NEW INDIA ASSURANCE CO. LTD. vs A.MOHAMAD YASIN

THIS First Appeal is directed against the order dated 12th May, 1993 passed by the State Commission, Tamil Nadu at Madras allowing the complaint and directing the Opposite Party-Appellant herein to pay to the Complainant Rs. 75,506.25 with interest thereon at 12% from the date of the claim till payment and costs of Rs. 1,000/-.

THE bare facts which are not in dispute are these. The vehicle bearing Registration No. TAV 503 owned by the Complainant was insured with the Opposite Party for the period 31.7.91 to 30.7.92. It met with an accident on 16.10.91 when it dashed against a tree resulting into the death of two persons and injuries to several other persons carried in the vehicle besides the driver. The vehicle was also damaged extensively. The Complainant lodged a claim in respect of the damages caused to the said vehicle with the Opposite Party. On receipt of the claim the Opposite Party appointed Surveyor who submitted its report assessing the loss on repair , basis. The report of the Surveyor revealed that the vehicle which was a goods carrying vehicle, was carrying unauthorised passengers in violation of the terms and conditions of the limitation as to use of the policy. The Opposite Party in view of the guidelines issued by the General Insurance Corporation of India treated the claim as non-standard and offered to settle for 75% of the loss. The Complainant did not accept it and alleged deficiency in service on the part of the Opposite Party and filed a complaint betore the State Commission claiming the insured value of the vehicle and a compensation of Rs. 300/- per day. The State Commission repelled the contention of the Opposite Party that at the time of occurrence of the accident the vehicle carried unauthorised persons in violation of the conditions of the policy by merely holding that the claim is for damages suffered by the vehicle in the accident and the question of vehicle carrying passengers unauthorised ly is not relevant for this case. The State Commission accepted the figures of loss as assessed by the Surveyor in its report Exhibit Bl and held that the Complainant is entitled to the amount of Rs. 75,506.25 with interest at the rate of 12% per annum from the date of the claim till payment.

WE have heard the arguments and perused the record. The certificate of insurance/ policy of the insurance is not on our record. Mr. S.M. Suri, the learned Counsel for the Appellant has produced the carbon copy of the certificate of insurance/policy of insurance for our perusal. It is evident that the vehicle bearing registration No. TAV 503 is a goods carriage vehicle and not a ''''mini lorry" the word as is loosely used by the State Commission. The Motor Vehicles Act, 1988 does not use or define "mini lorry". The vehicle in dispute is a goods carriage vehicle and is also insured as goods carriage vehicle. The Motor Vehicles Act, 1988 provides for the control of all transport vehicles which includes a goods carriage. A goods carriage vehicle is not permitted to be used for the purpose of carrying passengers. The policy issued by the Appellant also contains specific clause laying down limitation as to use. It, inter-alia, provides the vehicle is to be "used for carriage of goods under Motor Vehicles Act, 1988". The vehicle was admittedly carrying unauthorised passengers when the loss/damages to the vehicle occurred. The vehicle was being run for a purpose not allowed by the goods carriage permit and thus there has been a breach of the specified conditions of the policy which has put limitation as to use only for the purpose of the carriage of the goods within the scope and ambit of the Motor Vehicles Act, 1988. As at the time of the loss to the vehicle it was carrying unauthorised persons in violation of the terms and conditions of the Policy as well as of the permit, the Appellant was not liable to indemnify the Complainant against the loss caused to the vehicle. It may be that as a matter of policy and under the instructions of the General Insurance Company of India, the Appellant offered to settle the insurance claim for 75% of the loss but this offer was not accepted by the Complainant. A settlement offer on non-standard basis cannot be the foundation for a direction against the Insurance Company for non-settlement of the claim or any deficiency in service within the meaning of the Consumer Protection Act.

IN the result, the appeal is allowed. The impugned order dated 12.2.93 is set aside and the complaint is dismissed leaving the parties to bear their own costs throughout.