permit to ply the vehicle. Under the aforesaid facts and circumstances, it was held by the Apex Court that the Insurance Company was not liable. However, the Insurance Company was directed to deposit the amount and recover the same from the insured by initiating proceedings before the Executing Court; it need not file a separate suit.

On the other hand, there are other judgments of the Apex Court. One of them is a judgment rendered by two-Judge Bench in B. V. Nagaraju v. Oriental Insurance Co. Ltd. , II (1996) CPJ 28 (SC)=i (1997) ACC 123 (SC)=1996 (2) CPC 1, in which the facts were that the truck, which was insured with the Insurance Company, met with an accident as a tanker had dashed against it. Claim was denied by the Insurance Company on the ground that the vehicle was carrying passengers unauthorizedly at the time of accident and since there was violation of the terms of the insurance policy, i. e. vehicle was being driven in accordance with the provisions of the Motor Vehicles Act, the claim was not payable and it was stated that the same was rightly repudiated. The Apex Court took the view that exclusion terms of the policy must be read down so as to serve the main purpose of the policy and it was held that under such circumstances the insured must be indemnified. In para 8 of the judgment the Apex Court observed as under: "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. "

IT will be seen that in B. V. Nagaraju''s case (supra) it was laid down that the violation of the condition of the policy, if any, must be so fundamental that it must contribute to the accident and exclusion clause (s) of the policy must be read down so as to serve the main purpose of this policy. We may notice another judgment of the Apex Court in Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan and Others, I (1987) ACC 413 (SC)= (1987) 2 SCC 654, wherein it was observed by the Apex Court that exclusion clause would have to be read down for the purpose of finding out whether the breach of that clause was fundamental in nature or not. Even in National Insurance Co. Ltd. v. Swaran Singh and Ors. , I (2004) SLT 345=i (2004) ACC 1 (SC)=109 (2004) DLT 304 (SC)=jt 2004 (1) SC 109, the Apex Court observed as under: "even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a law valid licence by the driver of or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of accident. The Tribunals in interpreting the policy conditions would apply ''the rule of main purpose'' and the concept of ''fundamental breach'' to allow defence available to the insured under Section 149 (2) of the Act. "

THOUGH the observations of the Apex Court were qua the third party but what was being observed was that even where the insurer is liable to prove breach on the part of the insured concerning the policy condition regarding the holding of a valid licence by the driver or his disqualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of accident. The Tribunals in interpreting the policy conditions would apply ''the rule of main purpose'' and the concept of ''fundamental breach'' to allow defences available to the insured under Section 149 (2) of the Motor Vehicles Act. A further fact may be noticed that in this case the vehicle was stationary when the alleged fire took place because of short-circuiting or for some other reasons. So far as the Apex Court''s judgment of the Apex Court in Challa Bharathamma''s case (supra) cited by the learned Counsel for the respondent is concerned, it may be mentioned that that was a case where an auto-rickshaw had no permit at all to ply the vehicle, whereas in the present case the vehicle in question had a permit but may not be having a permit to ply in the State of Punjab. Relying on the principles laid down by the Apex Court in B. V. Nagaraju and Kokilaben Chandravadan, cases as also Swaran Singh''s case (supra), the question would arise : Is the plying of the truck in an area where there is no permit, i. e. is the breach of condition of insurance policy was fundamental to the cause of accident (i. e. in this case the accident was fire ). According to us, the cause of the accident in the present case has nothing to do with the vehicle being brought in the State of Punjab, for which there was no permit. As held by the Apex Court in B. V. Nagaraju''s case that though there was breach of condition of policy of plying the truck as it had been carrying passengers unauthorizedly, but the Supreme Court went further to find out whether this breach of condition of carrying unauthorized passengers was fundamental to the cause of the accident. After answering the same in the negative, it was held that the Insurance Company was liable to pay the insurance amount.

FOR the foregoing reasons, we do not agree with the approach of the District Forum and rather would hold that in the present case the repudiation was not well based.

CONSEQUENTLY, we allow this appeal, set aside the impugned order of the District Forum and direct the Insurance Company to pay to the complainant-appellant the amount as assessed by its Surveyor. The respondent Company is directed to pay the said amount within one month of the receipt of the copy of the judgment, failing which it will carry interet at the rate of 9% per annum with effect from the date of this judgment and order. Since the view which was taken by the respondent Insurance Company could not be said to be wholly arbitrary and may be said to be plausible view, with which we are not now agreeing, the complainant-appellant will not be entitled to any interest. No costs. Orders were reserved on May 29, 2007. Be communicated. Appeal allowed.