USHA PAVAIYA vs United India Insurance Co. Ltd.

THIS is a complainant''s appeal against the order dated 4.3.1998 passed in Case No. 298/1997 by the District Consumer Disputes Redressal Forum, Gwalior (for short the ''District Forum'') whereby the complaint for the alleged deficiency in service in not making the payment of the own damage claim was dismissed.

BRIEF facts giving rise to this appeal are thus: the appellant''s Tata Mobile bearing registration No. M.P. 07/B/6843 compre-hensively insured covering the risk for the period from 26.10.1994 to 25.10.1995 driven by the appellant''s husband Hari Mohan Pavaiya on 20.6.1995 at about 1.30 p.m. near village Baratha, was dashed by a truck No. CIW 8039 coming from opposite direction. In this unfortunate accident, 5 occupants died on the spot and 5 received severe injuries. A First Information Report was lodged and a claim with the Insurance Company. The Insurance Company appointed the Surveyor, who assessed the net loss on cash loss basis of Rs. 97,700/-. However, the amount was not paid as according to report of the Investigator as the vahicle was over-loaded which was carrying 15 passengers more than its seating capacity 5 + 1 and at the time of accident the vehicle was being driven who also died on the spot. The insured gave a wrong and incorrect information about the person who was driving the vehicle at the time of the accident. Therefore, the Insurance Company repudiated the claim vide letter dated 8.11.1996. The appellant filed the complaint which was resisted. The District Forum after appreciation of evidence on record held that the repudiation of the claim was bona fide after due application of mind on justifiable grounds, hence, dismissed the complaint.

After hearing learned Counsel for the parties, we are of the view that the repudiation of the claim in the circumstances of the case was not justified. As to incorrect information in relation to the driver, in the First Information Report the name of the driver who was driving the vehicle at the time of the accident is stated as Hari Mohan Pavaiya, against whom the challan was also filed. The applications for compensation by the legal representatives of the deceased persons and injured persons, were filed against the appellant the owner of the vehicle, the driver Hari Mohan Pavaiya and the United India Insurance Company. The report dated 13.5.1996 of the Investigator Mr. M.P. Tiwari and the statements recorded by him during investigation are of no help as the evidence collected by the Investigator and the statements were not proved by the affidavits of the witnesses and of the Investigator. It is well settled that the evidence collected during the investigation is no evidence unless it is turned into legal evidence. See, the decision of the Supreme Court in Virendra v. State of Delhi, JT 1999 (3) SC 31 and Kaptan Singh v. State of M.P., AIR 1997 SC 2485, followed by this Commission in Appeal No. 738/1999 decided on 15.11.1999 in Oriental Insurance Co. Ltd. v. Surendra Kumar Chouksey.

BESIDES, on the face of the First Information Report, charge sheet, applications for compensation it cannot be said that the vehicle at the time of accident was being driven by Bhagvan Lal Dubey, deceased and not by Hari Mohan Pavaiya, the husband of the appellant. Moreover, even if for arguments sake if Bhagvanlal Dubey was driving the vehicle, the Insurance Company to repudiate the claim has not adduced any evidence to establish that he was an unauthorised driver or was not holding a valid licence. The other ground of the repudiation that vehicle at the time of accident was carrying 15 passengers more than its seating capacity 5 + 1. According to the complainant, the capacity was changed from 5 + 1 to 9 + 1, in all 10 in the year 1994 as is evident from the entries made in the registration book. Even then in all 15 passengers were travelling in the vehicle which is a breach of the condition of the policy. However, excess passengers travelling in the vehicle, were not the cause of the accident as truck coming from opposite direction dashed and collided with the vehicle.

THE question of breach of the condition of the policy i.e. of overloading was considered in case of Ajay Kumar Singh v. United India Insurance Company Ltd., III (2000) CPJ 514=2000 (2) CPR 179 wherein after following the decision of the National Commission in United India Insurance Co. Ltd. v. Surjit Singh Asai, III (1999) CPJ 79 (NC)=(2000) NCJ 113, this Commission held that repudiation of the claim on the ground that the bus was carrying excess passengers could not be held bona fide when the cause of accident is totally unrelated to carrying of excess passengers. In the circumstances, the repudiation on the ground of over-loading of passengers beyond carrying capacity was held not justified. At this stage learned Counsel for the Insurance Company submitted that in view of the overloading, which is breach of the condition of the policy the claim would be settled as non-standard claim and the appellant would be entitled to 75% of the amount of admissible claim Counsel cited a decision of the National Commission in case of Kesarben v. United India Insurance Company Ltd., III (2000) CPJ 36 (NC). It would be appropriate to extract the guidelines for settlement of non-standard claim reproduced in Kesarben''s case (supra), in paras 2, 3 and 4 which we quote : 2. This case reliance has been placed only on the report, which has remained unproved and no affidavit of the person who has investigated the case on behalf of the Insurance Company has been produced. In such circumstances, it cannot be accepted that the facts alleged by the insurer are proved on record. A reference in this behalf is made to a decision of this Commission in United India Insurance Co. Ltd. v. Dashrathlal Jethabai Patel, II (1996) CPJ 77. 3. The types of claims which can be settled as non-standard under the guidelines are set out hereunder : "Non-standard Claims Following types of claims shall be considered as non-standard and shall be settled as indicated below after recording the reasons : Sr.No. Description Percentage of settlement (i) Under declaration of licensed carrying capacity. Deduct 3 years difference in premium from the amount of claim or deduce 25% of claim amount whichever is higher. (ii) Overloading of vehicles beyond licensed carrying capacity. Pay claims not exceeding75% of admissible claim (iii) Any other breach of warranty/condition of policy including limitation as to use. Pay upto 75% of admissible claim For breach of warranty/conditions which do not involve any saving in premiums or any additional exposure to the insurers such claims be considered as Standard Claims, e.g. Route Permit." 4. This Commission had also dealt with the settlement of certain claims as non-standard claims in case of Poly Mat India Pvt. Ltd. & Anr. v. National Insurance Co. Ltd. & Ors., reported as II (1999) CPJ 42 (NC)=2000 CCJ 64. There, in that case, the plea was as to whether a particular claim was covered by the policy when a part of the factory fell outside the factory shed. After examining the facts, this Commission had come to the conclusion that it could be settled as a non-standard claim at 75%."

IN view of the above, in our opinion the appellant would be entitled to Rs. 73,250/- less 25% of Rs. 97,700/- with interest thereon at the rate of 9 per cent per annum, in view of the recent pronouncement of the Supreme Court in case of S. Kaushnuma Begum & Ors. v. New INdia Assurance Co., AIR 2001 SC 85, from the date of filing of the complaint along with Rs. 1,000/- as costs of the proceedings which shall be paid by the INsurance Company within a period of two months from the date of receipt of certified copy of this order failing which the interest shall be payable at the rate 12 per cent per annum.

IN the result, the appeal is allowed. The order of the District Forum shall stand substituted as indicated hereinabove. A copy of this order be conveyed to the parties and a copy be sent to the District Forum along with the record of the case. Appeal allowed.