JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)

          The complainant/respondent owned a Mahindra Bolero vehicle bearing no. HP-08A-1017 which he had got insured with the petitioner company.  The said vehicle having met with an accident on 27.06.2012, a surveyor was appointed by the petitioner to inspect the vehicle and to assess the loss to the complainant.  The surveyor estimated the cost of repair at Rs.2,64,575/- but also gave an option to the insurer to settle the claim on CTL (Constructive Total Loss) basis, by deducting a sum of Rs.1,25,000/- as the salvage value and Rs.500/- as the policy excess. 

2.      The insurer, instead of offering compensation either based on CTL basis or on repair basis, repudiated the claim altogether, vide letter dated 07.11.2012, which to the extent it is relevant, reads as under:     

          We are in receipt of the documents in respect of your captioned claim and on the careful perusal and investigation of the same it is revealed that at the material time of accident the IV was found to be carrying capacity Grossly Over Seating which is in contravention of Policy Condition ‘Limitations as to use’ and Sec. 113 (Sub. Sec.3) of M.V. Act.

          We also draw your attention to the general exception of our policy reading as under:

          GENERAL EXCEPTIONS

          (Applicable to all Sections of the Policy)

          The Company shall not be liable under the Policy in respect of…

          3. Any accidental loss damage and/or liability caused sustained or incurrent whilst the vehicle incurred herein is

          (a) Being used otherwise than in accordance with the ‘Limitations as to Use.

          It is further found that such overloading was the reason for this alleged accident warranting forfeiture of benefits under the Policy.

          In view of the serious breach of policy condition ‘Limitations as to Use’, we express our inability to consider the claim.

3.      Being aggrieved from the rejection of the claim, the complainant approached the concerned District Forum by way of a Consumer Complaint.  The complaint was resisted by the petitioner inter-alia on the grounds on which the claim had been rejected.  It was also pleaded in the reply filed by the insurer that the driver of the vehicle did not possess a valid Driving License at the time the vehicle met with an accident. 

4.      The District Forum allowed the complaint and directed the insurer to pay a sum of Rs.3,75,000/- alongwith 9% per annum from the date of institution of the complaint and Rs.10,000/- as punitive damages as well as Rs.5,000/- as the cost of litigation. 

5.      Being aggrieved from the order passed by the District Forum, the petitioner approached the concerned State Commission by way of an appeal.  The State Commission while upholding the order of the District Forum, having directed return of the salvage or deduction of its value, the petitioner is before this Commission by way of this revision petition.

6.      As held by the Hon’ble Supreme Court in ‘Galada Power and Telecommunication Limited Vs. United India Insurance Company Limited & Anr.’ (2016) 14 SCC 161, the insurer cannot be allowed to take a stand which is not mentioned in the repudiation letter. While taking this view, the Hon’ble Supreme Court approved the decision of the Hon’ble High Court of Delhi in Krishna Wanti V. LIC (2000) 52 DRJ 123 where the High Court had held that an aspect which was not mentioned in the repudiation letter, could not be taken as a stand when the matter is decided.  In the present case, the claim was not repudiated

on the ground that the driver did not possess a valid Driving License at the time the vehicle met with an accident.  Hence, the said ground cannot be allowed to be taken while resisting the Consumer Complaint on merits.  Though the fora below have returned a finding that there was a valid Driving License in favour of the person who was driving the vehicle, I need not go into the correctness or otherwise of the said finding, in view of the above referred decision of the Hon’ble Apex Court. 

7.      It is next contended by the learned counsel for the petitioner that since the cost of repair was less than 75% of the IDV of the vehicle, fora below were not justified in allowing the claim on CTL basis.  As noted earlier, the insurer did not offer any payment at all to the complainant and chose to altogether repudiate the claim solely on the ground that eight persons were travelling in the vehicle whereas it was authorized to carry only five persons.  Had the petitioner offered compensation based upon the cost of repair, it would have been possible for the complainant to get the vehicle repaired soon after it had met with an accident.  It would be highly unfair to ask the complainant to get the vehicle repaired at this stage after a time gap of almost seven years, the accident having taken place on 27.06.2012.  The vehicle must have become incapable of being repaired or the cost of repair would have gone up due to passage of time.  As per the terms of the insurance policy, if the claim is settled on CTL basis, the value of the salvage is to be deducted from the IDV of the vehicle.  The value of the salvage was assessed by the surveyor at Rs.1,25,000/-.  However, the amount payable to the complainant was determined at Rs.3,25,000/- by allowing the claim at a non-standard basis considering that the vehicle was carrying more than the number of passengers allowed to be carried.  The orders of the fora below alongwith the claim at a non-standard basis being passed upon several decisions including the decision in Amalendu Sahu Vs. Oriental Insurance Co. Ltd. Civil Appeal No.2703 of 2010 and decided on 25.03.2010, was justified. 

8.      In Oriental Insurance Company Limited Vs. Laxmegowda 2017 (4) CPR 129 (NC), this Commission inter-alia held as under:

          "6. The main issue that merits consideration in the matter is whether the insurance company is liable to pay the claim to the insured in terms of the policy in question, keeping in view the fact that 14 passengers were found travelling in a goods-carrying commercial vehicle at the time of the accident. As stated by the petitioner, a contract of insurance is a contract of good faith and the insurer should not be liable to pay any amount, if there had been a breach of the terms and conditions of the policy. However, the matter has been considered in detail by the Hon'ble Apex Court in "Lakshmi Chand Vs. Reliance General Insurance Co." (supra) and it has been brought out that the insurer was liable to pay the claim, unless there was a fundamental breach of the terms and conditions of the policy in question. The Hon'ble Apex Court while pronouncing their judgement in this case, relied upon an earlier judgement passed by them in "B.V. Nagaraj Vs. The Oriental Insurance Co. Ltd." [(1996) 4 SCC 467]. In the case, "Lakshmi Chand Vs. Reliance General Insurance Co." (supra), the District Forum had allowed compensation to the complainant on 'non standard' basis and directed the insurance company to settle the same up to 75% of the amount spent for affecting repairs to the damaged vehicle. The said order of the District Forum was set aside in appeal before the State Commission. The order of the State Commission was upheld by the National Commission as well, but in appeal before the Hon'ble Apex Court, the order of the District Forum was restored. It is evident, therefore, that relying upon this order, the complainant is entitled to get the claim on 'non standard' basis only."

9.      In Lakshmi Chand Vs. Reliance General Insurance, II (2016) CPJ 3 (SC), the Hon'ble Supreme Court held as under:-

"Accident was caused on account of rash and negligent driving of offending vehicle. FIR under Section 337, 338, 304a And 427 of IPC (registered against driver of vehicle. Insurance Company not produced any evidence on record to prove that accident occurred on account of overloading of passengers in goods carrying vehicle. For the insurer to avoid liability breach of policy must be so fundamental in nature that it brings contact to an end. Violation of policy conditions not established.  Repudiation not justified."

10.    For the reasons stated hereinabove, I find no ground to interfere with the order passed by the State Commission which has allowed the claim on a non-standard basis and has also directed the complainant to return the salvage to the insurer.  It has also been directed that in the event of the complainant failing to return the salvage, the insurer will be entitled to deduct a sum of Rs.1,25,000/- which was the value of the salvage assessed by the surveyor.  The revision petition being devoid of any merits, is hereby dismissed.  It is made clear that if the vehicle had been financed and the order passed by the fora below is yet to be complied, the payment shall be made to the financer to the extent the liability of the complainant towards the financer remains undischarged.