ORIENTAL INSURANCE COMPANY LTD. vs Rajnesh Tandon

REVISION Petition no. 1569 of 2007 has been filed under section 21 (B) of the Consumer Protection Act, 1986 against the order dated 06.12.2006 passed by the Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla ( ''the State Commission '') in Appeal no. 50 of 2005.

THE brief facts of the case as per the respondent/ complainant are that the respondent purchased a TATA Sumo Maxi Cab registration no. HP 02 - 8314 in November 1997. The vehicle no., HP 02 -8314 was purchased by the respondent for the purpose of earning livelihood by way of self -employment after obtaining a loan from the Canara Bank, the Mall, Shimla, Himachal Pradesh at a high rate of interest. Vehicle no. HP 02 8314 was got insured by the respondent with the petitioner - insurance company on 25.10.2000 for a sum of Rs.2,80,000/ -. The premium amount of Rs.5791/ - was duly paid and the insurance was valid from 27.10.2000 to 26.10.2001. Tata Sumo No. HP 02 8314 owned by the respondent was insured with the petitioner and unfortunately met with an accident on 30.07.2001 near Karara Ghat when the vehicle was on its way from Darlaghat to Kashlog. The vehicle all of a sudden gathered speed and went off the road and fell into a 250 feet deep gorge. The factum of accident of the Tata Sumo was immediately intimated to the insurance company on 31.07.2001 itself telephonically by the respondent. On being intimated of the accident, the insurance company appointed one Mr Dogra as spot surveyor to inspect the spot of accident and the vehicle and submitted his detailed report. Mr Dogra visited the spot of accident on the very next day and directed the respondent to remove the vehicle from the place of accident and further to submit the registration certificate of the vehicle, road permit, insurance cover note, driving licence of driver, FIR of the accident and an estimate of repairs of the vehicle to the insurance company at the earliest for settlement of the claim. The respondent accordingly, submitted the insurance claim in the last week of August 2001, and requested for early settlement of the claim.

ALL the relevant papers stood submitted to the insurance company. One Mr Sood was appointed in October 2001 to submit his final report after carrying out the final survey of the loss. The final surveyor assessed the vehicle to total loss. As per the report of the said survey the surveyor recommended indemnification to the tune of Rs.1,70,000/ - without salvage and Rs.1,10,000 with salvage. The respondent has not been supplied a copy of the survey report and it is beyond the comprehension of the respondent as to how a vehicle the value whereof was assessed to be Rs.2,80,000/ - on 25.10.2000 has depreciated to Rs.1,70,000/ - only with in a period of ten months. The respondent has reasons to believe that the insurance company has manipulated a self -serving survey report in its favour as the surveyor who is engaged and paid by the insurance company stands in a fiduciary relationship with the company. The respondent is not in any manner bound by the biased and non -impartial report of the surveyor and is entitled to the insured amount of Rs.2,80,000/ - as it is an admitted case of total case.

AS stated supra the respondent had purchased the vehicle no. HP 02 8314, after obtaining loan from the Canara Bank at a high rate of interest. Since the vehicle in question had met with an accident the respondent was in precarious situation as the loan amount was mounting day by day. The only source of livelihood of the respondent had been ruined and he has not even in a position to maintain himself and his family members what to talk of repayment of the loan instalments. Taking advantage of the respondent ''s tight position in the OP insurance company through its officials coerced and pressurised the respondent into accepting and amount of Rs.75,000/ - as full and final settlement of the claim and retain the salvage. The respondent was threatened that in case he refused to give his consent the insurance company would ensure that not a single penny was paid to him. When asked the reasons why the assessed amount of the surveyor was being reduced from 1,10,000/ - to Rs.76,000/ - it was stated that the respondent ''s claim was non -standard. Moreover, it was assured that in case the respondent consented to receiving Rs.76,000/ - for the present, the insurance company may think of increasing the amount to Rs.1,10,000/ -. Forced by the circumstances and the misrepresentation made by the officials of the insurance company the respondent consented to receive Rs.76,000/ - as full and final settlement of his claim on 27.11.2001. Having agreed to make payment of Rs.76,000/ - the respondent under the bonafide belief that the payment would be made immediately. Instead the insurance company reverted its stand and after a period of about one month the respondent was intimated vide letter dated 03.01.2002 that the driving licence of the driver of the vehicle seemed to be false. In response thereto the respondent issued letter dated 06.01.2002 whereby it was made clear that the original driving licence was with the court of Judicial Magistrate, Arki and time was requested for producing the same. This was accordingly done. The insurance company persisted with its game of hide and seek and still the claim was not settled. It was finally vide letter dated 03.07.2002, the insurance company had repudiated the claim for want of valid driving licence.

IT was therefore, prayed that the complaint may kindly be allowed and the insurance company may be directed: (i) to pay to the respondent a sum of Rs.2,80,000/ - with interest @ 18% per annum from 20.04.2001 till the date of payment. (ii) To pay Rs.50,000/ - as damages for mental torture and harassment. (iii) To pay Rs.5,500/ - as costs of litigation.

THE petitioner/ opposite party - insurance company filed their reply with their preliminary objections that at the time of alleged accident the driver of the alleged vehicle Shri Tek Chand was not having a valid driving licence as the same was not renewed / valid as confirmed from the R & L A, Shimla (Rural), therefore, the present complaint deserves to be dismissed on this short score alone. The contents of paragraph 6 of the complaint are only admitted to the extent that the reply respondent insisted for the original driving licence from the respondent as after due verification from the R & L A (Rural) Shimla it was found that the said driving licence of Shri Tek Chand was not renewed/ valid at the time of alleged accident the respondent miserably failed to submit the said driving licence to the replying company despite the assurances given by him in his letter appended with the complaint. Since the original driving licence of the driver was not produced and after due verification the claim was duly conveyed to the respondent.

THE District Consumer Disputes Redressl Forum, Shimla, Himachal Pradesh ( ''District Forum '') vide its order dated 03.12.2004 allowed the complaint and directed the petitioner that ''''as a sequel of the above, we hereby direct the OP -company to indemnify the complainant to the extent of Rs.2,04,788/ - along with interest at the rate of 12% per annum with effect from the date of filing of the complaint, till actual payment is made. The litigation cost is quantified at Rs.2,500/ -. These payments be made by the OP - company to the complainant within a period of 45 days from the date of receipt of copy of this order ''''.

THE District Forum has held that: ''''It is not in dispute that the vehicle owned by the complainant was duly insured by the OP - company and met with an accident on 03.07.2001 during the currency of the insurance policy. All that is in dispute is as to whether or not at the time of accident, the driver of the vehicle was having a valid driving licence and the claim was rightly repudiated and in case the complainant is entitled to the claim what is the quantum of compensation. In order to substantiate its argument that the driver of the vehicle was not having a valid and effective driving licence, the OP - company is relying upon annexure R 6 which is verification report of one Ms Rajvinder Sandhu, Advocate and Annexure R 7 on which a report to the effect that DL no. 2445/ 88/ 97 issued in favour of Tek Chand son of Badru Ram has not been renewed by the Registering and Licence Authority, Shimla Sunni Sub -Division. We are of the view that evidence brought on record on behalf of the OP -company is not sufficient evidence in order to prove that the DL of Tek Chand who was driving the vehicle at the relevant time was not validity renewed and was fake. In order to prove that the driving licence was fake as has been the considered and consistent view of our State Commission. It was incumbent upon the OP - company to have produced the affidavit of the registering and licensing authority to the effect that the driving licence was not renewed by it was not valid for driving at the time when the accident in question took place. In the absence of the affidavit, it cannot be held that the OP - company has been able to prove that the driver of the vehicle Shri Tek Chand was not having a valid and effective driving licence at the relevant time. The controversy can be viewed from another angle also. The complainant has filed rejoinder in which it has been specifically pleaded that he had satisfied himself of the validity of the driving licence of Tek Chand before engaging him as his driver. The driver was duly authorised and competent to drive the TATA Sumo Maxi Cab. Here, the law laid down by the Hon ''ble Supreme Court of India. In Lehru ''s case comes to the rescue of the complainant where in it has been very categorically held that where the owner of the vehicle had satisfied himself of the validity of the driving licence, the onus lies on the OP - company to prove that the owner of the vehicle was aware of the fact that the licence was fake. As such, we hold that the driver of the vehicle at the time of the accident was holding an effective and valid driving licence to drive the vehicle ''''. Aggrieved by the order of the District Forum, the petitioner filed an appeal before the State Commission. The State Commission observed as under: ''''So far plea of driver having no valid and effective driving licence is concerned, in the rejoinder the respondent clearly explained that before employing the driver, he had satisfied himself about his driving licence. In this behalf we may observe that the owner of a vehicle is not expected to run from office to office to ascertain whether the licence had been actually issued or not. Of course, in a case where litigant like appellant in the present appeal is able to establish that despite knowledge of licence being fake or otherwise the driver being not authorised to drive vehicle of a particular type, the owner still employs such a driver, situation will be totally different. Admittedly that is not the situation in the present case, therefore, this plea is hereby rejected. Another reason to take this view is that this controversy has been set at rest by the Hon ''ble Supreme Court in a number of cases ''''.

THE State Commission had partly allowed the appeal and ordered as under: ''''No other point is urged. In view of the aforesaid discussion while partly allowing this appeal interest is reduced from 12% per annum to 9% per annum and rest of the order of the District Forum below is upheld. No costs. All interim orders passed from time to time in this appeal shall stand vacated forthwith ''''.

HENCE , the present revision petition. The main grounds of the revision petition are that: (i) The judgment and order of the State Commission is illegal, erroneous and contrary to the provisions of law and evidence on record; (ii) The State Commission failed to appreciate that non -renewal of driving licence after the expiry of its period is so stands on no -better footing that non -holding of an effective and valid driving licence; (iii) The State Commission failed to appreciate that once the insured has agreed for a sum of Rs.78,000/ - of his own sweet will, there is no justification in awarding Rs.2,04,788/ -. (iv) The State Commission has failed to appreciate that the surveyor has recommended an amount of Rs.1,70,000/ - on total loss basis which always entails that either salvage has to be handed over to the petitioner or amount payable would be reduced paid after deduction of the value of the salvage amount which has been assessed at Rs.50,000/ -. (v) The State Commission failed to appreciate that allowing 12/13 passengers than permissible limit of 9+1 in TATA Sumo is violation of the Act as well as of the provisions of the policy.

WE have heard the learned counsel for the petitioner and have also gone through the records of the case carefully.

THE main grounds that have been urged in the revision petition are that the repudiation letter dated 12.12.2002 stated that the claim of the respondent had been repudiated on the grounds of ''''non -effectiveness of driving licence '''' which was a violation of policy conditions. Counsel for the petitioner states that they had got the driving licence verified by Shri Rajvinder Sandhu, Advocate and he had submitted and stated that: ''''The DL No. 2454/SS/97 has been issued in favour of Shri Tek Chand for LTV with effect from 27.01.1998 and valid up to 26.01.2001. But the DL is not renewed vide no. 869/SS/2000 dated 27.02.2001 in the name Shri Tek Chand as per the office record. It was renewed in favour of Shri Pyare Lal D L No. 92/SS/95 -96 receipt no. 0460152 with effect from 27.02.2001 as per the office record. ''''

This report dated 02.02.2002 was supported by a report of the Registrar and Licensing Authority, Shimla Suni Sub -Division, Himachal Pradesh which stated as follows: ''''Returned in original with the remarks that DL No. 2454/SS/ 97 issued in favaour of Shri Tek Chand son of Shri Badru Ram resident of Floora Hotel Chakkar Road, Shimla for LTV with effect from 27.01.1998 to 26.01.2001. The D L in question has not been renewed vide no. 869/SS/ 2000 dated 27.02.2001 in the name of Shri Tek Chand as per this office record. ''''.

BOTH the District Forum and the State Commission held that it was incumbent upon the OP company to have produced the affidavit of the Registering and Licensing Authority to the effect that the driving licence was not renewed by it and was not valid for driving licence at the time when the accident in question took place. In the absence of the affidavit it cannot be held that the OP - company has been able to prove that the driver of the vehicle Shri Tek Chand was not having a valid and effective driving licence at the relevant time.

THE State Commission in its order had stated that the owner of the vehicle is not expected to run from office to office to ascertain whether the licence had been actually issued or not. Counsel for the petitioner has drawn our attention to an Apex Court judgment titled as - National Insurance Company Ltd., vs J Maheshwarama - Civil Appeal no. 3408 of 2009 - Special Leave Petition (Civil) no. 19995 of 2007) decided on 08.05.2009. The Apex Court has held as under: ''''20. In view of such concurrent finding, the National Commission did not interfere with the same. The State Commission also came to a finding that the burden is on the Insurance Company to show that the driving licence of the deceased was fabricated and the said burden has not been discharged. 21. The basic issue in the case was whether the deceased had a valid driving licence to drive the vehicle i.e. motor cycle with gear which was involved in the accident. The District Forum, State Commission and National Commission were of the view that since the deceased had a valid insurance policy and there was no dispute that the accident had taken place and the insured died during the validity of said policy, the stand that the driving licence of the deceased was fabricated was of no consequence. It was held that the insurance company had not discharged the burden to prove that the driving licence of the deceased was fabricated. The District Forum observed that no affidavit of the authority who issued the certificate (Ex.B -2) has been filed. The view was endorsed by the State Commission and by the National Commission. Additionally, the National Commission held that the licence produced clearly indicated that the deceased was having licence to drive motor cycle also. This finding cannot be maintained because there was a dispute about the genuineness of the licence failed to show that the deceased had licence to drive motor cycle. Additionally after Exh. B -2 was filed, there was no material brought on record by the complainant to show that the certificate dated 27.2.2006 issued by transport authorities was not authentic. Therefore the question of the insurance company having not discharged the burden, does not arise ''''.

THE facts of case (supra), is squarely applicable to the case on hand. It was for the respondent to bring material on record to show that the certificate issued by the Transport Authorities was not authentic one at the time of accident on 30.07.2001 and that the driver had a valid driving licence on the date of the accident.

IN view of the above facts of the case, the revision petition is allowed and the orders of the State Commission and the District Forum are set aside and the complaint is dismissed. No order as to costs.