KESHAVLAL JOITARAM PATEL vs NEW INDIA ASSURANCE CO.LTD

THE complainant, insured and the owner of DCM Toyota Truck No. GJ-02-T 7076 has claimed the amount of Rs. 3,04,000/- for the damages to the truck as per the contract of insurance, Rs. 61,500/- for the compensation for cost of transportation to and from the place of accident, for towing the vehicle from the place of accident, cost for various visits to the office of the opponent''s office, xeroxing and other expenses and for inconvenience, negligence, pain and suffering and Rs. 65,000/- for loss of business etc. THE said truck was purchased by the complainant on 6.5.91 and insured on the same day. THE truck was loaded with lemon fruits and occupied by the owner, driver and one Dashratbhai Parshottambhai Patel. THE truck was being taken to Delhi for sale of lime fruits and when it was proceeding towards Behror from Kotputli, it met with an accident. A Rajasthan State Road Transport Corporation bus, at a left hand turn, proceeded from behind and suddenly applied brake and dashed the truck causing injuries to the complainant and driver and fatal injuries to Dashratbhai. THE truck was extensively damaged and the opponent was informed and the opponent got the vehicle surveyed on 28.8.91 at the place of accident by Mr. Tilakraj Varma. According to the complainant, after receiving the survey report, the opponent had decided to consider the vehicle as total loss vehicle but did not settle the claim. THE opponent at one stage had offered an amount of Rs. 2,80,000/- for total settlement but did not state any details as to how the said figure was fixed by the opponent against the insurance amount of Rs. 3,04,000/-. THE opponent subsequently withdrew that offer also. THE opponent accordingly alleged deficiency in service by Insurance Company and demanded payment of the amount with 18% interest from the date of accident.

THE opponent by reply (Exh. 9) raised various contentions and stated that there was absolutely no deficiency of service by the opponent and had vide letter dated 7.10.92 offered the amount of Rs. 2,08,500/- for full and final settlement but the complainant did not respond and, therefore, ultimately that offer was withdrawn. According to the opponent certain persons were unauthorisedly and illegally taken in the goods vehicle as passengers and that amounted to breach of the conditions and, therefore, the claim is required to be treated as non standard claim and should be settled on payment of 75% of the claim as per the circular issued by the Insurance Company. THE other contentions are also denied and the opponent has denied any liability to the amount claimed. We do not intend to enter into the detailed factual and legal discussion as the complainant by affidavit dated June 8, 1993, in pursuance of the discussion between the parties before this Commission on previous hearing, has stated that the complainant is prepared to propose to settle the claim for Rs. 2,80,000/- for loss or damage to the vehicle as agreed on 27.9.91 and Rs. 84,000/- for the interest @ 18% from 28.10.92 till 28.6.93 and also till realisation. THE complainant had also stated that he ascertained and according to the persons who deal in salvage etc. of such vehicles, the salvage value of the vehicle is Rs. 95,000/- in open market. He has also alternatively stated that considering the salvage value at Rs. 95,000/- and the salvage to be kept with the complainant, the claim may be settled at Rs. 2,69,000/-. THE learned Advocate for the complainant has, however, stated that the proposal of the complainant may be considered but ultimately considering the relevant aspects, this Commission may decide the final amount which may be awarded and the complainant is prepared to accept the said amount. Shri. R.H. Mehta, the learned Advocate for opponent at initial stage asserted for the 75% of the damaged value of the truck i.e. Rs. 2,08,500/- but when the judgment of this Commission in the case of Jagdish Harilal Thakkar v. New India Assurance Co. Ltd., reported in II (1992) CPJ 497, was pointed out, he admitted that the present opponent who was also the opponent in that matter has to abide by the said judgment as it is not set aside by the Appellate Forum. As the law on the point is well settled by the judgment of this Commission, it is not necessary for us to discuss the factual aspects and the law points in details. However, we may consider in short the facts. The contention of the opponent is that the person who was alongwith the owner of the truck was taken as the passenger on . hire in violation of or in breach of the conditions of the terms of the Insurance Policy and, therefore, it should be considered as non standard claim and 75% of the damage to the vehicle should be awarded. The full copy of the insurance policy is not produced by either of the parties and only the page relating to the estimated value of the vehicle and the premium is produced. The premium is collected for the liability to the public risk and own damage. The value of the vehicle was considered at Rs. 3,04,000/-. Even though the terms and conditions are not produced, we accept that the terms is that the persons not owner of the goods should not be carried or taken in the vehicle on hire or purchase or other wise. It is the contention of the complainant that Dashratbhai was also accompanying his goods for sale at Delhi. As such there is no reason to disbelieve the fact. Apart from that, even if we accept for the sake of argument that Dashratbhai was not accompanying his goods in the vehicle that would not in any way change the legal position as the accident was not the result of Dashratbhai being in the vehicle. What is stated is that the truck was proceeding and there was a left turn and at that time the bus of the ownership of Rajasthan State Road Transport Corporation proceeded to overtake the truck and immediately applied the brake and the accident took place only because of the fault of the bus driver. Whatever may be the reason the fact remains that the truck was extensively damaged but Dashratbhai was not responsible for the accident in any way. As stated above, we do not wish to consider the legal aspects in details as the issue is now no more res integra. In Jagdish Harilal Thakkar (supra) similar contention was raised by the Insurance Company and the facts and situations were also practically similar and this Commission negativing the contentions observed that "the third submission which requires a serious consideration is regarding one of the terms of the Policy which has been pressed in service by Mr. Shah. There is no dispute that the policy was in force at the time of the accident. The schedule of the premium of the policy consist of two components - (A) is with regard to the own damage for which the premium is as high as Rs. 4,450/-less claim bonus and component (B) is in respect of liability to public risk where the premium if for authorised non-fare paying passengers Rs. 240/- and Rs. 64/- for L.L. paid to driver and cleaner and Rs. 100/- for increased T.P. limits unlimited Rs. 1,50,000/-. The policy is named is named as ''commercial vehicles comprehensive policy'' and Section II provides that the company will indemnify the insured against loss of or damage to the Motor vehicle and or its accessories whilst thereon by accidental external means, by fire external explosion self-oignition lightning etc. Since we are not concerned with other liabilities, same are not reproduced." It is also observed that "that under the Policy the insured was entitled to carry six employees excluding the driver and if total six persons are travelling in the truck, has it increased any risk for the Insurance Company or were these persons in any way connected with the cause of the accident. Our answer is no. The Insurance Company has not raised the contention that the truck was loaded with more than 12 tonns of goods. That taking of these three or four persons has contributed to the cause of accident or has increased any additional liability to the company. The accident has bean caused by the truck coming from the opposite direction directly dashed with the insured truck without any fault of the driver/cleaner. Even assuming for the sake of argument that taking of these 3/ 4 persons was strictly not provide, even then merely because some persons were taken by the driver and cleaner without the knowledge of the owner who had not contributed increase of risk or is not connected with the cause of accident, a contractual liability of this nature for which a very high premium has been paid by the insured cannot be repudiated by the Insurance Company. It was merely an irregularity which is not fundamental in nature so as to put an end to a contract. This type of breach will never give a right to a contracting party to rescind the contract. He might at the most claim some relief or concession in the damage. In that particular case 75% of the claim was directed to be paid as the claimant had relied upon the judgment regarding the non standard claim. In the instant case, the claimant has strongly challenged the right of the opponent to shirk the liability by paying 75% and the opponent has no right to refuse the claim as asserted.

The opponent has relied upon the circular by the head office of the Insurance Company (annexure-I) which is regarding the liability of the Insurance Company in respect of own damage claim when unauthorised passengers are carried in goods vehicle. The instructions are that the carrying of unauthorised passengers in the goods vehicle amounts to breach of ''limitation as to use'' clause. Such own damage claims should be treated as non-standard claim and settled upto 75% of the assessed loss if it is otherwise in order. The said guidelines are applicable when unauthorised passengers are carried in goods carrying vehicles and obviously not for passengers who come under the purview of the definition "non-fare paying passengers". The instructions are regarding interpretation of the terms regarding the limitation as to the use. The only contention is that Dashratbhai was passenger in the vehicle and, therefore, the claim should be considered non standard but as discussed above factually that aspect is also not proved. But apart from that merely because Dashratbhai was taken in the vehicle in any way did not contribute to the accident and was not relevant to the damages to the vehicle. As such it would not amount to breach of the condition regarding the use of the vehicle which relates to the cause of the accident. The claim, therefore, cannot be considered to be non standard claim and the liability cannot be reduced by 25%.

ADMITTEDLY, the damage was assessed at Rs. 2,80,000/- by Mr. Anil Tamne in the report. The opponent has admitted that fact and there is no dispute for that. The amount of Rs. 2,80,000/- therefore should be awarded for the damages to the vehicle. The salvage value of the vehicle, according to the complainant is at least Rs. 95,000/-. According to Shri R.K. Mehta, the learned Advocate for the opponent, the salvage value is Rs. 1,20,000/-. However, the learned Advocates have left it to the Commission to decide the salvage value of the vehicle. Considering the facts and the damage, we fix the salvage value at Rs. 1,05,000/-. The opponent has agreed that the salvage should be allowed to be kept by the complainant and the complainant is also willing to take it and, therefore, the salvage value of Rs. 1,05,000/- should be deducted from the amount of Rs. 2,80,000/- to be awarded to the claimant for the damage and loss to the vehicle.

THE vehicle was hypothecated with Nagrik Sahkari Bank Ltd., Vijapur and the Bank charge 18% interest from the complainant. It is clear from the record that opponent was prepared to pay Rs. 2,80,000/- for the damages and offered less amount and ultimately withdrew the offer. THE claim, therefore, could not be settled because of the non-co-operative attitude of the opponent and that resulted into the additional liability to the complainant to pay interest to the Bank. Normally the claim should have been settled within three months from the date of accident and, therefore, the interest should be awarded from 28.11.91 on the amount of Rs. 1,75,000/-. Calculating the interest @ 18% on the amount of Rs. 1,75,000/- from 28.11.91 to 11.6.92 it comes to Rs. 48,562/-. That amount should be paid with interest alongwith 18% interest from 12.6.93 till the date of realisation. The complainant has not asserted other claims or loss of business etc. Therefore, we do not consider that aspect. The complainant has also not asserted in the prayer for cost amount for the complaint. We accordingly pass the following order. ORDER The opponent shall pay the amount of Rs. 1,75,000/- with running interest @ 18% from 28.11.91 which comes to Rs. 48,562/- upto 11.6.93. and shall also pay 18% interest from 12.6.93 till the date of realisation. The salvage shall be allowed to be kept with the complainant. The parties to bear their own costs of this complaint. This 10th day of June, 1993. Complaint allowed.