United India Insurance Co. Ltd. vs BIKKER SINGH

THIS appeal is by United India Insurance Company challenging order of District Forum, Bathinda dated March 26, 1997 giving direction to the appellant to pay to the complainant Bikker Singh a sum of Rs. 9,305/- with 18% compound interest with effect from September 13,1994, the date of accident.

BIKKER Singh had purchased an insurance policy for his scooter from the appellant Insurance Company. The period of the policy commenced from November 10, 1997. The accident occurred on September 18,1994 when a trolley coming from the opposite direction hit the scooter damaging it. Claim was filed before the Insurance Company which was repudiated on December 28, 1994 that the complainant approached the District Forum for the relief. The Insurance Company took up the plea that the repudiation of the claim was valid as at the time of accident three persons were travelling on the scooter, which violated the provisions of the policy and the Motor Vehicles Act. Both the parties led their evidence on affidavits and documents, on the basis of which the impugned order was passed. Learned Counsel for the Insurance Company argued that not more than two persons were to occupy the scooter and as per the fact that three persons were travelling on the scooter it violated the provisions of the Motor Vehicles Act as well as the terms and conditions of the policy - Annexure R-3. The repudiation of the claim was thus bona fide and justified. After hearing Counsel for the parties, we are of the view that the approach of the Insurance Company in repudiating the claim was not justified. Every violation of provisions of the Motor Vehicles Act is not to be made ground for declining relief under the policy or the Consumer Protection Act. "Lakshmanbhai Nagindas Parmar v. United India Insurance Company, III (1993) CPJ 1529", was a case where the passenger Rickshaw was found to have additional passengers than permitted under the Motor Vehicles Act at the time of accident. It was alleged that one of the conditions of the Insurance Company was thus violated. While referring to the earlier decision by the Gujarat State Commission in "Jagdish Harilal Thakkar v. New India Assurance Company Limited" II (1992) CPJ 497, it was held that taking additional passengers was not a fundamental breach which will absolve the Insurance Company of all liabilities. The ratio of the decision of the aforesaid can aptly be applied to the case in hand. Three persons may be on the scooter where sitting capacity is two, but with the mere addition of another passenger, it cannot necessarily be held that the driver of the scooter was negligent in driving and that caused the accident. As per version given in the copy of the FIR produced before the District Forum, a tractor trolley came from the opposite direction and hit the scooter, m such like matters, the negligence would be on the part of the driver of the tractor trolley who would be responsible for the accident. Without further commenting on the subject, applying the ratio of the decision aforesaid mere inclusion of extra passenger may be a child or otherwise will not debar the insured of the scooter to claim damages for the scooter from the Insurance Company. The order of the District Forum regarding grant of compensation is, therefore, justified.

It has been argued by learned Counsel for the appellant, that compound interest as well as interest @ 18% by way of compensation could not be granted. There is force in this contention. The Supreme Court in "United India Insurance Co. Ltd. v. M.K.J. Corporation", III (1996) CPJ 8 (SC), has held that in case of nationalised Insurance Companies damages by way of compensation more than 12% per annum should not be granted. Thus to that extent the impugned order deserves to be modified. We order accordingly.

FOR the reasons recorded above, this appeal is partly allowed. The order of the District FORum is modified with direction to the appellant-Insurance Company to pay the assessed amount of Rs. 9,305 /- to the complainant with 12% per annum interest with effect from February 18, 1995 all owing three months time from the date of accident to settle the claim, till payment. There will be no order as to costs in this appeal. Appeal partly allowed. ________________