T.S.BHAGIRATHA vs ORIENTAL ASSURANCE CO. LTD.

THE complainant is the registered owner of Allwyn Nissan medium goods vehicle bearing registration No. CAN-2408. He had insured the said vehicle with the opposite party, that is, the Oriental Insurance Co. Ltd., Divisional Office, Gandhinagar, Bangalore, under Policy No. M-2-121/MV/12570/91, as per Ex. C-l, under comprehensive policy, covering the risk upto the limit of Rs. 1,63,000/-. This policy was valid for the period between 3.9.1990 upto 2.9.1991. THE complainant had paid the full premium of Rs. 3,816/- and the estimated value of the vehicle as shown in the policy issued by the Insurer is Rs. 1,63,000/-. THE policy also states in terms that the vehicle is of 1988 make.

THE said vehicle so insured with the opposite party, met with an accident on 24.6.1991, within the limits of Hoskote Police Station, Bangalore District. THE Police at Hoskote Police Station, registered a case in crime No. 203 of 1991, under Sections 279, 337 and 338 I.P.C., issued F.I.R. as per Ex.. C-2, recorded the mahazar as per Ex. C-4. THE motor vehicle Inspector report is at Ex. C-3. THE Police after completing the investigation placed charge-sheet as per Ex. C-5. The complainant immediately thereafter made a report of the occurrence to the opposite party and submitted a proposal form to the opposite party as per Ex.R-1.

The complainant got the damage to the vehicle estimated by M/s. Sundaram Motors, Bangalore, the report of which is as per Ex. C-7 and submitted the same to the opposite party. The opposite party further directed to get the damages estimated by one more expert garage. The complainant got it surveyed and estimated from M/s. Friend''s Auto Garage, Bangalore, who gave the report as per Ex. C-9. The opposite party further got surveyed and assessed the damage to the vehicle by its own surveyor who made the report as per Ex. R- 2. The opposite party did not settle the claim made by the complainant but on the other hand by its letter on 3.12.1991, as per Ex. C-11, repudiated the claim of the complainant on an untenable ground.

THE complainant on the basis of the averments so made claimed a sum of Rs. 1,60,000/- from the opposite party. The opposite party filed its statement of objections. The opposite party admitted that the vehicle was insured with them; it was a comprehensive policy as per Ex. C-1. It also admitted that it met with an accident as averred by the complainant on 24.6.1990 during the currency of the policy period Ex. C-1. It also admitted the fact of the said damaged vehicle being surveyed, inspected and assessed by its official Surveyor as per Ex. R-2. It did not deny the fact that the complainant got the vehicle surveyed and estimated by M/s. Sundaram Motors and M/s. Friend''s Auto Garage. The opposite party denied the claim of the complainant on the sole ground that some unauthorised passengers were carried in the vehicle at the time of the accident in violation of the policy condition as regards "Limitations as to use".

AT the enquiry, complainant examined himself as C.W.I and a Mechanic of M/s. Friend''s Auto Garage, as C.W. 2 and got Ex. C-l to C-28 marked in evidence. The opposite party did not lead any evidence, documents filed by it were marked as Exs. R-1 and R-2 with the consent of the complainant. Having regard to the pleadings of the parties as also the evidence adduced before us, the points that arise for consideration are: (1) Whether the complainant acted in violation of the policy condition as regards "Limitations as to use" by carrying unauthorised persons in the vehicle at the time of the accident? (2) What is the market value of the vehicle as on the date of the accident? (3) What is the claim to which the complainant is entitled to?

Regarding point No. 1:-The opposite party repudiated the claim of the complainant only on the ground that the complainant acted in violation of the policy condition. The repudiation letter Ex. C-11, read thus: "This has reference to the claim preferred by you in respect of the accident to the captioned vehicle on 24.6.1991. From the F.I.R. it was observed that unauthorised passengers were carried in your vehicle at the time of accident and all of them sustained injuries. Carrying unauthorised passengers in a goods vehicle is a clear violation of the policy condition as regards "Limitations as to use". In view of the above violation, we regret to express our inability to entertain the O.D. claim in question and the same stands repudiated by the Competent Authority which please note."

THE complainant has averred in the complaint at para 14 thus: "14. THE complainant submit that (although irrelevant for the purposes of settlement of own damages claim) that the persons travelling in the vehicle were none other than persons connected to the goods carried in the vehicle and coolies,"

THE complainant has stated in his evidence in this regard thus: "I was returning after loading the vehicle with the household articles of the person who had engaged the vehicle for that purpose at Hoskote. THE persons who were at the time of occurrence in the vehicle were the labourers engaged by the hirer for loading and unloading."

This evidence of the complainant is not denied by the opposite party nor did the opposite party lead any evidence to show that the persons in the vehicle at the time of the accident were unauthorised passengers.

The complainant has also produced Ex. C- 25 to C-28, the claim petitions made before the claims Tribunal by the injured persons in the said vehicle at the time of the accident, that show that all of them had stated that they were the coolies in the said vehicle.

THE Clause in the policy, Ex. C-1, pertaining to Limitations as to use, read thus: "Limitations as to use": Only for the carriage of goods within the meaning of the Motor Vehicles Act, 1986.THE policy does not cover - (1) Use for organised racing, pace-making reliability trial or speed testing. (2) Use whilst drawing a trailer except the towing of any one disabled machanically propelled vehicles. (3) Use for carrying passengers in the vehicle except employees (other than driver) not exceeding six in numbers coming under the purview of W.C. Act, 1923."

This would go to show that carrying of employees (other than driver) not exceeding 6 in numbers is permitted as per the condition contained therein. It is clear from the material placed on record that complainant has not acted in violation of the condition of policy in carrying the coolies in his vehicle. Even assuming, for the sake of argument, that the six persons travelling in the vehicle were passengers, it cannot be a ground for the Insurance Company to repudiate the contract as the fact of their being passengers or coolies does not make any difference to the risk involved. These persons were not in any way concerned with the cause of the accident nor have they contributed to the risk in respect of the loss caused to the vehicle. The complainant has not claimed any compensation in respect of his liability to the persons travelling in the vehicle. A similar question arose in. Jagdish Harilal Thakkar v. The New India Assurance Co. Ltd., reported in II (1992) CPJ page 497 wherein the Gujarat State Commission has observed as follows: "13. Now if we minutely consider the provision regarding the limitation as to use it appears to us that the vehicle should not be used for carrying passengers. In other words, it should not be used as a passenger carrying truck at the question raises is if a lift is given by the driver/cleaner without the consent or knowledge of the owner will it amount to using of the vehicle as a carrier or passengers. If some persons are taken either to help them or to oblige them will such a breach of condition totally discharge the liability of the Insurance Company? Let us consider this point from different angles. That under the Policy the insured was entitled to carry six employees excluding the driver and if total six persons are travelling in the truck, has it increased any risk for the Insurance Co. or were these persons were in any way connected with the cause of the accident. Our answer is no. The Insurance Co. has not raised the contention that the truck was loaded with more than 12 tonnes of goods. That taking of these three or four persons has contributed to the cause of accident or has increased any additional liability to the company. The accident has been caused by the truck coming from the opposite direction directly dashed with the insured truck without any fault of the driver/cleaner. Even assuming for the sake of argument that taking of these 3/4 persons was strictly not provided, even then merely because some persons were taken by the driver and cleaner without the knowledge of the owner who had not contributed increase of risk or is not connected with the cause of accident, a contractua1 liability of this nature for which a very high premium has been paid by the insured cannot be repudiated by the Insurance Co. It was merely an irregularity which is not fundamental in nature so as to put an end to a contract. This type of bread will never give a right to a contracting party to rescind the contract. He might at the most claim some relief or concession in the damage."

We are in respectful agreement with the said observations. So we hold and record Point No. 1 in favour of the complainant.

REGARDING Point No. 2: The estimated value of the vehicle as per Ex. C-1 is Rs. 1,63,000/- as on the date of issue of policy that is on 3.9.1990. This estimated value of the vehicle has not been denied or disputed by the opposite party when the proposal was submitted. In these circumstances, when the premium has been paid on the basis of the valuation of Rs. 1,63,000/- and when the same had not been disputed by the Insurance Company at the time of issuing the policy; and when the Insurance Company had assessed charges and collected the premium on that basis it is for the Insurance Company to prove that the value is excessive or that the market value is less than Rs. 1,63,000/-. In the absence of any material placed on record by the opposite party and when it has accepted the premium on the basis of the estimated value shown in the proposal form, we hold that the market value of the vehicle as on the date of the accident is Rs. 1,63,000/- as shown in the policy, Ex. C-1. Point No. 2 is answered accordingly. Regarding Point No. 3: The complainant has produced estimation of the damage sustained by the vehicle and sum required for the repair of the same as per Exs. C-7 and C-9. It shows that approximately a sum of Rs. 1,90,000/- is required for the repair of the said vehicle. Ex. R-2 is the survey report given by the official, Surveyor of the opposite party. The opposite party has not examined the said Surveyor and has not proved Ex. R-2. The complainant has not proved Ex. C-7. The complainant examined C.W. 2, a Mechanic, to prove Ex. C-9. The complainant did not examine the person who prepared Ex. C-9.

THE value of the vehicle was Rs. 1,63,000/- as shown in the policy. THE salvage value of the vehicle as shown in Ex. R-2 is Rs. 55,000/-. If this salvage value of Rs. 55,000/- is given deduction in the estimated value of the vehicle of Rs. 1,63,000/-, the amount required for the repair of the vehicle would be Rs. 1,08,000/-. In our opinion the complainant is entitled for this sum of Rs. 1,08,000/-.

EX. C-10 is the letter written by K.S.F.C. to the complainant demanding payment of the dues regarding the loan taken by him for the purchase of the vehicle. EX. C-l also shows that the vehicle was hypothecated with K.S.F.C. Bangalore. The complainant had paid and was to pay interest on the amount of loan taken from K.S.F.C. The complainant was a poor person and was plying the vehicle to earn his livelihood. The Insurance Company is enjoined with the duty to investigate the claim of the claimant with utmost care and diligence. The circumstances would go to show that opposite party failed to perform its duties in settling the claim diligently without any loss of time. In the circumstances, we have no other alternative except to compensate the claimant for the losses which he has suffered, by awarding interest on the amount of Rs. 1,08,000/- at 18% per annum. ORDER In the Result, therefore, this complaint is allowed. The opposite party, the Oriental Insurance Co. Ltd., shall pay to the complainant a sum of Rs. 1,08,000/- together with interest at 18% per annum on the said sum from the date of accident, i.e., from 24.6.1991, till the date of payment to the complainant. The opposite party shall also pay to the complainant the cost of this complaint which we quantify at Rs. 2,000/-. The opposite party shall pay the said sums to the complainant within a period of 6 weeks from this day. Complaint allowed with costs. _________________