DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II U.T. CHANDIGARH [Complaint Case No:47 of 2011] Date of Institution : 28.01.2011 Date of Decision :16.01.2012 --------------------------------------- Sh. Amit Mohunta resident of House No.402, Adarsh Nagar, Nayagaon, District Mohali. ---Complainant. V E R S U S Reliance General Insurance Company Limited, SCO No.212-214, 1st Floor, Sector 34-A, Chandigarh. ---Opposite Party. BEFORE: SHRI LAKSHMAN SHARMA PRESIDENT SMT. MADHU MUTNEJA MEMBER SH. JASWINDER SINGH SIDHU EMBER Argued By: Sh. Nitin Gupta, Advocate for the complainant. Sh. R. K. Bashamboo, Advocate for the opposite party. PER LAKSHMAN SHARMA, PRESIDENT 1. Sh. Amit Mohunta has filed this complaint under section 12 of the Consumer Protection Act, 1986 praying therein for the following reliefs:- i) To pay Rs.3,00,000/- being the claim amount along with interest @18% per annum; ii) To pay a sum of Rs.50,000/- as compensation for mental agony and harassment; iii) To pay a sum of Rs.20,000/- as costs of litigation. 2. In brief, the case of the complainant is that he got his car (Tavera) bearing Regd. No.PB-65-J-2454 comprehensively insured with the opposite party vide Policy No.108000957909 (Annexure C-2) for a sum of Rs.6,61,390/-. He paid a premium of Rs.20,320/- for the said coverage. The said vehicle was insured for the period from 27.03.2009 to 26.03.2010. It is specifically averred that no terms and conditions were ever supplied to the complainant along with the policy in question. According to the complainant, unfortunately, on 14.01.2010, the said vehicle met with an accident resulting into massive damage to the vehicle. F.I.R. No.9 dated 14.01.2010 (Annexure C-3) was lodged with concerned Police Station. It is averred that due intimation of accident was given to the OP and with its consent, the vehicle was taken to Dynamic Motors, Phase-I, Industrial Area, Chandigarh, wherein, accidental repair estimates (Annexure C-4) were prepared on 21.1.2010 and the vehicle was declared as total loss. It is averred that after completing all the formalities, the complainant lodged the claim with the OP on total loss basis. It is averred that the OP instead of paying the claim, repudiated the same and closed the file as ‘No Claim’ vide letter dated 7.7.2010 (Annexure C-5). It has further been pleaded that in the meantime, the complainant parked his vehicle at a safe place but despite due care, some of its parts were stolen. Intimation to this effect was also given to the OP. According to the complainant, the repudiation of his claim after six months from the date of accident amounts to deficiency in service. In these circumstances, the present complaint has been filed seeking the reliefs mentioned above. 3. In the reply filed by the opposite parties, it has been admitted that the car (Tavera) of the complainant was insured with it for the period from 27.03.2009 to 26.03.2010 vide Policy No.108000957909 for a sum of Rs.6,61,390/- as commercial vehicle under Package Policy. It is pleaded that the terms and conditions of the policy were duly supplied to the complainant. However, it has been denied that the complainant took the vehicle to the repairer with the consent of the OP. It is pleaded that the complainant failed to take due care of the vehicle/salvage and disposed off the same without the permission of the OP. The assurance of settling the claim for Rs.3 Lacs has also been denied by the OP. According to the OP, the insured was not holding valid permit for plying vehicle in area of Union Territory, Chandigarh and also the driver of the vehicle in question was under influence of liquor. Therefore, according to the OP, the claim was rightly repudiated vide letter dated 7.7.2010 on the above said two grounds, which were in violation of the terms and conditions of the policy. According to the OP, there is no deficiency in service on its part and the complaint deserves dismissal. 4. We have heard the learned counsel for the parties and have gone through the documents on record. 5. From the perusal of repudiation letter dated 7.7.2010 (Annexure C-5), the claim was repudiated by the OP on the ground that “the said vehicle was plying out of permitted area as specified in the route permit (Punjab) at the time of accident”. 6. Admittedly, there was no route permit for the area in which the accident took place. The learned counsel for the OP has vehemently argued that as the vehicle was not having valid permit to ply in the territory of Chandigarh where the accident took place, so, the OP is not liable to indemnify the complainant for the loss occurred to him due to the accident. In support of his argument, the learned counsel for the OP has relied upon the case titled National Insurance Company Limited Vs. M. Ramesh, First Appeal No.93 of 2007 decided on 22.11.2010, which is based on the ratio of the case titled National Insurance Company Limited Vs. Challa Bharathamma and others, reported in 2004 ACJ 2094 decided by Hon’ble Supreme Court of India. 7. On the other hand, the learned counsel for the complainant has vehemently argued that in the present case, the complainant is entitled to compensation on non standard basis despite the fact that the vehicle was being plied in violation of terms and conditions of the insurance policy qua the route permit etc. The learned counsel for the complainant has relied upon the ratio of the case titled Amalendu Sahoo Vs. Oriental Insurance Company Limited reported in II (2010) CPJ 9 (SC) wherein the Hon’ble Supreme Court of India has held as under: - “11. What is disputed by the insurance company is that the vehicle was not used for personal use but was used by way of being hired, though no payment for hiring charges was proved. However, according to the insurance company, by using the vehicle on hire, the appellant had violated the terms of the insurance policy and on that basis the insurance company was within its right to repudiate the claim.
12. Reference in this case may be made to the decision of National Commission rendered in the case of United India Insurance Company Limited v. Gian Singh reported in 2006 CTJ 221 (CP) (NCDRC). In that decision of the National Consumer Disputes Redressal Commission (NCDRC) it has been held that in a case of violation of condition of the policy as to the nature of use of the vehicle, the claim ought to be settled on a non-standard basis. The said decision of the National Commission has been referred to by this Court in the case of National Insurance Company Limited v. Nitin Khandelwal reported in 2008 (7) SCALE 351. In paragraph 13 of the judgment, in the case of Nitin Khandelwal (supra) this Court held:-
"..The appellant Insurance Company is liable to indemnify the owner of the vehicle when the insurer has obtained comprehensive policy for the loss caused to the insurer. The respondent submitted that even assuming that there was a breach of condition of the insurance policy, the appellant Insurance Company ought to have settled the claim on non- standard basis."
13. In the case of Nitin Khandelwal (supra) the State Commission allowed 75% of the claim of the claimant on non-standard basis. The said order was upheld by the National Commission and this Court refused to interfere with the decision of the National Commission.
14. 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:- Sr. No. | Descriptrion | Percentage of settlement | (i) | Under declaration of licensed carrying capacity. | Deduction 3 years difference in premium from the amount of claim or deduct 25
% of claim amount, whichever is higher. | (ii) | Overloading of vehicles beyond licensed carrying capacity. | Pay claims not exceeding 75% of admissible claim. | (iii) | Any other breach of warranty/condition of policy including limitation as to use. | Pay upto 75% of admissible claim. |
15. From a perusal of the aforesaid guidelines it is clear that one of the cases where 75% claim of the admissible claim was settled was where condition of policy including limitation as to use was breached.
16. In the instant case the entire stand of the insurance company is that claimant has used the vehicle for hire and in the course of that there has been an accident. Following the aforesaid guidelines, this Court is of the opinion that the insurance company cannot repudiate the claim in toto.”
8. It is pertinent to mention here that in case titled National Insurance Company Ltd. Vs. M. Ramesh (supra), the Hon’ble Chennai State Consumer Disputes Redressal Commission has not taken notice of case titled Amalendu Sahoo Vs. Oriental Insurance Company Limited (supra) decided by Hon’ble Apex Court, which relates to the cases in which indemnification has been sought on the basis of own damage. Whereas in the case titled National Insurance Company Limited Vs. M. Ramesh (supra) relied upon by the OP, reliance was placed on the case titled National Insurance Company Limited Vs. Challa Bharathamma and others (supra). In that case, the loss was caused to the third party. To our mind, the ratio of the case titled Amalendu Sahoo Vs. Oriental Insurance Company Limited (supra) is squarely applicable to the facts and circumstances of the case and in these circumstances, the OP is liable to indemnify the complainant on non standard basis. 9. As the OP has failed to indemnify the complainant as per law, it amounts to deficiency in service. 10. In view of the foregoing discussion, the complaint is allowed and the OP is directed as follows: - (i) To pay a sum of Rs.2,25,000/- (being 75% of Rs.3 Lacs as assessed by the surveyor vide report [Annexure R-2] to the complainant; (ii) To pay a sum of Rs.25,000/- as compensation to the complainant for harassment and mental agony; (iii) To pay a sum of Rs.7,000/- to the complainant as costs of litigation. 11. This order be complied with by the OP within 30 days from the date of receipt of its certified copy, failing which OP shall be liable to refund Rs.2,50,000/- i.e. (Rs.2,25,000 + Rs.25,000) to the complainant along with penal interest @18% p.a. from the dates of filing the complaint i.e.28.01.2011 till its realization besides payment of Rs.7,000/- as costs of litigation. 12. Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room. Announced 16th January 2012. Sd/- (LAKSHMAN SHARMA) PRESIDENT Sd/- (MADHU MUTNEJA) MEMBER Sd/- (JASWINDER SINGH SIDHU) MEMBER Ad/-
C.C.No.47 of 2011 Present: None. --- The case was reserved on 06.01.2012. As per the detailed order of even date recorded separately, this complaint has been allowed. Announced. 16.01.2012 Member President Member
| | MRS. MADHU MUTNEJA, MEMBER | HONABLE MR. LAKSHMAN SHARMA, PRESIDENT | MR. JASWINDER SINGH SIDHU, MEMBER | | 
