New India Assurance Co. Ltd. vs B.P. RAMU

-THE complainant''s bus bearing registration No. TCX 8586 met with an accident at Palayampatti on the Madurai-Aruppukkottai Road. THE bus was insured with the 1st opposite party. THE damaged bus was entrusted to the 2nd opposite party for repairs. THE complainant made a claim to the 1st opposite party who repudiated the same. Hence the complainant lodged the complaint before the lower Forum claiming compensation of Rs. 1,34,280/-.

THE 2nd opposite party only stated that he is an unnecessary party of the complaint and that this opposite party had filed O.S. No. 1309/95 for recovery of the money due to them from the complainant. The 1st opposite party raised several contentions, the main contention being that the repudiation was justified because at the time of the accident, the bus had carried 56 persons viz., more than the permitted load of passengers and, therefore, they are justified in repudiating the claim. They also took the other usual pleas.

The lower Forum by its order dated 31.8.1998 granted a compensation of Rs. 64,224/- with interest at 18% from 2.10.1998 and directed the 1st opposite party to pay the said sum while it dismissed the complaint as against the 2nd opposite party.

THE 1st opposite party Insurance Company, aggrieved by the order passed by the lower Forum, has preferred A.P. No. 599/98 while the complainant, claiming higher compensation, has preferred the appeal in A.P. No. 59/99. The points that arise for determination in these two appeals are, (1) whether the repudiation is justified and if so, whether there was no deficiency in service? (2) what compensation the complainant is entitled to?

THE Points: While the complainant would say that at the time of the accident the bus carried only 35 + 1 passengers, it is disputed by the 1st opposite party. In fact, by his letter marked as Ex. A-10, the complainant has specifically stated so. But in spite of it, the 1st opposite party has been again and again, by their letters, asking the question about the number of passengers carried, to which the complainant again sent a reply under Ex. A-12 dated 16.9.1993. According to the 1st opposite party, they have made investigations and came to know that about 56 persons travelled in the bus. THE 1st opposite party has not chosen to produce the statements alleged to have been recorded nor have filed any proof affidavit in support of the same. In the F.I.R., it is stated that the complainant Muruga Krishnan, s/o Nallayan Chettiar and others boarded the bus. THE complaint reads that there were 35 persons with few others who travelled in that bus. THErefore, from this it is sought to be argued by the 1st opposite party that more number of persons than the permitted limit travelled in the bus. THE opposite parties have not produced the Surveyor''s report or any other material to show that 57 persons travelled in that bus as against the permitted capacity of 35 + 1. THErefore, the 1st opposite party cannot draw any strength from what is stated in the complaint viz., in the FIR. Even at best it would mean that a few persons along with 35 others travelled and it cannot definitely be interpreted to read as 57 persons in all. It is necessary in this context now to refer to the insurance policy. The policy has been marked as Ex. A-21. It reads that- "the company will indemnify the insured against loss of or damage to the Motor Vehicle and/or its accessories whilst thereon- (a) by fire explosion self-ignition or lightning, (b) by burglary house breaking or theft; (c) by riot and Strike, (d) by earthquake (fire and shock damage), (e) by flood, typhoon, tempest, hurricane, storm inundation, cyclone, hailstorm, frost, (f) by accidental external means, (g) by malicious Act, (h) by terrorism, (i) whilst in transit by road, rail, inland waterway, lift elevator or air. Subject to a deduction for depreciation at the rates mentioned......"

The limitations as to its use are stated as follows: The policy does not cover the use of the vehicle for organized racing, pace-making reliability trial or speed testing and use whilst drawing a trailer except the towing (other than for reward) of any one disabled mechanically propelled vehicle. The policy does not contain any clause specifying especially about overloading. Of course, the permit condition does not authorize overloading and it has to be read as a part of the contract. The permit has been granted only to carry passengers numbering 35 + 1. Contending that more than 36 persons were carried, the 1st opposite party would say that it is a violation of the permit conditions and, therefore, the Insurance Company is not liable to honour the claim. We have already referred to the policy conditions, especially relating to loss or damage which specifies that the company will indemnify against loss of or damage to the vehicle and its accessories when it is caused by accidental external means. There is no dispute whatever here that the damage was caused by an accident and by external means. Therefore, the insurer is liable to make good the loss or damage caused to the vehicle. But in such circumstances, we have to see whether the breach of the permit condition would come in the way of the complainant succeeding in his claim. The Supreme Court has held in the decision reported in B.V. Nagaraju v. Oriental Insurance Co. Ltd., II (1996) CPJ 28 (SC)=AIR 1996 SC 2054, that mere lifting a person or two or even three by the driver or cleaner of the vehicle without the knowledge of the owner cannot be said to be such a fundamental breach that the owner in all events be denied indemnification. That was a case where the damage was caused to a truck which was only authorized to carry 6 workmen whereas it carried 9 workmen. Therefore, Their Lordships held that the exclusion terms of the insurance policy must be read down so as to serve the main purpose of the policy viz., indemnify the damage caused to the vehicle. Their Lordships further observed that the user in such case was only irregular and not fundamental in nature as to put an end to the contract. Here, the complainant has been consistently maintaining his stand that the bus carried only 35 + 1 passengers. Even assuming that the FIR mentions that more than 36 passengers were carried, it does not indicate as to the number of persons carried in excess. The stand of the 1st opposite party that about 56 persons were carried is unimaginable and stands not substantiated. Therefore, assuming for the purpose of the case that more passengers than the permitted loading capacity were carried and thus there was overloading of bus, applying the reasoning of the Supreme Court, we have to hold that it is only an irregular user. It is not the case nor it can be contended that the accident is the direct result of the overloading. In other words, there is no link to establish the accident to the fact of overloading. On the other hand, the FIR shows that the accident was not because of overloading but due to the circumstances stated therein. Therefore, the resultant position is that the accident was an independent event and it was unconnected with the overloading. Therefore, even assuming that there was some overloading, that fact had not contributed to the accident. Only where it is the cause of the accident, then alone the breach of permit conditions viz., the fact of overloading would become material and fundamental as to affect the very contract between the parties. Since it is not so in this case, the overloading is neither a fundamental breach nor a material factor. Therefore, it cannot be construed to affect the validity of the contract between the parties. At best it was only an irregular act on the part of the driver or conductor as the case may be in allowing the overloading of passengers. On that ground, the 1st opposite party cannot ward off the claim. Hence, the repudiation by the 1st opposite party is not justifiable and, therefore, the repudiation is unjustified and thus there is deficiency in service. Now coming to the question of compensation. Admittedly the vehicle was left with the 2nd opposite party for carrying out the necessary repairs. The 2nd opposite party has stated clearly that they forwarded a bill for a sum of Rs. 54,224/- and out of it, a sum of Rs. 25,000/- was received as advance and there remained only a sum of Rs. 34,359/- due to them for the repairs carried out by them and they have filed a suit in O.S. No. 1309/95 for recovery of the said amount. Therefore, the measure of damages in this case has to be determined only in a sum of Rs. 54,224/- being the sum incurred for affecting repairs. The lower Forum has rightly taken it as the basis and fixed it as the amount payable towards the claim. The lower Forum has also awarded a sum of Rs. 10,000/- in excess towards mental agony and monetary loss and thus has arrived at a sum of Rs. 64,224/-. We do not find any reason to take a different view on this aspect of quantifying the damages. However, the lower Forum was not justified in awarding interest @ 18% from 2.10.1998. In the circumstances, the complainant is entitled to interest only at 9% and from the date of repudiation which was on 12.1.1994. Therefore, in such circumstances, we hold that the complainant will be entitled to interest @ 9% on the said sum of Rs. 54,224/- along with a sum of Rs. 10,000/- as compensation for mental pain and sufferings and towards deficiency in service.

IN the result, these appeals are disposed of accordingly modifying the order of the lower Forum as follows: The 1st opposite party viz., the appellant in A.P. No. 599/98 is directed to pay a sum of Rs. 54,224/- with interest at 9% from the date of repudiation i.e. 12.1.1994 along with a sum of Rs. 10,000/- as compensation towards mental agony and deficiency in service. Time for compliance : 2 months. Since the lower Forum has not granted any costs, we are also not awarding any cost in these appeals. Appeals disposed of.