NEW INDIA ASSURANCE CO. LTD. vs A.NAZAR

THIS is an appeal against the order dated 14th August, 1992 passed by the State Consumer Disputes Redressal Commission of Tamil Nadu at Madras in Original Petition No. 127 of 1992.

BY this order the State Commission held that if the driver of the lorry had disobeyed the instructions of the owner and carried passengers, the lorry owner cannot be held responsible thereof and that this unauthorised and a minor deviation attracting the exclusion clause cannot disentitle the complainant from enforcing his claim under the policy against the insurer. The facts of the case briefly are that the respondent-complainant was the owner of the lorry which met with an accident on 14th October, 1991 and suffered extensive damage. This lorry had been insured with the appellant Opposite Party from 2nd August, 1991 to 1st August, 1992 for a sum of Rs. one lakh. This lorry met with an accident on the 14th October, 1991 i.e. during the period when the insurance policy was in force. The appellant repudiated its liability under the policy on the ground that at the time of the accident the vehicle was carrying passengers by collecting fares in violation of the terms of the policy. The complainant had admitted that some rose plants were being carried in the lorry and three occupants, who were owners of the rose plants, were traveling in the same lorry. The State Commission, after examining the evidence, came to the conclusion that three passengers were travelling in the lorry with the rose plants. It has, however, left open the question whether they had paid any fare for the journeys or they were travelling free. It has cited the judgment of the Andhra Pradesh High Court in New India Assurance Co. Ltd. v. Kothapalli Venkateswara Rao (1986-ICJ-891) wherein the Hon''ble High Court had observed that "such unauthorised and a minor deviation made by the insured does not disentitle him from enforcing his claim under the policy and as against the insurer". On this ratio, the State Commission held that the respondent-complainant was entitled to receive Rs. 77,500/- under the policy of insurance after deducting the salvage value of the damaged vehicle.

IT would be evident that the question to be considered in this appeal is limited; whether the Insurance Company was entitled to repudiate its liability under the policy on the ground that the insured vehicle was being run contrary to the terms of the agreement of insurance which does not permit the carriage of any passengers in that vehicle.

THOUGH the respondent-complainant had denied that the vehicle was being run in contravention of the policy of insurance, the State emission has held that at least three persons owning the rose plants were travelling in that y. Whether they had paid any fare for the same or not remains a moot question and there been no finding thereon by the State Common. Even if it is assumed that they had paid no fare for this journey, there is no doubt that the lorry driver was carrying passengers during journey who could not be carried in this ideas per the terms of the policy. It is in this text that we have to examine whether there been any deficiency of service on the part of I the Insurance Company. Since there has been a violation of the terms of insurance Policy by respondent insured it is immaterial whether it is major or minor. It cannot be held that the appellant Insurance Company has been guilty of deficiency in service while repudiating its liability in terms of the Insurance Policy. In consequence, the appeal is allowed; the order of the State Commission is set aside. There is no order as to costs.