The org. opponent-Bajaj Allianz General Insurance Company Ltd. (‘Insurance Company’ in short) has filed this appeal challenging the order dated 30/06/2011 passed by District Forum, Nashik in consumer complaint No.282/2010 (Mukund Triambak Kapre V/s. Bajaj Allianz General Insurance Company Ltd.). District Forum while deciding consumer complaint allowed the same partly and directed appellant/Insurance Company to pay an amount of `5,20,000/- together with interest @ 12% p.a. with ancillary relief of `15,000/- towards mental agony and `1,000/- towards cost of litigation. All these amounts were directed to be paid within a period of 30 days from the date of order.
2. Aggrieved with the impugned order, this appeal has been filed by the Insurance Company on the ground that insured vehicle was used for commercial purpose though insurance cover was provided as ‘Private Car Package Policy’. Therefore, question of covering risk does not arise as ex-facie the vehicle was used for hire. Claim was intimated by original complainant belatedly after about a month though F.I.R. was lodged with the concerned Police Station on the same date. This is an additional breach of condition as claim was not submitted in time. Even after filing the written arguments by the appellant, Learned District Forum allowed the delay condonation application though vehemently opposed by the appellant. The insured vehicle was hypothecated to the ICICI Bank. There is no material/documentary evidence whatsoever to support the case of total loss as claimed by the complainant. District Forum erred while deciding the consumer complaint in favour of complainant without going through the legal provisions as no insurance cover whatsoever was provided for ill-fated vehicle on account of ‘hire and reward’ for which vehicle was used contrary to the conditions of cover under the Policy.
3. We heard Mr.S.R. Singh, Learned Advocate for the appellant and Mr.A.S. Vidyarthi, Learned Advocate i/b. Mr.Vijay Gawande, Advocate for the respondent. Perused the record.
4. Facts which are not in dispute are that the incident of accident to the insured vehicle is not in dispute so also the F.I.R. lodged on the very day of accident is also not in dispute. What is disputed is that the claim preferred by the complainant belatedly though the accident was occurred on 09/12/2007 whereas the complainant preferred claim on 04/01/2008. District Forum appreciated the Survey Report on record which is not filed in the appeal compilation by the appellant. Vehicle was insured as Private Use and therefore, there were limitation as to use. Insured Declared Value is `5,20,000/- with sitting capacity of 10 passengers. There is no documentary evidence whatsoever led by the appellant/Insurance Company before the District Forum to establish that the ill-fated vehicle was used for the purpose of hire and reward. Appellant/Insurance Company relied only on the statement of one Smt.Pannashree Venkateshwarrao Sagi, which was recorded by the Police at the time of filing F.I.R. Claim preferred on 04/01/2008 was repudiated by the Insurance Company firstly on the ground of violation of terms and conditions as to limitation to use and second ground was that of delayed intimation of filing insurance claim.
5. Interestingly, on going through the repudiation letter, it cannot be construed as repudiation letter in strict sense as the Insurance Company after citing violation of the conditions in Para 1 of said letter inquired with the complainant stating, “Kindly explain why we should pay the claim?” However, the last line in the said letter says, “In the above your claim stands repudiated accordingly same may please be noted and no any communication should be entertained regarding the same.” On one hand the Insurance Company conveyed by said alleged repudiation letter the violation of terms and conditions of the Policy and on the other hand called for explanation from the complainant as to why they should pay the claim. Without giving opportunity of tendering explanation by the complainant, said letter also according to the Insurance Company operates as repudiation letter. We observed that Insurance Company issued the said letter without applying mind.
6. Both the Learned Advocates relied on various authorities to support their contentions as mentioned below :-
1) Judgement of the Apex Court in Civil Appeal No.4908/2008 in the case of Dr.Rajbir Sing Dalal V/s. ChaudhariDeviLalUniversity, Sirsa & Anr.
2) National Insurance Co. Ltd. V/s. Nitin Khandelwal, 2008 (3) ALL MR 875 (SC)
3) Amalendu Sahu V/s. Oriental Insurance Co. Ltd., 2010 SAR (Civil) 405 Supreme Court.
4) Delhi Administration (Now NCT of Delhi) V/s. Manohar Lal, (2002) 7 SCC 222.
5) Oriental Insurance Co. Ltd. V/s. Premalata Shukla & Ors., 2007 (5) Supreme 370.
6) National Insurance Co. Ltd. V/s. Challa Bharathamma & Ors., (2004) 8 SCC 517.
7) Judgement of the National Commission in R.P. No.681 & 300/2006 in the case of Joginder Singh V/s. Oriental Insurance Co. Ltd. & Ors. dated 23/10/2008.
8) Decision of this Commission in First Appeal No.19/2011 in the case of Oriental Insurance Co. Ltd. V/s. Shri Ravindra Mane, dated 03/02/2011.
9) Decision of this Commission in First Appeal No.A/111/2000 in the case of Oriental Insurance Co. Ltd. V/s. Sunil Vasantrao Mitkari, dated 09/08/2012.
7. Gist of the judgements cited above is summarized as below :-
In the case of Dr.Rajbir Sing Dalal V/s. ChaudhariDeviLalUniversity, Sirsa & Anr., supra, the Hon’ble Apex Court has explained application of ratio of the judgements by the lower judiciary.
In the case of National Insurance Co. Ltd. V/s. Nitin Khandelwal, supra, the Hon’ble Apex Court held that in case of theft of vehicle, breach of condition that vehicle was used as a taxi when it was insured for personal use is not germane to main condition of the contract and appeal of the National Insurance Company Ltd. was disposed off without disturbing the order of the National Commission in appeal.
In the case of Amalendu Sahu V/s. Oriental Insurance Co. Ltd., supra, the Hon’ble Apex Court explained the principle of granting claim on non-standard basis and formula set out by the National Commission was highlighted as guidelines for the Insurance Company for settlement of all such non-standard claims which permit settlement of admissible claim upto 75% of admissible claim.
In the case of Delhi Administration (Now NCT of Delhi) V/s. Manohar Lal, supra, the Hon’ble Apex Court held that - “Although law declared by Supreme Court is binding, High Court or any other court instead of mechanically applying a decision of the Supreme Court, should first find out the ratio of the decision on a careful reading of the judgment and then consider its applicability to the case in hand.” Learned Counsel of the appellant argued that the judgement of Hon’ble Apex Court is a law of land under Article 141 of Constitution of India, but the Subordinate Courts shall not apply decision of the Supreme Court mechanically. However, facts and circumstances of the case on hand are identical as in Amalendu Sahu V/s. Oriental Insurance Co. Ltd., supra. The Hon’ble Apex Court confirmed the guidelines evolved by the National Commission in the case of New India Assurance Company Ltd. V/s. Narayan Prasad Apparasad Pathak, (2006) CPJ 144 (NC),regarding settlement of claim on non-standard basis.
Judgement of the Hon’ble Apex Court in the case of Oriental Insurance Co. Ltd. V/s. Premalata Shukla & Ors., supra, pertains to theft of the insured vehicle and F.I.R. was closed as the insured truck could not be traced. Hence, it is not applicable to the case on hand.
Judgement of the Hon’bel Apex Court in the case of National Insurance Co. Ltd. V/s. Challa Bharathamma & Ors., supra, is not applicable to the case on hand since decision pertains to plying of vehicle without a permit.
In R.P. No.681 & 300/2006 (Joginder Singh V/s. Oriental Insurance Co. Ltd. & Ors.), principle laid down by the Hon’ble Apex Court by judgement in the case of Amalendu Sahu V/s. Oriental Insurance Co. Ltd.,(supra), confirmed the admissibility of claim upto 75% on non-standard basis. Judgement of the National Commission in the case of New India Assurance Company Ltd. V/s. Narayan Prasad Apparasad Pathak, (supra), is latest decision and this judgement is having a binding force.
In the case of Oriental Insurance Co. Ltd. V/s. Shri Ravindra Mane, supra, this Commission has dismissed the appeal of the Insurance Company as the allegations of hire and reward for use of the vehicle as against the personal use were not substantiated by the Insurance Company and confirmed the order passed by the District Forum awarding full claim under the policy.
In the case of Oriental Insurance Co. Ltd. V/s. Sunil Vasantrao Mitkari, supra, this Commission observed that onus to establish violation of terms and conditions of the Insurance Policy in respect of carrying more passengers than the approved capacity lies squarely on the Insurance Company. However, in the case on hand, it is not the case of Insurance Company of carrying excess passengers than the approved passengers.
8. Learned Advocate for the Insurance Company advanced his arguments at length stating that the risk was not covered under the policy for hire and reward use. Using the insured vehicle for hire and reward is a fundamental breach of condition of the policy since the insured vehicle was insured only for private use. In such a contingency, claim cannot be admitted as there was no insurance whatsoever provided to cover such a contingency. First of all for using the insured vehicle for hire and reward, registration of the vehicle with the Authority and obtaining appropriate licence to run the vehicle as such was mandatory requirement under Section 66 of Central Motor Vehicles Act and relied on a statement of user-passenger in F.I.R. about use of hire and reward of the insured vehicle.
9. For want of intimation within stipulated period about incident of accident, the Insurance Company as argued by Learned Advocate for the appellant lost valuable rights to assess the salvage and this point has not been considered by the District Forum while deciding the consumer complaint. However, evidential value of the statement made before the Police Officer has not been explained by Learned Advocate. During the course of arguments, Learned Advocate for the appellant made a statement across the Bar that in spite of various authorities cited above, if the State Commission is not convinced then on the non-standard basis upto 50% of admissible claim will be payable by the Insurance Company. However, on going through the various authorities relied upon on behalf of appellant/Insurance Company, we are not convinced as to how the claim on non-standard basis is not payable when it is the case of total loss of the vehicle as reported by Surveyor appointed for the purpose by the Insurance Company.
10. No explanation has come forward on behalf of the appellant as to how the repudiation letter is ‘final’ especially when explanation on account of breach of condition was called for from the complainant and without awaiting explanation, the Insurance Company finalized as ‘No Claim’ on the basis of said repudiation letter.
11. Learned Advocate for the respondent/complainant relied on Supreme Court’s judgement in Amalendu Sahu V/s. Oriental Insurance Co. Ltd., (supra), for the purpose of settling the claim on the basis of non-standard basis as set out by the National Commission in New India Assurance Company Ltd. V/s. Narayan Prasad Apparasad Pathak, (supra). Argument of the respondent’s Advocate that no opportunity for explaining alleged breach of conditions and terms was extended is tenable in as much as repudiation was treated as conclusive communication closing file as ‘No Claim’.
12. Learned District Forum while allowing the complaint by holding deficiency of service failed to appreciate the claim payable on non-standard basis in case of total loss and awarded the entire Insured Declared Value (IDV) of `5,20,000/- though the judgement of the Hon’ble Apex Court in the case of Amalendu Sahu V/s. Oriental Insurance Co. Ltd., (supra), was considered and relied upon by the District Forum. In view of this position, appeal is required to be allowed partly by modifying the impugned order of the District Forum to the extent that of 75% of admissible claim would be payable in the case as it is the total loss to the complainant. We hold accordingly and pass the following order :-
-: OPERATIVE ORDER :-
1. Appeal is partly allowed. The impugned order dated 30/06/2011 of the District Forum is modified as under :-
“Figure of “`5,20,000/-” in Para 2(a) of the operative part of the order be substituted as “`3,90,000/-”. Rest of the order stands confirmed.”
2. Parties to bear their own costs.
3. Copies of the order be furnished to the parties.
Pronounced
Dated 27th September 2013.
