New India Assurance Co. Ltd. vs GULSHAN KUMAR

THIS appeal under Section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as ''the Act''). is directed against order dated 11.2.1998 passed by Nand Nagri District Forum in Complaint Case No. 598/1997 entitled Shri Gulshan Kumar v. New India Assurance Co. Ltd., whereby appellant Company was directed to pay to the respondent a sum of Rs. 33,025.70 p. with 12% interest with effect from 1.1.1996 till realisation and also to pay cost of Rs. 1,000/-.

THE respondent had filed a complaint before the District Forum under Section 12 of the Act averring therein that he was registered owner of vehicle No. DL-IL-A-6369. That the vehicle was comprehensively insured for a sum of Rs. 2,49,000/- with the appellant Company from 28.2.1995 to 27.2.1996 vide Policy No. 31/20993. Under the said insurance policy, the respondent got covered the risk of the aforesaid Tata Truck 407 No. DL-IL-A-6369. On 12.5.1995, the aforesaid truck was going on National Highway No. 24 near rainy well No. II, Nizamuddin Bridge, New Delhi. THE vehicle was coming from East of Kailash (DESU Sub-Station) and was going towards Trilok Puri after finishing the job work given on contract. Accident took place near NOIDA turning point, Nizamuddin Bridge. A report of accident was lodged with the Police Station, Trilok Puri and appellant Company was also informed about the damage suffered to the vehicle. Case of the respondent was that he had claimed a sum of Rs. 52,846/- from the appellant Insurance Company as he had spent that money on the repairs of that vehicle but the Insurance Company in spite of the repeated visits of the respondent, did not finalise the claim. It was, therefore, prayed that the appellant Insurance Company be directed to pay him a sum of Rs. 52,846/- as the amount spent by him on repair, Rs. 40,000/- as compensation for mental torture, harassment and expenses incurred in visiting the office of the Company with 18% interest per annum. Appellant Insurance Company in its written statement took the plea that the vehicle of the complainant was insured as goods carrying vehicle and since at the time of alleged accident, a number of persons were travelling in the said vehicle against the terms of the insurance policy, the claim of the respondent was repudiated on 10.3.1997 after proper application of mind. It was also the stand of the Insurance Company that Surveyor appointed by the Insurance Company had assessed the loss only to the extent of Rs. 33,025.70 p.

A copy of the investigation report placed on record of the learned District Forum, reveals that the truck of the respondent was coming after finishing the job work given on contract. It was also mentioned in the said report that the persons travelling in the truck were employees of DESU with whom the truck was on contract and said persons boarded the truck while coming back to home from their work place and driver allowed them to board because they were familier to each other and were residing at Trilok Puri. It is also mentioned in the said report that six persons were not paid-passengers.

AFTER hearing the learned Counsel for the parties and on perusal of material placed on record, the learned District Forum observed that simply because at the time of accident, some persons were travelling in the vehicle, could not be held to be justified to repudiate the claim of the respondent. The learned District Forum has placed reliance on a decision of the Hon''ble Supreme Court in case B.V. Nagaraju v. Oriental Insurance Co. Ltd., reported as II (1996) CPJ 28 (SC)=I (1997) ACC 123 (SC)=(1996) 4 SCC 647. The learned District Forum accepted the loss assessed by the Surveyor appointed by the appellant amounting to Rs. 33,025.70 p. Accordingly, the learned District Forum has directed the appellant Insurance Company to pay Rs. 33,025.70 p. with 12% interest w.e.f. 1.1.1996 till realisation along with cost of litigation, amounting to Rs. 1,000/-. We have heard the learned Counsel for the parties and have also carefully perused the material placed on record. It is not in dispute that six passengers who boarded the truck were not paid passengers but were employees of DESU with whom the truck was on contract and the said persons were coming back to home from their work place and driver allowed them to board because they were familier with each other and were residing in Trilok Puri. The learned Counsel for the appellant has contended that respondent''s vehicle was insured with the appellant Insurance Company as goods carrying vehicle and that in contravention of Clause (b) of the "Limitations as to Use" of the vehicle, the said vehicle was carrying six persons at the time of accident and as such repudiating the claim of respondent by the appellant was fully justified and legal. In support of his above contention he has placed reliance on a decision of the Hon''ble Supreme Court in case Bharti Knitting Company v. DHL Worldwide Courier of Air Freight Ltd., reported as II (1996) CPJ 25 (SC), in which it has been held that where there is specific terms in the contract, the parties are bound by the terms of the contract. In order to consider the merits of the above contention advanced on behalf of the appellant, we need analysis of the relevant clause of the general exception of the policy in question. The said clause reads as : "Limitation as to use" "Use only for carriage of goods within the meaning of Motor Vehicles Act, 1988."

IT is an admitted fact that six persons besides the driver were in the vehicle in question at the time of accident. However, they were not paid passengers and were employees of DESU who were familier/known to the driver and they were going to Trilok Puri. Admittedly, the vehicle in question was not being plied as a passenger vehicle in routine in violation of the terms of the policy. Therefore, the moot point for consideration in the facts and circumstances of the present case is that as to whether the fact of six persons travelling in the goods carrying vehicle at the time of accident, was of such significance so as to disentitle the respondent of his otherwise legitimate claim under the insurance policy. IT is not the case of any of the parties that accident in question was caused or occasioned on account of passengers stated to be travelling in the vehicle. However, as per Clause 3, six employees coming under the provisions of Workmen Compensation Act, 1923 could board the truck besides the driver. The mere fact that instead of being employees of the respondent, they were strangers to the respondent would not make any difference in the circumstances of the case because the presence of six persons was not a factor which contributed to the causing of the accident. Thus the alleged violation of the terms and conditions of the policy was not of such a nature so as to vitiate the contract between insurer and the insured entitled the appellant to repudiate the claim of the respondent for compensation on the above ground. In the case of Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan & Ors., reported as I (1987) ACC 413 (SC)=(1987) 2 Supreme Court Cases 654, their lordships of the Hon''ble Supreme Court have held : "IT needs to be emphasized that it is not the contract of insurance which is being interpreted. IT is the statutory provision defining the conditions of exemption which is being interpreted. These must, therefore, be interpreted in the spirit in which the same have been enacted accompanied by an anxiety to ensure that the protection is not nullified by the backward looking interpretation which serves to defeat the provision rather than to fulfil its life-aim. To do otherwise would amount to nullifying the benevolent provision by reading it with a non-benevolent eye and with a mind not turned to the purpose and philosophy of the legislation without being informed of the true goals sought to be achieved. What the Legislature has given, the Court cannot deprive of by way of an exercise in interpretation when the view which renders the provision protest is equally plausible as the one which renders the provision imptent. In fact it appears that the former view is more plausible apart from the fact that is more desirable. When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependents on the one hand and the equally plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by way of business activity, there is hardly any choice. The Court cannot but opt for the former view. Even if one were to make a strictly doctrinaire approach, the very same conclusion would emerge in obeisance to the doctrine of ''reading down'' the exclusion clause in the light of the ''main purpose'' of the provision so that the ''exclusion clause'' does not cross swords with the ''main purpose'' highlighted earlier. The effort must be to harmonize the two instead of allowing the exclusion clause to snipe successfully at the main purpose."

(Emphasis supplied) The Hon''ble Supreme Court in a subsequent decision in case B.V. Nagaraju v. M/s. Oriental Insurance Co. Ltd., reported as II (1996) CPJ 28 (SC)=I (1997) ACC 123 (SC)=1996 (2) Current Consumer Cases 767 (NS), where the facts of the said case were almost identical to the facts in present case, has held : "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 6 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. Here, it is nobody''s case that the driver of the insured vehicle was responsible for the accident. In fact, it was not disputed that the on-coming vehicle had collided head-on against the insured vehicle, which resulted in the damage. Merely by lifting a person or two or even three, by the driver or the cleaner of the vehicle, without the knowledge of 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. In the instant case, however, we find no such contributory factor."

(Emphasis supplied) Thus, in view of the above two decisions of the Apex Court, there can be no two opinions about the fact that the repudiation of the claim of the respondent by the appellant Insurance Company was not justified and undoubtedly amounts to deficiency in service on their part. The point in issue is directly dealt with in the aforesaid two decisions of the Hon''ble Supreme Court and, therefore, the above mentioned decisions of the Apex Court apply with full force to the facts of the present case. Since the presence of the six persons did not admittedly contribute to the causing of the accident, breach was not so fundamental in nature so as to disentitle the claim of the respondent in the present case. In our opinion, the decision of the Hon''ble Supreme Court in case of Bharti Knitting Company''s (supra), delivered by three-Judge Bench is not helpful to the case of the appellant Insurance Company as the law laid down in the earlier two Apex Court decisions as referred above was not overruled by a later judgment of the Hon''ble Supreme Court as cited by the appellant and moreover the point as raised in the present case is directly covered in the above referred two judgments of the Hon''ble Supreme Court. In view of the aforesaid findings, we have no hesitation in holding that the impugned order dated 11.2.1998 passed in Complaint Case No. 598/1997, entitled Gulshan Kumar v. New India Assurance Company Ltd., does not suffer from any infirmity so as to call for any interference by this Commission in the exercise of its appellate powers under Section 15 of the Act. Accordingly, the impugned order dated 11.2.1998 passed by the learned District Forum is upheld and the appeal, being devoid of merits is liable to be dismissed. The same is dismissed accordingly. In the facts and circumstances of the case, the parties are left to bear their own costs. The present appeal stands disposed of in above terms. Appeal dismissed.