K.K.NAYYAR vs REGIONAL MANAGER, ORIENTAL INSURANCE CO. LTD.

THIS is an appeal filed against the order of District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (hereinafter referred to as District Forum-I for short) dated 13.5.2002 in Complaint Case No. 1010/1998, K.K. Nayyar v. Regional Manager, Oriental Insurance Company Limited.

THE complaint in brief is that Vehicle Registration No. CH-02-0219 a Maruti Van belonging to the complainant was insured with Oriental Insurance Company Limited. During the pendency of the Insurance Policy this vehicle met with an accident near Balachaur on 29.8.1996. THE damage caused to the vehicle was assessed by the Insurance Company Surveyor as Rs. 70,000/-. However, while settling this claim the Insurance Company paid him only Rs. 51,500/- after deducing Rs. 19,500/- on the ground that the aforesaid vehicle which was being plied as a taxi was carrying more than authorised passengers. THE complainant on his part averred that at the time of accident there were only four passengers in the vehicle nonetheless he signed the discharge voucher of the Insurance Claim accepting Rs. 51,500/- as full and final payment for the claim on 27.5.1997. However, later he first served a legal notice on 11.8.1998 but there was no response to this legal notice. He, therefore, filed this complaint to say that Rs. 19,500/- had been wrongly deducted from the claim and prayed for relief as under : (a) Full-payment of Rs. 70,000/- for the accident claim. (b) Payment of Rs. 2,00,000/- as compensation for mental torture and harassment. (c) Interest @ 24% p.a. from 29.8.1996 i.e. the date of accident till payment.

Learned District Forum-I in its order held that the complainant gave the discharge voucher on 27.5.1997 for Rs. 51,500/- without any demur or signs to indicate that the payment was received under any protest. It was also observed by the learned District Forum-I that the legal notice was served only on 11.8.1998 whereas the discharge voucher was signed on 27.5.1997 thus indicating that the settled amount was received voluntarily. Finding no deficiency on the part of the O.P. learned District Forum-I did not grant any relief but disposed of the complaint without prejudice to the right of the complainant to see, etc. remedy before the competent authority/Court as permitted by law.

Aggrieved by this order, the appellant filed this appeal. The appeal was taken on board, notice was issued to the respondent and record of the complaint case was summoned from the District Forum-I. Mr. Sanjiv Gupta, Advocate appeared for the appellant whereas Mr. Ashwani Talwar, Advocate represented the respondent.

LEARNED Counsel for the appellant submitted that the claim of the complainant had not been rejected by learned District Forum-I in toto as it had in its order let the complainant retain the right to seek remedy before the competent Court. He further submitted that the observer appointed by the O.P./respondent had admitted that there were only four passengers i.e. the number authorised to travel and hence the O.P. was not justified in deducting Rs. 19,500/- from the full claim of Rs. 70,000/-. He also submitted that inspite of execution of discharge voucher in full and final settlement of the claim, the appellant was legally permitted to challenge the award and in this context he cited the judgment in the case reported in II (1997) CPJ 77 (NC), National Insurance Co. Ltd. v. New Bharat Rice Mills. The learned Counsel further cited II (1996) CPJ 28 (SC)=JT 1996 (6) SC 32, B.V. Nagaraju v. M/s. Oriental Insurance Co. Ltd., to support his plea that carrying humans more than the number permitted in terms of insurance policy is not so fundamental a breach so as to afford grounds to the insurer to eschew liability altogether. He further submitted that the O.P. orally assured the complainant that Rs. 19,500/- deducted from the claim will be given to him but when the same was not done, a legal notice was served and the same was not even replied by the O.P. He, therefore, prayed for the appeal to be allowed. In response the main plea of learned Counsel for the respondent/O.P. was that since more than authorised persons were travelling in the vehicle at the time of accident, the claim was processed as a non-standard claim and hence 25% of the claim amount was disallowed. Moreover, the complainant/appellant had executed the discharge voucher without any protest and had kept quite for well over a year. In terms of the Insurance Policy he is deemed to have abandoned all claims for all purposes, if he does not put any claim within 12 months of the discharge voucher being executed and hence the plea of estoppel. He also cited the judgment of Hon''ble National Commission in the case of National Insurance Co. Ltd. v. New Bharat Rice Mills (supra), to emphasize that after execution of discharge voucher in full and final settlement of a claim the complainant can only challenge the award if the discharge voucher is signed unwillingly or unvoluntarily under any compulsion or coercion. But in this case, he contended that there was no such pressure or compulsion and appellant having signed the discharge voucher on 27.5.1997 kept quiet for well over one year indicating that he was fully satisfied with the award. He, therefore, pleaded that the appeal be dismissed and in case the appellant is so advised he may seek remedy in a Civil Court.

THE main issues that need to be resolved are : (a) Was the Insurance Company justified in treating the claim as a non-standard claim ? (b) Is the appellant estopped from making any claim at this stage ?

The first issue is most important as it is the reason for the complaint. Though in his report the Investigator has said that the vehicle had the driver and five passengers, Sh. Sawaran Singh, the GPA holder in his affidavit given to the Investigator has clearly stated that there were only four passengers in the vehicle. No passenger on oath has given evidence to state that there were six persons in the vehicle including the driver. Even if one accepts that there were five passengers in addition to the driver, it is not the case of the O.P./respondent that the accident took place due to carriage of an additional passenger. On the other hand, it has been stated in Investigation Report that as per one of the passengers namely, Sh. Gurcharan Singh, the accident occurred due to fault of the truck driver. The judgment of the Hon''ble Supreme Court in the case of B.V. Nagaraju v. M/s. Oriental Insurance Co. Ltd. (supra), inter alia, lays down that "mere lifting a person or two or even three by the driver 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 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". As there was no such contributory factor the Hon''ble Supreme Court allowing the appeal also held that exclusion term of the Insurance Policy must be read down so as to serve the main purpose of the policy that is, indemnify damage caused to the vehicle. In the instant case which has similar circumstances, treatment of the claim as a non-standard claim by the OP/respondent in our considered view is not correct, particularly in the light of the law laid down as discussed above. In this context it is also relevant to add that the Insurance Company has neither referred to the clause of the term and condition under which the claim was processed as a non-standard claim nor has it placed on record the copy of the Insurance Policy governing the claim. The O.P. has also not either given the Surveyor''s report nor placed on record any correspondence vide which the complainant was informed, if at all, of their decision to treat the claim as non-standard claim and authority for the same. It thus contributes a deficiency in service on the part of the Insurance Company. Coming to the next issue of ''Estoppel'' Counsel for both the parties have cited one and the same judgment of Hon''ble National Commission i.e. the case of National Insurance Co. Ltd. v. New Bharat Rice Mills (supra). The observation of the learned District Forum-I that complainant signed the discharge voucher without demur and thereafter kept quiet for over one year is indicative of the fact that the complainant accepted the settled amount voluntarily in our view is taking a very mechanical and legally technical view of the case, particularly in the backdrop that the processing of the claim as non-standard claim by the O.P. was not justified in view of the law laid down.

FROM the foregoing discussion of the case, we are of the opinion that processing the claim of the complainant/appellant as non-standard claim in the circumstances of this case amounts to deficiency in service on the part of the O.P. and on this aspect alone, inspite of signing the discharge voucher without indicating that it is under protest the appellant/complainant has the right to challenge deduction and subsequent denial of Rs. 19,500/- from the insurance claim of Rs. 70,000/-. This is a clear case where insurance of the vehicle is admitted, damage of Rs. 70,000/- to the vehicle is also admitted and it is not anybody''s case that the accident took place due to carriage of extra passenger. In such circumstances under the law laid down by the Hon''ble Supreme Court in the case of B.V. Nagaraju v. M/s. Oriental Insurance Co. Ltd. (supra). The appellant/complainant is entitled to full indemnification and any deduction therefrom for the mere reason of carriage of an additional passenger cannot be allowed particularly under the Consumer Protection Act, 1986 which aims at providing better protection to the consumers, we, therefore, set aside the impugned order of learned District Forum-I. The appeal is allowed. The respondent is ordered to pay within two months of receipt of this order Rs. 19,500/- in addition to Rs. 51,500/- already paid to the appellant/complainant as full indemnification of the loss assessed by their Surveyor, along with interest @ 9% p.a. from 27.5.1997 i.e. the date of signing of the discharge voucher till payment. Both parties will have to bear their respective costs of litigation. Copy of the order be supplied to the parties free of charges. Appeal allowed.