PER DR.(MRS.) MADANJIT KAUR SAHOTA,MEMBER

                Adumbrated in brief, the facts necessary for the disposal of the instant complaint are that the Complainant got is Pioneer Toyota, bearing Regn.No. CH-04A-1617, insured with the OP, which was valid from 21.6.09 to 20.6.10. Unfortunately, on 4.12.09 i.e. during the currency of the policy, the vehicle met with an accident and sustained heavy damages. It was taken to the authorized Workshop, upon which an estimate of Rs.1.93 lacs was prepared. The Workshop Manager informed the Complainant that the vehicle would be repaired only after receipt of the Surveyor’s report. It was alleged that despite making frantic telephone calls and personal visits, the Surveyor did not submit his report and rather, informed the Complainant that his vehicle would not be repaired under Cashless Scheme and he was free to repair it from outside. Accordingly, after carrying out the repairs from M/s New Friends Motors, the Complainant submitted a bill of Rs.67,426/- to the said Surveyor, but to his utter dismay his claim was rejected by the OP in an arbitrary and illegal manner. Hence this complaint, alleging that the aforesaid acts of the OPs amount to deficiency in service and unfair trade practice.

2]             Notice of the complaint was sent to OP seeking their version of the case.

3]             OP in its reply while admitting the factual matrix of the case, pleaded that as per the terms and conditions of the Policy, the vehicle was registered and insured as private vehicle and in contravention of the “limitation as to use clause”, the said vehicle has been used on hire and reward and the insured had taken Rs.2500/- for the same. The Complainant removed the vehicle from the spot of accident without intimating the insurance company. As such, the insurance company has been deprived to ascertain the true cause of loss by conducting the spot survey. Furthermore, upon lodging of the claim, the surveyor was appointed who did the preliminary survey and observed that the vehicle was being put to extensive use as the meter reading suggested the same. As such, the present case was sent to the Investigator for investigating it. Upon investigation, it transpired that the said vehicle was being used for taxi at the time of accident, which as against the conditions of policy, hence, the claim of the Complainant was repudiated. All other material contentions of the complaint were controverted. Pleading that there was no deficiency in service on their part, a prayer has been made for dismissal of the complaint.

4]             Parties led evidence in support of their contentions.

5]             We have heard the learned counsel for the parties and have also perused the record.

6]             The main contention of the complainant is that he had lodged a valid claim before the OPs but they refused to allow the claim on the ground that the vehicle was given on hire and as per the policy terms such use was not permitted and the insured was not entitled to any compensation for such unauthorized use of the vehicle. Annexure now marked C-1 is the copy of the policy schedule which shows that the vehicle of the complainant was insured during the period when the accident took place.  Annexure now marked C-2, is the repudiation letter of the claim in question, on the ground that the passengers were travelling in the insured vehicle at the time of accident, which is a violation of Motor Vehicle Act and policy clause, Limitations as to use. Annexure C-5 is the copy of the receipt, which shows that the complainant had paid a sum of Rs.2350/- to S.M. Recovery Service on 5.12.2009 as towing charges for his vehicle. Annexure C-6 to C-8 has been placed on record by the complainant to prove that he had paid a sum of Rs.67,426/- towards the repair of the said vehicle.

7]             On the other hand the OPs contended that upon investigation, it transpired that the said vehicle was being used for taxi at the time of accident, which is against the conditions of policy, hence, the claim of the Complainant was repudiated.  In support of their contentions the OP has placed on record Annexure R-1, the copy of terms and conditions of the policy, according to which as per limitation as to use clause, the vehicle in question could not be used other than (a) hire or reward (b) carriage of goods (other than sample/personal luggage) (c) organized racing etc. etc..  The OP has also placed on record the statement given by the insured on 17.12.2009, in which it has been stated by the complainant that the vehicle was used for hire and reward purposes.  The same has been observed by the investigator vide his report Annexure R-2 and Annexure R-3.

8]             Facts and circumstances of the case reveals that it is not disputed that the complainant has not taken the insurance policy in question from the OP nor has it been disputed that the accident took place during the period of insurance.  The sole point, due to which the claim of the complainant was repudiated by the OP, is that the vehicle was not used for personal use but it was used for hire and reward.  According to the OP, this act of the complainant was a breach of the terms and conditions of the insurance in question, due to which the claim stands void. The instant case is squarely covered by the decision in case New India Assurance Company Limited v. Narayan Prasad Appaprasad Pathak reported in (2006) CPJ 144 (NC) wherein the Hon`ble National Commission has set out in its judgment the following guidelines issued by the insurance company, while deciding the similar case for granting claim on non-standard basis.  The said guidelines are set out below:-

Sr. No.          Description                                           Percentage

(i)                       Under declaration of licenced                    Deduct 3 years` difference in

              Carrying capacity.                                  Premium from the amount of                                                                         claim or deduct 25% of claim                                                                       amount, which ever is higher.

(ii)                      Overloading of vehicles beyond                  Pay claims not exceeding 75% of

     Licenced carrying capacity                        admissible claim.

(iii)                     Any other breach of warranty/condition       Pay upto 75% of admissible

     of policy including limitation as to use        claim.

9]             Solely the basis of the above mentioned judgment, the Hon`ble Supreme Court of India, in case Amalendu Sahoo vs. Oriental Insurance Co. Ltd. (SC), 2010(2) R.C.R.(Civil) 635 : 2010(1) AICJ 476, has held that :-

                Consumer Protection Act, 1986, Section 14(1)(d)-Motor Vehicles Act, 1988, Section 166-Motor accident-Owner of a car took comprehensive policy-Vehicle met an accident-Insurance Company repudiated the claim on the ground that car was not used for personal use, but was used by way being hired which violated terms of Insurance Policy-Held, Insurance Company cannot repudiate the claim in toto-Insurance Company ought to settle the claim on non-standard basis-Insurance Company directed to pay a consolidated sum of Rs.2,50,000/- even though compensation claimed is Rs.5,00,000/-.

10]            From perusal of the aforesaid guidelines and the judgments, it is crystal clear that in several cases where 75% of the admissible claim was settled where condition of policy including limitation as to use was breached. In the present case also, the sole point of the OP is that the complainant has used the vehicle for hire and during that period only the accident took place. 

11]            Keeping in mind the aforesaid guidelines, and the judgments referred above, we are of the considered opinion that the OP cannot repudiate the claim in toto. The complaint therefore succeeds and the same is accordingly allowed.  The OP is directed to calculate/settle the claim of the complainant as non standard basis i.e. 75% of the admissible claim and pay it to the complainant.  The OP shall also pay to the complainant Rs.20,000/- as compensation towards mental and physical harassment.  The order shall be complied with by the OP within 30 days from the date of receipt of copy of this order failing which the OP would be liable to pay the aforesaid amount alongwith penal interest 18% p.a. since the date of filing of the present complaint i.e. 17.03.2010, till the order is fully complied with.

                Certified copies of this order be sent to the parties free of charge.  The file be consigned.