Oriental Insurance Company Ltd. and Anr. vs SANJEEV KUMAR

MR Sanjeev Kumar the respondent got a Scorpio vehicle insured with the Oriental Insurance Company (in short the Insurance Company) for the period 14.6.2004 to 13.6.2005 for a sum of Rs. 6.38 lakh. He had engaged one Naresh Kumar as a driver. On 14.7.2004, the owner of the vehicle had gone to Delhi and on his return from Patiala on 21.7.2004, he came to know that Naresh Kumar has gone with some strangers on 14.7.2004 in the said vehicle to some other place. On the intervening night of 16/17.7.2004 the vehicle was stolen from the parking lot of Avenue Hotel near Aligarh. Accordingly, an FIR was lodged by the driver Naresh Kumar with the police. As the vehicle was not traced the complainant lodged a claim before the Insurance Company. The claim was repudiated by the Insurance Company, for violating the terms and conditions of the policy stating that the vehicle was used as a taxi when it was stolen though it was insured as a passenger car. The District Forum allowed the complaint on non -standard basis and directed the Insurance Company to pay 75% of the admissible claim.

AGGRIEVED by the order of the District Forum, the Insurance Company had filed an appeal before the State Commission wherein the learned Counsel for the appellant argued that the investigator had given his report stating that the complainant had admitted that the driver had taken passengers in the vehicle of the complainant by collecting hire charges, which was recorded by the investigator. Complainant had alleged that his signatures were taken on a blank papers. The State Commission relying on a judgment of the National Commission dismissed the appeal. Hence, this revision petition.

LEARNED Counsel for the petitioner submitted that there is a clear -cut violation of the terms and conditions of the policy, as the vehicle was insured as a private vehicle but actually was used for hire. In fact the driver had informed the owner that, he will be taking the passengers. In the FIR, the driver of the vehicle had mentioned that after bringing it to the notice of the owner and fixing the fare with the persons he went along with the passengers to Bhatinda. He submitted that the National Commission''s judgment is relating to simple theft case, whereas the present case is distinguishable and as the persons who hired the vehicle were themselves instrumental in committing the theft. The learned Counsel for the petitioner also brought to our notice the judgment of this Commission in Oriental Insurance Company Ltd. v. Joginder Singh, III (2001) CPJ 560, decided on 23.10.2008, wherein it was held that award of the claim to the complainant on non -standard basis is also not in keeping with the terms of the policy -it is a matter of discretion of the insurer and can at best be done with the concurrence of the insurer. However, in that judgment, it was observed that the Insurance Company was directed to pay 50% of the assured sum as an ex -gratia without treating it as precedent.

LEARNED Counsel for the respondent submitted that in the judgment of the National Commission dated 23.10.2008 (supra) and also judgment relied upon by the petitioner''s Counsel the guidelines of the Insurance Company were not brought to the notice of the judicial authorities, hence, they are distinguishable. He also submitted that the judgment of the Hon''ble Apex Court in National Insurance Company Ltd. v. Meena Aggarwal in Civil Appeal No. 396 of 2009 (reportable), quoted by the learned Counsel for the petitioner is mostly related to fundamental breach of the policy condition wherein the vehicle was being driven by a person who did not have a valid driving licence hence, this case is distinguishable.

NOW let us look into those judgments which are directly connected to the case on hand i.e. claims can be settled on non -standard basis.

A four -Member Bench of the National Commission in National Insurance Co. Ltd. v. Prem Chand, decided on 12.3.2001, II (2001) CPJ 60 (NC)=2001 (2) CPR 38 (NC), wherein clause 10 of the guidelines on non -standard claims is quoted below: "Following types of claims shall be considered as non -standard and shall be settled as indicated below are recording the reasons. Sl. No. Description Percentage of Settlement Under declaration of licensed carrying capacity Deduct 3 years difference in premium from the amount of claim or reduce 25% of the claim amount, whichever is higher. Overloading of vehicles beyond licensed carrying capacity Pay claims not exceeding 75% of admissible claim Any other breach of warranty/ condition of policy (including limitation as to us Pay upto 75% of admissible.

IN this case, there was a theft of vehicle from the parking lot of PGI Chandigarh, and the District Forum dismissed the complaint after going through the report of the investigator appointed by the Insurance Company holding that it involved complicated questions of law and facts which cannot be gone into by the Consumer Forum under the CP Act, 1986. The relevant extract of this judgment is quoted below: "On appeal being preferred before the State Commission, the Counsel for the Insurance Company conceded that there did exist a policy based on the guidelines of settling certain claims, which are not strictly falling within the limitation as to use clause in the policy as non -standard claims and provided that such claims could be settled up to maximum of 75%. Such guidelines are contained in the Procedural Manual of Motor Claims. The existence of this procedure and practice was duly admitted by the Counsel for the Insurance Company. The view taken by the State Commission is in consonance with the view expressed by this Commission earlier. National Insurance Co. Ltd. v. Sri Munni Lal Yadav. We find that there is no infirmity in the impugned order and consequently, there is no merit in this case. No other grounds were urged before us at the hearing. Consequently, this revision petition is dismissed. No orders as to costs."

THE judgment of five -Member Bench of this Commission in National Insurance Company Ltd. v. Munni Lal Yadav, II (2001) CPJ 53 (NC)=2001 (2) CPR 1 (NC) quoted Clause 10 of the guidelines pertaining to non -Standard claims.

IN a subsequent judgment of five -Member Bench of this Commission in Rajiv Rathod v. Oriental Insurance Co. Ltd., I (2003) CPJ 206 (NC), the insured''s vehicle was looted by miscreants. Claim filed by the complainant was repudiated by the Insurance Company stating that the vehicle was registered as a private car, but it was used as a taxi, violating the policy conditions. The Commission held that order of the State Commission directing the Insurance Company to settle claim on non -Standard Basis needs no interference. Accordingly, the revision petition was dismissed.

IN the judgments cited by the learned Counsel for the petitioner, this above Clause 10 of the guidelines (supra) for settling the claims on non -standard basis for breach of policy conditions was not brought to the notice of the Bench deciding the cases. Hence, these judgments are not strictly applicable to the case on hand.

THEREFORE , we do not find any material irregularity or jurisdictional error in the order passed by the lower Fora warranting our interference under Section 21(b) of the Consumer Protection Act, 1986. Hence, this revision petition is dismissed. There shall be no order as to cost. R.P. dismissed.