Punjab

Ludhiana

CC/21/465

M/s Kasana Trading Company - Complainant(s)

Versus

Nw India Assurance Co.Ltd - Opp.Party(s)

Yadwinder Sharma Adv

04 Jan 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No:465 dated 12.10.2021.                                                         Date of decision: 04.01.2024.

 

M/s. Kasana Trading Company, Plot No.49, Transport Nagar, Near Samrala Chownk, Ludhiana through its Proprietor Ashwani Kumar.                                                                                                                 ..…Complainant

                                                Versus

The New India Assurance Company Ltd., having Policy issuing office at Campa Cola Chownk, City Branch-360201, Ludhiana through its authorized person.                                                                                        …..Opposite party 

Complaint Under Section 35 of the Consumer Protection Act, 2019.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

SH. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Nitin Kapila, Advocate.

For OP                           :         Sh. Mandeep Sharma, Advocate.

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Shorn of unnecessary details, the facts of the complaint are that the complainant is a proprietorship concern, who had purchased a Tipper make Tata Signa 3525 T.K. 8X4 BSVI HD 23BX having registration No.PB07-BX-9865, which the complainant is running to earn livelihood. The complainant stated that got insured the said tipper vide policy No.30620131200300004491 from the OP for a sum assured of Rs.45,60,000/- having validity from 01.03.2021 to 28.02.2022. The complainant paid a premium of Rs.41,258/-. On 22.03.2021 at about 07.00 AM, the driver namely Rakesh Bhatia son of Sh. Mohan a was driving the insured vehicle and while coming from Sh. Anandpur Sahib to Ludhiana, when he reached near Rahon Road, a stray animal suddenly appeared in front of the vehicle and in order to save the animal, the drover lost the balance of the vehicle due to which the vehicle struck against the tress and turned turtle on the right side. Due to said accident a huge damage was caused to the insured vehicle regarding which a claim was lodged with the OP for payment of claim amount. The complainant further stated that he also got repaired the vehicle from his own pocked by spending a huge amount of Rs.8,50,000/-. However, the OP rejected and closed the claim vide repudiation letter dated 05.08.2021 on flimsy ground that the vehicle was not having a valid permit at the time of accident. According to the complainant, he had already deposited the amount required for permanent registration certificate with the Govt. of  Punjab which was not issued and permit could not be sought till receipt of registration certificate. Moreover, due to Covid-19 situation, there was complete nationwide lockdown and the Govt. of India, Ministry of Road Transports & Highways, New Delhi had issued advisories dated 30.03.2020, 09.06.2020, 24.08.2020, 27.12.2020, 26.03.2021, 17.06.2021 and 30.09.2021 directing all State and Union Territories regarding extension of validity of documents relating to Motor Vehicles Act, 1988 and Central Motor Vehicle Rules, 1989. It was advised that the validity of fitness, permit (all types), driving license, registration or any other concerned document(s), whose extension of validity could not or not likely be granted due to lockdown and which had expired since 01.02.2020 or would expire by 30.09.2021, the same might be treated as valid till 30.09.2021. As such, in terms of said advisories, the permit of the vehicle in question was not required as due to Covid-19 situation, the necessity of these documents was already dispensed with by the concerned Transport & Highway Ministry of India. The complainant further stated that he requested the OP to accept his genuine claim but OP had paid no heed to his request, which amounts to deficiency in service on the part of the OP. In the end, the complainant has prayed for issuing directions to the OP to pay the claim of Rs.8,50,000/- along with interest towards the damage of Tata Tipper and also to pay compensation of Rs.1,00,000/-.

2.                Upon notice, the opposite party appeared and filed written statement by taking preliminary objections that the complaint is not maintainable; the complainant has no locus standi to file the complaint; suppression of material facts etc. The opposite party stated that the after receipt of the intimation regarding the claim lodged by the complainant and the expenditure incurred by the complainant on the repair of the insured vehicle, the  OP appointed R.K. Bhasin & respondent appointed Co. Surveyor and Loss Assessor who demanded the documents of the vehicle and driving licence of the driver. However, the complainant supplied the copy of R.C., fitness, permit and insurance policy of the insured vehicle and driving licence of the driver but failed to supply the copy of permit of the truck. The surveyor submitted his detailed report dated 22.06.2021 after scrutinizing the documents of the insured vehicle, stating that the permit has been issued non 27.04.2021 valid till 26.04.2026 whereas the accident occurred on 22.03.2021, hence the damaged vehicle did not have any permit at the time of accident. Thereafter the OP wrote a letter dated 13.07.2021 to the complainant to clarify the matter with 7 days. The complainant vide his reply dated 21.07.2021 stated that the vehicle was vehicle and was purchased on 01.03.2021 and R.C. applied on 15.03.2021 and after receiving the R.C. other documents file was submitted with RTO and due to lockdown it new was and that was not issued in time. The OP further stated that the complainant failed to submit any receipt regarding submitting the documents with RTO permit of the insured vehicle. Hence the competent authority Insurance Company after applying the mind of to the claim of the complainant observed that the insured vehicle was being plied by the complainant on the road without permit which is violation of the terms and conditions of the policy. Section 66 of The Motor Vehicle Act, says that "no owner of a shall use or permit the use of the motor vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passengers or goods save in accordance with the conditions of the permit granted or countersigned by Regional or State Transport Authority or any prescribed authority authorizing him the use of the vehicle in that place in the manner in which the vehicle is being used.” The claim was rightly repudiated vide letter dated 05.08.2021. According to the OP, claim of the complainant/insured is not payable as terms and conditions of the policy and complaint is liable to be dismissed.

                   On merits, the opposite party reiterated the crux of averments made in the preliminary objections. The opposite party has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.

3.                In support of his claim, Sh. Ashwani Kumar, Proprietor of the complainant firm tendered his affidavit Ex. CA in which he reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents Ex. C1 is the copy of policy schedule w.e.f. 01.03.2021 to 28.02.2022, Ex. C2 is the copy of add-on cover, Ex. C3 is the copy of RC No.PB07-BX-9865, Ex. C4 is the copy of driving licence of Rakesh Bhatia, Ex. C5 is the copy of Aadhar Card of Ashwani Kumar, Ex. C6 is the copy of number reservation fee e-receipt, Ex. C7 is the copy of permit, Ex. C8 is the copy of Form GST REG-06 of Registration certificate, Ex. C9 is the copy of invoice issued by Dada Motors Pvt. Ltd., Ex. C10 is the copy of invoice issued by Balwinder Singh Truck Body Maker, Ex. C11 is the copy of disclaimer of Hoshiarpur RTA, Ex. C12 is the copy of  repudiation letter dated 05.08.2021, Ex. C13 is the copy of advisory dated 30.09.2021 issued by Government of India, Ex. C14 is the copy of advisory dated 27.09.2020 issued by Government of India and closed the evidence.

4.                On the other hand, the counsel for the opposite party tendered affidavit Ex. RA of Ms. Punam Sharma, Deputy Manager (Legal), The New India Assurance Company Limited, Regional Office, The Mall, Ludhiana along with documents Ex. R1 is the copy policy schedule w.e.f. 01.03.2021 to 28.02.2022, Ex. R2 is the copy of permit, Ex. R3 is the copy of Final Motor Survey Report, Ex. R4 is the copy of letter dated 13.07./2021 issued by the OP, Ex. R5 is the copy of email dated 07.07.2021, Ex. R6 is the copy of  receipt issued by Hoshiarpur RTA, Punjab and closed the evidence.

5.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written reply along with affidavit and documents produced on record by both the parties.      

6.                Un-disputably, the complainant firm purchased a tipper Tata Signa, a transport vehicle and availed services of the OP who issued a Commercial Vehicle Policy Package Policy Enhanced Covers effective from 01.03.2021 to 28.02.2022 having an IDV of Rs.45,60,000/-. A premium of Rs.41,258/- was paid. Ex. C1 = Ex. R1 is the Policy Schedule cum Certificate of Insurance which imposes a restriction with the use of vehicle. The same is reproduced as under:-

“Limitation as to use: The policy Covers use only under a permit within the meaning of the Motor Vehicles Act, 1988 or such a carriage falling under Sub-section 3 of Section 66 of the Motor Vehicles Act, 1988. The Policy does not cover use FOR a) Organized racing b) Pace Making c) Reliability Trials d) Speed Testing.”

7.                The vehicle was finally registered on 06.04.2021 and registrati9n No.PB07-BX-0965 was issued by the competent registering authority. The permit Ex. C7 = Ex. R2 which was valid for State of Punjab was issued on 27.04.2021 having a validity up to 26.04.2026. However, before issuance of a regular registration certificate and permit, on 22.03.2021 at about 07.00 AM the vehicle met an accident in the area of Rahon Road, Ludhiana and it was damaged. According to the complainant, the complainant incurred a total expenditure of Rs.8,50,000/- vide invoices Ex. C9 and Ex. C10. At the time of accident, the vehicle was loaded with crusher stone which was being transported. On receipt of intimation of accident, the OP appointed M/s. R.P. Bhasin & Co. Surveyor and Loss Assessor who submitted his Final Motor Survey Report on 22.06.2021 Ex. R3 wherein the registration certificate, route permit, fitness certificate, driving licence were found to be genuine. He assessed the net loss to be Rs.4,36,923/-. However, the surveyor made a note in its report to the effect that the vehicle met with an accident on 22.03.2021 whereas the route permit of the vehicle was issued on 27.04.2021, after the accident. So without having a valid route permit as on date of loss, the insured is not liable to get the claim. Relying upon the findings of the surveyor, the OP repudiated the claim on 05.08.2021 vide letter Ex. C12. The operative part of Ex. C12 reads as under:-

“In regard to the claim intimated to us on the above mentioned policy, M/s. R.P. Bhasin & Com., Independent Surveyor and Loss Assessors was deputed for assessment of your loss. Now We are in receipt of Survey Report and documents submitted by you; as per his survey report the Permit was issued on 27-Apr-2021 i.e. after the date of loss 22-Mar-2021.

Therefore on recommendations of Surveyor, Your claim is repudiated and closed as NO CLAIM.”

 

8.                It is evident from the facts that at the time of accident, the vehicle was being plied by the complainant without a valid permit. However, there exist certain circumstances which need to be taken into consideration. The fact that when one purchases a vehicle, it is statutory obligation that the vehicle cannot be plied unless it is registered whether permanent or temporary and is having an insurance policy. The officials of the insurance company generally mentions engine and chassis number in the insurance cover note and later on when the registering authority issues a regular registration certificate, the same endorsed or incorporated additionally in the certificate of the insurance. Further a temporary registration certificate remains valid for 30 days from the date of its issuance and during this period, the purchaser of the vehicle is required to apply for registration certificate. In case of a transport vehicle, once a purchaser gets a regular registration certificate, only then he can apply for issuance of permit. The entire process normally takes up to two months. So if the mandate of liability is strictly imposed, the person purchaser of transport vehicle is required to wait for such a long time before plying the vehicle on the road. As per insurance policy Ex. C1 = Ex. R1, the vehicle was being insured from Yes Bank Ltd. For which the complainant had to pay installments. At the same time, the complainant who purchased the vehicle for earning his livelihood would remain deprived of usage and earning from the vehicle. So in the said circumstances, even if it is a breach, the insurance companies are required to be more liberal. Considering from another angle, when the OP issued a policy containing a limitation clause, its officials were fully aware that no permit has been issued to the complainant nor it could have been issued on the date of purchase. Still they accepted the premium and imposed a limitation clause. It amounts to conscious waiver of limitation/exclusion cause of the policy. Reference can be made to 2022 LiveLaw (SC) 937 in M/s. Texco Marketing Pvt. Ltd. Vs TATA AIG GIC Ltd. and others passed by the Hon'ble Supreme Court of India. Appellant secured a Standard Fire & Special Perils policy which was meant to cover a shop situated in the basement of the building. However, exclusion clause of the contract specifies that it does not cover the basement. The appellant continued to pay the premium promptly. The shop met with fire accident for which the appellant raised a claim. The claim was repudiated by respondent No.1 taking the umbrage under the exclusion clause. The Hon'ble Supreme Court partly allowed the appeal and observed in para No.21 of the judgment:-

"21. On a discussion of the aforesaid principle, we would conclude that there is an onerous responsibility on the part of the insurer while dealing with an exclusion clause. We may only add that the insurer is statutorily mandated as per Clause 3(ii) of the Insurance Regulatory and Development Authority (Protection of Policy Holder's Interests, Regulation 2002) Act dated 16.10.2002 (hereinafter referred to as IRDA Regulation, 2002) to the effect that the insurer and his agent are duty bound to provide all material information in respect of a policy to the insured to enable him to decide on the best cover that would be in his interest. Further, sub- clause (iv) of Clause 3 mandates that if proposal form is not filled by the insured, a certificate has to be incorporated at the end of the said form that all the contents of the form and documents have been fully explained to the insured and made him to understand. Similarly. Clause 4 enjoins a duty upon the insurer to furnish a copy of the proposal form within thirty days of the acceptance, free of charge. Any non-compliance, obviously would lead to the irresistible conclusion that the offending clause, be it an exclusion clause, cannot be pressed into service by the insurer against the insured as her e may not be in knowhow of the same."

The Hon'ble Supreme Court also further observed in para No.37 of the judgment:-

"37.Once it is proved that there is a deficiency in service and that respondent No. I knowingly entered into a contract, notwithstanding the exclusion clause, the consequence would flow out of it. We have already discussed the scope and ambit of the provisions under the Indian Contract Act, 1872. Even as per the common law principle of acquiescence and estoppel, respondent No. I cannot be allowed to take advantage of its own wrong, if any. It is a conscious waiver of the exclusion clause by respondent No. 1."

9.                In the present case also, M/s. R.P. Bhasin & Co., Surveyors/Assessors vide his report Ex. R3 has assessed the insurance company’s liability as Rs.4,36,923/-. The complainant has not controverted the facts mentioned in the written statement, so far as the surveyor report Ex. R3 is concerned as the complainant has neither filed any objections to controvert the averments made in the written statement. Neither the report Ex. R9 has been challenged by the complainant on any ground nor any evidence has been led by the complainant to prove that the report is faulty for some reason or the other. In the given facts and circumstances, it would be just and appropriate if the opposite parties are directed to pay the claim of Rs.4,36,923/- to the complainant as per survey report Ex. R3 along with interest @8% per annum from the date of filing of the complaint till date of actual payment. The opposite parties are also burdened with composite cost of Rs.10,000/-.

10.              As a sequel of above discussion, the complaint is partly allowed with an order that the opposite party shall pay the claim of Rs.4,36,923/- to the complainant as per survey report Ex. R3 within 30 days from the date of receipt of copy of order failing which the complainant shall be held entitled for interest @8% per annum from the date of order till actual payment. The opposite party shall further pay a composite cost of Rs.10,000/- (Rupees Ten Thousand only) to the complainant. Payment of costs shall be made within a period of 30 days from the date of the receipt of the copy of this order. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.         

11.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

(Monika Bhagat)                    (Sanjeev Batra)                      Member                                  President   

 

Announced in Open Commission.

Dated:04.01.2024.

Gobind Ram.