BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD

F.A.No.571 OF 2011 AGAINST C.C.NO.50 OF 2007 DISTRICT FORUM ADILABAD

Between:

The New India Assurance Co.Ltd.,

Rep. by its Branch Manager,

Branch Office 5-11-41/2, Near Old Bus Stand

Nirmal District, Adilabad

                                                        Appellant/opposite party

                A N D

Ch.Dattatreya S/o Ch.Veerappa
age 29 yrs, Occ: Business Owner of
Mahindra Bolero Vehicle bearing
No.AP 01J 1542, R/o H.No.1-2-47/1
Bhattigally, Bhainsa Dist.Adilabad

Respondent/complainant

Counsel for the Appellant                      M/s Katta Laxmi Prasad

Counsel for the Respondent                   M/s V.Gourisankara Rao

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

                                                AND

SRI THOTA ASHOK KUMAR, HON’BLE MEMBER

THURSDAY THE FIFTEENTH  DAY OF NOVEMBER

                                TWO THOUSAND TWELVE

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

                                                ***

1.              The opposite party is the appellant. 

2.             The brief facts of the case as seen from the comlaint are that the respondent insured his vehicle Mahindra Belero Trax bearing No.AP 1J 1542 with the appellant vide policy bearing No.6160/05/00001178 valid from 3.11.2005 to 2.11.2006 by paying premium of Rs.12,598/-.  On 20.08.2006 the vehicle of the respondent met with an accident with lorry/truck bearing No.MH 26B 7724 while proceeding to Shirdi due to which two passengers died and others sustained grievous injuries.  The police concerned conducted pancahanama and the insurance surveyor visited the scene of offence and estimated the damage to the vehicle at `4,16,580/-.   The appellant agreed to pay `2,70,000/- on a total loss basis and the appellant repudiated the claim by its letter dated 1.6.2007 on the premise that the vehicle was used for hire and thereby committed violation of conditions of the policy. 

3.             The appellant resisted the case contending that on receipt of information the appellant appointed an independent investigator/loss assessor by name G.Ram Kumar who conducted the survey and reposed that the jeep was used for hire and was carrying passengers on hire at the time of accident.  The jeep was taken on hire by one Anand Rao Narwade to go to Shridi from Bhainsa along with his family members.  On 20.08.2006 at about 5.30 p.m. near Dokri Pimpri Pata the jeep dashed a parked lorry.  The jeep was carrying excess passengers at the time of accident.  The respondent violated the terms and conditions of policy by using the vehicle for hire purpose.  As such the appellant justified its action of repudiation of the claim.

4.             The respondent filed his affidavit and the documents Exs.A1 to A11.  On the side of the appellant-insurance company Ex.B1 to B9 had been marked.  The District forum had considered the request of the appellant-insurance company that the counter be treated as affidavit.

5.             The District Forum has allowed the complaint awarding `1,35,00/- towards 50% of the amount claimed by the respondent on non-standard basis.

6.             Aggrieved by the order of the District Forum, the opposite party insurance company has filed appeal contending that the respondent used the vehicle for commercial purpose and thereby violated the terms of the insurance policy and that the District Forum has not appreciated the documentary evidence in correct perspective as also that the District Forum failed to consider the applicability of the terms and conditions of the insurance policy. 

7.             The point for consideration is whether the order of the district Forum suffers from misappreciation of facts or law?

8.             The ownership of the respondent of the vehicle Mahindra Bolero bearing Registration No.AP 1J 1542 insured with the appellant-insurance company under the insurance policy bearing No. No.6160/05/00001178 and the validity period of the insurance policy  from 3.11.2005 to 2.11.2006 are not disputed.  It is stated by the respondent that the vehicle met with an accident on 20.8.2006 while proceeding from Bhainsa to Shirdi when it reached Dukri ampri on Jalna Manta Road as the truck bearing No.MH 26B 7724 came in opposite direction and dashed against the insured vehicle.  The appellant insurance company disputed the manner in which the accident stated to have been occurred while the vehicle was proceeding from Jalna to Aurangabad and dashed against a parked lorry on the side of the road.  In whatever manner the accident is described to have been occurred, the fact remains that the vehicle met with an accident while proceeding from Bhainsa to Shirdi. 

9.             The claim of the respondent is repudiated on two counts, the respondent had let the vehicle on hire for commercial use against the terms fo the insurance policy and that the vehicle at the time of the accident was carrying passengers in excess of the permitted capacity.  As per the certificate of registration, the seating capacity of the vehicle is 10 in all.  The vehicle, admittedly is registered as private car.  The contention of the appellant insurance company that the respondent violated the terms of the insurance policy is borne from the records as also upheld by the District Forum.  As such it is an established fact that the respondent had violated the terms of the policy as to the limitation of the use of the vehicle.                                   

10.            Insofar as the plea that the vehicle was carrying excess passengers than the permitted capacity is concerned, the repudiation letter does not decipher any violation of the condition of the insurance policy as to the carrying of persons than the permitted capacity.  Even otherwise, the appellant-insurance company has not chosen to press in to service the violation of the terms of the insurance policy as regard to the vehicle carrying excess persons than the permitted capacity.  As such the only objection that was  raised by the appellant in regard to the violation of the condition of the insurance policy in respect of limitation as to its use is to be considered in the backdrop of the proposition whether the violation of the terms is fundamental as to hold the respondent disentitled to claim for indemnification of the amount stated to have been incurred for getting the vehicle repaired. 

11.            The Hon’ble Supreme Court in “Amalendu Sahu Vs. Oriental Insurance Co.Ltd.” (2010) 4 SCC 536 approved the settlement of claim on non-standard basis in the matter like vehicle carrying passengers, limitations as to its use 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. 

12.            In the light of the aforementioned decision the appellant insurance company has to settle the claim of the respondent on non-standard basis.  The District forum has awarded the amount of `1,35,000/- towards 50% of the claim, not basing on any documentary evidence.  The only document submitted in support of his claim, by the respondent is the quotation which cannot be considered as receipt of payment of actual amount incurred for repairing of the vehicle.  The policy was issued by the appellant subject to depreciation of the vehicle.  While granting the amount in favour of the respondent, the depreciation of vehicle basing on its age, different rates for different damaged parts of the vehicle such as rubber and plastic items attracting 50% depreciation and glass parts attracting nil depreciation and the machinery attracting depreciation according to the year and age of the vehicle have to b e considered.

13.            Except, stating that the appellant insurance company has admitted for `2,70,000/- the respondent has not produced any bills or cash receipts or any document showing the admission of the appellant insurance company to pay the amount claimed by the respondent.  On the other hand the appellant insurance company had specifically denied the contents of the complaint and the claim of the respondent.  The District Forum not considered depreciation of the vehicle as also the parts of the vehicle which were damaged in the accident and which attracted different rates of depreciation.  The respondent has failed to prove that he incurred an amount of `2,70,000/- as claimed by him or Rs.1,35,000/- as awarded by the District Forum.  The District Forum has applied thumb down rule and awarded 50% of the amount claimed by the respondent purportedly on non-standard basis. 

14.            No doubt, in view of the decision of the Hon’ble Supreme Court in Amalendu Sahoo (Supra) the respondent is entitled to settlement of the claim on non-standard basis on the admitted amount.  The appellant has not admitted the amount claimed by the respondent said to have been incurred for repairing of the vehicle.  The respondent has also not adduced evidence even to the extent of `1,35,000/- as awarded by the District Forum on non-standard basis.  The respondent can claim amount on non-standard basis only on submitting the cash receipts showing the amount actually incurred for getting the vehicle repaired.  As such we are inclined to set aside the order passed by the District Forum and hold the respondent entitled to the amount to the extent of 50% on submission of the cash receipts to the satisfaction of the appellant. 

15.            In the result the appeal is allowed modifying the order of the District Forum.  The appellant insurance company directed to settle the claim on non-standard basis on submission of cash receipts showing the amount incurred for repairing of the vehicle to the satisfaction of the appellant-insurance company.  There shall be no order as to costs.

                                                                        MEMBER

                                                                        MEMBER

                                                                   Dt.15.11.2012

KMK*