New India Assurance Co. Ltd vs Ashok Pandit

ASHOK BHAN, J.

NEW India Assurance Company Ltd., Petitioner herein which was the opposite party before the District Consumer Disputes Redressal Forum, Bulandshahr (for short, ?the District Forum) has filed this Revision Petition against the order dated 11.05.07 passed by the State Consumer Disputes Redressal Commission, Uttar Pradesh (in short, ?the State Commission?) in First Appeal No.1103/05 whereby the State Commission has dismissed the appeal filed by the Petitioner. The District Forum had allowed the complaint and directed the Petitioner to pay Rs.60,982.27 to the complainant along with interest @ 8% p.a. from 1.8.93 till realization. Rs.1,000/- were awarded by way of costs. Complainant/Respondent filed a complaint before the District Forum Bulandshahr alleging, inter-alia, that tanker No.UP-13-8970 owned by the Respondent and insured with the Petitioner Insurance Company under ?Carriers Liability Insurance Policy? for the period 06.08.91 to 05.08.91 met with an accident on 09.07.92 while it was carrying 12,000 litres of diesel belonging to the Respondent. In the said accident, tanker was damaged and except for 212 litres of diesel, the entire remaining diesel spread on the road and was damaged. Value of the damaged diesel was Rs.60,982.27 Ps which the insurance company was liable to pay. That the Insurance Company had wrongly repudiated the claim of the Respondent. A direction was sought to the Petitioner to pay the sum of Rs.60,982.27 along with interest @ 24% p.a together with sum of Rs.10,000/- as compensation and costs of litigation.

Petitioner in its written statement contended that the Petitioner was not liable to reimburse the loss suffered by the Respondent as he himself was the owner of the diesel which was being carried in the tanker at the time of accident. That under the ?Carriers Legal Liability Insurance? Policy, the Petitioner was liable to indemnify the insured against his legal liability for the actual loss or damage to the goods being carried belonging to a third party. That the Petitioner was liable to reimburse the loss or damage to the tanker which was offered and paid to the Respondent.

DISTRICT Forum allowed the complaint and directed the Petitioner to pay a sum of Rs.60,092.27 towards the loss of the diesel as assessed by the Surveyor along with interest @ 8% p.a. w.e.f 1.8.93 till realization together with sum of Rs.1,000/- as costs. Petitioner, being aggrieved, filed an appeal before the State Commission which has been dismissed by the impugned order. Counsel for the Petitioner contends that the fora below have misread and mis-understood the terms, conditions and the coverage under the ?Carriers Legal Liability Insurance Policy?. That the Petitioner was not liable to pay the amount of insurance claim in respect of damage to the goods belonging to the Respondent while being carried in his vehicle. Respondent is not present despite notice. Ordered to be proceeded ex-parte. Relevant clause of the Carriers Legal Liability Insurance Policy reads:- "Company hereby agrees to indemnify the insured against his legal liability for actual loss of or damages to the goods or merchandise directly cause by fire and/or accident to the vehicle under the No. stated in the schedule whilst such goods or merchandise are actually transported in the vehicle provided that fire or accident has arisen on account of negligence of the insured or negligence of act of his servants and further provided that the vehicle is damaged by such fire or explosion or and a claim in respect thereof is admitted under the motor comprehensive insurance policy covering it"

Further the Exclusion Clause says:- "Provided always that the company shall not in any circumstances be liable under the Policy in respect of :- Liability in respect of damage of property belonging to insured or to any servant, agent or sub contractor of the insured or to third parties unless such property is covered by a contract of carriage entered into by the insured in an approved form"

District Forum in its order came to the conclusion that the onus to prove that the diesel belongs to the Respondent was upon the insurance company which the Insurance Company had failed to prove. State Commission upheld this finding. Onus to prove that the diesel was being transported under a contract of carriage of a consignor other than the Respondent was upon the Respondent because the said fact was within the knowledge of the Respondent only. This fact could not be in the knowledge of the Petitioner. Respondent had failed to produce the relevant documents showing that he was carrying the diesel belonging to a third party and had incurred the legal liability to pay for the loss caused to the property belonging to a third party. In our considered view, the Fora below have erred in placing the onus on the Petitioner to prove that the diesel belonged to the Respondent. The case of the Petitioner throughout was that the consignment, being transported, was of the Respondent/Complainant. A perusal of the complaint makes it clear that the Respondent was carrying his own consignment in the tanker.

UNDER the ?Carriers Legal Liability Insurance Policy?, the Insurance Company is liable to indemnify the insured against his legal liability for the actual loss or damage to the goods being carried belonging to a third party. Consignment belonging to the insured is not covered under the policy. In the exclusion clause, it is specifically mentioned that the Insurance Company was not in any circumstances liable to reimburse for the loss in respect of damage to the property belonging to the insured or his agent. In case the insured was interested in taking the insurance cover for the said consignment, he should have taken the "Inland Transit Policy" and not "Carriers Legal Liability Policy". A perusal of the operative part of the policy and the exclusion clause would show that the policy would not cover the risk of the consignment belonging to the insured. Merely because the consignment was lost/damaged while being carried in the tanker in question would not entitle the insured to the claim under the policy when the policy is subject to the Terms and Conditions and the specific cover granted. A similar view was taken by this Commission in the case of National Insurance Company Ltd. Vs. Sri Eshwara Sai Oil Mills ? III (2010) CPJ 336 (NCC). The State Commission has erred in holding that the Petitioner was liable to pay merely because consignment was lost/damaged while being carried in the vehicle in question. Respondent did not lead any evidence to show that the consignment belonged to a third party. Onus was on the Respondent to prove that the consignment in question belonged to a third party which he failed to do. Fora below have completely misread and mis-understood the terms, conditions and the coverage under the ?Carriers Legal Liability Insurance Policy?. For the reasons stated above, the orders passed by the fora below cannot be sustained and the same are set aside. Revision Petition is allowed and the complaint is ordered to be dismissed. Parties are directed to bear their respective costs.