New India Assurance Co. Ltd. vs Sunder Lal

THIS is an appeal by the Insurance Company against the judgment and order dated 20.9.1999 passed by the District Forum, Uttarkashi whereby the District Forum allowed a claim of Rs. 2,64,500/- in favour of the claimant Sunder Lal.

THE brief facts of the case are that Shri Sunder Lal had a truck No. UPY 2294. It was insured with the appellant. During the insurance period on 27.3.1995, it met with an accident as a result of which three persons sitting in the insured vehicle died. THE truck was badly damaged. A claim was lodged with the Insurance Company. It is alleged that Rs. 14,500/- was spent in taking the truck from the place of accident to village Badethi. THE claimant suffered loss of Rs. 2,25,000/-. It is alleged that the first Surveyor assessed the loss for Rs. 1,75,000/-, again it was assessed for Rs. 1,65,000/-, which was too inadequate. THE price of the truck was more than Rs. 2,50,000/- in the market. THE Company did not assess and was not ready to pay a total loss to the complainant. Hence a complaint was filed for Rs. 2,50,000/- as compensation, Rs. 14,500/- as towing charges and Rs. 5,000/- as litigation charges. The appellant contested the petition, admitted the insurance and the accident and also admitted that after the survey, the salvage was removed by the complainant. The Insurance Company was ready to give a compensation of Rs. 1,65,000/- on the basis of total loss according to the report of the Surveyor to which the complainant did not agree. It is alleged that there is no deficiency in service of the O.P.

On the evidence of the parties, the learned Forum allowed a compensation of Rs. 2,50,000/- as also towing charges of Rs. 14,500/-. Hence, the appeal was filed.

WE have heard the learned Counsels for the parties and gone through the records. The vehicle was insured for a sum of Rs. 2,50,000/-. According to the insurance policy, it had a right to carry one driver and two persons plus premium was paid for the sitting of two labourers. Thus, according to the Insurance Company, the truck was entitled to carry not more than 5 persons whereas there were 8 persons in the truck. It is admitted fact that three persons in the truck died and it is further alleged that as many as six claim petitions have been filed for injuries to other persons. According to the Insurance Company, there were 8 persons in the truck. The copy of the policy which has been filed shows that the truck was entitled to carry 6 persons including the driver. It was argued by the Insurance Company that they do not deny their liability but since the truck was being driven against the terms of the policy, therefore, on the basis of non-standard claim, there should have been settlement of the claim. Previously, as the law was, when there was a breach of policy, the owner of the vehicle was not entitled to get any claim. But by the lapse of time and in view of several decisions by the Hon''ble Supreme Court and the National Commission, such claims had been started to be settled on the basis of non-standard claim. The learned Forum did not take notice of this fact that even if the case of the complainant is taken to be correct that he was entitled to carry 6 persons including the driver then also the truck was carrying 8 persons which is a breach of the terms of the policy. The learned Forum has allowed the total claim on the basis of the ruling reported in I (1997) ACC 123 (SC), B.V. Nagaraju v. M/s. Oriental Insurance Co. Ltd. In this ruling the terms of the policy provided carriage of 6 workmen including the driver. The vehicle actually carried 9 persons. The State Consumer Forum awarded compensation towards the repairs of the insured vehicle and fastened liability on the Insurance Company. In appeal by the Insurance Company, the National Commission reversed the order of the State Commission taking the view that the policy did not cover use for carrying passengers in the insured vehicle except employees (other than drivers) not exceeding 6 in number. In an appeal to the Supreme Court, the Hon''ble Supreme Court held that the exclusion clause could not exonerate the Insurance Company because it must be read down so as to serve the main purpose or object of the policy that is to indemnify the damage caused to the vehicle. It has been held in this ruling that misuse of the insurance vehicle though somewhat irregular is not so fundamental in nature so as to put an end to the contract of insurance. The carrying of the extra passengers did not in any way contribute to the cause of accident and, therefore, the claimant was entitled to get the compensation reading down the contractual clause. In this ruling it was held that the owner should get the claim confining the damage to the vehicle which was very limited in nature. In this ruling, the insurance was for Rs. 2,09,000/-, repair charges were Rs. 87,170/- and the State Commission has allowed the claim for Rs. 75,700/-. The bare reading of the ruling shows that the Hon''ble Supreme Court has directed that the exclusion clause should be read down. Hon''ble Court did not give any guideline on the basis of which the claim should be allowed. WE have to refer, therefore, other rulings in this context. The recent ruling as pronounced by the National Commission in I (2003) CPJ 92 (NC), Oriental Insurance Co. Ltd. v. Raj Kumar Gupta, referred the Supreme Court judgment of Nagaraju and it has been held that : "This judgment of the Supreme Court in B.V. Nagaraju has been followed in number of case and as noted above, relied upon by the District Forum. However, we are of the view in the case like this the claim under the policy should have been settled on the basis of non-standard claim i.e. complainant should have been entitled to 75% of the insured amount under the policy."

On this basis, the present claimant was entitled to get a compensation of Rs. 1,87,500/- only.

AS regards, the towing charges, the claimant has claimed a sum of Rs. 14,500/- which was also totally allowed by the learned Forum. It was argued by the learned Counsel for the Insurance Company that no receipt, no voucher whatsoever has been produced to prove that the owner has actually spent this much of amount. This may be true but there is a definite allegation supported by his affidavit that the claimant has to call the crane from Dehradun to the place of accident and again to pull the vehicle from the place of accident to village Badethi. A judicial notice of the fact can be taken that no lesser amount than this can be charged by the crane owner for such service. There is no reason to disbelieve the claim and affidavit of the claimant to this effect. Thus, the claimant was entitled to get a total sum of Rs. 2,02,000/- in total. It was alleged that the claim is on the total loss basis. The salvage have not been returned to the Insurance Company. Besides, the vehicle has not been transferred in the name of the Company. These are mandatory obligations of the insurance. It was argued by the learned Counsel for the claimant that no such plea was taken before the learned Forum and this plea could not have been taken here. It may be true to some extent, but since it is obligatory mandate of the Insurance Company, therefore, plea or no plea before getting the compensation amount, the claimant has to satisfy this obligation. ORDER The judgment under appeal is modified to this extent that the claimant shall get a sum of Rs. 2,02,000/- as compensation including the towing charges along with interest as directed by the learned Forum. The appeal is decided accordingly. Cost of the appeal shall be easy. The claimant to return the salvage of the truck and transfer the vehicle in the name of the Insurance Company immediately. The Insurance Company is directed not to delay the payment on this ground. Appeal disposed of.