BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD

F.A.No.177 OF 2011 AGAINST C.C.NO.406  OF 2009 DISTRICT FORUM-I HYDERABAD

Between:
Mohd Jamal Qureshi S/o Mohd Haji Osman Qureshi
aged about 42 years, Occ: Business
R/o H.No.13-5-506/25, Tappachabutra, Hyderabad
Appellant/complainant
A N D
Bajaj Allianz General Insurance Co.Ltd.,
Far East Plaza, 11th Floor, H.No.3-6-111/8
Street No.18, Himayathnagar, Hyderabad
rep. by its Manager

Respondent/opposite party

Counsel for the Appellant         Sri N.Narotham Reddy
Counsel for the Respondent     Sri N.Mohan Kirshna

QUORUM:   SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER

    AND
SRI THOTA ASHOK KUMAR, HON’BLE MEMBER

WEDNESDAY THE TWENTY NINETH DAY OF AUGUST
   TWO THOUSAND TWELVE

Oral Order (As per Sri R.Lakshminarasimha Rao, Hon’ble Member)

***

1. The unsuccessful complainant is the appellant. 
2. The appellant  is the owner of Eicher Van bearing No.AP 13X 7357 which was insured with the respondent vide policy bearing No.OG-09-1801-1803-00005343. The respondent had paid `19,596/- towards premium and the policy is valid from 17.7.2008 to 16.7.2009.    On 15.9.2008 the van met with an accident by colliding with an RTC bus as a result of which the van got damaged.  The police Kattangur registered a case in Cr.No.128/2008 under Sec.337 of IPC.  The damage was estimated at `2,31,139/- by Talwar Auto Garage Private Limited.  The appellant got repaired the damaged van.  The matter was reported to the respondent  company which repudiated the claim on 5.2.2009 by its letter on the ground that the vehicle was proceeding with more than three passengers which is a breach of policy condition.  The appellant got issued notice dated 20.12.2008 to the respondent. 
3. The respondent resisted the case contending that the vehicle bearing NO. AP-13X-7357 was insured by the respondent under the category of goods carrying commercial vehicle.  As per the FIR, the vehicle was carrying four passengers against the seating capacity of two which is violation of policy conditions.  The repairs were not carried out with the consent of the respondent company.  The appellant failed to clarify the doubt of the respondent in regard to the vehicle carrying excess passengers.  The explanation of the appellant that two home guards forcibly entered the vehicle is not tenable.  The vehicle was constructed for carriage of goods.  At the time of accident it was carrying excess passengers because of which efficiency of the driver was affected.       As per FIR five persons including the driver were traveling in the vehicle at the time of accident.  As per the RC the seating capacity of the vehicle is only for three persons including the driver.   
4. The appellant had filed his affidavit and the documents, ExA1 to A7. The Senior Legal Executive of the respondent  insurance company had filed his affidavit and the documents, Ex B1 to B8.
5. The District Forum dismissed the complaint on the ground that there were four persons in the cabin against the seating capacity of three persons which hampered efficiency of the driver resulting in his loss of control over the vehicle contributing to the accident.
6. Aggrieved by the order of the District Forum, the complainant has filed the appeal contending that in the FIR he was stated that five persons were injured but nowhere it is mentioned that they were sitting in the cabin of the vehicle and that the driver of the vehicle has stated that he and the cleaner was sitting in the cabin and two home guards along with another person were sitting along with the goods in the vehicle. 
7. The point for consideration is whether the respondent insurance company is liable to pay any amount to the appellant?

8. The appellant’s ownership of the vehicle, Van bearing No.AP-13X-7357 and its insurance coverage under the insurance policy have not been in dispute between the parties.  The accident that occurred on 15.9.2008 when the vehicle collided with an RTC bus and the vehicle sustaining damage in the accident are also no longer in dispute between the parties to the proceedings.  The insured declared value as mentioned in the insurance policy is `8,11,300/- whereas the appellant had submitted claim for an amount of `2,31,139/-.   
9. The vehicle was carrying 4 persons on the fateful day when it met with an accident which resulted damage to the vehicle and injuries to four persons.  The accident occurred when the vehicle was collided with an RTC bus coming in opposite direction auto.    In all there were 4 persons in the vehicle against the seating capacity.   Therefore, we have no iota of doubt in holding that the appellant had violated the terms of the insurance policy by permitting more number of persons to travel in the vehicle at the time of the accident. 
10. The learned counsel for the appellant has relied upon the decisions of the Hon’ble National Commission in “the National Insurance Company Limited and another Vs. Ms Usha Devi and another” reported in 2011 (3) CPR, 231 and the National Insurance Company Limited Vs Suresh Babu and another reported in  2006(3) CPR 175. 
11. In Usha Devi’s case the insurance company repudiated the claim on the ground that there were breach of policy conditions as 25 persons were travelling in the insured vehicle at the time of the accident as against the authorized strength of 13 persons because of which accident was occurred as excessive overloading by nearly 100% was one of main contributing causes of the accident. 
12. In Suresh Babu’s case the National Commission held that the insurance company was justified in repudiating the claim when the driver of the insured vehicle permitted 36 passengers against the bus having capacity to carry 17 passengers plus one driver and one conductor  and the driver of the insured vehicle had driven it recklessly at high speed which dashed from behind to the vehicle which was parked on the road side. 
13. In both the aforementioned decisions overloading by 100% against the seating capacity of the vehicle is the main cause that contributed to the occurrence of the accident.  In the case on hand the seating capacity of the vehicle is three and at the time of the accident five persons including the driver were proceeding in the vehicle.  In FIR it is not mentioned as to where the persons other than the cleaner were sitting in the cabin of the vehicle or along with the goods in the rear portion of the vehicle.  At any stretch of imagination in the absence of any contemporaneous evidence overloading of the vehicle can be said to be the factor that contributed to the accident.  As such, there has been no fundamental breach of terms of the insurance policy and the breach of condition of the insurance policy is only in regard to limitation as to its use. 
14. The Hon’ble Supreme Court in “Amalendu Sahu Vs. Oriental Insurance Co.Ltd.” (2010) 4 SCC 536 and the National Commission in 2006 (3) CPR 178 (NC) in National Insurance Co., Ltd., and II (2006) CPJ 144 (NC) in New India Assurance Co., Ltd., Vs Narayanprasad Appaprasad Pathak held that in case of breach of terms of policy as to limitations of use of the vehicle, the claim can be settled on non-standard basis. 
15. As per the judgment of the National Commission in New India Assurance Co. Ltd vs A Mohamad Yasin (14.08.1995) it was observed that a settlement offer on non-standard basis cannot be the foundation for a direction against the insurance company for settlement of the claim or holding the insurance company guilty of any deficiency in service within the meaning of Consumer Protection Act. (para 4 of the order). Secondly, the National Commission, in its order dated 29th October 2007, in G Kothainachiar vs The Branch Manager, United India Insurance Co. Ltd., and Others has taken note of the policy framed by the General Insurance Corporation of India with regard to settlement of non-standard claims in case of breach of policy of terms and warranties and has confirmed that such settlements would essentially inter alia cover claims were the breaches are of a technical or minor and not serious breaches.
16. In Amalendu Sahoo’s case, the Supreme Court approved the settlement of claim on non-standard basis in the matter like vehicle carrying passengers etc.  The Supreme Court approved the decision of the National Commission in New India Assurance Company Limited Vs Narayan Prasad Appaprasad Pathak (2006) II CPJ 144 (NC) wherein the National Commission set out guidelines issued by the insurance company about settlement of non-standard claims. 
17. The Supreme Court held that:
14. In that case also the question was, whether the insurance company can repudiate the claims in a case where the vehicle carrying passengers and the driver did not have a proper driving license and met with an accident. While granting claim on non-standard basis the National Commission set out in its judgment the guidelines issued by the insurance company about settling all such non-standard claims. The said guidelines are set out below:-

S.No. Description Percentage of settlement
(i) Under declaration of licensed
Carrying capacity Deduct 3 years difference in premium from the amount of claim or deduct 25% of claim amount whichever is higher.
(ii) Overloading of vehicles beyond licensed carrying capacity Pay claims not exceeding 75% of admissible claim.
(iii) Any other breach of warranty/condition of policy including limitation as to use.
Pay up to 75% of admissible claim.

15. From a perusal of the aforesaid guidelines it is clear that one of the cases where 75% claim of the admissible claim was settled was where condition of policy including limitation as to use was breached.

16. In the instant case the entire stand of the insurance company is that claimant has used the vehicle for hire and in the course of that there has been an accident.  Following the aforesaid guidelines, this Court is of the opinion that the insurance company cannot repudiate the claim in toto. 

18. In the light of the aforementioned decision,  the respondent  insurance company has to settle the claim of the appellant on non-standard basis.  The respondent insurance company even after receipt of intimation of the accident involving the insured vehicle, has not taken steps for deputation of surveyor.  In the circumstances, the reliable evidence placed on record is the job card invoice credit  dated 29.8.2008 issued by Talwar Auto Garage Private Limited, Hyderabad.  It has issued the invoice for a sum of `1,51,174/- which in fact,  has not been disputed by the respondent insurance company.  It is pertinent to note that the appellant has brought it to the notice of the respondent company immediately after the accident that the vehicle was taken to M/s Talwar Auto Garage Pvt Ltd., for the purpose of getting it repaired.   A combined reading of the notice dated 20.12.2008 and the job card invoice issued by M/s Talwar Auto Garage Pvt Ltd., would leave no iota of doubt   that the appellant incurred an amount of `1,51,174/-. 
19. In the light of the aforementioned decision,  the respondent  insurance company has to settle the claim of the appellant on non-standard basis.  As per the Job Card Invoice issued by M/s Talwar Auto Garage Pvt Limited, the amount spent by the appellant for repair of the vehicle is `1,51,174/- .  As per the decision of the Hon’ble Supreme Court, 75% of admissible claim has to be awarded.  Three fourth of `1,51,174/- is `1,13,380/- to which the complainant is entitled to. 
20. In the result the appeal is allowed.  The order of the District Forum is set aside.  Consequently, the complaint is allowed.  The respondent insurance company directed to pay `1,13,380/-  together with costs of `2,000/-.  Time for compliance four weeks. 

MEMBER

MEMBER
     Dt.29.08.2012

KMK*