PER JUSTICE R.C. JAIN PRESIDING MEMBER (ORAL) Aggrieved by the order dated 31.05.2007 passed by the Punjab State Consumer Disputes Redressal Commission (for short ‘the State Commission’) in First appeal No. 460 of 2007, the National Insurance Company Ltd., which was arrayed as opposite party in the complaint has -2- filed the present petition purportedly under Section 21-B of the Consumer Protection Act, 1986. The appeal before the State Commission was filed against the order dated 19.2.2007 passed by the District Consumer Disputes Redressal Forum, Amritsar in the complaint filed by Jaswant Singh alleging deficiency in service on the part of the Insurance Company in settling its insurance claim under insurance policy covering a Mini Truck, the insurance company having repudiated the claim primarily on the ground of violation of the terms and conditions of the policy. The precise ground being that the mini truck had no valid permit for plying the said mini truck in the area or where the peril had taken place. The mini truck having been damaged/destroyed on account of fire in the jurisdiction of Amritsar and the permit issued by the Transport authority was valid only for the State of Haryana. The District Forum on consideration of the facts and circumstances of the case had dismissed the complaint upholding the defence plea put forth by the insurance company. In the appeal filed by the complainant, the State Commission has reversed the finding of the District Forum and has allowed the appeal with the direction to the insurance company to pay the amount of claim as assessed by the surveyor within one month from the receipt of the copy of the order and in default to pay interest on the awarded amount @ 9% per annum with effect from the date of the order. -3- 2. We have heard Mr. S.L. Gupta, learned counsel representing the petitioner-Insurance Company and Mr. R.K. Rathore, learned counsel for the respondent-complainant and have considered their submissions. The facts and circumstances, which led to the filing of the complaint, are amply noted in the order of the fora below. There is no denial about issuance of the insurance policy covering different perils in respect of mini truck owned by the complainant and the said mini truck being a commercial vehicle and having a road permit to ply within the State of Haryana. It is also not in dispute that during the currency of the said insurance policy the truck was damaged/destroyed on account of fire incident while it was parked at Trimurti Goods Transport Company, Golden Avenue, G.T. Road, Amritsar for unloading the goods. Therefore the root question which needs to be considered is as to whether the insurance company was justified in repudiating the claim of the complainant all together or the violation of the Motor Vehicles Act which in turn took the violation of the terms and conditions of the policy was such which could be waived/condoned and claim settled by the insurance company. 3. Mr. Gupta, learned counsel for the petitioner submits that the violation in regard to the permit being a serious violation could not be condoned and therefore, the insurance company was justified in -4- repudiating the claim. In support of his contention, he heavily relies upon a decision of the Hon’ble Supreme Court in the case of National Insurance Company Ltd. Vs. Challa Bharathamma & Ors. 2004 8 SCC 517. On the other hand, counsel for the respondent-complainant supports the order passed by the State Commission and submits that the above referred decision is not applicable to the facts and circumstances of the present case in as much as in the present case the respondent-complainant did have the permit to ply the mini truck in question within the territory of Haryana and therefore, it cannot be said that by taking the truck to the State of Punjab he really committed any violation either of the provisions of the Motor Vehicles Act or the terms and conditions of the insurance policy. The question has been considered at great length by the State Commission and answered in favour of the complainant by observing as under: “We may notice another judgment of the Apex Courtin Skandia Insurance Co. Ltd., Versus Kokilaben Chandravadan & Ors., reported in I (1987) ACJ 413 (1987) 2 SCC 654 wherein it was observed by the Apex Court that exclusion clause would have to be read down for the purpose of finding out whether the breach of that clause was fundamental in nature or not. Even in National Insurance Co. Ltd., Versus Swaran Singh reported in JT 2004 (1) SC 109, the Apex Court observed as under: “Even where the insurer is able to prove breach on the part of the insured concerning the policy/condition regarding holding of a valid -5- licence by the driver of or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of accident. The Tribunals in interpreting the policy conditions would apply ‘the rule of main purpose’ and the concept of ‘fundamental breach’ to allow defence available to the insured under section 149 (2) of the Act.” Though the observations of the Apex Court were qua the third party but what was being observed was that even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding the holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is / are so fundamental as are found to have contributed to the cause of accident. The Tribunals in interpreting the policy conditions would apply ‘the rule of main purpose’ and the concept of ‘fundamental breach’ to allow defences available to the insured under Section 149 (2) of the Motor Vehicle Act. A further fact may be noticed that in this case the vehicle was stationary when the alleged fire took place because of short-circuiting or for some other reasons. So far as the Apex Court’s judgment of the Apex Court in Challa Bharathamma’s case (Supra) cited by the learned counsel for the respondent is concerned, it may be mentioned that that was a case where an auto-rickshaw had no permit at all to ply the vehicle, whereas in the present case the vehicle in question had a permit but may not be having a permit to ply in the State of Punjab. Relying on the principles laid down by the Apex Court in B.V. Nagaraju and Kokilaben Chandravadan cases as also Swaran Singh’s case (Supra), the question would arise : Is the plying of the truck in an area where there -6- is no permit i.e., is the breach of condition of insurance policy was fundamental to the cause of accident (i.e. in this case the accident was fire). According to us, the cause of the accident in the present case has nothing to do with the vehicle being brought in the State of Punjab for which there was no permit. As held by the Apex Court in B.V. Nagaraju’s case that though there was breach of condition of policy of plying the truck as it had been carrying passengers unauthorizedly, but the Supreme Court went further to find out whether this breach of condition of carrying unauthorized passengers was fundamental to the cause of the accident. After answering the same in the negative, it was held that the insurance company was liable to pay the insurance amount. For the foregoing reasons, we do not agree with the approach of the District Forum and rather would hold that in the present case the repudiation was not well based.” 4. Without repeating the reasons given above, we are of the view that going by the facts and circumstances of the present case that the vehicle in question had a valid permit issued by the Transport Authority to ply the vehicle within the territory of Haryana and the only violation being about crossing to the other territory and plying the mini truck in the adjoining territory, we uphold the findings given by the State Commission. 5. Having done so, the next question arises, as to whether in the given facts and circumstances, the insurance company can be asked to settle the insurance claim of the complainant in its entirety as per the assessment of the surveyor or the insurance company should be -7- allowed to deduct a certain amount from the said assessment of loss on account of the limited violation of the terms and conditions of the policy. The Hon’ble Supreme Court in the case of Amalendu Sahoo Vs. Oriental Insurance Company Ltd. 2010 STPL (Web) 212 SC (Civil Appeal No. 2703 of 2010 decided on 25.3.2010) as going by the instructions/guidelines issued by the IRDA to all the Public Sectors, General Insurance Companies has taken a view that even in the case of violation of the terms and conditions of the policy, the insurance company can settle the claim on Non-Standard Basis by paying a sum equivalent up to 75% of the assessed claim. In our view this is one such case where the insurance company ought to have settled the claim of the respondent-complainant atleast on non-standard basis i.e. by paying atleast 75% of the assessed amount of Rs. 4,38,500/-. The order of the State Commission requires to be modified to this extent. Since there has been undue delay in settling the claim of the complainant, we consider it appropriate to award interest @ 9% per annum on the amount to be awarded with effect from the filing of the complaint in the District Forum. 6. We partly allow the Revision Petition and hold that the insurance company should compensate the complainant by paying a sum of Rs. 3,28,875/- (75% of the assessed loss i.e. Rs. 4,38,500/-) to the -8- complainant along with interest @ 9% per annum with effect from the date of filing of the complaint in the District Forum. The amount shall be paid within a period of six weeks from the date of this order failing which the rate of interest shall stand enhanced to 12% per annum with effect from the date of default. Parties are left to bear their own costs throughout. | 
