Delhi

West Delhi

CC/14/416

Bal Kishan - Complainant(s)

Versus

New India Assurance Company - Opp.Party(s)

Ramesh Chand Gupta

31 Jan 2022

ORDER

 

BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION-III (WEST)

C-150-151, COMMUNITY CENTRE, JANAKPURI,

NEW DELHI-110058

 

COMPLAINT CASE NO. 416/2014

 

 

IN THE MATTER OF

 

Bal Kishan Panwar                                                                              ……COMPLAINANT

Prop. of M/s B.K.Travels

C-30, Village Shahpurjat,

New Delhi-110049

VERSUS

 

The New India Assurance Co. Ltd.                                                ……OPPOSITE PARTY

Through its Manager/Principal Officer,

J-129, Kirti Nagar, New Delhi

 

Also at:

Regd. & Head Office at

New India Assurance building

87, Mahatma Gandhi Road, Fort, Mumbai

 

Also at Claim Hub

R.G.City Centre, LSC,

Block B, Lawrence Road,

Delhi-110035                                                                                    

 

                                        Date of Institution of complaint:11.07.2014

Date of judgment reserved:10.01.2022                                                                                                                                                                                                                                                        Date of Judgment: 31.01.2022

 

PRESENT: Mr. Ramesh Gupta, counsel for the complainant

 

Order by: Anil Kumar Koushal (Member)                                                  

 

 

ORDER

The grievance of the complainant is that he had got his goods vehicle(Eicher Canter) bearing Regn. No.DL-1LS-0991(hereinafter referred to as the subject vehicle) insured with the  OP’s Branch Office at Kirti Nagar, New Delhi vide Policy No.31170131130100005080 which was valid for the period from 02.11.2013 to 01.11.2014 for insured declared value (IDV) of Rs.7,47,100/- for which a premium of Rs.25,415/- was paid by complainant to the OP. Unfortunately, the said vehicle met with an accident on 05.11.2013 in Etawah, U.P. due to negligence of another vehicle plying on the road bearing Regn.No.RJ-29-GA-1697(truck), which resulted in  extensive damage to the vehicle of the complainant. Accordingly an FIR No.323/13 was lodged  by the complainant with PS Vakewar, Distt. Etawah, UP against the driver of the said truck.   The OP was immediately informed about the occurrence of the accident and the OP appointed a Spot Surveyor namely Mr. A.S. Duggal to verify the facts of the accident.Thereafter, the complainant took the said vehicle to the workshop of M/s Sincere Marketing Services Pvt. Ltd, Rang Puri, near Shiv Murti, MahipalPur, New Delhi-37 to get the same repaired. The  said workshop gave an estimate of Rs.7,06,759/- for repairing of the vehicle in question.  Accordingly, claim No.31170131130190000164 was lodged by the complainant with the OP for payment.   It is the contention of the complainant that as per the inspection report prepared by the OP’s Surveyor on the spot, an estimate to the tune of Rs.6,25,000/- was made in full and final settlement on total loss basis.  However, the complainant never agreed to the said estimate as he was entitled to full claim value as per the policy as there was total loss of the vehicle.  On being demanded requisite documents by the OP for settlement of the claim, same were supplied by the complainant.   According to the complainant it was assured by the OP and its surveyor that he need not panic and his claim will be cleared.  However, on not getting any response from the OP, the complainant contacted the OP on various occasions requesting to clear his claim but the OP assured him every time that his claim will be cleared shortly.  Since the vehicle of the complainant was fully insured with the OP, it was required to  pay the full estimate amount but it failed to make payment of even the claim amount assessed by the surveyor to the tune of Rs.6,25,000/-.

It is the submission of the complainant that the vehicle in question is still lying at the workshop of M/s Sincere Marketing Services Pvt. Ltd, Rang Puri, Near Shiv Murti, MahipalPur, New Delhi, the authorized service centre.  The said service centre is also claiming garaging charges of the said vehicle from the complainant.

It is contended by the complainant that instead of passing his aforesaid claim, the OP illegally and unlawfully repudiated it vide its letter dated 30.12.2013 on false and flimsy ground.  The reasons given for repudiation of the claim are quoted below:

“Please note that the claim does not fall under the scope of the policy particularly “Limitations as to use”.  It is also noted that as per Authorisation Certificate of National Permit the vehicle is registered for Light Goods Vehicle which does not permit to carry passengers. Keeping in view of the above we regret our inability to entertain your claim.”

 

According to the complainant, the plea taken by the OP for rejection of his claim is totally illegal and unlawful and fanciful without carrying any truth.It is pleaded that he has been running from pillar to post to get his claim settled atleast for the amount which was settled by the Surveyor of the OP, but all in vein. Due to non-repair of the damaged vehicle of the complainant, the condition of the same is deteriorating day by day.  The complainant is also facing hardships and financial loss on day to day basis as the said vehicle is the source of income of the complainant.  It is stated that it has become a routine affair for the OP to firstly lure the general public to have the policy floated by it and later on if any mishap occurs with the public, reject the genuine and legitimate claim of the gullible peopleon flimsy grounds. 

It is further contended that despite lapse of more than two months of submission of the claim, left with no other option, the complainant sent legal notice dated 12.2.2014 to the OP, thereby calling upon them to pay a sum of Rs.7,06,759/- alongwith interest @ 18% p.a. from 25.11.2013 till its payment as also to pay damages  in the sum of Rs.10,00,000/- for the pain and suffering  and financial loss suffered by him.  In the reply filed by OP to the legal notice, same flimsy ground as mentioned in their letter dated 30.12.2013 was repeated.This way the OP has cheated and defrauded the complainant. This amounted to deficiency in service.

Therefore as a last resort, aggrieved because of the above illegal and unlawful acts of the OP, the complainant has filed the present compliant praying for the following reliefs.

1. Direct the Respondent and its officials etc. to pay a sum of Rs. 7,06,759/- along with interest @ 18% p.a. along with interest from 25.11.2013 till its payment to complainant.
2. Direct the respondent to pay a sum of Rs. 10,00,000/- as damages towards pain and suffering and financial loss suffered by the complainant due to the deficiency of service and no action on the part of the Respondent and its officials.
3. Direct the Respondents to pay a sum of Rs. 25,000/- towards litigation charges to the complainant.

On notice being issued in the complaint, the OP filed its reply in which it took the preliminary objection that the subject vehicle of the complainant bearing Regn No.DL-1LS-0991 was registered under certificate of National Permit for Light Goods Vehicle (LGV)  which is not permitted to carry passengers and since at the time of alleged accident, the vehicle was carrying  five passengers, out of which four died and one sustained injuries, therefore, in view of the terms and conditions of the policy, particularly “Limitation as to use clause”, it amounted to breach of terms and conditions of the policy as well as the National Permit and as such the insurance claim of the complainant  was not payable under the policy and was rightly repudiated and the OP is not liable for any claim in favour of the complainant and the complaint is liable to be dismissed. OP, while admitting the factum of insurance cover of the subject vehicle given by it, urged thatthere is no deficiency in service on their part and rather the complainant has not come with clean hands and has concealed material facts. According to the OP, in terms of the Supreme Court judgment, commercial vehicle is not covered under the Consumer Protection Act since it is registered in the name of M/s B.K.Travels as per the insurance policy.  The OP also declined to accept that its surveyor  had passed  an estimate in relation to the damage to the vehicle in the sum of Rs.6,25,000/- in full and final loss  and the complainant had declined to agree to the said estimate.  According to the OP the Surveyor had assessed the loss on total loss basis(IDV) less excess policy clause and wreck value of the damage clause(with RC) as well as net liability on net salvage basis  and further net liability on repair basis.It is contended by the OP that the  assessment of loss by an independent Surveyor is the  requirement of Section 64 UM of the Insurance Act and as such the OP was bound to depute  a surveyor and carry out the assessment of loss  but the admission of liability under the policy  in respect of alleged damage to the vehicle of the complainant was to be determined and decided by the OP on examination of relevant documents, terms and conditions of the policy and as such the assessment of loss by the surveyor does not amount to admission of liability under the  claim of any amount by the OP. It is submitted by the  OP that the claim of the complainant was rightly denied as per terms of the policy and the same were specifically mentioned in its repudiation letter dated 30.12.2013.

In the rejoinder to the written statement ofOP, complainant denied the allegation that the vehicle in question was registered under certificate of permit for light goods vehicle which is not permitted to carry passengers. He also denied the claim of the OP that complainant violated terms and conditions of the policy, particularly the “Limitation as to use clause” which actually amounted to breach of terms and conditions of the policy or National permit as alleged by the OP. It is reiterated by the complainant that the accident in question was caused due to rash and negligent driving of the other offending vehicle bearing No.RJ-29-GA-9716 and an FIR to this effect was also lodged, which is already on record.  The story of passengers has been concocted by the OP just to mislead the facts and to avoid the claim submitted by the complainant. According to the claimant, it is a settled law that if an accident takes place due to rash and negligent act of the driver of other vehicle, the Insurance company cannot repudiate the claim submitted by the claimant. It is alleged by the complainant that due to delay and not allowing the claim of the complainant, he could not get his vehicle repaired in time and it has become a garbage.  Had it been repaired in time and brought to its original shape, at the relevant time, the complainant would not have suffered huge financial losses and thus the OP is liable to make good the loss by making payment of the legitimate claim.  According to the complainant, the vehicle in question is duly registered in the name of firm B.K.Travels, of which he is the proprietor.

In the evidence filed by way of affidavit, the complainant has exhibited documents filed alongwith complaint, i.e.  copy of FIR as Ex.C.W.1/1;  copy of repair estimate given by M/s Sincare Marking service as Ex.C.W.1/2;Copy of  Repudiation letter as Ex. C.W.1/3; copy of Insurance Policy/covering letter issued by OP as Ex.C.W.1/4; Copy of Authorisation Certificate as Ex.C.W.1/5;Copy of Fitness Certificate as Ex.C.W.1/6;Copy of RC of  Canter DL-1LS-0991 as Ex.C.W.1/7;Copy of National Permit as Ex.C.W.1/8; copy of Legal Notice as Ex.C.W1/9;Copy of speed Post receipt and AD card as Ex. C.W.1/10;Copy of the reply of OP to the legal notice  of complainant as Ex.C.W.1/11.     

To prove its case, the OP also filed evidence by way of affidavit.  It relied upon the letter dated 30.12.2013 written by it to the complainant whereby the claim was repudiated as Ex.R.W.1/1; Copy of FIR as Ex.R.W.1/2; Copy of Cover note of insurance as R.W.1/3; Copy of R.C. of the vehicle in question as R.W.1/4; Copy of fitness certificate as R.W.1/5; Copy of Permit of the vehicle as R.W.1/6; copy of authorization to ply the vehicle in question issued by the Transport Department, Delhi as R.W.1/7; copy of surveyor report  as R.W.1/8.

Both the parties filed written arguments and reiterated their stand as mentioned in respective pleadings.

It may be noted that upon filing of written arguments by the respective parties as also relevant judgments in support of his claim by the complainant, the previous Bench of this Commission had reserved its orders on 12.8.2019. Thereafter due to administrative reasons, the judgment in this case could not be pronounced.

Today, the matter was taken up afresh for arguments before the newly constituted Bench.  Mr. Ramesh Gupta, Counsel for the complainant has taken us through the submissions made in the complaint as also the documents proved in the evidence as also the written arguments filed by him. Counsel for the OP was not present to address his arguments. Nonetheless the pleadings  filed on behalf of OP  shall be considered while passing orders  on merits as per the settled law.

The contention of the complainant is that there is deficiency on the part of the OP in not approving his legitimate claim.  It is also submitted that the OP has taken a frivolous ground of rejection as breach of terms of insurance Policy or National permit.  Except this, nowhere there is even whisper from the side of OP what to talk of stress on the point that the accident was caused due to any negligent driving or rash act on the part of driver of the insured vehicle.  In fact the accident was caused by the rash and negligent act of the offending vehicle RJ-29GA-9716 for which the Police of the area had already lodged an FIR(Ex.C.W.1/1).  The OP has even admitted the fact that the Surveyor was appointed by them  as per the requirement of Section 64 UM of the Insurance Act but since there was breach  of the policy terms and the  National Permit  for light goods vehicle which does not permit carrying of passengers in the vehicle, the claim was repudiated  on the ground of “Limitation as to use clause”.

To fortify his arguments, counsel for the complainant has placed reliance on the two judgments of the Hon’ble Supreme Court in the case of B.V.Nagaraju Vs. M/s Oriental Insurance Company Limited, Divisional Office, Hassan, II(1996) CPJ 18(SC)  and Jitender Kumar Vs. Oriental Insurance Co. Ltd. &Anr, (2003) 5, SCC 420.

We have heard the arguments and perused the records keenly.

Now reverting to the facts of the case in hand, the OP while repudiating the claim of the complainant,  laid stress only on the point that there was breach of the terms of the insurance policy  as also the National Permit granted by the Transport Department for plying of the vehicle in question, as per which the vehicle was registered as a “Light Goods Vehicle” and there was no permission to carry passengers.  In the pleadings filed by the OP in the present case, there is not even an iota of reference or stress laid on the fact that the accident in question was caused due to negligence or any act or omission on the part of the driver.  No claim whatsoever was ever made by the complainant for the death of four occupants of the vehicle in question out of five. The OP also did not contend that the driver of the vehicle of complainant was not having a valid license. Still taking a narrow connotation of the “Limitation as to use clause” of the insurance policy, the claim was rejected.  The OP  did not even  consider  the report of its own Surveyor, dated 23.12.2013 (Ex. R.W.1/8)   in which he  had   assessed the damage on Repair basis, Total loss basis, loss on Net of salvage bases. 

At this stage, it will be relevant to quote the relevant part of report of the Surveyor as under:

“xxxxxxxxxxx

On the basis of above, settlement of loss on Net of Salvage Basis(Agreed value) for Rs.3,84,000/- is reasonable  in the opinion of the undersigned subject to policy conditions.  It may be noted  that there were 6 passengers in the insured vehicle and 5 passengers died at the spot of mishap.  The approval is subject to policy conditions.

 

The settlement of loss on Net of Salvage Basis (Agreed value) is economical as the underwriters would save the cost of auctioning, losses due to pilferage and storage charges.  Hence the same is reasonable/justified/economical.” 

 

 

This issue is no longer res integra in terms of the law laid down by the Hon’ble Supreme Court  in the non-reported case of Amalendu Sahu vs. Oriental Insurance Co. Ltd in Civil Appeal No.2703 of 2010(arising out of SLP© No.11227/2009), decided on 25.03.2010.  For the sake of brevity, we may note their  relevant findings as under:

“In this connection reference may be made to a decision of National Commission in the case of New India Assurance Company Limited v. Narayan Prasad Appaprasad Pathak reported in (2006) CPJ 144 (NC). 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 licence 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:-

Sl. No.	Description	Percentage of Settlement
1.	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
2.	Overloading of vehicle  beyond licensed carrying  capacity	Pay claims not exceeding 75% of admissible claim.
3.	Any other breach of warranty/condition of policy including limitation as to use	Pay upto 75% of admissible claim.

 

After analysing the facts of the case based on the arguments advanced by the rival parties including the citations quoted by counsel for the complainant as also relying on the judgment of the Hon’ble Supreme Court  in the case of AmalenduSahu(supra) especially para 3  thereof relevant to the present case, we are of the considered opinion that the  law enunciated by Hon’ble Supreme Court in the aforesaid case of AmalenduSahu(supra)is the guideline for such cases  and having  a direct bearing on the facts of the present case and it is  presently the law of the land. In the present case, as per the Insurance Policy as also the Authorization letter issued by the Transport Department, the vehicle   was to be plied as Light Goods Vehicle under the National Permit in which three (1+2) passengers were allowed.In any case there was breach of the terms of the Insurance policy and the National Permit  in the present case as to overloading of vehicle which was double the  licensed carrying capacity but at the same time the complainant has suffered  genuine  loss due to damage caused to his vehicle as per Surveyor’s report. Therefore, it will suffice if the complainant is compensated with 50%  of the IDV value of Rs.7,47,100/-, (as per guideline of AmalenduSahu (supra) case) as mentioned in the Insurance policy validly taken by the complainant from the OP.

Here we may note that in the Insurance policy taken by the complainant from the OP (Ex.R.W.1/3), there is a column as to the Name of the Bank/Finance Co., in which the name of Sundaram Finance Ltd has been mentioned.   On enquiry being made from counsel for the complainant as to such remark, he stated that the complainant had got financed his vehicle in question from  M/s Sundaram Finance Ltd.  However, the amount of loan taken from the said Finance company has since been paid and the same is reflected in the order dated 04.04.2018 passed in Ex. No.845/2017 (Sundaram Finance Ltd. Vs. Bal Kishan Panwar & Ors).  We have gone through the said order and find that the matter between the parties has since been settled amicably and the  complainant herein (Judgment Debtor) has made payment of the settled amount to the Decree Holder. The Execution Petition was withdrawn accordingly. A digitally signed copy of the said order  of the District Court, Saket has been placed on record of this case.

Accordingly, on record, the complainant having become first charge holder and beneficiary of claim, we direct the OP to pay a sum of Rs.3,73,550/- (being 50% of the IDV value of Rs.7,47,100/-) to the complainant within  30 days  of receipt of copy of this order. No order as to costs.

The complaint is disposed of in the above terms.   A copy of the order shall be supplied free of cost to the rival parties under Order 21 of CPR, 2005.

 

(Ms. Richa Jindal)                  (Anil Kumar Koushal)            (Ms. Sonica Mehrotra)

     (Member)                                (Member)                                   (President)