New India Assurance Co. Ltd. and Anr. vs G.J. Ashok

AGGRIEVED by the order of dismissal of their appeal dated 13th December, 2004, by the Karnataka State Consumer Disputes Redressal Commission the Insurance Company has filed this revision petition before us.

THE factual matrix of the case of the complainant in the brief are that -Shri G.J. Ashok who is the respondent before us was the complainant before the District Forum, was the owner of a tempo running it on hire basis which was insured with the respondent for comprehensive risk for the period from 21.5.2002 to 20.5.2003. On 8.7.2002, the vehicle meet with an accident at the outskirts of Ananthapur City of Andhra Pradesh. This incident was intimated to the police authorities as well as to the Insurance Company. The Insurance Company appointed Surveyor who inspected the damages caused to the tempo in order to carry out the repairs to make it road worthy. Accordingly, the complainant spent Rs. 35,000 towards towing charges for bringing the vehicle to Bangalore and incurred an expenditure of Rs. 2,22,872 towards repair, replacement of parts and labour charges. As this was not paid, he issued a notice to the Insurance Company and ultimately filed a case before the District Forum.

THE District Forum after hearing the parties and going through the records of the case directed the Insurance Company to pay compensation of Rs,2,22,872 towards reimbursement of the expenses incurred by the complainant along with interest @ 6% per annum from the date of the complaint i.e. 26th August, 2003 till the date of payment. Dissatisfied by the order of the District Forum, the Insurance Company had filed an appeal before the State Commission, which was dismissed by the State Commission as stated above. Hence, this revision petition.

THE learned Counsel for the petitioner submitted that two unauthorized persons were travelling in the tempo and hence the Surveyor has assessed the loss on non -standard basis at Rs. 40,000 and the original assessed loss was at Rs. 66,000 He submitted that the estimate submitted by the complainant cannot be construed as loss incurred by him. There is a clear breach of warranty condition as two persons were travelling in the tempo. Accordingly, the Insurance Company justified in offering Rs. 40,000 as compensation. In support of his contention, he quoted the judgment of this Commission in National Insurance Company Ltd. v. Munni Lal Yadav, II (2001) CPJ 53 (NC). As per this judgment which is related to the non -standard claims example overloading of vehicles beyond licensed carrying capacity and therefore relief can be not exceeding to 75% of the admissible claims. He submitted that the ratio of the case is squarely applicable to this case

AS against this the learned Counsel for the respondent submitted that the complainant has given the estimates of the bills from an authorized workshop of the Insurance Company. It is not disputed by the Insurance Company, that the estimates and bills were from the authorized workshop. The Surveyor has not filed any affidavit nor he has been examined and the estimate of the bills has not been disputed or denied by the Insurance Company.

IN the rejoinder, the learned Counsel argued that the fact that two passengers were travelling was not disputed and the owner of the authorized workshop has not filed any affidavit to support his estimate / bills.

IT has been observed by the District Forum that the insurance policy permits only one employee and two unpaid passengers to be carried in the vehicle and the FIR also discloses that two passengers were in the cabin and they had sustained injuries. It is also a fact that the driver of the vehicle had died in the ghastly accident and this indicates that there was an extensive damage to the vehicle. Therefore, the vehicle was carrying persons within the limit as per the conditions of the policy. There was no nexus between these two passengers and the cause of accident and hence the Insurance Company was not justified in repudiating the claim.

THE complainant had submitted the bills to the tune of Rs. 2,22 ,872 along with the towing charges at Rs. 3,500 and the vehicle was got repaired at St Antony Diesel Auto Works at Bangalore which is the authorized service centre of Eicher Vehicles. The Insurance Company has not disputed nor has doubted the bills stating that the bills are excessive or exorbitant. Even the Surveyor''s report indicates that there was extensive damage to the vehicle: 1. Balance Rod and suspension Arms are bent.

Steering Wheel is bent. Steering Linkages are bent.

Brake booster is broken. Air Pipes are cut. Brake pipes are cut.

Propelar Shaft is bent. Front Axle Beam is bent.

Front Right wheel Disc is bent. Front shock absorbers are bent.

Air cleaner is broken. Radiator Core is scored.

Chassis long members are bent. Body front portion is crushed.

Body beams are bent. ABC pedals are bent. R V Mirrors are broken.

Wiring is cut. Wiper is broken. Front Panel is crushed.

Dash Board is broken. LH Door is crushed. RH Door is crushed.

RH Windscreen glass frame is crushed. All Cabin glass are broken.

ACCORDINGL Y , it is clear that the loss assessed by the Surveyor is very much on the lower side. The judgment quoted by the learned Counsel for the Insurance Company is not relevant because, it is applicable to the case where there is a violation of the terms and conditions of the policy. The Insurance Company has not filed a copy of the Insurance policy along with the revision petition. We only infer the clause of the policy from the judgment of the District Forum. The District Forum has categorically observed that overloading means much beyond the licence to carry passengers. This means that there was no violation under the terms of the policy. Hence, the ratio of the judgment quoted by the learned Counsel for the petitioner is not applicable to this case.

IN B.V. Nagaraju v. Oriental Insurance Co. Ltd., Divisional Officer, Hassan, (1996) 4 SCC 647, the Apex Court has observed as follows: "It is plain from the terms of the Insurance Policy that the insured vehicle was entitled to carry 6 workmen, excluding the driver. If those six workmen when travelling in the vehicle are assumed not to have increased any risk from the point of view of the Insurance Company on occurring of an accident, how could those added persons be said to have contributed to the causing of it is the poser, keeping apart the load it was carrying. In the present case the driver of the vehicle was not responsible for the accident. Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, 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. The 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."

ASSUMING for a moment that compensation awarded by the District Forum is excessive to the tune 10 -15%, we are not inclined to reduce the same, because, the interest awarded by the District Forum is only to the tune of 6%. Considering the cost of the money is 10% interest should have been awarded. Accordingly, we do not want to interfere with the concurrent decisions of the District Forum and the State Commission. The Revision Petition is, therefore, dismissed. However, there shall be no order as to cost. R.P. dismissed.