New India Assurance Company Ltd. vs Ashok Kumar

This revision petition has been filed by the petitioner New India Assurance Co. Ltd., against the order dated 24.04.2015 of the State Consumer

Disputes Redressal Commission, Himachal Pradesh, (in short ‘the State Commission’) passed in First Appeal No.447/2014.

Brief facts of the case are that the respondent is the owner of a bus and the bus met with accident during the currency of the Insurance policy. The

accident had happened on 08.05.2013 and the bus was badly damaged. The severity of the accident can be imagined from the fact that in the accident

about 20 persons died. The insurance claim was repudiated by the Insurance Company on the ground that the driver was not having valid licence at

the time of accident and that bus was carrying 65 persons as against the total capacity of 44 passengers.

The respondent/complainant preferred complaint bearing No.10/2014 before the District Consumer Disputes Redressal Forum, Kullu, (in short ‘the

District Forum’). The complaint was resisted on the same grounds on which the repudiation was made. The District Forum however, allowed the

complaint vide its order dated 12.11.2014 and directed the Insurance Company to pay the amount of Rs.5,16,088/- along with 9% p.a. interest from

the date of filing of the complaint together with a compensation of Rs.4,000/- and litigation cost of Rs.2,000/-. The Insurance Company preferred an

appeal before the State Commission bearing No.447/2014. The State Commission ordered the claim to be paid on non-standard basis and accordingly,

ordered Insurance Company to pay Rs.3,87,066/- with 9% p.a. interest along with litigation cost as ordered by the District Forum.

Hence the present revision petition.

The revision petition was dismissed in default on 12.06.2017, however, the same was restored after allowing the application for restoration vide

order dated 13.10.2017 and the matter was listed for final hearing on 01.03.2018. However, on 01.03.2018 none was again present on behalf of the

petitioner though the respondent was present, who came from Kullu, Himachal Pradesh. Respondent was heard.

Respondent in person argued that it is true that there were about 32 deaths in the accident, however, claims of all the persons have been settled by

the Insurance Company, but the claim regarding the bus is still pending. Both the fora below have given orders in favour of the

respondent/complainant and the scope under the revision petition is very limited. This Commission cannot reassess the facts.

On the basis of the facts and circumstances, the District Forum has allowed the complaint and ordered the opposite party to pay the insurance claim

as recommended by the surveyor. However, the State Commission, in appeal filed by the opposite party has allowed the claim only on non-standard

basis i.e. 75% of the amount assessed by the surveyor. Thus, the claim has already been reduced for violation of condition of the policy and therefore,

revision petition does not have any merit and deserves to be dismissed.

I have carefully gone through the material on record and have considered the argument advanced by the respondent in person. It is true that there is

concurrent finding of the fora below in respect of allowing the insurance claim. In the revision petition, the facts cannot be reassessed by this

Commission as held in Mrs. Rubi (Chandra) Dutta vs. United India Insurance Company, 2011 (3) Scale 654. However, in my view, there is a question

of law involved in the matter. The repudiation has been made on two grounds. The First ground was that the person driving the vehicle at the time of

accident was not having valid licence and second ground was that the bus was carrying 65 passengers against the total capacity of 44 passengers.

The State Commission in its order has observed the following:-

“10. As regard the plea that the driver did not possess a valid and effective driving licence, it is stated by the learned counsel for the appellant that

on verification, licence of the person, who was driving the vehicle, has been found to be genuine.â€​

On the basis of the above observations, it becomes clear that issue of driving licence is no more valid for repudiation. Both the fora below have

established the fact that the bus was carrying 65 passengers against the total capacity of 44 passengers. This means that the bus was carrying 47%

more passengers than its carrying capacity and definitely this might have been a reason for accident. Clearly this is not a minor violation of the

provisions of Motor Vehicle Act. This is a major violation, which might have contributed to the accident also. Law violators are required to be dealt

with strictly. It is true that Hon’ble Supreme Court in Amalendu Sahoo Vs. Oriental Insurance Co. Ltd., II (2010) CPJ 9 (SC) observed that claim

may be settled on non-standard basis by paying upto 75% of the insurance claim for violation of some condition of the policy.

The significance and magnitude of the violation of condition is to be kept in mind while deciding on the quantum of insurance claim. As in the present

case, the carrying capacity has been violated by 47%, I deem it appropriate, to reduce the amount ordered by the State Commission by 47%. Had

there been violation of 2 or 3 excess passengers, the claim could have been settled on non-standard basis allowing 75% but there has been a gross

violation both in terms of importance and magnitude, therefore, further reduction in the claim amount ordered by the State Commission is being

ordered.

On the basis of the above discussion, the order dated 24.04.2015 of the State Commission is modified and the petitioner Insurance Company is

directed to pay Rs.2,05,145/- only for settlement of the Insurance claim to the respondent/complainant with 7% p.a. interest from the date of order of

the District Forum i.e. 12.11.2014 till actual payment.

With these modifications, the order of the State Commission is upheld and stands modified. Order of State Commission in respect of compensation and

cost is maintained. Accordingly, the petitioner Insurance Company is directed to comply with this order, within a period of 45 days, failing which,

additional interest of 3% p.a. shall be payable from the date of this order till actual payment. No order as to costs for this revision petition.