New India Assurance Co.Ltd. vs MOHANBAI

THIS revision petition has been filed by the OP Insurance Co. against the order dated 19.11.2009 passed by the Rajasthan State Consumer Disputes Redressal Commission, Jaipur (State Commission for short) allowing the appeal of the complainant, respondent herein, against the order of the District Forum, Chittorgarh by which the District Forum had dismissed the complaint of the respondent. The respondent had filed a complaint against the OP Insurance Co. on 7.7.2008 stating therein that her bus bearing Registration No.RJ 09P 1481 which had been insured with the petitioner Insurance Co. for the period from 15.5.2006 to 14.5.2007 for a sum of Rs.2,97,500/- as IDV was involved in an accident in which the bus fell into a river. It was stated in the complaint that on 15.8.2006 when the bus in question was coming from Badi Sadri to Jogania Mata near village Bichhore, because of the heavy rain the water level in the nalah was very high and since the water was flowing over the bridge when the driver of the bus tried to reverse the bus, the same fell into the river thereby killing 5 persons and damaging the vehicle in question in the accident. FIR of the incident was lodged with the police station and a challan was filed against the driver of the bus for committing offence under section 304 of IPC. It was stated in the complaint that at the time of accident, the driver had a valid and effective driving licence. A claim was lodged with the petitioner Insurance Co. but the same was not settled. It was claimed that the complainant had suffered a loss to the tune of Rs.1,00,000/- for the damage of the vehicle and hence a claim was made for that amount. On being noticed, the OP Insurance Co. resisted the complaint by stating that at the time of accident, the bus was overloaded and was carrying 70-80 passengers against the permissible capacity of 47 persons in the bus. According to the Insurance Co., it was because of the overloading of the bus that the driver while passing through the bridge had lost control as a result of which, the bus had fallen in the river and thus the accident had taken place because of the rash and negligent driving of the driver of the bus and further taking into consideration that the driver had violated the specific terms and conditions of the policy by taking more passengers than permitted, no claim was payable under the policy. It was further stated in the reply of the Insurance Co. that no doubt the surveyor in his report dated 27.8.2006 had assessed the loss to the tune of Rs.53,838.80 paisa but since there was violation of the terms and conditions of the policy and since it was a case of rash and negligent driving by the driver, the claim was not payable and it was prayed that the complaint be dismissed. On appraisal of the issues and the evidence adduced, the District Forum vide its order dated 16.1.2009 dismissed the complaint and held as under:- (i) That since the capacity for carrying the passengers was 40-50 persons but at the time of accident there were 60-70 persons were found sitting in the bus and therefore, there was violation of the terms and conditions of the permit. (ii) That since there were 60-70 persons were being carried in the bus against the capacity of 40-50 persons, therefore, because of the violation of the terms and conditions of the policy, claim was not payable. (iii) That the respondents were justified in not settling the claim of the complainant appellant.

AGGRIEVED by the order of the District Forum, the complainant filed an appeal before the State Commission challenging the order of the District Forum. It was contended by the appellant that even though it may have been found that at the time of accident more persons were sitting in the bus than permitted, the cause of the accident could not be related to the persons sitting in the bus as the bus had fallen in the river because of the high level of the water and thus the petitioner Insurance Co. was not justified in not settling the claim of the complainant and the District Forum had committed serious error and illegality in dismissing the complaint. After hearing the parties, the State Commission allowed the appeal of the complainant and set aside the order of the District Forum. The appeal was allowed in the manner that the petitioner Insurance Co. was directed to pay to the complainant a sum of Rs.40,379/- along with interest @ 9% p.a. from the date of filing of the complaint till the payment is made along with Rs.3,000/- as cost of litigation. The State Commission has recorded the following reasons in support of its order:- 12. In our considered opinion, looking to the fact that immediate cause of the accident was not the passengers sitting in the bus but the immediate cause of the accident was heavy flow of the water in the river by which the driver of the bus could not maintain the balance and thereafter the bus had fallen in the river and was damaged but the fact that there was violation of the terms and conditions of the policy on the point that the driver was carrying more persons then permitted is well established and in such a case, repudiation of the claim in toto could not be justified as in fact there is breach of terms and conditions of the policy but not so fundamental in nature as to put the whole contract to an end and thus, this Commission is of the view that the claim of the complainant appellant should have been treated as sub-standard and the same is being treated as sub -standard and thus the findings recorded by the District Forum by which complaint was dismissed could not be sustained as they suffer from basic infirmity, illegality and perversity. Hence, the impugned order is liable to be quashed and set aside and this appeal deserves to be allowed.

On point of compensation 13. It may be stated here that since in this case the surveyor Mr.D.D.Mantri had assessed the loss to the tune of Rs.53,838.80, therefore, the complainant appellant is entitled to get 75% of that amount which comes to Rs.40,379/-and thus, the appellant complainant is entitled to get a sum of Rs.40,379/- alongwith interest @ 9% p.a. from the date of filing of the complaint and further a sum of Rs. 3000/- as costs.

We have heard learned counsel for the petitioners. No one has appeared for the respondent. Learned counsel has argued that accepting the claim of the respondent by the State Commission on non-standard basis is erroneous in that the violation of the terms and conditions of the policy has not been disputed by the respondent. He further submitted that it was because of the excess number of passengers in the bus that the driver lost his control over the bus thereby leading to the serious accident resulting in damage to the bus as well as casualties. In this context, learned counsel specifically relied on the judgement of this Commission delivered on 30.11.2006 in appeal no.166 of 2003 of National Insurance Co. Ltd. Vs. Suresh Babu & Anr. [I (2007) CPJ 23 (NC)]. He drew our attention to the following observations of this Commission in that case in support of his arguments:- It is true that as per the permit issued under Motor Vehicles Act by the Regional Transport Officer, Dharwad, the sitting capacity for the vehicle was 19 in all. Even if we take that the complainant was entitled to carry 17 passengers one driver and one conductor then also the breach of the terms of the policy would be with regard to limitation as to use. Because, in the Mini bus having capacity to carry 17 passengers + 1 driver and one conductor, 35-36 passengers were being carried. This would have its own adverse effect in driving the vehicle. That too, in the dead of night, the driver may lose control at any point of time. As per the judgment of the M.A.C.T. one of the witnesses stated that the mini bus was driver very fast and recklessly and it dashed behind the vehicle which was parked on the road side. Hence, it cannot be said that such breach of the conditions of the policy and the permit could not be one of the causes for the accident. Therefore, the decision relied upon by the State Commission in the case of B.V. Nagaraju v. Oriental Insurance Company Ltd. (1996) 4 SCC 647, would have no bearing in the facts of the case because in that case only 2 to 3 more passengers were carried in a goods vehicle. In view of the above ruling of this Commission, learned counsel pleaded that the impugned order cannot be sustained in the eye of law since the ratio of the earlier judgement of this Commission fully covers the present case as well.

We have considered the submissions made by the learned counsel for the petitioner Co. and have also perused the record before us. It is not under dispute that the bus in question was carrying more number of passengers than the permissible number at the time of the accident. However, it has not been held anywhere that the accident was caused on account of the violation of this condition of the policy. In fact, the perusal of the report of the surveyor dated 27.8.2006, a copy of which has been placed on record by learned counsel for the petitioner, shows that the immediate cause of the accident was the high water level in that Nala caused on account of excessive rain. We consider it appropriate to reproduce the following observations of the surveyor at page 2 of his report:- Cause and Nature of Accident As stated by Insured in claim form and as per spot surveyor and as per newspaper cuttings that while driving from Badi Sadri to Jogniya Mata, near vill. Bhichor ki Jhunpadlya, water level in a Nala was very high due to heavy rain and insureds driver reversed his bus and was coming back towards Bhichor Tiraha, on Ruparel River Causeway, rain water was flowing over it and I.V. driver tried to cross it but in doing so, RHS Fr. Tyre left the road and IV became out of control and toppled down in the river, causing damages to it.

AFORESAID observation of the surveyor is quite significant in regard to the decision of the present case before us. No doubt, in case of overloading of vehicles beyond the license carrying capacity, discretion is given to the Insurance Co. to settle the same by paying upto 75%. It is also held that if that discretion is not properly exercised, the court/consumer fora may interfere and direct the Insurance Co. to reimburse the insured appropriately. However, it would depend upon facts of each case. Since the report of the surveyor appointed by the Insurance Co. clearly indicates that the immediate cause of the accident was over flowing of the Nala and high water level thereof, the State Commission rightly directed petitioner Insurance Co. to settle the claim on non-standard basis. The facts and circumstances of the case (supra) relied on by learned counsel were different inasmuch as the immediate cause of the accident in that case was carrying of excess number of passengers which caused the accident by having adverse effect in driving the vehicle in the dead of night. The decision in that case, therefore, will not apply to the present case. Under these circumstances, we find that the State Commission decided the case in favour of the complainant by applying the non-standard clause correctly and we do not see any reason to interfere with its order through this revision petition. The District Forum apparently lost sight of this aspect and hence gave an erroneous decision which was set aside in appeal. The revision petition, therefore, stands dismissed with no order as to costs.