Oriental Insurance Co. Ltd. vs PRASHANT KUMAR B.M.

THIS appeal, under Section 15 of the Consumer Protection Act, 1986 is directed against the order dated 31.1.2004 in Complaint No. 209/2003 by District Consumer Disputes Redressal Forum, Durg (hereinafter called the District Forum for short) directing the appellant/insurer to pay to the complainant/respondent Rs. 2,00,000/- towards compensation on account of theft of his vehicle.

UNDISPUTABLY, the complainant/appellant is the owner of Tata Sumo vehicle bearing registration No. 23-GA-3086. It was comprehensively insured with the appellant for the period from 6.9.2000 to 25.9.2001 for an assured sum of Rs. 2,00,000/-. Allegedly when the complainant/appellant had gone to Navrangpur with one Sunil Kumar the said vehicle was stolen by latter on 2.11.2000. The complainant, therefore, lodged the report of the incident on 3.11.2000 and also submitted claim form to the appellant/insurer for payment of amount of compensation under the said Insurance policy. The complainant''s claim was, however, repudiated by the respondent/insurer. Feeling aggrieved, he preferred complaint before District Forum. The complaint was resisted by the respondent mainly on the ground that there was breach of terms of policy by the complainant/respondent, inasmuch as the said vehicle was being used as taxi for hire and reward while it was registered as private vehicle. The appellant/insurer, therefore, averred that the claim under the policy was not payable.

The District Forum in the impugned order held that the vehicle was comprehensively insured and the appellant is liable to pay compensation of Rs. 2,00,000/- to the complainant/respondent. Rs. 5,000/- was awarded for the mental and physical harassment caused to the complainant/respondent.

LEARNED Counsel for the appellant assailed the impugned order. It was submitted that the complainant/respondent has committed breach of terms of policy, by permitting the use of vehicle as taxi for hire and reward and, therefore, he could not get any benefit under the policy. It was further submitted that as the complainant committed breach of policy, he was only entitled to get his claim settled on non-standard basis. The learned Counsel for the appellant/insured relied upon the decision in National Commission in Rajiv Rathod v. Oriental Insurance Co. Ltd., I (2003) CPJ 206 (NC). In the said order under similar circumstances, the order of the State Commission, treating the claim as non-standard, was upheld by the National Commission. The learned Counsel for the appellant also urged that the value of the vehicle in question at the time of incident could not be treated as more than Rs. 1,45,000/- as was agreed to by the complainant/respondent, and an endorsement to effect was made by him in the report dated 3.6.2002 of the Surveyor Nanda & Nanda Associates. It was, therefore, submitted that the impugned order be set aside or alternatively the amount of compensation be reduced. The learned Counsel for the respondent however supported the impugned order and submitted that the complainant/respondent was entitled to the amount of compensation as awarded by the District Forum under the terms and conditions of the policy, which covered the risk of theft of vehicle.

THE question that arises for consideration is as to whether the complainant/respondent is entitled to compensation, and if so to what extent? Undisputably the vehicle of the complainant/respondent was comprehensively insured by the appellant/insurer for a sum of Rs. 2,00,000/- and the same was stolen during the subsistence of the policy. Therefore, complainant/respondent can claim compensation under the policy. The learned Counsel for the appellant/insured submitted that as per report of the investigator R.K. Agarwal the vehicle was being used for hire and reward as taxi. The learned Counsel in the above context also drew our attention to the First Information Report lodged by complainant, as also to various newspapers clipping in which the incident was reported. After considering the material as above and the circumstances of the case, it appears that the vehicle was being used for hire and reward as had been asserted by the appellant/insurer. It is, therefore, clear that when the vehicle was stolen, the same was being used in contravention of the terms of policy. However, it is clear that the vehicle was stolen and the breach of terms of policy as above, would not constitute such a fundamental breach so as to nullify the whole claim of the complainant/respondent. However, as laid down by National Commission in Rajiv Rathod v. Oriental Insurance Co. Ltd. (supra), the claim as above deserves to be treated as non-standard and 75% of the value of the vheicle deserves to be awarded.

THE appellant''s learned Counsel submitted that the value of the vehicle at the time of incident should be treated as Rs. 1,45,000/- as has been reported by the Surveyor Nanda & Nanda. However, it may be noticed in the above context that the vehicle was insured for a sum of Rs. 2,00,000/- on 6.9.2000. It was stolen on 2.11.2000 i.e., just after above two months. Since the vehicle was Tata Sumo and was about 3 years old at the time of incident and as it was insured for Rs. 2,00,000/-, therefore, there appears to be no reason as to why the value of the vehicle at the time of incident should not be treated as is mentioned in the policy, that is Rs. 2,00,000/-.

IN view of the above, the insurer/appellant is liable to pay Rs. 75% of the assured amount to the complainant/appellant, as his claim is to be treated as non-standard. The said amount works out to Rs. 1,50,000/-. Accordingly the impugned order deserves to be modified to the above extent. Accordingly, this appeal is partly allowed. Impugned order is modified and it is directed that the appellant shall pay to the complainant/respondent Rs. 1,50,000/- (Rupees one lac fifty thousand) only as compensation, with interest at the rate and from the date as directed by the District Forum. Cost of the appeal shall be borne by the parties. Appeal partly allowed.